ISSN: 0973-9165OCTOBER 2016 - MARCH 2017 Vol: 12. No: 2
Disruptive Technologies:Breaking Boundaries,Transforming Work, Enhancing Lifestyles (A Conceptual Study)
Priya Angle | Bhaswati Biswas
E-marketplaces:The New Mantra of Farmer-Centric Agri Business Marketing in Karnataka
Dr. S Manoharan Rachana Pujar|
Digital India:A Proposal to Bring Transparency in Agricultural Supply Chains?
Dr. Y.T Krishnegowda | Nagaraj BV
Employee Response to Dimensions of Internal Branding:A literature review
Dr. Githa Heggde Gayatri Sasi Tampi|
Impulse Response of Economic Growth to Renewable Energy Shocks: Indian ScenarioDr. B.Venkatraja
HR Analytics:A Big Deal for C-Suite in Talent Management
Mohamed Minhaj | L. Gandhi, M. A
www.ifimbschool.com
Employability Skills: A Comparative Study of Students from Metro and Tier-II cities in India
Archana Shrivastava Manujata Midha Richa Verma| |
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3IFIM International Journal of Management FOCUS | October 2016 - March 2017
From the Editor's Desk
Chief Editor - FOCUS
Dr. Githa Heggde
Dear Readers,
Happy to release FOCUS, IFIM’s International Journal of Management, Vol 12, No 2.
This issue includes outcome of contemporary management challenges such as
disruptive technologies and its impact on lifestyle, ecommerce for agribusiness,
Analytics for talent management, study on Internal Branding. Papers vary from
conceptual to empirical studies and are insightful.
The theme paper titled, “Impulse Response of Economic Growth to Renewable
Energy Shocks: Indian Scenario” highlights the Share of renewable energy
consumption in total energy consumption and share of renewable electricity output in
total energy output as proxies to renewable energy and economic growth. Linear
multiple regression model, variance decomposition and impulse response function
techniques have been applied to estimate the impact.
We thank you all for patronizing FOCUS Journal and acknowledge the contribution
made by Authors, Reviewers and Editorial board Members
4 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Index
5IFIM International Journal of Management FOCUS | October 2016 - March 2017
Impulse Response of Economic Growth to Renewable Energy Shocks: Indian Scenario
Employee Response to Dimensions of Internal Branding: A literature review
E-marketplaces: The New Mantra of Farmer-Centric Agri Business Marketing in Karnataka
Digital India: A Proposal to Bring Transparency in Agricultural Supply Chains?
HR Analytics: A Big Deal for C-Suite in Talent Management
Disruptive Technologies:Breaking Boundaries, Transforming Work, Enhancing Lifestyles (A Conceptual Study)
Employability Skills: A Comparative Study of Students from Metro and Tier-II cities in India
S.No. Title and Name of the Author Page No.
1
Dr. B.Venkatraja
Dr. Githa Heggde | Gayatri Sasi Tampi
Priya Angle | Bhaswati Biswas
Dr. S Manoharan | Rachana Pujar
Dr. Y.T Krishnegowda | Nagaraj BV
Mohamed Minhaj | L. Gandhi, M. A
2
3
4
5
6
7
Archana Shrivastava | Manujata Midha | Richa Verma
06-10
11-17
18-27
28-37
38-43
44-50
51-58
Impulse Response of Economic Growth to Renewable Energy Shocks: Indian Scenario
*Assistant Professor of Economics, Shri Dharmasthala Majunatheshwara Institute for Management Development (SDMIMD), MysoreEmail: [email protected].
Dr. B.Venkatraja*
Abstract
Introduction
There is a growing urge from among the global community to
sustain the growth by adopting more of renewable energy
practices since the Kyoto Protocol Agreement, 1997. In a bid to
reduce greenhouse gas emissions, many countries particularly
developed economies have increased the production and
consumption of renewable energy in absolute terms and its
proportion to total energy mix as well. Different hypotheses have
been developed by the theorists on the relationship between
renewable energy and economic growth. One of the prominent
hypotheses in the literature is the growth hypothesis which
propounds that increased share of renewable energy to total
energy mix depresses the economic growth. At this backdrop the
present paper studies the impact of shocks in renewable energy on
economic growth in India and tests the growth hypothesis. The
study employs the secondary data covering the period 1991-2012.
Share of renewable energy consumption in total energy
consumption and share of renewable electricity output in total
energy output have been considered as proxies to renewable
energy and economic growth is measured by GDP per capita.
Linear multiple regression model, variance decomposition and
impulse response function techniques have been applied to
estimate the impact. Results of the study support the growth
hypothesis reflecting that increased share of renewable energy in
total energy tend to adversely affect economic growth in India.
With the emergence of the greater need for 'welfare state' across
the world, developed and emerging economies accelerated
industrialisation and other economic activities which have
created two major challenges. Firstly, fast depletion of non-
renewable energy sources like petrol, diesel, gas and coal with their
Key words: Impulse Response, variance decomposition, GDP per capita, renewable energy, India
ever increasing consumption. Secondly, global warming caused by
the emissions of greenhouse gases like carbon dioxide and
methane. These energy challenges have shifted the focus heavily
towards renewable energy. Renewable energy sources are clean
and sustainable unlike conventional energy. There is a growing
urge from among the global community to sustain the growth by
adopting more renewable energy practices since the Kyoto
Protocol Agreement, 1997. In a bid to reduce greenhouse gas
emissions, many countries particularly developed economies have
increased the production and consumption of renewable energy
in absolute terms and its proportion to total energy mix as well.
With the changed energy dynamics, the impact of increased
consumption of renewable energy on economic growth is to be
researched.
The dynamics of relationship between renewable energy and
economic growth is highly debated and led to the emergence of
four different hypotheses. The growth hypothesis believes that
energy conservation policies and increased consumption of
renewable energy may adversely affect the economic growth. It is
argued that economic growth is largely dependent on the
traditional energy sources. In contrast, conservation hypothesis
advocates that energy conservation policies or increased
renewable energy consumption may have very little or no impact
on economic growth. The feedback hypothesis reflects the
interdependence and complementarities among the energy
conservation and economic growth. The neutrality hypothesis
implies that energy conservation policies/ increased renewable
energy consumption will leave insignificant impact on economic
growth with the absence of the causal relation running from
renewable energy consumption to economic growth.
Given the emergence of significance for renewable energy for a
sustainable future, it is pertinent to understand the nature and
6 IFIM International Journal of Management FOCUS October 2016 - March 2017|
size of impact of renewable energy on economic growth. The
current study attempts to address the same. This study, unlike
many of the previous works, disaggregates energy into renewable
and non-renewable and investigates their impact on economic
growth. Thus the objective of the study goes into finding out the
variability and response of economic growth for the shocks in
renewable energy variable over the long run.
The study of Menegaki (2011) by using a random effect model to
cointegration and a panel error correction model framework to a
group of 27 European countries support the neutrality
hypothesis, implying that the lower levels of renewable energy
consumption across Europe cannot play a significant role in
promoting economic growth. Lean and Smyth (2013) examined
the relationship between disaggregated energy consumption by
fuel type and economic growth in Malaysia. The main finding is
that diesel and motor petrol are the major contributors to
economic growth in the long-run. The results suggest that the
challenge for Malaysia will be to replace diesel and petrol with
cleaner biodiesel alternatives, which will not adversely affect
Malaysia's growth rate. This empirical result supports the
conservative hypothesis. Fang (2011) empirically investigated the
impact of renewable energy consumption on the economic
growth using Cobb–Douglas production functions for China
from 1978 to 2008. From the multivariate ordinary least squares
method it is found that a 1 percent increase in renewable energy
consumption increases real GDP by 0.12 percent.
Lotz (2013) estimated the impact of the renewable energy
consumption on economic welfare by using panel data
techniques. The results showed that the influence of renewable
energy consumption or its share to the total energy mix to
economic growth is significantly positive. The study led to the
inference that promoting renewable energy bears benefits not
only to the environment but also to the economic growth of the
countries.
Ikhide and Adjasi (2015) investigated the causal link between
renewable and non-renewable energy sources and economic
growth in Nigeria. The study employed quarterly time series data
for the period of 1971-2013. The model had real GDP as a
dependent variable and energy as an independent variable. The
Granger causality test found that causality runs from renewable
energy to real GDP. The impact of renewable energy on real GDP
appears to be positive as obtained from the ordinary least squares
test. The elasticity values showed that a unit change in renewable
energy increases economic growth by 19 percent, while it is 8
percent in case of non-renewable energy.
Cetin (2016) investigated the long-run relationship between
renewable energy consumption and economic growth for E-7
countries over the period 1992–2012 by heterogeneous panel data
analysis techniques. According to the result, renewable energy
consumption has a positive impact on real GDP in E-7 countries
in the long run. In a similar study Tiwari (2011) also arrived at
similar results. His study focussed on the comparative
performance impact of renewable and non-renewable energy on
economic growth in Europe and Eurasian countries. The study
Review of Literature
reveals that while the growth rate of non-renewable energy
consumption has a negative impact, the growth rate of renewable
energy consumption has a positive impact on the GDP growth
rate.
Ferroukhi et.al. (2016) analysed the impact of renewable energy
deployment on the economies across the globe and arrived at the
similar results of Lean and Smyth (2013) and Ikhide and Adjasi
(2015). This study demonstrates that scaling up renewable energy
is cost competitiveness. The study observes that increased
deployment of renewable energy can meet the energy needs of the
growing population, drive development and improve well-being.
It also reduces greenhouse gas emissions and increases natural
resource productivity. The study outcome provides empirical
evidence that economic growth and environmental conservation
are compatible, and that the conventional consideration of trade-
off between the two is outdated and erroneous.
Silva et.al. (2012) analysed the impact of increasing share of
renewable energy sources on electricity generation (RES-E) on
Gross Domestic Product (GDP) and Carbon Dioxide (CO2)
emissions using a 3 variable Structural Vector Autoregressive
(SVAR) methodology. The study was conducted for four countries
- the USA, Denmark, Spain and Portugal for the period 1960 to
2004. The impulse response function estimation showed that, for
all countries in the sample, except for the USA, the increasing
share of renewable energy sources had economic costs in terms of
GDP per capita which in turn is the acceptance of growth
hypothesis. The variance decomposition showed that a significant
part of the forecast error variance of GDP per capita was explained
by the share of renewable energy sources.
Apergis and Danuletiu (2014) examined the relationship between
renewable energy and economic growth for 80 countries using
long-run causality test, which indicates that there is long-run
positive causality. The findings of the study support feedback
hypothesis with strong evidence to conclude that renewable
energy is important for economic growth. Further, economic
growth encourages the use of more renewable energy source.
Leitao (2014) also examined the correlation between economic
growth, carbon dioxide emissions, renewable energy and
globalization. The results demonstrated the existence of a strong
and positive link between renewable energy and economic
growth.
Though a large plethora of literature is available on the
relationship between renewable energy and economic growth, the
current study is unique in three ways: Firstly, the available
evidence from the empirical results on the dynamics of
relationship between renewable energy and economic growth is
inconclusive. Different studies support different hypothesis. This
creates scope for a reinvestigation on the impact of changed share
of renewable energy in the total energy produced and consumed
on the economic growth. The present study would focus largely on
testing the growth hypothesis of energy conservation. Secondly,
very limited number of empirical studies were conducted on this
specific issue in Indian context and this makes the case for the
study. Thirdly, the study applies three estimation techniques-
multiple linear regression analysis, variance decomposition and
impulse response function. Each technique validates the result of
the other and provides comprehensive understanding on the
7IFIM International Journal of Management FOCUS | October 2016 - March 2017
nature and extent of variability in economic growth caused by
shocks in renewable energy in India.
Variables:
In the present study, renewable energy has been measured by two
proxy variables: clean energy and sustainable energy. Clean energy
is measured by share of renewable electricity in total energy
output. Sustainable energy is measured by share of renewable
energy consumption in total energy consumption. Both the
energy variables are taken into study in per capita unit. The
economic growth is measured by GDP per capita.
Data:
The present study uses time series data of the variables selected for
Indian situation from secondary sources. The essential data are
procured from World Development data base. The study covers
annual data from 1991 to 2012. Recent years' data are excluded as
they are unavailable.
Model Specification & Estimation Techniques:
To meet one of the objectives of the study i.e., to assess the impact
of renewable energy on economic growth, multiple linear
regression model is estimated. The model estimated for impact
analysis is:
Methodology
In this model, GDP/c is per capita GDP, REC is the share of per
capita renewable energy consumption in total energy
consumption, and REO is the share of per capita renewable
electricity in total energy output. Whereas, b1 and b2 are the
elasticity coefficients of independent variables, a is the constant of
the model and e is the error term of the model.
Although regression model shows the relationship between the
variables and the impact of independent variables on the
dependent variables, it does not sufficiently answer on what is the
extent of impact of one variable on the other. Further, it does not
explain how much variability in the dependent variable is caused
by the shocks of independent variables and how much is owing to
its own shocks. The variability of GDP per capita over the long
period of time for the volatility in renewable electricity output and
renewable energy consumption as well as GDP per capita itself is
measured through Variance Decomposition.
Impulse response function verifies the results of variance
decomposition. The impulse response explains the
responsiveness of the endogenous variable in the system to shocks
to each of the other endogenous variables. For each endogenous
variable in the system, a unit shock is applied to the error, and the
effects over time are noted. Impulse response function reflects the
percentage change in GDP per capita for a given percentage
change in the renewable energy variables in the long run.
The review of literature and theoretical framework has prompted
the testing of two hypotheses in this study.
Hypotheses:
1. Renewable energy consumption (sustainable energy)
does not adversely affect economic growth.
2. Renewable electricity output (clean energy) does not
have significant impact on the economic growth in
India.
Impact of Renewable Energy on Economic Growth
Inorder to meet the objective of bringing out the impact of
renewable energy on economic growth, multiple linear regression
model is estimated. The results are presented in Table-1.
Result Analysis and Discussion
Table - 1. Estimation of renewable energy - growth model.
Predictors Beta coefficients t sig VIF
Constant
22.896
26.087
.000
REC
- 4.242
- 19.269
.000 1.059
REO
0.022
0.133
0.895 1.059
R2
= 0.954
Adj.
R2
= 0.949
D- W = 0.688
F= 196.053, Sig. =.000
GDP/c is the dependent variable
From the results it appears that the model explains 95 percent of
the changes in the GDP per capita. The Durbin – Watson statistic
value confirms the goodness of fit of the model. Multiple
regression estimation may sometimes result in wrong inferences if
the predictors are correlated. The current study tested for the
multicollinearity using Variance Inflation Factor (VIF) method
and it has been found that the model is free from such
multicollinearity issues as predictors are not correlated which is
evident from low VIF. The reliability of the model is
authenticated by high and significant F value. From the results,
the regression model can be written as:
GDP/c = 22.89 - 4.24 REC + 0.022 REO + e
The constant has positive sign as expected. However, the
coefficient value of renewable energy consumption is negative.
This reflects that increased share of renewable energy in the total
energy consumption has negative impact on the growth. Further
the size of impact is large. The regression model estimates that one
percent increase in the share of renewable energy consumption in
the basket of total energy consumption, the per capita GDP
decreases by more than four percent. The result supports the
growth hypothesis which advocates that more of energy
conservation and increased consumption of renewable energy
adversely affects economic growth.
Significantly, the result appears to be statistically significant as
reflected in the regression result table-1. Owing to this, the first
hypothesis of the study i.e. renewable energy consumption
(sustainable energy) does not adversely affect economic growth - is
rejected. This makes us to infer that sustainable energy has
significant impact on the economic growth. And the impact is
rather negative.
Clean energy is also a very vital component of renewable energy.
Theoretically it is argued that transition from conventional energy
8 IFIM International Journal of Management FOCUS October 2016 - March 2017|
to clean energy would incur very huge fixed cost as well as variable
cost. Increased cost of clean energy is expected to raise the cost of
production, bring down the production and hence affects
employment negatively. The growth hypothesis considers clean
energy as impediment in growth. However, the regression results
provide positive impact of clean energy component i.e. share of
renewable electricity output in total energy output on GDP per
capita. Significantly, the magnitude of impact is very limited. If
the share of renewable electricity output to total energy output
increases by ten percent, the GDP per capita is likely to increase by
a only two percent. Further the impact is not statistically
significant. Hence, the second hypothesis of the study i.e.
renewable electricity output (clean energy) does not have
significant impact on the economic growth in India- is accepted. It
rather supports neutral hypothesis.
The regression model demystifies the impact of renewable energy
on economic growth. Two major inferences could be arrived from
the regression estimation. One, sustainable energy in the form of
increased renewable energy consumption has significant adverse
impact on the growth. Second, clean energy in the form renewable
electricity output does not significantly accelerate the growth of
the economy. Going by the growth hypothesis, renewable energy
does not induce growth may be due to the fact that the initial fixed
capital assets requirement is very high in renewable energy
production as well as utilisation. Technological backwardness and
high costs involved in the production/consumption of renewable
clean and sustainable energy may reduce the economic efficiency
of the production sector. Further, transition from non-renewable
energy to renewable energy in the production sector involves long
run and necessitates transition in the production tools,
equipment, skills of manpower – burdening the production sector
financially. This will affect the growth negatively.
Variance Decomposition of Economic GrowthFrom the regression results it is not known how much variation in
economic growth is caused by its own changes and how much
variation is caused by shocks in the independent variables.
Variance decomposition technique provides such analysis for a
longer period. The results are presented in Table-2.
Table - 2. Variance Decomposition Index of GDP Per capita for REO & REC
Period
Variance Decomposition of
GDP/c
Variance Decomposition of
GDP/c
GDP/c REO GDP/c REC
1 100.0000 0.000000 100.0000 0.000000
2
99.67318
0.326824
99.37967 0.620328
3
99.71255
0.287445
99.50446 0.495543
4
99.20998
0.790025
98.59933 1.400670
5
98.27295
1.727047
97.47981 2.520190
6
97.15069
2.849309
96.32666 3.673344
7
96.01485
3.985152
95.13006 4.869937
8
94.95286
5.047142
94.18396 5.816044
9 93.99811 6.001885 93.49540 6.504604
10 93.15584 6.844163 92.97814 7.021861
The results show how much an economic growth's own shock is
explained by movements in its own variance and in the other
variables viz. renewable electricity output and renewable energy
consumption. It appears from the results that only about 6
percent variability of GDP percapita is accounted for renewable
electricity output shocks over the time horizon. Similarly,
shocks/innovations in renewable energy consumption over the
period of time causes just 7 percent variability in GDP percapita.
Thus, the forecasting error in economic growth is not significantly
explained by the lagged values of either clean energy or sustainable
energy. This supplements regression results.
Impulse Response of GDP/c to Shocks of
Renewable EnergyTo understand the precise size of response of economic growth for
the shocks in the renewable energy in a time horizon, which is not
reflected in the regression, impulse response function is applied.
The impulse response explains the responsiveness of the
endogenous variable in the system to shocks to each of the other
endogenous variables. So, for each endogenous variable in the
system, a unit shock is applied to the error, and the effects over
time are noted. In Figure-1, the impulse responses of GDP per
capita for the given shocks in the renewable energy variables are
presented.
This is evident from the results that future values of GDP per
capita respond significantly but negatively to the shocks of
renewable electricity output. For renewable electricity output
shocks, future values of GDP per capita respond sharply and but
negatively as year progresses. The inverse response of the GDP per
capita to the renewable electricity output is evident from the steep
downward flow of the curve over the period. Whereas, to the
shocks of renewable energy consumption, GDP per capita
responds positively as time progresses. But the response is very
mild and not significant. So, even in the long run renewable
9IFIM International Journal of Management FOCUS | October 2016 - March 2017
energy does not seem to contribute significantly to the economic
growth in India. The results of impulse response function affirm
the initial conclusion arrived by regression model and variance
decomposition.
Conclusion, Policy Implications and Scope for Future Studies
It is undeniable fact that world has to shift towards renewable
energy to sustain economic growth. The renewable energy policy
initiatives should drive economic growth towards sustainability.
However, the results of the present study do not signal any such
association between renewable energy and growth. Ability of
renewable energy to drive growth of Indian economy appears to be
very limited, rather it affects growth negatively. In the recent
decade, the government has made increasing budgetary allocation
to develop renewable energy sector. Solar energy, wind energy, bio
energy are the focus sectors. But the government investment is not
successful in harnessing the potential renewable energy and
channelise to the growth. The effectiveness of the current
renewable energy policy is to be reviewed at this backdrop. Faulty
renewable energy policies appear to be the major issue. This
argument is strengthened by the fact that despite government
allocations, the share of renewable energy in total energy is
declining over the period of time.
Results have significant policy implications. The policy makers
have to introspect the renewable energy policy of the nation and
retrieve the major factors affecting the growth adversely. Despite
adverse impact, thrust has to continue on renewable energy. To
enable sustained long run growth environmental friendly energy
policies are essential to pursue. To withstand the negative impact
of renewable energy on the growth and make growth more
sustainable, the government may formulate policies which are
more realistic, result oriented and implement them effectively.
Periodic assessment of the project implementation and the
resultant outcome has to be taken up.
The current study offers scope for future research as well. The
present study measures economic growth in terms of GDP per
capita. One of the major limitations of GDP per capita is that it
does not take into account the quality of environment. Future
studies may incorporate variables proxy to environment to reflect
the sustainability of the growth caused by the renewable energy.
Further, study can also be extended to detect the factors affecting
the economic growth adversely with increased share of renewable
energy.
References
Apergis, Nicholas., Danuletiu, Dan Constantin, 2014, “Renewable Energy and Economic Growth: Evidence from the Sign of Panel
Long-Run Causality”, International Journal of Energy Economics and Policy, Vol. 4, No.4, pp 578-587.
Cetin. M.A 2016, “Renewable energy consumption-economic growth nexus in E-7 countries”, Energy Sources, Vol. 11, No.12, pp 1180-
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10 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Employee Response to Dimensions of Internal Branding: A literature review
Key words: Internal Branding, brand understanding, brand commitment, brand citizenship behavior, job satisfaction.
Dr. Githa Heggde* Gayatri Sasi Tampi**|
Internal branding has increasingly been conceptualized in recent
times. But there does not seem to be much agreement on what it
is, the attitudes involved in it, how it is initiated and its positive
consequences. Hence, the employee branding construct is still not
completely conceptualized. In spite of the growing popularity of
the concept of internal branding in aligning employees' brand
behavior, not much is known of the relationship between internal
branding practices and employees' brand behavior. The dearth of
research in this area also limits the understanding of what is the
appropriate employee behavior that could enhance the
organization's brand performance. (Shaari, Hasnizam et al (2012).
This paper reviews the definitions and dimensions of internal
branding by drawing together strands from various literature and
empirical studies made. The paper reviews the definitions and
literature on internal branding. A framework is then built for
internal branding, focusing on employee based context that
includes the dimensions of internal branding.
Some studies have provided empirical evidence for the link
between internal branding and employees brand commitment
(Burmann and Zeplin, 2005), some have focused on the
relationship between internal branding and brand loyalty
(Papasolomou and Vrontis, 2006) and others have focused on the
influence of internal branding on employees' brand supporting
behaviours (De chernatony and Cottam, 2005; De chernatony
and Segal-horn, 2001; Kotter and Heskett, 1992).
Clearly, research in internal branding through the years result in
different dimensions of internal branding. However, a common
denominator in many of the models is the utilization of the Miles
and Mangold model (Miles and Mangold, 2004) and secondly,
brand supporting behavior (Javanmard and Nemati Nia, 2011).
Internal branding practices consists of initiatives, which in turn
leads to brand supporting behaviors, which in turn leads to job
satisfaction.
Abstract
Introduction
Internal Branding is a concept born in the early 1990s. Successful
internal branding provides a competitive advantage that is critical
to the accomplishment of companies. There is no common point
of view with regard to the measurement of internal branding,
however, this paper only studies the employee response to the
internal brand. The aim of this study is to review the dimensions
of the internal brand by drawing together strands from various
literature and empirical studies made within the area of internal
branding. The paper is conceptual in nature. The required data
has been collected from different secondary sources like research
paper, review papers, journal articles in the area of internal
branding. A conceptual framework for understanding and
measuring the internal brand and the internal branding process is
developed to provide a more integrative conceptualization of
internal branding.
The study of internal branding is increasingly popular as some
researchers have concluded that it is one of the most valuable
competitive advantages that a company has. The brand image
desired by the organization can be achieved only by employees
who characterize the organization and the task of getting
employees to reflect the organization's brand image and deliver on
its promises is a challenge for the business. The topic has gathered
both managerial and research attention that focuses on
addressing this challenge (Miles & Mangold, 2004). Frontline
employees' behaviors and attitudes not only affect external
stakeholders, but also shape the organization's brand and
reputation in the eyes of the public and other stakeholders
(Punjaisri and Wilson, 2007; Bergstrom, Blumenthal and
Crothers, 2002).
11IFIM International Journal of Management FOCUS | October 2016 - March 2017
*Dean Research and International Affairs, IFIM Business School. **Research Scholar, Bharathiar University & Assistant Professor, St Joseph's College of Commerce
A framework for measuring internal branding
Brand Understanding
Internal branding is defined as an enabler of an organization's
success in delivering the brand promise to meet customer's brand
expectations set by various communication activities (Drake et al,
2005). The employees' brand attitudes are namely brand
identi?cation, brand commitment and brand loyalty. (Punjaisri,
Khanyapuss & Wilson, Alan (2007). A conceptual framework for
measuring internal branding, based on the employees' perspective
of it, is developed by using the conceptualization of the employee
branding process by Miles and Mangold(2004). There is an
attempt to study the antecedents of internal brand management
outcomes i.e brand understanding, brand commitment and
brand citizenship (Piehler and Burmann, 2014), in relation to the
job satisfaction, and perceived individual productivity, which are
the outcome variables studied. Brand understanding and brand
identification are the cognitive components of the brand
attitudes, brand commitment and loyalty are the affective
components and brand citizenship behavior is the behavioural
component of the brand attitudes.
In the present scenario, establishing brand equity by the
establishment of a strong internal brand is becoming more and
more challenging. Amplified pressures to compete on salary and
perquisites are faced by companies in the current scenario.
Internal branding emerges from the greater enthusiasm that
employees place in their organization, than they do in
competitors. This confidence of brand association gets translated
into employees' job satisfaction, individual productivity, tenure
and their willingness to accept the conditions of work. But how
the various internal branding practices will affect the brand
attitudes of the employees and how they will react and respond
towards these practices of internal branding is relatively
unknown. The study highlights employees' understanding and
identification with the brand as a basis for brand commitment
and brand citizenship behaviour and argues that these three
factors become the actual foundation for internal branding. The
study aims: -
• To review the dimensions of internal branding.
• To provide a more integrative conceptualization of
building internal branding.
• To study the antecedents of internal brand
management outcomes in relation to the job satisfaction, and
perceived individual productivity.
Source of datahe required information has been collected from various
secondary resources like research papers, articles, conference
proceedings that are peer reviewed, and books related to the topic.
The results of the study on antecedents of internal brand
management outcomes, show that cognitive brand
understanding is a key outcome which has an effect on affective
brand commitment and behavioral brand citizenship behavior.
There has not been much resarch on antecedents of cognitive
outcomes. The cognitive outcome is brand understanding in the
Internal Brand Management study. (Piehler, Rico and Burmann,
Christoph (2014). Employee brand understanding is a precursor
to positive brand building behaviour. Internal oriented brand
activities are a important influence on employees'brand
understanding, leading to exhibition of pro-brand behaviour.
Employees'understanding of the brand is critical to successful
brand building behaviour. (King, Ceridwyn and Fung So, Kevin
Kam (2015).
he involvement of the human resources function for helping
employees in internalizing brand identity has been a developing
area of study. Internal branding emerges as a strategy through
which organizations encourage their employees, through their
engagemet, to become involved in the nurturing of a brand. (lik,
Gaye (2015). A brand needs to have a consistent and continuous
identity in order to be trusted and a holistic model for internal
brand management focuses on the role of employees in ensuring
consistency of the brand identity. (Burmann, Christoph & Zelin,
Sabrina (2005). The organization brand is found to be effective
on brand identification from the employees'perspective.
(Javanmard, Habibollah and Nia, EnsiyehNemati (2011). The
relationship between brand identification, brand commitment
and brand loyalty was assessed empirically and one of the findings
was that brand identification is a driver of brand commitent,
which precedes brand loyalty of employees. (Punjaisri et al, 2009).
Brand identification is the employees sense of belonging, which
will in turn induce a behavior that strives to improve the external
perception of the organization (Punjaisri, et al.,2009Punjaisri &
Wilson, 2011). The employees will then perceive the successes and
failures of the brand as their own and thus brand identification
encourages brand-supporting behavior (Vallaster & De
Chernatony, 2005).
rand commitment of employees is de?ned as the extent of
employee's psychological attachment to a brand and the extent to
which they experience a sense of identification and involvement
with the brand values of the company they work for, and is an
important factor for the effectiveness of brand management.
(Burmann, Christoph and König, Verena (2011), Kimpakorn,
Narumon and Tocquer, Gerard (2009). The organization brand is
effective on brand commitment, from the employees' perspective.
(Javanmard, Habibollah and Nia, EnsiyehNemati (2011). It is a
large contributor to the retention of valuable employees (Du Preez
& Bendixen, 2015). Brand commitment has a significant
relationship with brand citizenship behavior and the causal link
between brand commitment and brand citizenship behaviour was
empirically validated. ( Burmann ,Zeplin& Riley, (2009), Shaari ,
Hasnizam et al (2012), Burrmann, Christoph & Zeplin, Sabrina
(2005). It thus explains the psychological processes that leads
employees to show brand citizenship behaviour. (Burmann,
Christoph & Zeplin, Sabrina (2005).
Brand identi?cation is the driver of brand commitment, which
precedes brand loyalty of employees. (Punjaisri K, E. and Wilson,
A. (2009). The affective outcome in the study conducted on
Internal Brand Management is brand commitment and the
results show that cognitive brand understanding is a key Internal
Brand Identification
Brand commitment
12 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Brand Management outcome which has an effect on affective
brand commitment and behavioral brand citizenship behavior. (
Piehler, Rico and Burmann, Christoph (2014).Internal branding
seeks to achieve consistency with the external brand and
encourage brand commitment and the possibility of brand
championship among employees.( Mahnert, K.F and Ann, T.,
(2007).
Brand loyalty is a measurement of the employees' willingness to
stay with the current organization which is closely related to brand
commitment. Brand commitment precedes brand loyalty of
employees. The mediational effects of brand loyalty have been
studied. (Punjaisri, et al., 2009) The effect of internal branding on
employees' brand loyalty has been studied and it has a positive
effect on their performance with regard to customer attraction.
(Javanmard, Habibollah and Nia, Ensiyeh Nemati (2011).
Employee brand attitudes are namely brand identification, brand
commitment and brand loyalty and they influence the manner in
which employees deliver their service. Internal branding
influences the attitudes employees have towards the brand.
(Punjaisri, Khanyapuss & Wilson, Alan(2007). Hence, it is
important to have a high level of identification, commitment, and
loyalty towards the brand since they are all interlinked to each
other, to achieve employees' delivery of brand promise (Punjaisri
& Wilson, 2011).
Brand citizenship behaviour outlines what it means for employees
to 'live the brand'. (Burmann, Christoph & Zeplin,
Sabrina(2005). Brand citizenship behavior is one of the three
concepts of internal brand management model, the other two
being brand commitment and brand customer relationship.
(Burmann ,Zeplin& Riley, 2009). The behavioral outcome of the
study on Internal Brand Management was brand citizenship
behaviour ( Piehler, Rico and Burmann, Christoph (2014). Brand
psychological ownership was found to have a positive effeect on
brand citizenship behaviour. Brand psychological ownership
mediated the relationship between corporate branding and brand
citizenship behaviour in the multilevel relationship. (Chiang,
Hsu-Hsi et al (2013). Brand knowledge and brand rewards have a
significant positive relationship with brand commitment and
brand citizenship behavior. Brand commitment has a significant
relationship with brand citizenship behavior. Attempts have also
been made to examine the relationship between brand knowledge
and rewards on employees' brand citizenship behavior and
integrating brand commitment as mediation. (Shaari Hasnizam
et al (2012). Brand trust has a significant effect on brand
citizenship behavior and it mediates the effect of brand
commitment on brand citizenship behavior. (Erkmen, Ezgi and
Hancer, Murat (2015).
The antecedents of Brand Citizenship Behavior (BCB) and the
role that the frequency of employee contact with customers plays
has been examined. (Porricellia, Mathew et al (2014). An
organization can adopt brand-centered HR practices to make
employees produce brand citizenship behaviors, thus
contributing to customer satisfaction. HR managers can
Brand Loyalty
Brand Citizenship Behaviour
strengthen employees' brand citizenship behaviors by fostering
their brand psychological ownership feelings. (Chang, Aihwa et al
(2012).
Fig.1 Conceptual framework of internal branding developed by researcher
Dimensions of Internal Branding: The proposed
model
Internal branding practices
Internal Communication
As indicated from Figure 1, the internal branding practices are
what produce the brand supporting behaviours. These practices
form the basis of internal branding. They bring about the
cognitive, affective and the behavioural components of the brand
supporting behavior. Possible consequences of successful
employee branding efforts are increased job satisfaction and
increased individual productivity, which is perceived by the
individual employees.
Internal communication is the concerted, inter-departmental and
multi-directional internal communications effort carried out in
order to create and maintain an internal brand. ( Mahnert, K.F
and Ann, T., (2007). Managers can use internal communication
to enhance employee buy-in and thus achieve better performance.
The positive impact effective communication has on buy-
in,commitment and trust and therefore performance, is noticed.
(Thomson, Kevin, de Chematony, Leslie, Aianbright, Lorrie and
Khan, Sajid (1999), (Ferdous, Ahmed Shahriar(2008)). The
internal branding process from the employees' perspective is
described. Internal communication and training can be used to
in?uence employees' brand-supporting attitudes and behaviours.
(Punjaisri K, E. and Wilson, A. (2009).
Practice of internal communication is considered as one of the
antecedents of the three Internal Brand Management outcomes.
The results show that the usage of central, cascade, and lateral
internal communication are important antecedents of brand
understanding, brand commitment, and brand citizenship
behaviour. (Piehler, Rico and Burmann, Christoph (2014). By
involving the HR in internal branding projects, firms can better
use internal communications to give employees a deeper
understanding of the brand and the enhancing their role in
increasing the brand image ( Aurand et al (2005), Timothy A.W,
Linda and Terrence B. R (2005)).
13IFIM International Journal of Management FOCUS | October 2016 - March 2017
Values are communicated to employees via overt internal
communications. There is the need for consistency in all brand
value communications. (De Chernatony, Leslie et al (2006).
When internal communications is founded on strong corporate
values, it can help transform key employees into 'walking
embodiments' of the core values, and key touch points into
opportunities for fulfilling the brand promise. (Mark
Chong(2007)
.
Internal communication is important for building a culture of
transparency between management and employees, and it can
engage employees in the organization's priorities. There is a
growing role that internal communication plays in employee
engagement to build optimal levels of engagement.((Mishra,
Karen et al (2014), (Karanges, Emma et al(2014)). Most employees
felt most engaged at work when face-to-face communication was
used. (O'Neill , Kate et al(2015).
Internal communication strategies can promote strategic
employee communicative actions to disseminate positive
information that enhances the company's reputation and they
sustain the competitive advantage of a company. (Mazzei,
Alessandra (2014) Internal brand communication is the most
important contributor to Internal Brand Management. (Du
Preez, Rose and Benxiden, Michael Thomas (2015)
Leadership as the 'key element' in organisation's brand to the
outside world, which also influences how employees eventually
perceive the external brand that has been portrayed by the
organization.( Naidoo, Vinessa and Ukpere, Wilf
red(2012).Internal branding is related to organisational factors
such as OCTAPACE culture, communication and information,
management support, leadership, teamwork, HR processes,
engagement, citizenship behaviour and employer brand equity
(Raj, AshaBinu and Jyothi, P(2011) . It is argued here that the
success of internal brand building depends on the ability to
leverage cognitive, affective, and communicative differences
amongst culturally-diverse employees. For this, it becomes
necessary to define a clear brand vision, and facilitate verbal and
non-verbal social interaction pattems (showing commitment,
trusting employees, and living brand values) which helps to build
commitment and organisational identification amongst
employees, ultimately responsible for successful brands.
(Vallaster, Christine and de Chematony, Lesl ie (2005).The brand-
oriented leadership of top management is an important driver of
the internal branding process. The top management's leadership
is important in internal branding and its role in achieving
employees' emotional attachment to the brand. Leaders must
compel employees to possess brand–relevant knowledge, share
similar values and perceive their psychological contract as being
fulfilled. (Terglav, Katja et al (2016).
How can managers elicit brand-building behaviour on the part of
frontline employees? Transformational leadership styles clearly
outperform transactional leadership styles. Brand-specific
transformational leaders influence followers through a process of
internalization, leading to decreased turnover intentions and an
Leadership
increase in in-role and extra-role brand-building behaviors.
(Morhart, Felicitas et al(2011). In building a holistic model for
internal brand management, brand leadership is identified as one
of the three key levers for generating brand commitment, and
illustrated as building blocks of internal brand management.
(Burmann, Christoph & Zeplin, Sabrina(2005).
Successful employment branding develops a theme and
establishes an image of the employment experience at an
organisation and helps to retain the right employees to the
organisation. (Amin, Shivdasini Singh & Bhaskar, Shilpa
(2014).Resources plays a strong role in ensuring effective
implementation. It is seen that internal branding is not just the
purview of marketing departments. However, it was noticed that
the marketing department tended to be more involved in the
development of the brand strategy, while the HR department was
involved in the matter of compensation,employee attributes and
behaviors and recruitment. (Groom S, Maclaverty, Mcquillan,
Oddie (2008).
It is found that internally oriented brand activities, especially
brand oriented recruitment, training and brand oriented support
exert a significant influence on employees' brand understanding,
leading to subsequent exhibition of pro-brand behaviour. (King,
Ceridwyn and Fung So, Kevin Kam (2015)
OrientationInternal Branding process is chronicled in seven phases, out of
which senior management orientation is one of the important
phases. It ends on the note that internal branding is critical to
survival. (Tosti, D. T. and Stotz, R. D. (2001). Relationship
orientation was found to have a signi?cant positive effect on
Brand Commitment, but not Brand Citizenship Behaviour.
(King, Ceridwyn and Grace, Debra(2012)
TrainingTraining and education are one of the four constituents of
Internal Management. The IM perspective has the potential to
integrate all staff in the branding process. (Papasolomou and
Vrontis (2006). It plays a strategic role. It an help transform key
employees into embodiments' of the core values, and key touch
points into opportunities for fulfilling the brand promise.(Mark
Chong(2007) It can be used to in?uence employees' brand-
supporting attitudes and behaviours and exerts a significant
influence on employees' brand understanding, leading to
subsequent exhibition of pro-brand behaviour. (King, Ceridwyn
and Fung So, Kevin Kam (2015), (Punjaisri K, E. and Wilson, A.
(2009).
The internal marketing dimensions of training, among others has
a strong and significant influence on employees' job satisfaction. (
Allada, Vijaya Kameswari & Rajyalakshmi, Nittala(2012).
Internal branding is used to focus on training and operations.
There should be a focused message and goal behind all the
elements of training. (Davies Josh (2004). For transforming
organizations, consultants should create strategies for internal
Recruitment
Orientation and Training
14 IFIM International Journal of Management FOCUS October 2016 - March 2017|
and external audiences. The benefits of such inward-focused
brand initiatives in the arenas of human resources, organisational
development, training and operations are many. (Faust, Bill and
Bethge, Beverly (2003). It is recognized that brand training has a
positive impact on communication satisfaction that further
promotes a sense of brand identi?cation, loyalty and commitment
among the employees. (Sharma, N and Kamalanabhan, T (2011).
RewardsIt is revealed that brand knowledge and brand rewards have a
significant positive relationship with brand commitment and
brand citizenship behavior. (Shaari , Hasnizam et al (2012).It has
been demonstrated that IT professionals' perceptions of the
valence of job satisfaction would be in?uenced more by ?nancial
rewards than by non-?nancial rewards. (Chou, Shih Yung and
Pearson, John M. (2012). The messages emanating from the
organization's message systems should be proactively designed to
reflect the behaviors and attitudes the organization expects and
rewards. (Miles, Sandra Jeanquart & Mangold, W.
Glynn(2005)Rewards systems should be repeated on a constant
basis to build and sustain a strong corporate brand.
Perceived Individual ProductivityEmployee engagement is linked to higher productivity. While
drivers of employee engagement have been identified as perceived
support, job characteristics, and value congruence, internal
communication is theoretically suggested to be a key influence in
both the process and maintenance of employee engagement
efforts. Organizations and supervisors should focus on internal
communication efforts toward building greater perceptions of
support and stronger identification among employees in order to
foster optimal levels of engagement. (Karanges, Emma et al(2014)
Successful employment branding develops a theme and
establishes an image of the employment experience at an
organisation and retains the right employees to the organisation.
Effective, practical employer branding strategies in India that
address issues like recruitment, training, employee motivation,
employee engagement, and retention, with a view to positively
impact organisation costs, productivity and business performance
has been examined. (Amin, Shivdasini Singh & Bhaskar, Shilpa
(2014).
PerformanceThe employees' brand loyalty has a positive effect on their
performance with regard to customer attraction. (Javanmard,
Habibollah and Nia, EnsiyehNemati (2011).Internal branding
not only directly in?uences the extent to which employees
perform their role in relation to the brand promise, but also
in?uences the attitudes employees have towards the brand, which
in turn affects employee performance. Punjaisri, khanyapuss &
Wilson, Alan(2007).
Greater staff understanding (intellectual buy-in) and
commitment (emotional buy-in) can enhance brand and business
performance. Focusing on internal branding, it shows why these
two issues are important drivers of brand success. The intellectual
Outcome variables
emotional buy-in matrix is developed, showing how managers can
better use internal communication to enhance employee buy-in
and thus achieve better performance. Links between buy-in as
perceived employee performance are reported. The positive
impact effective communication has on buy-in, and therefore
performance, is noted. (Thomson, Kevin, de Chematony, Leslie,
Aianbright, Lorrie and Khan, Sajid (1999).Brand's contribution
to company success by brand consistent employee behaviour,
functional employee performance and brand congruent mass
media communication has been studied. Brand consistent
employee behaviour and functional employee performance in
turn are modelled as determined by formal and informal
management techniques as well as employee empowerment.
(Henkel et al (2007).
Job SatisfactionInternal marketing is relevant to all organizations and especially
critical for a people intensive industry such as services. The
internal marketing dimensions of work content, training, support
from superiors, support from colleagues and recognition have a
strong and significant influence on employees' job satisfaction.
(Allada, vijaya kameswari & Rajyalakshmi, nittala(2012).Internal
brand management, a subset of internal marketing, impacts job
satisfaction.(Rose Du Preez and Michael Thomas Bendixen
,(2015) While positive external communication has proven to
have a positive association with brand commitment and job
satisfaction; when approached by positive external information
employees feel sense of pride and gains an increased incentive to
perform to the fullest (Du Preez & Bendixen, 2015). Job
satisfaction is a precursor to employees' intention to stay, which is
the definition of brand loyalty (Punjaisri & Wilson, 2011).
Service-worker customer orientation affects several important job
responses, including perceived job fit, job satisfaction,
commitment to the firm, and organizational citizenship
behaviors. (Donavan, D. Todd, J. Brown, Tom & C. Mow,
John(2004).
It has been studied that job stress, trust and commitment affect
job satisfaction in the IT Sector, which in turn in?uences his or
her OCB. There is signi?cant relationship between job
satisfaction and OCB. Additionally, commitment to organization
and profession contributed signi?cantly to job satisfaction.
Exhibiting OCB results in job satisfaction in the IT setting.
Moreover, it is demonstrated that IT professionals' perceptions of
job satisfaction would be in?uenced more by ?nancial rewards
than by non-?nancial rewards. Furthermore, because of the
dif?culty of changing profession and the ease of changing
workplace, IT professionals' commitment to the profession might
be higher than commitment to their organizations. The paper
provides a starting point for the investigation of OCB exhibited by
highly skilled professionals. (Chou, Shih Yung and Pearson, John
M. (2012).The construct employee engagement is built on the
foundation of earlier concepts like job satisfaction, employee
commitment and Organizational citizenship behaviour. Though
it is related to and encompasses these concepts, employee
engagement is broader in scope. Employee engagement is stronger
predictor of positive organizational performance. Engaged
employees are emotionally attached to their organization and
15IFIM International Journal of Management FOCUS | October 2016 - March 2017
highly involved in their job with a great enthusiasm for the success
of their employer, going extra mile beyond the employment
contractual agreement. (Markos, Solomon and Sridevi, Sandhya
(2010). It has also been found that exhibiting OCB results in job
satisfaction in the IT setting. (Chou, Shih Yung and Pearson, John
M. (2012).It has been proven that internal Brand Management
significantly contributes to Job Satisfaction. (Du Preez, Rose and
Benxiden, Michael Thomas (2015)
Several favorable consequences occur to organizations in which a
strong brand is developed, job satisfaction and productivity, being
some of the important ones (Rousseau, 1995).The model
presented here goes beyond the existing literature by bringing
about a framework, which, if utilized properly, will lead to strong
employee branding, which can be then turned into a competitive
advantage. The processes include, but are not limited to, internal
communications, training support, leadership practices, reward
& recognition programs, recruitment practices and sustainability
factors" (Groom, McQuillan, MacLaverty and Oddie, 2008). The
process centers around the internal branding practices, which, if
Conclusion
effective, leads to three main attitudes, translating into favorable
satisfaction levels and perceived productivity. All the five internal
branding practices should be aligned to the organization's brand
image. The conscious development of the internal branding
practices is the fundamental building block/bottleneck in this
process. Also, employees need to have the right skills and
knowledge in order to gain a higher level of emotional attachment
towards the brand. Therefore, the organization need to take
measures to implement activities that enhances the employees'
skills and knowledge about the brand. This will enable the
employees to embrace the brand and develop an emotional
attachment to the brand which helps them to incorporate the
brand values in their everyday actions (Du Preez & Bendixen,
2015).
The consequences of the employee branding process can be
monitored through the feedback loop. We hope that a fair
comprehension of the employee branding process, which we have
attempted through this model, will lead to sound and consistent
employee branding programs within the institution, which will
lead to higher job satisfaction and productivity.
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17IFIM International Journal of Management FOCUS | October 2016 - March 2017
E-marketplaces:The New Mantra of Farmer-Centric Agri Business Marketing in Karnataka
*Associate Professor at the Department of Management Studies and Research Centre, BMS College of Engineering, Bangalore ([email protected]) Research Scholar at the Department of Management Studies and Research Centre, BMS College of Engineering, Bangalore ([email protected])**
Dr. S Manoharan* | Rachana Pujar**
The agricultural trading environmentAgriculture marketing is a state subject and markets in agricultural products are regulated under the
Agricultural Produce Market Committee (APMC) Act enacted by State Governments.
There are about 2477 principal regulated markets which are also called as APMCs and 4843 sub-market yards in India (Economic Survey,
2014-15). In order to ensure standardised regulatory framework for agriculture marketing governance and reforms across states the
Ministry of Agriculture has been soliciting the state governments to modify their respective Acts along the lines of the Model APMC Act,
2003. (Economic Survey, 2014-15)
Underscoring the importance of State's role in facilitation of
agriculture marketing, Karnataka has consistently been able to
implement reforms in regulation after the enactment of
Karnataka Agricultural Produce Marketing (Regulation and
Development) Act, 1966 and recently introduced a
comprehensive Karnataka Agricultural Marketing Policy 2013.
Since the initial legislation, there have been numerous changes in
the agricultural marketing scenario – such as increase in
commodities produced, changing consumption patterns, and
emerging agriculture business models. This has led to a need for
increased autonomy for farmers and a liberalised market scenario.
While state regulations have provided for establishment of private
markets, operations of bulk buyers like exporters, food processors,
retail chain stores, through registration under respective APMCs,
establishment of special commodity markets and Public private
partnership (PPP)in the agriculture sector the effectiveness of
these provisions still remains to be seen.
The National Agriculture market proposed by the Ministry of
Agriculture, is a nationwide e-platform that will connect 250
mandis by September 2016 and a total 585 mandis by March 2018
across India.
The table below gives an indication of various stakeholders and
participants that are directly or indirectly involved in agricultural
marketing transactions.
18 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Role of an Agriculture Produce Market
Committee (APMC) in Karnataka
As per the APMC act, “agriculture produce to include all produce
of agriculture, animal husbandry, apiculture, horticulture or
pissciculture, forest produce and any other produce, live-stock and
poultry.”
Each APMC is a separate governing body which has a market area
and linked sub-markets. The APMC Act indicates that any market
area is more than a district or less than a taluk. Trading of
notified agriculture commodities happens only through APMCs.
The APMC licenses various participants or market functionaries
such as – brokers, commission agents, exporters, importers,
stockists, traders, ginners, pressers, processors, weighman,
measurer, transporter, warehouse. It also provides various
amenities in or around its premises such as - auction halls, weigh
bridges, godowns, shops for retailers, canteens, infrastructure for
access roads, lights, drinking water, police station, post-office,
bore-wells, warehouse, farmers amenity centres, water treatment
plant, soil-testing laboratory, toilet blocks, etc
19IFIM International Journal of Management FOCUS | October 2016 - March 2017
APMC levies different kinds of fee for market participants licensed for agriculture transactions.
a. Market fee is an important component of the trades conducted in an APMC's market area.
APMC is authorised to levy market fee through
i. commissioning agents who mediate between buyers and farmers
ii. importer who will realise the fee from the purchaseriii. trader who directly purchases from a producer iv. any
other purchaserb. Licensing fees from a whole range of functionaries
(warehousing agents, loading agents, quality assignors etc.)c. Statutory levies/mandi tax, Value added tax (VAT) etc.
In 2013, 92 agriculture commodities were traded in Karnataka through APMCs. There currently are
155 primary markets (APMCs) and 354 sub markets like weekly mandis while there are 771 rural primary markets. The volume of business transacted through these markets exceeded Rs. 25,000 crores in 2011-12. Tumkur, Koppal, Udupi, Bangalore Urban and Shimoga making the top five districts in terms of revenue contributions (Refer Annexure I) (Agricultural Marketing Reforms Committee, 2013). The revenue earned by the APMCs does not go to the State exchequer (Economic Survey 2014-15)While the agricultural markets continue to be governed by APMCs - directly or indirectly there is a need for assessment of factors that will enable a greater role of technology in liberalisation of agricultural trading.
The e-marketplace or e-trading model of agriculture transactions started to come in vogues in 2014. These marketplaces target both business and end consumers with focus on participants in the agriculture trading chain. As Karnataka has been in the forefront of agriculture marketing reforms, the State has witnessed various emerging business models in this segment.
1. Online matching of demand and supply–
a. Businesses are facilitating interaction of farmers, producer organisations and sellers/wholesalers/retailers and direct customers while actual trading happens physically. There is no licensing requirement in this model.
2. Single APMC license for e-trading –
a. Commodity trading platforms such as NCDEX, N-Spot
b. Existing traders are allowed to operate online with license for online trading/e-trading.
Evolving models for farmer centric agricultural marketing
They can operate both – physical and virtual trading.c. Licensing and accreditation for weighment, payment, stocking, transportation and logistics. d. Eg. A large trader get license from Director of Agriculture Marketing to supply maize toAfrica which is bought from Karnataka – Davangere or Koppal.
e. The state government has formed a SPV and joint venture with existing commodity trading platforms Eg. Rashtriya e-Market Services
3. Price information providers –
a. Private
i. Reuters –The farmers can register to get SMS alerts on price information for selected commodities and select markets as part of annual subscription. The service gives details of input availability at the beginning of crop season, likely diseases and pesticides to be used during sowing and prices of commodities in different markets for selling the produce. The service enabler farmers make informed decisions.
b. Government institutions
i. NICNET– daily arrivals and prices are generated and fed into the network by APMC.
Krishimarata vahini managed by KSAMB (as part of AGMARKNET) covers 192 markets in Karnataka.ii. More than 2200 markets are regularly reporting price and arrivals related data which is being disseminated through the portal of AGMARKNET.
4. Farm input (non-financial) marketing involves supply of inputs like seeds, fertilizers, manures, pesticides, cattle feed to the members & farmers
Virtual Markets or electronic markets enable producers and buyers in the supply chain to access each other spread beyond geographies with a view to transact at the most efficient and transparent prices, reducing the cost of intermediation, improving marketing efficiency.
Various categories of virtual markets include Futures Exchange, Spot Exchange, Warehouse Receipt
System, ICT based demand and supply matching and crowdsourcing solutions or e-marketplaces.
Agriculture e-marketplace is a business to business e-trading platform that provides a convenient way for price comparison, demand matching and logistics that provide significant advantages towards cost reduction, elimination of middlemen and an easier way of trading their produce. (Xiaoping Z., Chunxia W., Dong T., Xiaoshuan Z., 2009).
These platforms though primarily business to business in nature are also connecting end consumers directly to the producer.
While different pricing methods (Refer Annexure II) are
Convergence of technology aided agriculture marketplace platforms
20 IFIM International Journal of Management FOCUS October 2016 - March 2017|
adopted by participants for trading of agriculture produce in both traditional and electronic forms, the e-trading platform provide a transparent approach for pricing.
The electronic trading platform also fills the structural hole in the agricultural network by connecting the farmers and the consumers. It takes care of the important task of matching supply and demand. The Mandi Exchange employs quality checkers who check the quality of the produce at the source. With connections to transporters the exchange ensures efficient transport of produce directly from farms to industrial or retail markets. (Viswanadham N., Chidananda Sridhar, Narahari Y., Dayama Pankaj,2012)
The figure below provides the process flow comparison of a market yard through e-tendering and transaction through an e-trading platform–With mobile or smartphones as the change
Figure 1 - High level process flow for e-Auction & e-Trading
Source: Agriculture Marketing Reforms Committee, 2013 and NCDEX Spot Exchange guidelines
agent, non-conventional platforms such as crowdsourcing solutions or e-marketplaces are disrupting the traditional multi-tiered transaction mode of e-trading. They eliminate multi-tiered transaction mode and reduce transaction costs by bringing together the buyer and seller under a single platform through
Key technologies –
• Automated geo-tagging of location• Map based view of available farm products• Matching algorithms for pricing, buying and selling• User preferred language support• Proposed features such as - Post-harvest support such as
Logistics based information and warehouse availability, historical data usage in making price predictions–
Allied services –
• Price alerts for preferred agricultural inputs and produce• Farmer or buyer profile specific information• Access to financial services e.g. mobile payment system and
microlending platform• Real time weather informationo Information on
procurement of high yielding seeds, fertilizers,etc.• Networking platform for farmers, traders, agriculture experts,
food processors and other allied entities
The report of Working Group on Agriculture Marketing Infrastructure, Secondary agriculture and Policy required for Internal and External trade in 2013 indicated the following gaps in the agriculture marketing infrastructure across India (as quoted from the report) –
Average area served by a market is 115 sq. km while an average area served by a regulated market is 454 sq.km (varies from 103 sq km in Punjab to 11,215 sq km in Meghalaya ). According to recommendations by National Farmers Commission, availability of Markets should be within 5 km radius (approx. 80 sq km) (2004).
Only 11 States have taken initiative in establishing 109 cold storage and eight states have established 51 apni mandis, there is virtually no progress in the setting up of wholesale markets except in Kerala Only 1637 grading units at the primary level, which include 125 units with cooperatives and144 units with others
Regulated markets, there are only 1368 grading units in a total of 7246 market yards/sub- yards Only around seven percent of the total quantity sold by farmers is graded before sale
Scientific storage capacity is only 30 per cent of the required capacity
Cold storage facility is available for only 10 per cent of fruits and vegetables
Following factors will play a pivotal role in encouraging the development of e-marketplace model –
1. Need for Quality standardisation of inputs and produce
Quality of the agriculture produce needs to be graded through Quality assignor (recognised and authorised by e-trading platform) based on which the produce stored in an accredited warehouse.
Current status of Agricultural Marketing Infrastructure
Key factors that enable e-Marketplaces
21IFIM International Journal of Management FOCUS | October 2016 - March 2017
2. Addressing information asymmetryThe primary factor contributing to farmer e-
commerce adoption is information dissemination - access of price information, climate change and weather data etc. This information can be extraneous or general, product related, and personal information (Just & Just, 2006)
In addition, information availability and standardisation is a huge challenge due to the differences in regulatory provisions of state specific APMC acts.
3. Controlling food losses through efficient post harvest processes
“Post harvest food losses (PHFL) is defined as measurable qualitative and quantitative food loss along the supply chain, starting at the time of harvest till its consumption or other end uses” (FAO Paper, 2013)
The diagram below indicates the traditional versus mechanised post harvest chain and the food loss therein –The infrastructure
for storage, sorting, grading or post-harvest management includes storage including cold chain infrastructure, infrastructure required for linking the commodity futures with the farmers, perishable cargo centres, rural farm road infrastructure, market information infrastructure, infrastructure for livestock markets, poultry and livestock meat markets, slaughter house facilities and quality assurance infrastructure of various agricultural commodities.
4. Elimination of regulatory environment that hinders e-Trading
The mandatory requirement of the buyers having to pay APMC charges even when the produce is sold directly outside the APMC area (for eg. to the contract sponsors or in a market set up by private individuals) even though no facility provided by the APMC is used does not encourage competition and a liberalised trading environment. (Economic Survey,2014-15)
5. Transparency in price setting mechanism
The farmers buy farm and agricultural inputs at market price but sells the produce at wholesale price
There is no standard methodology for price determination and to ensure efficient and fair price setting mechanisms. I n case of certain commodities, the farmer receives only 20% of market price paid by the end customer due to the long chain of middlemen, logistics involved and food losses.
6. Provision of quality agriculture inputs
Inspite of regulations for control of seed, fertilisers and pesticides, the availability of good quality of seeds is difficult. Farmers face problems such as failure in germination, creation of artificial scarcity, being charged high prices and duplicates or imitation seeds and farm inputs.
7. Effective implementation of Government Schemes
Various schemes related to pre and post harvesting, listed below, have been lauched to benefit the agricultural marketing sector but have been inadequate in their outreach to the farmer –
i. Central Sector Scheme of Marketing Research and Information Network (AGMARKNET)
ii. Strengthening of Agmark Grading Facilities (SAGF)
iii. Development and strengthening of agricultural marketing infrastructure, grading and standardization
iv. Grameen Bhandaran Yojana
Rashtriya e-Market Services Limited (REMSL) is a division of NCDEX and is a special purpose vehicle (SPV) created alongwith Government of Karnataka. As an extension of the APMC led agricultural marketing model, REMSL provides an e trading solution with logistics management obligations handled by NCDEX.
For this NCDEX is licensed with the respective APMC under a revenue sharing model. The exchange pays 70% of market fees to APMC for trades that happen through REMSL platform while APMC pays back 20% of revenue received on account of availing NCDEX services.
According to experts in Agriculture Marketing, less than 5% of the produce is traded through this e- trading platform and the arrangement has not been satisfactory. An important factor being inadequacy of quality assignors and accredited warehouses and the unwillingness of farmers to grade their produce. APMC has already paid around Rs. 40 crores to NCDEX for its services until the year 2015.
As an alternative to the government led model of e-trading, 6 startups that are based or have operations in Karnataka are providing solutions for price and demand matching of produce and agriculture inputs as well as online trading of farm and farm-related produce.
While REMSL services are only available to licensed traders that are linked to APMC platform, these startups provide services through website or mobile application.The following table
A comparison of e-marketplace models
22 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Methodology and summary of findings
In order to understand the simplification of agricultural trading models for marketing farmer produce, this study analyses the government operated and privately owned online marketplaces for their contribution in efficient transaction mechanisms. As the
e-marketplace model for agriculture trading is at a nascent stage an unstructured questionnaire based approach to interview stakeholders was taken. Key stakeholders that were connected to these firms were interviewed to understand the strategies adopted by these firms and effectiveness of the marketplace model. An in-depth interview with a checklist based approach was taken to interview experts in the agricultural marketing sector.
Assessment of various business models of e-marketplace modelTable 5 - Assess ment of e- marketplace business models
Assess mentparameter
Special Purpose Vehicle basedmodel
Privat e e- marketplace 1 Privat e e- marketplace 2 Researcher ’s perspective
Presence Karnataka Only National Global Applicable globally
Business model Licensed by APMC as trader Trade enabling platform Private disruptive Technology intensive model withoutgovernment intervention
Reason To bring
in
reforms
in
agriculture
Marketing
Sector
Faced
a problem
and
set
up
business
to
solve
this
problem
Faced
a problem
and
set
up
business
to
solve
this
problem
Urgent need for farmer centricbusiness models
Target segment Farmers,
Traders,
Processors
Entire
agri
market
supply
chain
Global
agricultural
community
Farmers, multiple categories oftraders, end consumers
Ser vices offered Platform
for
trading(Buyers
and
sellers
meet),
price
discovery mechanism
Online
matching
of
demand
and
supply
Online
matching
of
demand
and
supply
One
to one trading platform, pricediscovery, weather information, logistics support, warehouse support sys tems, financial support
Channels ofmarketing
Producers
to
buyers
Collaboration
with
NGOs
and
other
organisations App,
Social
media
and
public
relations
(PR) Networking events, Phys ical mandis,
Kisan
bazars, private mandis, Conventional rural gatherings , Digital media, NGO collaborations
Stage of offering Scali ng
up
Scali ng
up
Scali ng
up
-
Period of ideation Less than
6
months
6 to
12
months
Not
available
-
External supportreceived
Incentives
from
government
(State
and Centre)
None
Founders
are
external
funding
entities
Government incentives are needed toliberalise e- marketplace facilities in trading in agricultural inputs and produce
Interaction withgov ernment ag encies
Agriculture
Produce
Market
Committee
(APMC)
None
SFC/Commercial,
Cooperative,
Regional
Rural
Banks
Government entities, agricultureinstitutes, Banks and financial institutions
Opinion on role ofAPMCs
APMC is working and theirpresence is strong.Still lot of scope to facilitate better price discovery and competition
APMC restric ts the farmersreach and agricultural marketing space need not be regulated
APMC is an unfair platform fortrading in agriculture
Need to minimise APMC role andmove towards an external facilitation agency
matching of buyers and farmers
A traditional platform that providesprice and demand-supply matching services. Farmers can
social networking platform
23IFIM International Journal of Management FOCUS | October 2016 - March 2017
Assess mentparameter
Special Purpose Vehicle basedmodel
Privat e e- marketplace 1 Privat e e- marketplace 2 Researcher ’s perspective
Regulations that promote e- Trading in ag ricul ture
A special purpose vehicle can beset up to provide e- trading inAgriculture commodity.Director of Agriculture marketing has the provision to direct the market and
commodity
that
has
to be traded
through
online
No Introduction of provision for
direct marketing-
Post transaction -Logistics andwarehousingsupport
1. APMC
Godowns
used
by
buyers
to
store
post-
transaction
2. e- permit
can
be
generated
by trader
themselves
3. Single
license
to
trade
in
all
APMC's
in
Karnataka
4. Online
payment
facility
No
Support
in
the
form
of
1.
Logistics
2.
Warehousing
3.
Cold
chain
4.
Financing
the
transaction
are provided
Support in the form of1.
Logistics2.
Warehousing3.
Cold chain4.
Financing the transaction are provided
5.
Financial investments
Basis of delivery after sale
Primary sale bill, Sec ondary Sale Bill and e-Permit
Farmers directly interact with sellers
Goods receipt note (GRN) To be standardised
Agricul ture datasources
krishimaratavahini.kar.nic.in
AGMARKNET
Internal
Information
Standard pricing mechanisms to beintroducedManually entered data to be eliminated
Competition NCDEX
FARMILY,
GREENO,
ITC
E
CHOUPAL
Existing
middlemen
Opening up of the sector for privateplayers
Transaction flow Gate entry,
Lot
entry ,
Assaying,
information
upload,
Bidding, Tender list
declaration, Weighment
entry,
Primary
sale bill generation, Settlement voucher, Online payment, e-Permit
Farmers
and
traders/shop
owners
connect
and
decide
on price
and
product
quantity
for sale
Login,
List
produce
for
sale,
add
photos
of
produce,
desc ribe quality
and
grade
etc
and
terms
of sale,
buyers
are
notified
and
bids are placed, Seller chooses the best bid and terms, Material isshipped, Buyer accepts the goods, Payment is done
-
Qualitystandardisat ion
Through external certified qualityassignor
Responsibility of purchaser Purchaser responsibility to ensurequalityCertification through a certified quality ass ignor
-
Regulations that promote e- Trading in ag ricul ture
A special purpose vehicle can beset up to provide e- trading inAgriculture commodity.Director of Agriculture marketing has the provision to direct the market and commodity that has to be traded through online
No Introduction of provision fordirect marketing
-
Post transaction -Logistics andwarehousingsupport
1. APMC
Godowns
used
by
buyers
to
store
post-
transaction
2. e- permit
can
be
generated
by trader
themselves
3. Single
license
to
trade
in
all
APMC's
in
Karnataka
4. Online
payment
facility
No
Support
in
the
form
of
1.
Logistics
2.
Warehousing
3.
Cold
chain
4.
Financing
the
transaction
are provided
Support in the form of1.
Logistics2.
Warehousing3.
Cold chain4.
Financing the transaction are provided
5.
Financial investments
Basis of delivery after sale
Primary
sale
bill,
Sec ondary
Sale
Bill and
e-Permit
Farmers
directly
interact
with
sellers
Goods
receipt
note
(GRN)
To
be
standardised
Agricul ture datasources
krishimaratavahini.kar.nic.in
AGMARKNET
Internal
Information
Standard pricing mechanisms to beintroducedManually entered data to be eliminated
Competition NCDEX
FARMILY,
GREENO,
ITC
E
CHOUPAL
Existing
middlemen
Opening up of the sector for privateplayers
Transaction flow Gate entry,
Lot
entry ,
Assaying,
information
upload,
Bidding, Tender
list
declaration, Weighment
entry,
Primary
sale bill generation,
Settlement voucher,
Online
payment,
e-
Permit
Farmers
and
traders/shop
owners
connect
and
decide
on price
and
product
quantity
for sale
Login,
List
produce
for
sale,
add
photos
of
produce,
desc ribe quality
and
grade
etc
and
terms
of sale,
buyers
are
notified
and
bids are
placed,
Seller
chooses
the
best bid
and
terms,
Material
is
shipped, Buyer accepts the goods, Payment is done
-
Qualitystandardisat ion
Through external certified qualityassignor
Responsibility of purchaser Purchaser responsibility to ensurequalityCertification through a certified quality ass ignor
-
y
Transaction charges
1.5% market fee on trade value Free platform 1% of trade value Revenue generation is also donethrough sponsored advertisements
Businesseffectiveness metrics
Business Analytics, ISOCertifications, Transactions, IT Strategy ,
CSI
and
Regulatory
Number of transactions,Engagement on app
Customer satisfaction and growthin transactions
App engagement, transactions,revenue analytics for farmer
No.
of
farmers
connected
More
than
500
More
than
500
More
than 500 -
Number
of
buyers/wholesalers connected
More
than
500
More
than
500
More
than 500 -
Number of APMCs connected
100 to 500 less than 50 Less than 50 -
Source:
Primar
data -
Stakeholder
Interviews
conducted b authors
24 IFIM International Journal of Management FOCUS October 2016 - March 2017|
ConclusionThe agricultural marketing sector is still highly regulated in nature. In order to provide a far reaching platform for agriculture trading and consolidation of its activities, technology enabled platforms also called as e-marketplaces have emerged to eliminate the nexus of middlemen and provide global market access to farmers. These models also aim to address –
awareness among market participants especially farmers
access to information on modern farming methods
outreach of pricing and produce related information
quality of agriculture inputs
capacity of post-harvest infrastructure
food losses and quality of produce due to longer storage period
While the government approach has been provider led, various startups are directly connecting farmers to suppliers, buyers and end consumers through technology enabled platform using Internet of things (IoT), geo-tagging and price matching mechanisms.
However, due to the nascent stage of their operations and the continued dominance of APMC market- fee based regime, e-
marketplaces have constrained effectiveness. The business models that have emerged as a result need further study over the next five years so concrete conclusions can be arrived at regarding their effectiveness. At present, their importance as an alternate and effective option for trading of produce and procurement of farm inputs needs has been emphasised through this paper.
The financial input marketing such as insurance, financial assistance through government institutions, banks has not been considered in this study. Due to the evolving nature of the business models and reduced effectiveness of regulation in agricultural marketing the study was unable to substantiate the impact these changes have in shaping a farmer centric environment.
Various other areas also present avenues for research such as relationship between e-marketplaces and Integrated Value Chains. Other startup business models that are bringing the farmer towards technology utilisation enabling end to end tracking of produce right from sowing season, harvesting and settlement also needs to be explored. The effectiveness of public sources of agricultural market data and farmer's direct linkages is an important area that needs to be studied further.
Future scope of the study
Areas of further study
(Rs. In Lakhs)
S. No. District/Division 2007- 08 2008- 09 2009- 10 2010- 11 2011 - 12
1. Tumkur 5841.17 6148.02 8191.77 9770.96 10338.25
2. Koppal 5816.99 6982.61 6760.2 8300.31 8286.55
3. Udupi 2308.21 3019.92 4013.18 4721.74 5377.95
4. Bangalore Urban 1972.71 1906.82 2364.16 2877.63 2735.96
5. Shimoga 1101.37 1316.95 1803.62 2178.97 2441.76
6. Haveri 1243.68
1361.79
1629.86
2460.59 2177.20
7. Raichur 1759.3
1982
1963.56
2479.91 1934.17
8. Bellary 1248.45
1610.24
1397.67
1603.25 1697.4
9. Gulbarga
979.97
1055.9
1090.11
1342.99 1528.66
10. Davangere
713.07
810.69
1266.48
1409.44 1434.88
11. Mysore 539
685.26
914.34
1123.04 1187.47
12. Belgaum
585.34
646.59
879.18
1102.47 1146.6
13. Hassan 381.84
405.82
609.51
843.8 1098.94
14. Dharwar
654.52
698.52
941.12
1304.84 1094.4
15. Chitradurga 738.4 682.82 858.1 1010.26 1076.62
16. South Canara
475.94
767.8
863.45
914.12 1054.45
17. Gadag 382.72
433.69
626.12
891.26 1018.15
18. Mandya 317.71
427.71
745.11
722.64 778.92
19. Uttar Kannada
355.45
417.08
540.84
579.17 734.12
20. Bijapur 326.13
341.33
402.39
669.41 705.13
21. Y adgir 431.64
499.02
414.61
682.18 623.92
22. Bagalkot
229.88
295.03
365.83
527.89 545.96
23. Bidar 394.74
345.86
308.56
490.11 529.28
24. Kolar 427.62
303.86
380.87
411.23 482.37
25. Chickmaglur
238.27
274.26
332.56
412.7 441.94
26. Chickballapur 99.67 97.36 138.02 243.95 349.5
27. Coorg 136.97 182.68 230.41 268.39 267.27
28. Chamrajanagar 117.37 147.37 149.39 202.54 265.99
29. Bangalore Rural 137.86 247.53 290.63 331.14 250.89
30. Ramanagaram 43.76 44.85 62.4 96.44 102.89
Sta te total17744.09 20344.58 24350.49 30328.64 31424.31
Source: Report of Agricultural Marketing Reforms Committee 2013
Annexure I - Statement showing details of market fee collected by APMCs from 2007-08 to 2011-12
25IFIM International Journal of Management FOCUS | October 2016 - March 2017
Annexure II – Types of trading transactionsThe various types of transactions that facilitate trading of agriculture produce are –
Type of transa ction Description1. Mutual negotiations The buyers and sellers mutually agree upon a price based on
which the transaction is carried out.
2. Secr et tender sy stem A prospective buyer can inspect the commodity well in advance, note the lot number, quote the price in a piece of paper and dropin a box for secret tenders. The highest bidder is awarded withthe lot and the trade conclusion is at the discretion of the farmer or producer. However, it is binding on the bidder to accept the product.
3. Open auction
The
produce
is displayed
for
inspection of
prospective bidders.The
APMC official
or
licensed auctioneer
will
conduct the auction
and award
the bids
for
highest
price. However, the choice to sell
is with the farmer
and is not
binding.
4. Secr et tender
sy stem
cum Open auction
In order
to eliminate
the possibility
of
collusion between traders and other
allied participants, bids
from
secret
tender and open auction
are
combined. For
the same lot,
the
trader that providesthe best
price
quote can settle the
transaction.
5. Price determination based on k nown
standar ds
The
price
of
the
commodity
is determined based on the quality of the product
available
for
sale.
6. e- Tendering or
Virtual bidding
The
e- tendering
terminal
enable
the
trader
to fill in quotes for a commodity
available for
sale.
This
is a
secret
tender sy stem. Atthe
initial
entry
into APMC
premises,
the
produce is assigned a lot
identification number
(lot
ID)
based on which it is tracked for sale
and
settlement. Every
buyer
will
check
the quality and lotnumber
before entering
the
e- tender.
The
auction results can be gained in
a span of
10 minutes
and payment
received on the sameday.
Computer
network
across
the state for
e-Tendering includesGulbarga
–
Toor, Gangavati – Paddy, Tiptur
–
Kopra,
Chamrajnagar – Turmeric. In Karnataka, 50 APMCs have installed computers for e-
tendering
where buyers can
quote
the
price
and solicit traders fortransaction.
The
National
Informatics
Centre (NIC)
platform created the e-
tendering
platform.
NICNET
also
facilitates
daily
transmission
of
prices of commodities.
7. e- Tra ding
The
e- trading
system
enables
producers,
user
organizations, electronic traders
and existing
traders
to offer
product to themultiple markets.The system provides facility to provide buying needs and product requirements through secure information exchange.In this case, while area- specific license jurisdiction is restricted to the APMC of area of produce, single license is issued by Directorof Agriculture marketing, Government of Karnataka which isvalid across the state for e-Trading.Licensed buyers from outside the state can also buy the product through this platform.
The government in a tie up with NCDEX for futures exchange and spot exchange. The first of its kind spot exc hange was established in Gulbarga for Toor – N Spot where the prospectivebuyers can quote the price indicating the quality ba sed onWarehouse receipt.
Eg-
Arecanut
from
Shimoga can be bought buy a buyer inKanpur
which
enables
optimum pricing and increased competition
from
across
the country.
8.
National
Integra ted mark et
-
NIM
(recently pro posed)
The
Union Budget
2015
proposed establishment of NIM.
Under
NIM
a licensee
can
operate through partner for management
of
logistics
and software solutions.
In this case, each state
is needed to amend their Act permitting other
agencies
to operate
in
Agriculture marketing apart fromAPMCs.
Source:
Expert
interview
–
University
of
Agricultural Scie nces, Bangalore
26 IFIM International Journal of Management FOCUS October 2016 - March 2017|
References
1. Aulakh, Jaspreet, Regmi, Anita, Post Harvest Food Losses estimation – Development of consistent methodology, GS SAC-102,2013,
Food and Agriculture Organisation Retrieved from
http://www.fao.org/fileadmin/templates/ess/documents/meetings_and_workshops/GS_SAC_2
013/Improving_methods_for_estimating_post_harvest_losses/Final_PHLs_Estimation_6-13-13.pdf
2. Agricoop (2006-07), Annual Report – Agricultural Marketing
Retrieved from http://agricoop.nic.in/AnnualReport06-07/AGRICULTURAL%20MARKETING.pdf
3. Boehlje, Michael, The Agricultural Marketplace in the 21st Century - A Synopsis of Farming, Finance and the global marketplace
symposium, Kansas City, June 8-9, 2010
Retrieved from https://www.kansascityfed.org/publicat/rscp/closing-agricultural- marketplace.pdf
4. Dey Anindita, (September, 2014), Various states start amendment of APMC Act to begin market reforms, Business Standard
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market-reforms-114091800773_1.html
5. Economic Division of the Department of Economic Affairs, Government of India, Ministry of
Finance - Economic Survey 2014-15, pp 117-121
Retrieved from http://indiabudget.nic.in/es2014-15/echapter-vol1.pdf
6. Goswami, Rahul, Juneja, Ekta, and Sharma, Swati, Agribusiness Sector in Rural India and Increasing Opportunities of E-Commerce,
2008 - Conference on Marketing to Rural consumers, April 3,4,5, 2008, IIM Kozhikode
7. Just, R David, Just E, Richard, Information exchange and distributional implications of price discrimination with internet marketing
in agriculture, American Journal of Agricultural Economics, 2006, 88:1, pages 882 to 889
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Rules 1968,Retrieved from http://krishimaratavahini.kar.nic.in/department/acts.htm
9. Emanuel Haque, Anu Peter, MS Jairath (2015, Jan 28) Karnataka shows the way on Unified
National Agri Market, The Hindu
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National Farm Market, The Indian Express
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farm-market/#sthash.IDPeH4RQ.dpuf
11. Government of Karnataka, List of Licensed holders to establish spot exchange trading centre under the Act 131(D) & RULE 91(J)
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12. Markets Covered, AGMARKNET
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13. Madhvi Sally (2015, Dec 16) National Agriculture Market to cover 250 mandis by September2016
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16/news/69091190_1_market-farmers-mandis
14. Ministry of Agriculture, Department of Agriculture and Co-operation, Government of India, Final report of Committee of State
Ministers, In-charge of Agriculture Marketing to Promote Reforms (January, 2013)
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(Department of Agriculture & Cooperation), New Delhi
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18. Report of Agricultural Marketing Reforms Committee 2013, Co-operation department, Government of Karnataka
http://www.remsl.in/docs/AMRC%20Report%202013-ENG-LOW-72dpi.pdf
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27IFIM International Journal of Management FOCUS | October 2016 - March 2017
Digital India: A Proposal to Bring Transparency in Agricultural Supply Chains?
*Professor, Maharaja Institute of Technology, Srirangapatna, Mysore ([email protected])**Asst. Professor at Kirloskar Institute of Advanced Management Studies, Yantrapur, Harihar. ([email protected])
Dr. Y.T Krishnegowda* | Nagaraj BV**
priority projects of the present government with a clearly laid out
mission to provide broadband in 2 lakh villages, universal phone
connectivity, 400,000 public internet access points, Wi-fi in 2.5
lakh schools and all universities; Public wi-fi hotspots for citizens,
Digital Inclusion of IT, Telecom and Electronics; e-Governance &
e-Services across government, resulting in digitally empowered
citizens through public cloud, internet access by the end of 2017.
Common citizen of India residing in urban places can now
visualize usefulness of digitalization as almost all of them are
enjoying benefits of internet banking facilities, core banking,
services provided by private e-commerce portals like Amazon,
Flipkart and many more which not only changed the basics of
trade and commerce but also paved a way to reach out almost
everybody potentially in understanding their needs. Further
successful implementation of unique ID through Aadhar has
created lot of faith among people about dynamics of public
administration through e-governance though there were some
hick-ups faced for its security issues.
However common farmers who make about more than 60% of
Indian population are still ignorant of the potential of
digitalization except for those who came in contact with private
organizations' successful initiatives like ITC's e- Choupal, EID-
Parry's Indiagriline and Shakthi and such few who acted upon
strengthening agribusiness supply chain using Information
Communication Technology (ICT) applications.
In fact digitalization is a much needed device to realize the
strength of Indian Agriculture when it is used to track
agribusiness supply chains, which are being presently controlled
by intermediaries like agents, processors and stockists before
reaching end consumers in their respective supply chains of
almost all crops in the absence of agile and transparent
governance. A research carried out in the state of Karnataka by the
authors Nagaraj BV and Y.T Krishnegouda (2015) points out the
fact that there is a distress sales of more than 65% of paddy which
is being sold out at the farm gate bypassing all standing norms of
Abstract
Introduction
Digitalization in India sounds to be the most wanted requirement
to get connected with whole nation in order to bring in
transparency in governance and to reach out the common and
poor in a much effective manner. There has been over 60% rural
population with average literacy rate of just 74% who are under
the influence of the current of liberalization, privatization and
globalization since three decades. During this phase of three
decades, there has been tremendous growth in food retail sector,
export of agricultural produce from India, direct marketing
initiatives like e-choupal of ITC, which in turn exposed Indian
farmer to make agri-business differently. But all this happened
with non-transparent governance of agricultural supply chains
and hence in most of the cases common farmer was the biggest
loser for not being equipped to face rapid change in trade and
business. Research findings show that in Karnataka, annually for
paddy alone there has been a distress sale of more than 65%
(2015) which is not routed through proper channel (APMC), the
reasons being poverty, middlemen and search for better selling
price. The present study uses the existing status of digitalization
done at schools, rural banks, agricultural research centers spread
across the state of Karnataka to build a conceptual network of
digitalization to bring transparency in agricultural supply chains
and policy requirements to revive the economics and lives of
common farmer which in fact is our primary motive since
independence.
Digital India is an initiative to ensure that Government services
are made available to citizens electronically by improving online
infrastructure and by increasing Internet connectivity. It includes
plans to connect rural areas with high-speed internet networks
and envisages
• The creation of digital infrastructure
• Delivering services digitally
• Digital literacyDigital India is one among the top
28 IFIM International Journal of Management FOCUS October 2016 - March 2017|
selling through APMC and that every year the worth of paddy
produced in a year is $1.3 billion (approximately 8000 MT/ year).
Further the study estimates 44.6% of value mark-up just for
stocking and milling of paddy soon after harvesting which is being
presently managed by rice mill owners and a network induced by
them (referred to as harvesting network) mainly due to inadequate
storage facility and policy lapses of the government in managing
the harvest volume of paddy even today. If this issue is managed
within the ambit of well administered ICT enabled applications
across its value chain, paddy supply chain can create wealth of over
20% on its investment (i.e., $1.3 billion to buy from farmers after
harvesting, stocking and milling) every year which alone if
controlled can transform the face of agriculture.
ITC's e- Choupal, EID- Parry's Indiagriline are the strong
evidences on agribusiness supply chains in Indian context on how
ICT applications help farmers as well as organizations to make
mutually profitable avenues apart from exposing farmers to food
and hygiene requirements of the world, producing export quality
agricultural produce just by supporting them with information
and guidance thereby making their lives economically better and
futuristically potential. With the support of such practical
ventures and documented research work carried out on
agribusiness supply chains across the world, this paper tries to
bring about the conceptual model of managing agribusiness
supply chains with the existing ICT infrastructure available at
government schools and offices of public administration in sync
with digital India initiatives with special reference to supply chain
of paddy in Karnataka.
The present work is based on the thinking leads from extensive
review of literature in support of agribusiness supply chain
management using ICT applications apart from its practical
ventures by organizations in Indian context to understand the
existing status, support systems provided by the governments,
agricultural and financial institutions; policy lapses and scope for
further development.
This paper uses the basic research cues from a study done by the
authors on value chain analysis of paddy. The theoretical
framework and its outcomes are discussed in the following
sections. Primary data is collected from 196 farmers from across
the state according to their holding pattern and Secondary
information is collected from available literature and web sources
to know the existing IT infrastructure made available by the
governments (both central and state) in Karnataka at schools,
offices of public administration, banks in order to meet the
functional requirements at these work centers. Keeping the
principal objective of digital India initiatives and its derivable
benefits to the common public in mind and synchronizing the
existing IT strength mentioned herewith, the plausible
conceptual model is proposed for effective agribusiness supply
chain management of paddy in Karnataka.
Research Objective
Methodology
Literature ReviewExtensive literature search on agribusiness supply chains; need
and importance of agricultural value chains; cases of successful
agribusiness supply chain models in the context of different
nations across the world and in India using ICT applications and
in particular value chain tracking of paddy in Karnataka as a part
of authors research work and published papers on the same were
found to suit the relevance of the topic. Extracts of the same are
presented as follows.
One of the key dimensions of VCA is “governance”. It has become
a dominant theme in food value chain discussions in recent years
(Gereffi, 1994; Kaplinsky and Morris, 2001; Humphrey, 2006a, b;
Dolan and Humphrey, 2004). It indicates the degree of power and
defines the strength in a chain's performance. Kaplinksy and
Morris (2001) classified it as “legislative”, “executive” and
“judicial governance” that, respectively, allowed compliance of
standards, assisting value chain participants in complying to
standards and co-coordinating their compliances.
Using Case study of ITC's e- Choupal, Zabir Ali and Sushil Kumar
(2011) empirically analyzed the role of information and
communication technology in enhancing decision making
capabilities of Indian farmers and found that users of e-choupal
are significantly better in decision making when compared to non-
users on many practices across the agricultural supply chain. They
also found the various factors like education background, social
category, income and land holding pattern also influence farmer's
decision making ability. Further they emphasized the importance
of designing ICT enabled information systems to suit the socio-
demographic profile of farmers.
Soham Sen and Vikas Chaudhary (2012) in lists various working
models of agribusiness supply chains across the world with the
inputs of ICT applications. The authors strongly recommend
with evidences that inclusion of smallholders in agribusiness
supply chains is possible in ICT enabled environments. Quoting
the successful implementation in India about e-chaupal of ITC
Ltd., EID Parry's Indiagriline and how Suguna poultry used ERP
system in managing their agribusiness supply chain, the authors
identify the need for change in existing policies of agricultural
marketing towards broader perspectives of managing agribusiness
supply chains effectively in tune with the far reaching abilities of
technology and digitalization.
M Umagowri and M Chandrasekaran (2011) in their study An
Economic Analysis of Value Chain of Banana in Western Tamil
Nadu brings out the fact that to prevent the post-harvest loss there
is need for training in post-harvest handling of fruit bunches; to
improve the marketing efficiency, the growers should sell their
produce directly to the wholesaler or tie up with the processor or
retailer wherever feasible; and farmers must have the latest market
knowledge, for taking better sales decision.
Niraj Kumara and Sanjeev Kapoor (2010) in their research ”Value
Chain Analysis of Coconut in Orissa” finds that, no major value
addition is done by the players at any level. The study has observed
a high ratio of vendors v/s farmers and aggregators v/s vendors in
the channel. In spite of this high ratio, both vendors and
aggregators are able to earn profit and are continuing the
business. It is suggested that coconut based industries should be
29IFIM International Journal of Management FOCUS | October 2016 - March 2017
jointly promoted by state industry department, state agriculture
department
Nagaraj BV and Dr. Y.T. Krishnegowda (2015) in their empirical
research article, “Value Chain Analysis for derived Products from
Paddy- a case of Karnataka” finds step wise value addition for all
stages of paddy cultivation, harvesting, milling, wholesale & retail
markets of rice; value addition at solvent extraction plant using
rice bran and husk aft different industries. It is further found that
the highest gain (44.6%) in the value chain of paddy is for a
network of people who take care of paddy soon after harvesting till
its milling and the lowest paid stakeholder in the paddy value
chain is the farmer, who is a source of paddy supply chain.
Nagaraj BV and Dr. Y.T. Krishnegowda (2015) in their work
“Supply Chain of Paddy : an opportunity to revive for continual
growth of agriculture sector?” tries to find a conceptual solution to
the smooth functioning of paddy supply chain and conceptually
evolves “Harvest Reserve Fund” based on the responses collected
across all stake holders of integrated value chain of paddy that can
work as an engine producing high returns every paddy harvesting,
paying back the farmers in the form of regular income apart from
striking equally balancing all involved in the chain.
The agricultural supply chains in India and their management are
now evolving to respond to the new marketing realities thrown by
the wave of globalisation and other internal changes like rise in
the level of disposable income of consumers, change in the food
basket of the consumers towards high value products like fruits,
Agribusiness supply chains in India: reach and
limitations
vegetables and animal protein. The new challenges of the
agricultural economy of the country have now spurred the
government agencies to go in for different legal reforms for
enabling and inviting private investment in agricultural
marketing infrastructure, removing different entry barriers to
promote coordinated supply chain and traceability. The amended
APMR act, the major agricultural Marketing Act of the country,
being implemented by the different states of India, now contains
enabling provisions to promote contract farming, direct
marketing and setting up of private markets (hitherto banned).
These measures will go a long way towards providing economies of
scale to the small firms in establishing direct linkage between
farmers, and processors/ exporters/ retailers, etc. Thus, the
measure will provide both backward and forward linkages to
evolve integrated supply chains for different agricultural produce
in the country.
While studying the supply chain-management issues of the
agriculture sector, it is worthwhile to analyse the prevalent market
channels of some commodities to bring the discussion to
perspective. Marketing channels for fruits and vegetables in India
vary considerably by commodity and state, but they are generally
very long and fragmented. Figure 4 presents typical marketing
channels for mangoes and onions in Tamil Nadu. The majority of
domestic fruit and vegetable production is transacted through
wholesale markets although depending on the state and
commodity; farmers may sell to traders directly at the farm gate, to
traders at village markets, or directly to processors, co-ops and
others. Some of the common problems in agricultural supply
chains in India are presented in table-1 below.
Table - 1: Broken Links in Agri cultural Supply Chain in India
Stage 1 –
mroduction
Poor extension
of quality inputs
Low productivity
Deficient and inefficient production management
Non demand linked production
Improper post- harvest management resulting in poor quality
Stage 2 - Supply Chain Issues
Lack of storage, Poor transportation High wastages Multiple intermediaries Fresh produce transported to mandis in open baskets or gunny bags stacked one on top of the other Cold chain absent or broken, produce deteriorates rapidly Food safety is major concern: Hygiene and pesticide MRL not monitored
Stage 3 –
Processing
Low processing
Lack of quality
Poor returns
Low capacity utilization
Stage 4 –
Marketing
Poor infrastructure
Lack of grading
No linkages
Non- transparency in prices
Long delays from producer to retailer
Source: adopted from http://www.manage.gov.in/studymaterial/scm -E.pdf
Note: Each stage works
in an isolated manner resultin g
in multiple losses across the value chain.
30 IFIM International Journal of Management FOCUS October 2016 - March 2017|
There has been a tremendous support to agriculture from the
government and non- government organizations across the
country through various programmes due in the interest of the
farming community. Since independence, Indian Council of
Agricultural Research(ICAR) an autonomous organisation under
the Department of Agricultural Research and Education (DARE),
Ministry of Agriculture, Government of India. has set up many
agricultural universities and research centers across the country to
educate farmer for better productivity and achieved remarkable
success in many areas like seed development, better agricultural
practices, better yield, agricultural engineering and technology,
exports etc.,.
In order to help farmers financially, banking organizations like
NABARD has in its network more than 1800 rural banks
operating across the country. Albeit all efforts from many such
organizations, agriculture in India faces many problems like poor
education level, socio economic conditions & living standards of
farmers who are dependent on agriculture since generations,
which in fact obstructing the pace of growth in agriculture sector
as a whole.
The supply chain of agricultural produce in India is well
supported by government up to the stage of farm production and
later part of supply chain is dominated by economically strong
intermediaries who act as traders, next level industrial processors,
stockists, wholesalers and so on and hence much of the benefit of
value addition to the basic produce is encashed by them. The
network of these intermediaries with farmers is so enduring that
farmers exercise more faith in dealing with intermediaries rather
than any government schemes / systems existing to have better
governance (eg. APMC) over the supply chain. This practice over a
long period of time has put farmers in a loop of earning and
spending without much scope to better their living standards.
Further this network becomes instrumental in forming different
colonies and groups with different interests influencing electoral
system and hence become attractive political destinations for the
people who run governments in a democratic system like India
through elections. Hence policies also get biased in serving the
interests of such powerful networks rather than being rational and
integrative.
Though all agricultural universities, institutes, research centers do
have internet connectivity as of now, they are working as internal
support systems to reach out annual goals of departments and
there is no integrative effort of these entities to support entire
supply chain of the agricultural produce instead of stopping their
assistance soon after production. Thus there is a burning need to
track agricultural supply chains through ICT, digitalization
applications and revision of policies in in accordance with todays'
requirement in order to efficiently meet the goals set out by these
stakeholder bodies.
Value chain of paddy (as an example) in
KarnatakaPaddy is a food crop in India with largest area under cultivation
contributing to about 20% of its world production. Rice the
cereal inside the hull of the paddy is used as the staple food in
India and 2/3rd of the world as well. Karnataka stands 5th (4388
kg of paddy / Ha) in rice productivity and 12thin its area under
coverage (1.416 million Ha, 2011-12) in India.
In Karnataka many varieties of paddy (both scientifically /
traditionally developed) are cultivated in almost all districts as per
the suitability of agro climatic conditions. Out of 31 districts, 14
districts produce high yielding (more than 2750 kg paddy /Acre)
fine quality rice. Unlike other cereal foods, paddy after initial
hulling process, gives vide range of products viz., fine rice, cut rice,
derived products (from large sized varieties) like Poha (known as
Avalakki in Kannada), stuffed rice products (known as
Churumuri / Mandakki in Kannada) and by-products like Husk
& Rice Bran. One of these by-products Husk is used as fuel in
steam / power generation in process industries besides being used
in Brick manufacturing as burning curator. Ash remains of paddy
husk is further used as farm yard manure with additions of some
micronutrients. Another by product rice bran contains about 18-
20% of oil content extracted as Rice Bran Oil (RBO) in solvent
extraction plants. In Japan RBO is used as edible oil since many
years, which is also known as heart oil for its vitamin E rich
content with high smoke point and antioxidant √ - Oryzanol,
which possess high nutraceutical value with properties to reduce
low density cholesterol absorption in blood, lowering of TSH and
skin care. There has been extensive research in Japan on RBO and
commercial extraction of √ - Oryzanol. In India till recently the
usage of Rice Bran Oil was limited and now with the awareness
among the customers it is being used as edible oil which assures
not only good health but also economically viable in comparison
with other edible oils available in the market. (Source
:http://drd.dacnet.nic.in/Status Paper - 05.html)
Based on the research output reported by Nagaraj BV and Y.T
Krishnegowda in International Journal of Managing Value and
Supply Chains (March 2015) for paddy based on information
collected from 196 farmers through interview, the estimated
production quantity for the year 2012-13 in Karnataka,
participants of harvesting network of paddy, their financing
mechanism, benefits and quality of life the following section of
value chain analysis of paddy is adopted and presented in the
following sections.
Table - 2: Value Chain Analysis of Paddy
Paddy at
Farm Farmer Agent NA 1606 49707264 79829865984 -
Paddy Agent Stockist NA 1686 49707264 83806447104 4.9 (Commission to agent)
Paddy to Rice Stockist Rice Mill NA 1790 49707264 88976002560
6.17 (Cost of
milling+Storing)
Product From To
% of
paddy Price/Qntl
Qtty
(Qntl) Value (Rs.) % Value Created
31IFIM International Journal of Management FOCUS | October 2016 - March 2017
a) Rice Paddy Rice 67% 3500 33303867 1.1279E+11 -
b) Levy Rice *
c) Cut rice Paddy Cut rice 8% 2000 3976581 2684192256 -
d) Husk Paddy Husk 18% 300 8947308 5219262720 -
e) Bran Paddy Bran 7% 1500 3479508 7953162240 -
Total
(a+b+c+d+e)
Rice Mill
Mill Owners
(stockists)
NA
NA
49707264 1.28647E+11 44.6
Rice
Mill Owner/
Stockist
Agent
3450
33303867 1.14898E+11 -
Rice
Rice Stockist
Wholesaler
NA
3500
33303867 1.16564E+11 -
Rice
Wholesaler
Retailer
NA
3700
33303867 1.23224E+11 5.71(Commission to agent)
Rice
Unorganized
Retailer- 95%
Customer
NA
4200
33303867 1.39876E+11 13.5
Rice
Organized
Retailer- 5%
Customer
NA
4600
33303867 1.53198E+11 24.3
* Levy rice quantity and price is regulated by the government from time to time (not a fixed quantity)
Product From To
% of
paddy Price/Qntl
Qtty
(Qntl) Value (Rs.) % Value Created
Unlike many staple food commodities, paddy creates a distinct
supply chain for its variety of by-products and their usage by many
stakeholders including end consumers and industrial users.
Recent study carried out by Nagaraj BV and Dr. Y T
Krishnegowda (2015)on value chain analysis of paddy in
Karnataka and its derived products reveal that the highest value
addition of about 44.6% in the chain (see table 1 below)is
recorded through harvesting & stocking at optimum moisture
content, milling and packing of rice and selling of other by-
products like rice bran and husk to respective industrial users
from rice mills. All these activities of buying paddy from farmers
soon after harvesting, stocking and preserving them with
optimum moisture content, milling paddy and sellingby-products
at right time are handled by a well organized network of people
involving potential farmers, agents, stockists and rice mill owners
(hereon this group of people is referred to as Harvesting Network)
who assume multiple roles as farmers, stockists, wholesale and
retail merchants in the entire supply chain of paddy. It is because
of this risk involving complicated high investment activity
(investment of approximately Rs. 9000 crores every year) executed
by the harvesting network, it commands over rest of the value
chain of paddy right from influencing price fixing for different
varieties of rice, its stocking and marketing as the role of
government in this entire process is very much limited.
Participants of harvesting network of paddy: Characteristics and Functions
Participants Characteristics in social set up FunctionsSemi- Medium to large scale farmers
Themselves farmers, Opinion Leaders, own wholesale dealership, large land holding, maintain good relationship among other channel members, influential, politically able people in villages
Will observe constantly about practices of other small farmers, financially help them at times; purchase paddy from small farmers either directly or through agents to stock it in their own facility/ Govt. go -downs / rice mills on rent
Private commission agents
Usually farmers / non farmers, who maintain balanced relationship between farmers and stockistsand rice mill owners; acts as catalyst to carry out harvesting of
paddy; they can even act as agents to sell rice to wholesellers after milling; can assume roles of wholesale merchants, partners of rice mills
Identification of potential farmers for harvesting; negotiating for price; understanding the pulse of the farmer in influencing sale of paddy as per his requirement
Stockists& Rice Mill Owners
They can be potential farmers, wholesalers of paddy & rice; foresee the demand and provide financial assistance for harvesting as per their strength; politically influential;
partners
of rice mills; licensed merchants or exporters; run parallel businesses
Stocking paddy at optimum moisture content and processing; Establishing and developing market, creating demand, mobilizing finances either through banks or open market or sel f
32 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Financing mechanism of harvesting network
a) Semi-Medium to large farmers
b) Commission Agents
c) Commission Agents
Benefits of paddy harvesting to participants of Harvesting Network
*Societal Benefit: is perceived as the benefit to the larger farming community of marginal and small farmers who account for about 76.4% of all farmers in the state.
Observe that the benefits are almost personal with varied level of
risks associated and societal benefits in reaching out large
population involved in agriculture is just marginal. Note that the
benefits are almost cyclic in each year without much deviations.
This works as a routine for all participants of the harvesting
network. Though the personal benefits seem high for all involved
in harvesting network, it is to be understood that they finance this
activity by sourcing funds from the open market in most of the
cases at high interest rates; since the proportion of gain is high, it
offsets the effect of interests paid there by. As most of the finances
arranged by the participants of harvesting network comes from
private financing bodies or banks, to whom they have to pay huge
interest, the quality of life enjoyed by them can be rated as “just
above average” and this continues to be their growth pattern year
on year. Most beneficial in this network rice mill owners, semi-
medium and large farmers who invest on their own and stock
paddy or rice at their own facility; hence quality of life enjoyed by
them can be rated as “Good”. However for nobody in the
harvesting network, the quality of life can be called “excellent” as
there is very less evidence of finding any participant of the
harvesting network who are elevated differently in reaching out
the larger population of small and marginal farmers, improving
their business acumen, transforming themselves as diversified
farmers. Thus the present process of post harvest scenario of
paddy being handled by harvesting network sets a kind of routine
for all involved in agriculture with either marginal benefit in large
or “Just above average” or “good” quality of life. The approximate
number of farm house holds with respective quality of life due to
paddy cultivation in a state can be summarized as follows.
Rating Scale for Quality of Life*
33IFIM International Journal of Management FOCUS | October 2016 - March 2017
Summary of the above table can be visualized as follows
2309000
1283000
760000
307000
41000
0
500000
1000000
1500000
2000000
2500000
Poor to Marginal Marginal Average Avg. to Above Avg. Above Avg - Good -Very Good
Outcome of Existing Paddy Supply Chain No.of Farm house holds <> Quality Of Life
It is quite evident that marginal and small farm house holds i.e.,
almost 75% of families dependent on agriculture are
continuously put in a loop of experiencing poor to marginal
quality of life because of their marginal earnings from agriculture
of paddy. This can be very well attributed to the existing practice
of its supply chain which is proving itself inefficient in paying
farmers with sustainable income. This infact is making farmers to
loose confidence in agriculture. With present supply chain
practice, there is no scope for constant increase in pricing of
paddy, improvements to cut down cost of cultivation need
mechanization which can not be afforded neither by farmers nor
by governments as it need huge funding and willing involvement
of private agencies which is very difficult to happen.
Under these given circumstances the only way out possible is to
control the agriculture and supply chain of paddy as a regulated
activity by the government. By having such a regulated system for
agriculture of paddy, it is possible to revive the whole agriculture
sector itself as more than 60% farmers in Karnataka (or in India or
in 2/3rd of the world agriculture community) are involved in
cultivation of paddy. To have regulated system in place for
agriculture of paddy, it is very essential to run the complete supply
chain of paddy under participative and legislative e-governance
model (Kaplinksy and Morris (2001) on dimensions of VCA). The
only area in existing supply chain of paddy where government is
not an active participant is itspost harvest scenario, which requires
huge funding & trained manpower in addition to building new
stocking capacities. The approximate amount to control post
harvest scenario of paddy in Karnataka state is estimated at Rs.
9000 crores annually with a growth rate of 45% (Table 1).
Need for digital supply chain of paddy
It is evident from table-2 above that there is a disproportionate
wealth distribution across the supply chain of paddy even though
the law of high risk- high return holds true. The stocking or
milling firms/intermediaries earn the highest value of 44.6% of
their investment and if we observe the practices being followed in
buying paddy by farmers from these intermediaries, there is no
fool-proof tracking system by the government / APMC and actual
quantities produced are just based on estimates of agricultural
departments and there is no accurate way to verify these estimates
as more than 65% of paddy produced is sold at farm gate by the
farmers to many intermediaries who maintain an enduring
relationship with farmers in terms of helping them financially
when required across the year by serving them through part
payment (in 53% of cases) to their (farmers) selling of paddy
during harvesting. With the existing practices of paddy supply
chain following questions remain unanswered with very less to
justify on the part of governance.
[Note: Pre- production losses i.e., selection of quality seeds,
authentication, land preparation, cultivation practices, soil
testing, selection of seed variety is dropped in the discussion as the
losses during this phase are attributed to many socio economic
factors of farmers, weather conditions etc., which cannot be
estimated uniformly. Hence only tangible and controllable loss to
farmers after harvesting due to improper governance issues is
herewith focused].
1. No guidelines for buyers of paddy at farm gate.
Vast area under production. Hence no uniform
mechanism be monitored.
2. Will the farmer get complete payment for the paddy sold
immediately to agents?
No. he gets partly paid (in 53% of cases) & he is happy with
it.
3. Why more than 65% of paddy is sold out at farm gate?
No adequate stocking facility by the government. So
government has to be dependent on rice mills.
4. How do the stockist / mill owners arrange payment
during harvesting?
They are large farmers; arrange money from markets,
banks and sometimes raise agriculture loans through
farmers
5. Is there any verification mechanism to verify the
estimated production figures with actuals?
No monitoring system be planted as the area under
production is vast.
6. Who will fix price of paddy? Is there a scientific base for it?
Stockists. It is not related to inflation in the economy.
7. Is there any mechanism to track the quantities
stocked/transacted at rice mills?
There is a mechanism but accuracy cannot be exercised.
8. Is there any way to control overstocking of paddy / rice b y
rice mills?
No exhaustive mechanism
9. Is there any chance to earn high for paddy farmer in a year
so as to get better QOL?
Not possible for a routine paddy farmer
10.Are the mill owners / stockists lead exemplary QOL?
No. They are also formers who worry arranging finance f o r
harvesting.
The following conceptual model is believed to answer the above
questions effectively seeking connectivity between government
offices like district and gram panchayats, Govt. offices, Schools,
ICAR, Research Stations, KVKs, APMCs', Banks (Need for
commodity banking), which do already have IT infrastructure in
place. Now in order to track supply chain of paddy the very
important new interfaces that are to be established are
Conceptual model for digitalization of paddy
supply chain
34 IFIM International Journal of Management FOCUS October 2016 - March 2017|
1. Profiling of each paddy farmer & data on his agricultural
practices, seed selection, problems, quantity grown etc., being
reported at regular basis electronically. An established format
may be asked to be filled up by school children (studying VII,
VIII & IX classes) of respective village & the same be uploaded
from centralized computer labs of schools in each taluk.
2. All rice mills, rice bran extraction plants to be tracked online
for its operations, receipt and delivery of goods to accurately
track the demand and supply.
3. There should either be a Public-Private-Partnership (PPP) or
One Time Harvest Reserve fund (HRF) (Nagaraj BV & YT
Krishnegowda 2015) set up by contribution of all farmers in
buying of paddy during harvesting through a creation of
designated fund for the purpose. Banks need to manage and
monitor the fund.
4. Designate all agents who work during crucial season of
harvesting as government recognized paddy supply chain
assistants with RFID enabled identification. Further stockists,
wholesalers and retailers of paddy, rice and industrial users of
paddy by-products
5. Rice mills should be the single points of reporting for paddy
sales. Government should pay rent for stocking paddy and rice
until its delivery in the market.
6. APMCs' need to track and cross-verify quantities across the
supply chain & report exhaustive and accurate supply and
demand data to all supply chain stake holders which can be
made online.
Farming Harvesting Stocking Paddy Milling/Packing Selling of Rice
Govt. approved
Stock Yards
Kisan ID
(RFID enabled) with
farmer detail s
Fixing of price based
on yearly BCR
Digitally controlled Rice Mills to
act as hub of data to track the
supply chain further
PPP* / One time HRF** to
buy paddy
from farmers
(Help of RRBs’)
Schools with
ICT facility to
get farm data
Schools with ICT
facility to get
harvest data
Diagram 1: I-KISAN (PPP/HRF) Paddy Supply Chain Model
* Public Private Partnership (PPP) for buying, storing, milling of
paddy and dispatch of rice: The present mechanism/network
among farmer-agent-rice mill owner during harvesting for buying,
storing, milling of paddy make a private entity (i.e., referred to as
“Mill owners & Stockists”) in the PPP model which owns 50% of
the process and Govt./a firm nominated by the government will
have ownership of remaining 50%
** “Farmers One Time Harvest Reserve Fund” is a fund to manage
post harvest scenario of paddy. This fund will be raised from all
the farmers as one time investment plan based on their strength
(size of the holding). As there is a huge scope of making annual
gain of 44.6% every year through harvesting, the part of this
revenue can be shared to all farmers annually for their life time,
which may even cover life and crop insurance. The remaining part
of the revenue can be used for agricultural developments,
mechanization, reduction of labor cost, increase productivity,
seed development, exports, building new opportunities in
agriculture through innovation and so on. Managing post harvest
scenario of paddy using “Harvest Reserve Fund” need strict
adherence to participative and legislative e-governance which
need the following things to be in place.
1. “Harvest Reserve Fund” should be managed and maintained
by rural banks which are functioning all over the state in
almost all rural areas.
2. New team from APMC for paddy harvesting to be formed with
new set of guidelines suiting to the requirement of new supply
chain practices and personnel having separate designation &
electronic IDs' to be made available on the task.
3. Farmers to be tracked with a unique electronic ID (Kisan ID)
4. Purchase of paddy should happen primarily at rural banks and
its receipt should be used for further stocking and processing
as a document of trade authenticity
5. The existing skilled human resource instrumental during
paddy harvesting to be identified and employed by the
government, later the same set of resource may be used for
bringing other agricultural products to the market.
6. All private stocking warehouses / rice mills to be used on
rental basis until the sophisticated government warehouses are
built
7. All rice mills to be digitalized and centrally controlled through
ERP system for receipt and delivery of paddy and related
quantities
8. “Harvest Reserve Fund” should not be used as an alternative
arrangement in place of state agriculture budget.
Farmers' One time Harvest Reserve Fund (HRF) is constructed
based on the land holding pattern of farmers in Karnataka which
is the only measure of their economic status and financial stability
(table-3). Primary structure of contribution to HRF from farmers
belonging to each class is worked out based on financial capability
to invest (table-4). Finally the derived benefits at the rate of 45%
(approximated value to 44.6% of table-2) of the total investment
on harvesting of paddy is calculated taking hypothetical
importance to possible heads of expenses (table-5). Finally annual
benefits to each former is calculated by considering 25% of the
total returns distributed to different class of farmers as per their
investment (table-6) is presented as follows.
Construction, primary structure and benefits of
Harvest Reserve Fund
Table – 3: Landholding pattern of farmers in Karnataka
Size (Class) No of Operational holdings (‘000 )
Area of operational holdings (‘000 ha)
Av g. size of operational holdings (ha)
Marginal (Below 1 ha)
3848
1851 0.48Small (1 to 2 ha)
2138
3020 1.41Semi Medium (2 to 4 ha)
1267
3393 2.68Medium (4 to 10 ha)
511
2904 5.69Large(Above 10 ha)
68
994 14.71
Total
7832
12161 1.55Source: State Agriculture Profile Karnataka- Agricultural Census 2010-11; a part of reported research by the authors
Required amount for farmers' One Time Harvest Reserve Fund =
Rs. 9000 Crores (an amount to buy paddy in one year of
harvesting)
Total number of farm house holds = 7832000
Thus investment/house hold = 90000000000/7832000=11,491
(Rs. 12000 approx.)
35IFIM International Journal of Management FOCUS | October 2016 - March 2017
Investing Rs. 12000 is very difficult for marginal and small house
holds, whereas it is easy for semi medium, medium and large
holders. Keeping in view the capability of different size of
holdings the following one time investment amounts can be fixed.
Size (Class) No of Operational holdings (‘000 )
Amount of one time investment (Rs.)
Total Amount (Rs.)
Marginal (Below 1 ha) 3848 6000 23088000000
Small (1 to 2 ha) 2138 12000 25656000000
Semi Medium (2 to 4 ha) 1267 20000 25340000000
Medium (4 to 10 ha) 511 30000 15330000000
Large(Above 10 ha) 68 40000 2720000000
Total 7832 92134000000
Source: A part of reported research by the authors(2015).
Revenue through paddy harvesting activities (assuming 45% return) = 41460300000
Table - 5: Sharing of the revenue due to paddy harvesting
Total annual revenue 45% on Harvest reserve fund
Rs. 41460300000
Annual Return to farmers with life and crop
insurance
25% of total
revenue Rs. 23033500000
Buying mechanized instruments for cultivation 10% of total
revenue Rs. 4146030000
Payment of salaries & rentals to the resources of
harvesting activiti es & Training of farmers in
handling advanced instruments / methods in
agriculture
5% of total
revenue Rs. 2073015000
Addition to reserve fund
5% of total
revenue Rs. 2073015000Source: A
part of reported research by the authors
(2015).
Table - 6: Annual Return to all farmers
Size (Class)
Amount for one time investment (Rs.)
Return @ 25% p.a.*
Total Amount (Rs.)
Marginal (Below 1 ha)
6000
1500 5772000000
Small (1 to 2 ha)
12000
3000 6414000000
Semi Medium (2 to 4 ha)
20000
5000 6335000000
Medium (4 to 10 ha)
30000
7500 3832500000
Large(Above 10 ha)
40000
10000 680000000
Total
23033500000
Derived benefits of the conceptual model1. Elimination of middlemen; All farmers are equally treated;
2. No power imbalance in the supply chain & no power play
because of transparency
3. Maximum benefits to farmer due to harvest reserve fund.
Huge benefits of minimum 20% return of investment for
harvesting, which can be used for lot of developmental
activities.
4. School children get exposure to agricultural economics
5. Continuous periodical income for the life time to all farmers
6. Enhanced scope for using modern agricultural practices
which can increase productivity & reduce cost of farming
7. Scope to focus on large and semi medium farmers for exposing
them to international standards of food requirements; focus
on small and marginal farmers to move them to better quality
of life
8. Scope to enhance confidence level of farmers at the bottom of
agriculture pyramid.
Source: A part of reported research by the authors (2015).
*This amount will be the continuous return on farmers' one time investment payable annually throughout his/her life time.
9. Exploring possibilities to reach out the best standards in food
export and new opportunities of growth through agriculture.
10.Harvest reserve fund during un-season will earn interest and
the annual return credited to farmers account also keeps on
growing which in turn help farmers in a long run as provident
fund.
11. No question of market support price (MSP) for as the
production will be demand based after few years (5-10 years) of
implementing the model. Even if it exists, it will be based on
point-to-point cases and not en-mass.
12.Agricultural loans which seek waive-off after some time in
existing system start diminishing over a period of time, there
by making farmers self-reliant.
1. Strict guidelines to treat paddy as regulated commodity by the
government in which entire ownership of supply chain is
managed by Government-Agricultural Institutes-Rural Banks-
PPP agreements or one time HRF & Rice-mills under the
ambit of e-governance.
2. Vital middlemen in paddy supply chain (agents who work
actively in paddy harvesting purely for commission) who make
virtual connect between farmers and stockists / mill owners to
be appointed as paddy supply chain assistants by the
government with digital ID. Later the same persons can be
used to maintain supply chains of other commodities also (if
needed).
3. Others acting as middlemen in paddy supply chain (semi
average/ average / large farmers) with identities like stockist,
wholesale merchants and mill owners are to be differently
motivated to their next potential level of agriculture and be
involved to improve their existing agriculture practices
towards excellence (mechanization, exporting, horticulture
and other farms of agriculture) with better assistance
programs.
4. Education department can design a subject in their
curriculum for classes VII VIII and IX on agricultural economics
(Each district has Krishi Vigyan Kendra which may be asked to
educate students with limited number of sessions). Evaluation
component can be based on practical exposure through
conducting structured survey to collect and report information
on agricultural statistics (from each farmer regarding area used for
cultivation of each crop, quantities of seeds, fertilizers, varieties
used, cost, problems faced and harvesting details like yield,
quantity sold, unit rate, product selling mode etc.,) to the
government thrice in a year first during commencement of
monsoon, second at the end of monsoon and start of winter and
third at the end of winter and start of summer (reporting can be
online as almost all taluks in each district of Karnataka will have
at least one government school having ICT enabled
infrastructure. There are more than 5000 government and aided
schools situated in rural and semi-urban places across the state –
source: dsert.kar.nic.in/html/chapter06.html). This data collect
this way is a real time data and very crucial to run effective supply
chain of paddy to meet expected dividends. This step would help
students to realize agriculture as a potential field of growth and
expose them to new thoughts to bring more transparency to the
Policy needs for digital agribusiness supply chain
management
36 IFIM International Journal of Management FOCUS October 2016 - March 2017|
existing state of affairs and prosperity to the families
dependent on agriculture.
5. Rural banks are to be given autonomy to act as Agri-Wealth
Banks who will actively involve in
a. managing one time Harvest Reserve Fund (HRF) or such fund
originated through Public-Private-Partnership for paddy
harvesting payments
b. certifying the quantities of paddy produced by each farmer, its
price, payment to farmer and maintain stocks & sales of paddy
at rice mills / warehouses.
Though digitalization of the nation is an apt and priority project
initiated by the government, ICT enabled infrastructure has been
developed since 1990 (post liberalization era) rapidly across
different functions of the society viz., govt. administrative offices
at national, state, district, taluk and to some extent village
panchayat offices, schools, banks and so on in order to improve
the efficiency of services. Parallel to these efforts development of
human resource also has taken place accordingly. Now with
digitalization being in place, some of the complex processes in
society and agriculture are to be focused which are otherwise
dominated by intermediaries and private parties who kept on
exploring huge benefits, one among such processes is e-
Conclusion
governance of agricultural supply chains and in particular supply
chain of paddy.
Since paddy is an agricultural produce cultivated by more than
60% of the farmers in Karnataka, its geographical spread is vast
and to maintain its supply chain for effective results, timely and
enormous data need to be collected and tracked simultaneously
and this cannot be accomplished until all the supporting
functions viz., government, agricultural institutes, banks,
processing units (rice mills) and offices / facilities (schools, taluk
& district administrative offices) with ICT infrastructure along
with all stakeholders of its supply chain work unitedly under e-
governance made possible by digitalization.
As evidenced through the example of paddy supply chain, there is
a potential return of nearly 45% on every year's paddy harvesting
provided there is a bureaucratic e-governance across the agile
supply chain which can serve as boon to solve many issues of
agriculture. It is now time for the policymakers and regulators to
focus on the issues related to supply chain of paddy and agri-
business supply chain as whole which in true spirit help the
farmers to develop themselves economically year on year. Thus it
can be concluded that digitalization with coordinated efforts of
people related to agriculture, e-governance of agricultural supply
chain of paddy can set agriculture on high growth trajectory.
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Zabir Ali and Sushil Kumar, “Information and Communication Technologies (ICTs) and farmers' Decision-Making across the Agricultural Supply Chain”,
International Journal of Information Management. Apr 2011, Vol. 31 Issue 2, p149-159
37IFIM International Journal of Management FOCUS | October 2016 - March 2017
HR Analytics:
A Big Deal for C-Suite in Talent Management
*M.B.A., M.Phil., UGC-NET (Ph.D), Asst. Professor- OB/HRM |** MCA, M.Phil, Associate Professor – SystemsShri Dharmasthala Manjunatheshwara, Institute for Management Development (SDMIMD), Mobile: 9916122245
Mohamed Minhaj*| L. Gandhi, M. A**
Abstract
HR Analytics- Objective
In this highly networked business world, there may be some
dichotomous perceptions in the minds of C-suite such as why does
one executive outperform his/her colleagues? What is the effect of
training and development programs on company's overall
performance? What will be the minimum duration for new
personnel to get acquainted with the system and start showing
results? Why do some Managers flourish and others perish? If one
stop solution is surfed to all such interrogations, then they have to
hit the Big Data and derive logical analysis. In fact, the companies
are not in dearth of data, they do have abundance of data to
critically analyze. But, the million dollar question is how to use it
logically for getting required analysis. If the concern is to logically
analyze data than just compiling them, then HR Analytics come
in handy in all dimensions. This article laid emphasis on
objectives of HR Analytics, HR Analytics beyond reporting, 4 As
of HR Analytics, Transmitting HR Data into Insight and review of
existing studies, HR Intelligence cycle, HR intelligence value
chain, Uses of HR Analytics and Technological aspects.
Human Resources (HR) Analytics is the application of refined
data and business analytics techniques to Human Resources (HR)
data. The major aim of HR analytics is to provide a business entity
with acumen for successfully managing people in order to
synchronize and accomplish overall corporate goal. The
enormous challenge of HR analytics is to ascertain what data must
be captured and how to use the data in forecasting competencies
in order to realize the best output from employees.
Understandably, organizations are in possession of adequate data
to trigger analytics meaningful; In general, companies create data
in different formats like spreadsheets, HRIS and store in multiple
Key words: HR Analytics, Talent Analytics, HR Data analysis, HR Intelligence cycle
locations. If the Mangers are on the lookout for a system which
can solve most of their HR related problems, then HR Analytics to
be administered in the organization. The role of HR Analytics is
not only collecting data pertaining to employee efficiency but also
to give insight into each step by collecting data and analyzing to
enhance the processes.
Bridging Business and Employees data
HR Analytics- beyond HR Reporting
The pivotal aspect of HR Analytics is to categorically exhibit the
influence of HR department on the organization. In order to
measure this impact, HR analytics correlate Business and
Employees data. Precisely, HR analytics is all about establishing a
cause-and-effect relationship between HR functions and
organization results and then deploying strategies based on the
analysis.
Although, HR reporting plays a significant role in people
management, it should not be confused with HR analytics as it
has got its own impact and implications. In addition to avoiding
interchangeable use of HR Reporting and HR Analytics, it is also
important to learn how these two are different. HR Reporting is
38 IFIM International Journal of Management FOCUS October 2016 - March 2017|
arranging data into meaningful packages of information; on the
contrary, HR Analytics is about making insights from available
data to predict future implications and suggest outcome based
decisions.
Exhibit 2- HR Analytics beyond HR Reporting
HR Analytics: Review of LiteratureAccording to an SHL global assessment report published in
February
There are still obstacles to adopting workforce analytics: Less than
half of the global companies use objective data when making
workforce decisions, and fewer than 20 percent were satisfied with
the ability of their current data management systems to manage
talent data,. But armed with actionable analytics, leaders and
managers have immense opportunities to use talent data in
reducing workforce costs, identifying revenue streams, mitigating
risks and executing business strategy. As David Crumley, Vice-
President of HRIS at Coca-Cola Enterprises, says, “this is where it
gets really exciting.”
People Matters talent analytics study 2016
The People Matters Talent Analytics Study 2016 collected
responses from 239 leaders across India Inc. via a survey which
was rolled out during the months of January' 16 and February' 16.
Breakdown of the participant organizations: MNC's 58%,
professionally-run business 29%, Family-owned business 11%
and public sector organization 2%. This study revealed that 81%
of the respondents agree to the fact that analytics is an important
competitive resource for any company. The study also revealed
that only 26% organizations do analytics, the remaining 74%
organizations do reporting (which is often mistakenly perceived as
analytics). The study says that 38% organizations do simple
reporting, 36% organizations do advanced reporting, 9%
companies have predictive models and 17% engage in prescriptive
analytics. When it comes to analytics tools, as many as 70% of the
organizations use spreadsheet based systems for HR analytics;
68% rely on HRIS or dashboards; 17% have dedicated analytics
software and 5% have no system at all.
According to a study by Deloitte
Only 6% of HR departments believe they are excellent in using
analytics and about 60% feel they are poor and are lagging behind.
Apart from this, companies are also coming to terms with the
preferences of the millennial workforce. Millennials want their
workplace to be “fun and social” and this generation also has the
higher propensity for instant gratification. They are also a
generation heavily reliant on the mobile phone. As a result of all
these factors, the attrition level of millennials is also very hard to
keep up with. While several companies are proactively adopting
analytics in talent acquisition, retention, risk management, sales
forecasting, capacity planning, the use of analytics in driving
increased employee engagement and therefore improving
productivity will be critical for the future.
According to Tuhin Subhra Dey and Prithwis De in their white
paper on Predictive Analytics in HR: A Primer at TCS
“Every business function has to reduce costs, increase revenue,
maximize operational efficiency, and focus on strategic initiatives
to stay profitable, sustain agility, and grow. Whether in developed
or emerging markets, HR leaders often struggle to support the
business with the skilled workforce it needs, due to budget and
time constraints. One of the biggest challenges a company faces
when it plans to launch a new line of services or products is
recruiting the right people for the job in time for execution.
Similarly, businesses bear explicit and implicit costs when talent
exits the organization. It is worse when employees quit soon after
participating in an expensive training program sponsored by the
organization. Is there a way to predict such risks and reduce the
costs associated with them?”
Talent acquisition and resource management
How can we acquire the right talent? How can we decide which
profiles are right for the job
description?
How can we extract high-employee value?
How can we retain and engage our top talent?
Workforce administration
How can we manage capacity optimally?
How can we reduce employee fraud risk to protect our brand
image?
How can we leverage social network data to ensure employee-
centric human resources operations?
Performance and learning
How can we gain greater value from our training programs?
How do we select the right employees for training?
According to Mick Collins (2013), in his HBR article Change your
company with better HR Analytics narrates that “the good news is
that Big Data is making a difference in places and ways you might
not expect, particularly in human resources. Companies are
analyzing their employee data with workforce analytics to answer a
variety of critical questions: Black Hills Corp. is one of those
companies. A 130-year-old energy conglomerate, Black Hills
doubled its workforce to about 2,000 employees after an
acquisition. Like many energy companies, a combination of
challenges — an aging workforce, the need for specialized skills,
and a lengthy timeline for getting employees to full competence —
created a significant talent risk. In fact, forecasts showed that,
within five years, the firm could lose 8,063 years of experience
from its workforce. To prevent a massive turnover catastrophe, the
company used workforce analytics to calculate how many
employees would retire per year, the types of workers needed to
replace them, and where those new hires were most likely to come
from. The result was a workforce planning summit that
Other such questions to be addressed by HR
leaders include:
39IFIM International Journal of Management FOCUS | October 2016 - March 2017
categorized and prioritized 89 action plans designed to address
the potential talent shortage. For other firms, more effectively
using talent data is a key component of an HR transformation,
one that seeks to improve the function's role as a true business
partner”.
Exhibit 3- Applications of HR Analytics
Accoring to Dr. Salvatore Falletta, Managing Director for the
Organizational Intelligence Institute
“HR analytics encompasses the full range of HR research and
analytics related practices including workforce surveys and
assessments, 360° feedback, metrics and indicators,
benchmarking, human capital research, employee and talent
profiling, talent forecasting, learning evaluation, and more.”.
The HR Intelligence Cycle is a process involving seven steps as
developed by Dr. Salvatore Falletta.
1. Determining stakeholder requirements
2. Defining the HR research and analytics agenda
3. Identifying Big (and Little) data sources
4. Gathering data
5. Transforming data
6. Communicating and using intelligence results
7. Enabling strategy, decision-making, execution, and
learning
Source: http://hrintelligence.org/our-mission-promise/hr-analytics-intelligence/
Step 1: Determine Stakeholder RequirementsDetermining stakeholder requirements is vital to the overall
success of any HR analytic initiative. It is much more than meeting
with a few influential or vocal stakeholders each year to formulate
the annual HR research and analytics agenda. It's about
establishing and cultivating a partnership and becoming a
legitimate player by adding value to the business. With respect to
the HR intelligence cycle, an ongoing and proactive partnership
with key stakeholders is an essential role to ensure up-front
legitimacy and trusted credibility and to obtain an accurate
picture of the most pressing organizational problems and
expected outcomes. In short, determining stakeholders'
requirements is important to:
• Identify strategic and tactical research, data and
informational needs, expectations and priorities;
• Secure involvement, commitment and support of the
HR research and analytics effort to increase ownership
of the intelligence results, both positive and negative;
• Provide communication on the ongoing progress of the
overall HR intelligence cycle; and,
• Ensure utilization of the intelligence results and
recommendations.
Once stakeholder requirements are obtained, it's time to define
the HR research and analytics agenda. An HR research agenda in
organizational settings may be long-term or short-term. The
constantly changing and evolving nature of business and the
external environment are redefining the notion of time in terms
of what is considered long-term versus short-term. In our age of
real-time technologies and on-demand data visualization, long-
term is no longer three to five years out. One year is considered the
long-term norm today in virtually all industries. Conversely, short-
term requirements tend to coincide with a company's quarterly
results, sometimes monthly. It important to note that short-term
doesn't necessarily mean tactical or reactive, nor is long-term
equated with strategic. Short-term and long-term research
requirements can be both strategic and tactical in nature. For
example, a short-term project can yield strategic results (e.g.,
market adjustments to employee salaries that could potentially
have strategic and long-term implications).
Consider the following when establishing the HR analytics and
research agenda:
• Organize the general stakeholder requirements by
theme or major topic;
• Pose broad research questions for each theme or major
topic and use stakeholders' language and terminology
to the extent possible;
• Under each of the broad research questions, begin
generating targeted research questions, which lend
themselves to measurement;
• Identify both the long-term and short-term
requirements of the overall research agenda; and
• Share the research agenda with your key stakeholders
and go through an iterative process of refinement.
Once the HR research and analytics agenda is established, you
need to identify the sources of data that will help to answer the
research questions. Data sources may be either public or private.
Step 2: Define HR Research & Analytics Agenda
Step 3: Identifying Data Sources
40 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Public data resides in university libraries, knowledge repositories
and governmental databases (e.g., U.S. Department of Labor
Statistics). Examples of private data include a company's internal
employee data through HRIS as well as external benchmarking
data from "best-in-class” companies. Research reports and results
gathered by credible membership-based consortia (e.g., HR
Intelligence Organization, CEB, The Conference Board, and the
i4CP) and academic think tanks (e.g., Cornell's Center for
Advanced Human Resource Studies, University of Southern
California's Center for Effective Organizations) are excellent
sources of private data and information. Sources of data may or
may not exist depending on your organization's current HR
research and analytics practices. While reviewing data sources,
questions may arise as to whether your organization's HR research
and analytics practices are still valid and useful to the business
(e.g., some practices may have become institutionalized or
ritualized over the years). Therefore, some tough decisions may
need to be made with respect to modifying existing practices,
starting new ones, and in some cases, discontinuing outmoded or
symbolic practices.
This step of the HR intelligence cycle involves the actual
collection of data through primary research, secondary research,
or mining your HRIS. Primary research is new or original research
that addresses a specific research question or set of questions (e.g.,
a study to identify which factors enable or inhibit employee
engagement and performance). Secondary research is data and
information available through existing research sources; it may
involve examining existing literature or research reports. Mining
and modeling data from your HRIS is another way to gather,
query, and analyze data about your workforce, provided it's done
responsibly and ethically.
Given that data and information are gathered from multiple
sources at different points in time, it is recommended that you
coordinate and monitor all aspects of HR research and analytics
activities at your company. For example, if your company uses
multiple customized employee surveys within business units
rather than a single corporate-wide or global employee survey
effort, you should assess and consider the implications and
potential impact of such an approach. Companies that are serious
about Big Data and predictive analytics in the context of HR and a
driving cohesive HR strategy should arguably conduct a company-
wide employee survey to ensure consistency, ease of analysis across
the entire company, and minimize the impact of over surveying
their employee base.
Transforming data into useful and insightful intelligence is
arguably the most important yet most challenging step. While a
number of advancements and innovations have been made by
leading edge software firms (e.g., Oracle, SAP, Workday,
Salesforce) that have incorporated workforce analytical
capabilities within their suite of products, none of these SaaS-
based tools can magically codify, analyze, and interpret all of the
disparate “Big Data” at our disposal.
Step 4: Gather Data
Step 5: Transform Data (Meta-Analysis)
When it comes to a company's annual HR strategy and planning
cycle, however, much of this work is still done manually by HR
professionals – usually with some outside assistance from social
and behavioral scientists, statisticians, and data scientists. It is
recommended that you start small and build your HR analytical
capability overtime. Perform a meta-analysis (i.e., an analysis of
analysis) across your disparate data sources. For example, to what
extent are the results from individual 360 degree assessments
consistent with your employee survey data, exit survey data, or
actual turnover? Are high-potential, emerging leaders leaving the
company for same reasons year over year (e.g., little to no
advancement and promotion opportunities, lack of decision
rights, low base pay relative to the market)? Performing a meta-
analysis enables you to answer these questions and more
importantly organize and codify information in order to glean
critical workforce insights. Performing the meta-analysis can be
simple or complex. This largely depends on the nature of the data
gathered, sophistication and competency of the HR researcher or
data scientist, and the amount of time one has to actually conduct
the analysis.
The sixth step of the HR intelligence cycle involves
communicating intelligence results. The gestalt of HR
intelligence places more effort and emphasis on telling a story
about the data in relation to the organization's most pressing
problems and successes. This goes beyond traditional HR
research and analytics reporting processes and presentations,
which can be characterized as the “proverbial data dump,” as it
involves strategic insights and interpretation by you – the HR
research and analytics professional.
The final step of the HR intelligence cycle is strategy creation and
decision making. We all have heard the proverbial mantra that
behind every successful company is a strategy that works. But what
exactly is strategy? Strategy is a multidimensional concept that can
be defined in a number of different ways. It involves asking
intelligent questions, identifying strengths, weaknesses,
opportunities and threats (SWOT), knowing the right things at
the right time, game theory, scenario planning, decision-making,
establishing priorities and goals, and effectively managing
execution, and so on. Despite these various methods and
approaches, strategy can be simply viewed as the means by which
an organization intends on achieving its overall mission and goals,
and creating value for its stakeholders.
Proactive HR analytics arms strategists and decision-makers with
pertinent knowledge and insight to make critical decisions
pertaining to human capital. Moreover, establishing effective HR
research and analytics practices can ameliorate ad hoc data
fetching by providing HR leaders with real intelligence and
insights. While this undoubtedly can be a slippery slope in terms
of organizational politics and data ownership across your
company's HR functional silos, data analyzed and interpreted in
the context of the business and in relation to other factors and
Step 6: Communicate Intelligence Results
Step 7: Enable Strategy & Decision-Making
41IFIM International Journal of Management FOCUS | October 2016 - March 2017
variables are hard to ignore, particularly when it's predictive in
nature.
It is incumbent on HR to play a central role in delving into the
data science revolution before someone else does. In fact there are
a handful of “Big Data” hawks, annoyingly, calling for IT and
Finance to lead the way. While an IT and/or financial
professional might possess the technological and statistical chops
to mine and model data, it takes an applied HR researcher,
analyst, and/or data scientist with the right disciplinary
background and experience to accurately interpret the workforce
data and predictive insights in the context of individual, group,
and organizational behavior. This is not to say that we shouldn't
collaborate with IT and Finance – but HR should be leading the
human capital analytics charge while leveraging IT and Finance's
expertise as appropriate.
Closing Remarks
HR Intelligence Value Chain
Source: http://hrintelligence.org/our-mission-promise/hr-analytics-intelligence/
4 As of HR AnalyticsHR department should be cautious enough in delivering Big Data
to their Managers primarily to enable advanced levels of
application and faster creation of key insights. The suggested 4 As
of HR analytics shall be considered while transferring data to
Managers for making HR related decisions
Exhibit 4- 4 As of HR Analytics
Appropriate: In order to get meaningful results, HR analysts need
to relate pertinent data to the business problem rather than using
a redundant amount of information.
Actual: In HR Analytics, in addition to the quality of data,
Managers must be appraised about the trustworthiness of Human
Resource metrics.
Absorbing: HR department should not get carried away with
disseminating raw numbers and anticipating the receiver to
ascertain the exact interpretations. HR Analysts have to know
their spectators, construct related storylines and inscribe
conclusions that pool together the fundamental details.
Adaptation: In the long run, meaningful analytics have to
transform a Manager's perception and attitude. With the help of
HR Analytics data, Managers should be able to bring alteration in
their pattern of thinking and create swift and logical decisions.
Business challenges of the moment call for more than just larger
competence in the HR department or system. Fairly, they are in
need of improved value gained through an extensive
understanding of the dynamics enhancing employees'
performance. Business houses need to realize the multifarious
relationship between employment levels; skills, compensation,
employees' profile and other pertinent aspects to assist them
maximize their return on HR. In order to know how personnel
factors impact the industry warrants not only suitable but also
cohesive comprehension from HR and functioning structures
across the company. On the other hand, most organizations face
hurdles to acquire timely and pertinent facts from their systems.
Dual reasons could be portrayed in this case. First, there has been
an outburst in both the size and intricacy of data. Secondly, the
customary Business Intelligence (BI) systems used by many
establishments to analyze the statistics do not convey the required
evidence to C-suite executives and Managers when it has the
ultimate consequence.
Human Resources Analytics system provides reliable metrics,
signals and reports to C-suite executives and HR Managers in
facilitating them to recognize how HR factors are influencing
departments and take relevant actions. Managers receive
significant information on Talent acquisition and development,
HR cost and multiplicity at levels of detail such as by geographical
factors, job grade/category, hierarchical division and pay
structure.
Professional Human Resources Analytics system enables
organizations to effectively accomplish and advance performance
by:
Optimizing Talent: To improve overall cost-effectiveness through
active HR cost control measures is the major objective of
optimizing talent. In fact, executives can appreciate how to
optimize the talent to make sure that reasonable distribution of
service while retaining the lowest but efficient employees. There is
also possibility of understanding the effect of paying overtime
work versus staffing new employees on overall productivity.
HR Insight: Generating and disseminating HR Managers reliable
and cohesive talent insight to efficiently manage employees'
performance and competencies. HR and top file and rank can get
clarity into High, Slow and Low performing talents, to develop
and retain key talents.
HR Causal Effect: Delivering the ability to correlate HR
information with overall functioning processes to better
Transmitting HR Data into Insight
42 IFIM International Journal of Management FOCUS October 2016 - March 2017|
apprehend the causal effect of HR investment on results in
congruence to organizational objectives.
Moving forward to Execution of HR Analytics from transmitting
data to insight is lucrative and significant part of HR Analytics, a
few live cases are narrated in the table below. The companies such
as Google, AMC Theaters, HP, IBM and Kaiser Permanente have
implemented HR Analytics in different functions of their
respective HR department as mentioned below.
Uses of HR Analytics- Data Execution
HR Function Company Name
Execution
Personnel Recruitment Google Google applies its proprietary predictive modeling to the field of recruitment as well. They have learned not to rely on traditional performance indicators like school or GPA, which prove to not have much predictive value. Instead they use five key, measurable attributes that correlat e with successful hires: coding ability, cognitive skills, leadership, humility & ownership. (Friedman 2014)
Employee Recruitment
AMC Theaters
AMC used workforce analytics and employee profiling to identify the core traits of superior customer service representatives, and re - modeled their hiring and interview process to predict successful hires. The result: increased employee engagement, lower turnover, and improved client satisfaction. (Kruse 2013)
Employee Retention
HP
HP used data science to determ ine create a ‘flight risk’ indicator for its employees. (Single 2014) The program is described to have identified opportunities to save A3MMjI but there was also a lot of negative fallout in the mo department once employees realized what was happening. A good example of the potential of using predictive modelling, but also in the sensitivity of working with people analytics
Workforce Planning IBM In 2010, a team of IBM researchers from the Watson laboratory were awarded with the Daniel H. Wagner prize in Excellence in Operations Research Practice for a project called OnTheMark (OTM), applied stochastic modeling and supply chain techniques to workforce planning. (Butler 2011) The presentation of the project introduced three core modelling techniques (Squi llante 2010):
Demand Forecasting:
probability modeling of sales opportunities, likely revenue and skills needed to deliver opportunity based on historical operations data comparisons.
Risk based capacity planning: Optimization models map current available skills, utilization to maximize productivity, and opportunity loss risked if under staffed.
Supply evolution & optimization:accounts for time variables in supply and the human nature of the service product. This step takes into account hiring, promotion, skills acquired over time, and attrition over the entire ecosystem over time.
Kaiser Permanente
Two major projects at KP helped them to close anticipated gaps in their service delivery: (Shen 2011)
Supply and Demand Forecasting: prediction of future critical business drivers in relation to anticipated market forces such as: process improvements, anticipated market size, changes in technology and changes in healthcare delivery. Comparison to current skills and capacity .Leadership behavior modeling: regression analysis of high performance team indicators: quality, safety, delivery performance, & innovation were correlated with the following leader behaviors: new hire orientation, setting clear expectations, coaching and using lean tools.
LeadershipHR Planning and
Source: Daniel B Macdonald (2016) 5 HR Case Studies in Predictive Analytics , Adapted from http://www.talentrics.com/case_studies/
Daniel summarizes as these five examples of applied analytics in
the field of Human Resources are only a small set of a much
broader movement in the profession. As a new generation of HR
data scientists emerges, and improved optimization methods are
discovered, it is becoming more and more common to see
organizations move to data driven HR decision models
Conclusion
References
Human Resource department has essential operational functions
that can be enriched by relating procedures in HR analytics. These
are talent acquisition, Training & Development, Measuring
performance, compensation management etc., HR analytics can
support to dig problems and issues adjoining these necessities and
by means of analytical process will direct the HR Managers to
answer queries and understand from information at hand. This
will facilitate the HR Managers to make appropriate decisions and
take suitable actions.
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Science of Human Capital, Boston, MA: Harvard Business
School Press.
2. Davenport, T., Harris, J., & Morison, R. (2010). Analytics at
Work: Smarter Decisions, Better Results, Boston, MA: Harvard
Business School Press.
3. Davenport, T, Harris, J., & Shapiro, J. (2010). Competing on
talent analytics. Harvard Business Review, 52-58.
4. Falletta, S. (2014). In search of HR intelligence: Evidence-based HR
practices in high performing companies. People & Strategy, 36, 4, 28-37
5. Mick Collins (2013), Change your company with better HR
Analytics, Harvard Business Review, Dec 2013
6. Vikas Arora (2016), Workplace Analytics: How mature are
organizations, People Matters, May 2016.
7. Daniel B Macdonald (2016) 5 HR Case Studies in Predictive
Analytics, Retrieved from http://www.talentrics.com/case_studies/
h t t p : / / w w w. t c s . c o m / S i t e C o l l e c t i o n D o c u m e n t s / W h i t e -
Papers/Predictive-Analytics-HR-0115-1.pdf z
Sample of Technology Platforms used for Analytics
IBM
Microsoft
Microstrategy
SAS
SAP
Tableau
Qlik
TIBCO
43IFIM International Journal of Management FOCUS | October 2016 - March 2017
Disruptive Technologies:Breaking Boundaries,Transforming Work, Enhancing Lifestyles -A Conceptual Study
Key words: Disruptive Technology, Mobile Internet, Near Field Communication, Smart Watches, Mobile Wallets, Digital Climate, Digital Excellence, Digital Transformation, Smart City
* Research Scholar , IFIM Research Centre Under Visvesvaraya Technological University, Belagavi & Associate Professor , IFIM Business School Bangalore**Chartered Accountant
IntroductionGrowth in the Indian economy has been fuelled by rapid changes
in technology in the recent years. Changes in technology have
occurred so fast that at times it is difficult to keep pace with these
new developments.
Technology has in fact impacted the way we live and work. It has
led to the development of new markets, new products and
services, new business models and made redundant established
norms and ways of doing business. It is therefore important to
understand the likely economic impact and possible disruptive
changes that any new technology can bring to a market place.
Corporations must understand how technological advancements
can erode their customer base and resultant market share or how
it can help them develop competitive advantage. Governments
will have to create infrastructure where its citizens can
continuously upgrade themselves in order to survive and prosper
through the changes that technology will bring. The regulators
will also have to be nimble in terms of new regulations that may be
required to protect the rights and privacy of citizens.
This paper looks at the parameters that helps in classifying
technologies as disruptive and tires to identify a few upcoming
technologies that are likely to have a major impact on the
prosperity of nations. In particular, the paper will focuses on the
impact of mobile internet on different sectors of an economy.
Transformation possible in education, communications,
transportation and healthcare sectors due to the advent of mobile
internet technology is assessed. The key drivers that would lead to
the proliferation of mobile internet technology are also evaluated.
Economist Joseph Schumpeter has aptly said that “the most
significant advances in economies are often accompanied by the
process of creative destruction, which shifts profit pools,
rearranges industry structures and replaces incumbent businesses
AbstractIn the recent years growth in the Indian economy has been fuelled
by rapid changes. Changes in technology have occurred so fast
that at times it is difficult to keep pace with these new
developments.
Technology has in fact impacted the way we live and work. It has
led to the development of new markets, new products and
services, new business models and made redundant established
norms and ways of doing business. It is therefore important to
understand the likely economic impact and possible disruptive
changes that any new technology can bring to a market place.
This paper looks at the parameters that helps in classifying
technologies as disruptive and tries to identify a few upcoming
technologies that are likely to have a major impact on the
prosperity of nations. In particular, the paper will focus on the
impact of mobile internet on different sectors of an economy.
Transformation possible in education, communications,
transportation and healthcare sectors due to the advent of mobile
internet technology is assessed. Current trends seen in these
sectors are highlighted .The key drivers that would lead to the
proliferation of mobile internet technology are also evaluated.
The paper also tries to postulate what is likely to happen in future.
The mobile phone being the identity of a person using near field
communications, life in a smart city and the redundance of
hospital services due to the introduction of a medical tricorder are
explored.
We conclude by identifying a few challenges that consumers,
corporation and governments' will face in light of disruptive
technologies and discuss probable ways of addressing these.
Priya Angle* | Bhaswati Biswas**
44 IFIM International Journal of Management FOCUS October 2016 - March 2017|
”What are Disruptive Technologies?
Mobile Internet Economies:
A disruptive technology displaces an established technology and
shakes up the industry or creates a ground-breaking product that
creates a completely new industry and a new way of doing business
A technology could be classified as disruptive if it has the
following characteristics:
1. High Rate of Change
2. Broad Impact
3. High Economic Value
4. Potential to change Status Quo
Disruptive technologies are those that change rapidly in terms of
price and performance, as compared with substitutes or
alternative approaches. These technologies experience
breakthroughs that enable them to change at an accelerated pace.
Disruptive technologies affect a large number of people across
organizations, industries and geographies. These technologies
lead to the introduction of new products, new services and new
machines, that improves the efficiency and effectiveness of masses
These technologies are high value in nature implying that they
significantly impact profit potential of firms, GDP and capital
investment patterns of nation.
Such technologies change the way people live and work. They
create new opportunities, make businesses obsolete, and change
the status of competitive advantage enjoyed by nations.
Mckinsey Global Institute has identified twelve upcoming
technologies as potentially disruptive technologies( Table 1). This
paper however, would focus on how the Mobile Internet is
transforming lives across nations.
According to research conducted by the World Bank in 2008, a
10% increase in mobile phone use in low and middle income
economies leads to a 0.81% increase in per capita GDP growth
annually. Advances in wireless networking technology has led to
the development of a large number of new services and
applications that have resulted in significant improvement in the
standard of living for people across nations. A study conducted
on the fish industry in South India, by economists of Brown
University highlighted that the use of new phones had helped
sellers reduce their costs by 4% and increase profits by 8%.
Improved productivity and the creation of new business models
have been possible because of mobile internet. The computing
power of smart phones today is better than that of
supercomputers of the previous decades. The speed of mobile
data delivery as well as the quality of wireless networks has
improved with each passing day and is likely to be enhanced
further with the introduction of fourth –generation (4G)
networks. The convergence of cellular telephone networks and
the internet led to the development of mobile broadband as we
see it. While the 3G networks focused on voice, the 4G network
have been developed to handle large quantities of data. The
challenges faced by mobile internet so far have been the cost,
speed of service and uninterrupted availability. These shortfalls
are likely to be addressed by new emerging technologies.
sources with reduced harmful climate impact
Mobile Landscape in India
Mobile Internet Opportunities:
More than 53% of Indian homes, roughly 70% in the villages, lack
toilets. In contrast, the number of mobile phone subscribers in
India has almost touched the billion figure mark. According to
the latest report from TRAI mobile phone subscriber base in
India recorded 6.71% YOY growth to 980.81 million users in Q2
2015
Low entry barriers have led to the success of mobile application.
The advances in internet mobile technology are driving
transformation across many sectors like education, energy,
healthcare, banking and transportation.
Communication One carries in pocket a 5-inch device that allows
one to call, message, search information on the internet, take
pictures and videos and share them via e-mail, whatsapp or social
media. One can have a music library composed of many songs,
and if one gets bored on the car/bus/train/metro, s/he can watch
the last episode of their favourite serial , listen to music, browse
through the day's newspaper or read a book. All of this can be
done within 10 seconds, and at an affordable price.
Education processes are likely to become more flexible and
unique because of wireless mobile devices. Going forward, the
45IFIM International Journal of Management FOCUS | October 2016 - March 2017
classrooms may not be the focal point of student education.
iPhone and iPads with a plethora of educational application will
not only make learning fun but also will also innovative. SMS
facilities are already being used by many schools to communicate
important messages to parent and students. Tablets are being used
by teachers in coaching institutes. Near Field Communication
enabled phones could help student use their mobiles to mark
their attendance, pay canteen expenses and also review books on
their machines.
Problems of poor infrastructure and cost that plague the
education systems in developing countries could be overcome
using mobile internet technology. The information asymmetry
that exists between urban and rural populations can be bridged
using mobile phone.
Healthcare can benefit immensely because of mobile internet
technology. Widespread use of mobiles can be tapped to provide
quick and expert care to underdeveloped, remote or rural regions,
at low costs. For example, applications like pill phone, used in the
US, help in providing reminders about dosage amount and
dosage time, to patients on their cell phone. Many applications
also provide information on body mass index, nutrition and other
health indicators. GPS systems can also be used to warn of
medical hazards that individuals might encounter. For example a
GPS enabled mobile device could warn asthma patients when air
quality in a region reaches dangerous levels because of pollutants
or allergens.
Fitness and tracking apps have been around earlier but 2015 saw
them being more tightly integrated with gear such as fitness bands
and pedometers. Garmin, Tom, Fitbit and even watch majors
such as Timex have jumped on to this bandwagon. With Swiss
watchmakers announcing smart watches, 2016 might well see the
debut of fitness apps from storied companies.
Transportation space is also getting transformed due to mobile
internet. Access to real time information about traffic condition,
flight/ train status, less congested routes is making lives of
commuters easier. Already, cities in the US like San Francisco are
using mobile networks to promote “smart parking systems” that
enable commuters to identify and pay for open parking slots using
their mobile phones. Even commercial transport can benefit from
mobile broadband as tracking and tracing vehicles and better
inventory management would be facilitated.
Mobile Banking and Mobile Wallets are common in many
developed countries like US, Japan and Korea. Single, powerful
digital devices are replacing the traditional wallets as far as
transactions relating to cash, credit cards and personal
identification are concerned. Online payment, electronic
boarding passes and payment made using mobile phones is not
only providing convenience to consumers but is also enabling
service and application innovations and productivity
improvements
Today, people no longer spend hours gazing at a computer screen
after work or class; instead, they use their mobile devices to stay
online everywhere, all the time. 24/7 communication is the new
way of life now. Anyone failing to keep abreast of this radical
change is losing out on an opportunity
While the benefits of mobile internet are immense, meaningful
participation of all the stakeholders would be only possible if the
requirements pertaining to the key drivers of digital excellence are
met.
The important drivers of digital excellence are (Chicago, May
2007, Report of the Mayors Advisory Council on Closing the Digital Divide, “ The City that Networks: Transforming Society and Economy through Digital Excellence)
• Effective Network Access – high speed, reliability,
affordability and availability at all places.
• Affordable Hardware – that will enable complete
utilization of the entire range of internet capabilities.
• Customized Software – catering to the requirements of
individuals, families communities and businesses
• Digital Education - for users to make them comfortable
and proficient with the new technology
• Evolving Mindsets - Willingness to continuously learn
new things and identify new opportunities.
The Digital Climate Success Factors
Digital
Transformation
Digital
Excellence
Access
Hardware
Software
Education
Mind- Set
(Chicago, May 2007, Report of the Mayors Advisory Council on Closing the Digital Divide, “ The City that Networks: Transforming Society and Economy through Digital Excellence)
Current Trends :Scenario 1 - Flight, Train, Bus, Hotel Bookings via Mobile Sites,
Apps rise (Source: Business Standard)
In a clear sign of changing hotel and flight booking habits among
Indians, travel portals like MakeMyTrip and Cleartrip are seeing
about half of the hotel bookings and one- third of their flight
bookings coming from mobile phones, including apps.
Mobile booking is assuming a greater importance for these
portals. For some of the portals, mobile apps are accounting for
over half of the traffic.
As per Clear trips latest quarter report over 60 per cent of total
traffic came from the mobile channels, overtaking desktop
channel for the first time. Clear trip's mobile app has seen over
nine million downloads since its launch in 2012. Make My Trip
46 IFIM International Journal of Management FOCUS October 2016 - March 2017|
too is witnessing a similar mobile growth story. Its app has seen 12
million downloads in four years.
The chances of retaining customers as well as their engagement
works better in apps as compared to a web site. An app on a
customer's mobile phone ensures that there is constant
engagement.
One of the reasons behind the rising popularity of mobile site and
apps for travel portals is the convenience it offers. These apps
allow customers to book flights, hotels and bus tickets on the
move, cancel their bookings, track the status of their refunds, send
e- tickets and vouchers. It also allows them to locate hotels near to
their current location, and provide attractive last minute deals for
same day hotel bookings
Price Talkie achieves the following:
Makes selection easy for consumers
Instant consumer gratification
Instant results that help in
Grows market share
Reinforces brand awareness
Helps in customer retention and loyalty
The rapid increase in usage of smart phones (on account of falling
prices) and better internet access has resulted in an increase in app
downloads across tier- II and tier- III cities. Yatra's app has seen five
million downloads since its launch in 2012.
Scenario 2 - A retail mobile app : Future of retail in an app-
enabled world (Source: www.pricetalkie.com)
Price Talkie is a mobile app that works for all brands, across all
segments. This enterprise marketing software is used by brands to
rapidly introduce, target, track and modify sales promotions
across entire retail network instantly, anytime and anywhere. It is
used by retailers and consumers to discover brand promotions
and participate in them. It is an unique app that straddles
seamlessly between B2B and B2C business models.
Scenario 3 – Netmeds : Netmeds is India's largest online
pharmacy. It enables individuals to buy medicines online /
through the mobile app and get it delivered anywhere in India..
For example one could be in Delhi and order medicines over the
app for parents living in Chennai, which will be home-delivered to
them. One can get a plethora of benefits (convenience, comfort,
trust, cost advantage, time saving, reliability, relief). Distance is
not an issue as mobile technology shows the way to the future
Scenario 4 – Paytm, the Mobile Wallet
The mobile commerce platform allows buyers and sellers to do
transaction on its mobile app. It also has the facility of “cash on
the go” – the Paytm Wallet.
A digital wallet, Paytm Wallet can be used for:
• Recharges, bill payments, bus ticket bookings, shopping
from hundreds of categories on Paytm
• Send & receive money to & from friends and family
• Avail of services at partner destinations like Uber,
Makemyt r ip , Bookmyshow, Fab Furn i sh ,
HomeShop18 and many more.
• Can be used 'on-the-go' using web or mobile app
• Is RBI approved
• Is like ready to use cash
Scenario 5 - Mobile Banking & E- Commerce
The rising number of smart phones in the country, rapid growth
in e- commerce and the shift in consumer behaviour has
prompted several players including banks to launch their mobile
payment solutions. Long, serpentine queues for even basic
banking activities are now a story of the past; today's banks reside
in customers' pockets on their mobile phones.
The sector has changed considerably in the past 15 years, and
India's banking regulator is aware of this evolution. “The day is
not far when banks will be viewed more as technology firms
offering banking products and services. While this will be a new
challenge, I see this as an opportunity for banks to find new
growth drivers,” said Reserve Bank of India (RBI) Deputy
Governor H R Khan in August 2015.
Banking is undergoing a transformation, and the world,
including India, is at the cusp of that change. The concept of
brick- and- mortar branches is fading fast, with consumers
increasingly embracing technology for their basic banking needs,
especially driven by a rise in e- commerce. According to an
ASSOCHAM- PricewaterhouseCoopers study, India's e-
commerce sector could rise beyond $ 100- billion mark in five
years, from $ 17 billion at present.
Bankers see a future where the entire payment system will be built
around the mobile phone architecture.
Given the rapid pace at which mobile apps are being adopted for
banking, this seems credible. “Five years ago, we did not expect
mobile phones would have such a huge impact on banking. Now,
we cannot think of a future without them,” said Chadra Shekhar
Ghosh, Managing Director (MD) & CEO of Bandhan, India's
Mobiles as virtual Debit Cards
47IFIM International Journal of Management FOCUS | October 2016 - March 2017
newest bank. Customers are paying taxi fares through mobiles and
soon may even pay the vegetable vendor using the same route.
A unified payments interface, launched in February,2015, aims to
make mobile phones double up as virtual debit cards. It will allow
account holders across banks to send and receive money through
smart phones using Aadhaar, phone numbers, or even virtual
payment addresses like e- wallets. No bank account details will be
required. Improvement in mobile data speeds, with 3G, 4G and
beyond, will make the process hiccup- free.
Mobile wallet generally refers to payment services performed from
or via a mobile device. Instead of paying with cash, cheque, or
credit cards, a consumer can use a mobile phone to pay for a wide
range of services and digital or hard goods. These transactions
come under the ambit of the Regulator.
In developing countries mobile payment solutions have been
deployed as a means of extending financial services to the
community known as the "unbanked" or "underbanked," which is
estimated to be as much as 50% of the world's adult population,
according to Financial Access' 2009 Report "Half the World is
Unbanked". These payment networks are often used for
(https://en.wikipedia.org/wiki/Mobile_payment)
Mobile wallet might be a new concept in India, but it has
surpassed credit cards in terms of the number of users. Noida-
based Paytm, has 20 million active users and this is higher than the
cumulative number of credit cards in India. There are 10-12
companies operating in the mobile wallet space in the country.
The players in the mobile wallet service space in India are Paytm,
MobiKwik, Oxigen and Citrus. Users can digitally store cash for
mobile and online transactions, however, money cannot be
withdrawn. Mobile wallet operators follow a semi-closed model,
according to which users load money in the wallets and make
payments to only those merchants that have operational tie-ups
with a mobile wallet service provider.
Digital wallets have already become extremely popular with
consumers, and all banks have launched their versions of wallets,
or virtual prepaid accounts. According to a Business Standard
report, the number of transactions via mobile wallets in 2014- 15
stood at 255 million, compared with 172 million transactions
through mobile banking. Though the size of transactions through
wallets remains smaller, mobile wallets exceed mobile banking in
the number of transactions.
Scenario 1
Imagine a scenario where your debit/credit cards are gone, air,
train, bus tickets have vanished, the loyalty/membership cards for
retail chains are binned.
You are the victim not of theft, but of the future - a future where
the wallet, purse, plastic cards, paper tickets and pockets have all
gone digital and live solely on your phone. Your identity is in your
phone. All of this will be possible because of near field
communications (NFC)
By tapping your phone on a payment terminal in a shop, airport,
train or bus station or retail shop your account could be identified
Rise of the Mobile Wallet
Future Scenarios
and payments made through an app on your phone.
Scenario 2 (Source : PCQuest)
What would it be like to live in a smart city? Cisco has created a
blueprint for it on its own sprawling 2.6 million sq ft. campus in
Bengaluru. Smart cities will integrate traditional technologies
with the new emerging technologies to improve quality of life.
Imagine that you wake up in the morning and open your mobile phone and check where your office bus has reached on a map, so that you can plan to reach the bus stand just in time. Your company too tracks you along with other employees who are on board its entire bus fleet, along with their gender and arrival times to ensure complete safety of each employee. If you prefer to drive down to work instead, then you check for free parking slots in your office compound from your mobile app and book one in advance.
You reach office and choose a cubicle you want to work in, because your company hasn't allotted any fixed seats to anyone. Each cubicle has a QR code, which you scan to login and personalize the work space. Once logged in, it adjusts the lighting and AC as per your preferences. Also, as you have already checked whether this cubicle was vacant from your mobile phone and booked it, the cubical has the workstation of a particular configuration you will be needing for your work.
During a break, you walk over to your office café to grab a coffee, and while there, remember that you have to book a meeting room for some visitors. You pull out your mobile phone and quickly check the status of meeting rooms on a map, and book the one that with an A/C, Internet access, projector and whiteboard.
When you leave office, all lights and ACs automatically go off. The entire city is under electronic surveillance. You pass by a kiosk where you see some ladies filing an FIR over a high-definition video chat and a touch screen with a complaint form. You'd never imagined that citizens would ever be able to do this, because doing so earlier required going to the police station.
You have to pick up something from the mall before going home, so you once again pull out your mobile phone to check which mall has a free parking slot, because it is rush hour and most malls would be crowded. You save both time and fuel by doing that. If the parking lot is full or you are tired, you open the big basket or the Grofer app and order online. You save time and effort, as also the jostling around.
Life in a Smart City
48 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Scenario 3
With the development of high power computer chips, advanced
technology for cell phones and scanners, the invention of a
handheld device to take health measurements of individuals is a
possibility. Such a device would help to self diagnose medical
conditions. Such a hand held device could check vital organ
functions, detect the presence of dangerous organisms, and
human physiology. Such a device could bring huge increases in
productivity and cost-savings
The device should be able to do the following:
• Disease diagnosis.
• Show ongoing personal health metrics such as heart rate.
• Monitor ongoing health
• Summarize a person's state of health.
• Confirm quickly if a person is healthy or not. This
function would be similar to the check engine light on car.
Mobile technology is expanding the digital frontiers far beyond
what was even imaginable a few years ago. The disruption to
traditional communication media is beyond imagination.
To ensure that mobile broadband reaches its full potential,
nations must continue to support both the deployment of mobile
broadband technologies and the proliferation of mobile
computing devices through which to access the Internet.
Ensuring the trust and security of mobile networks; to encourage
companies to invest in mobile technology is necessary. Equally
important is digital literacy of people so that they can enjoy the
benefits of the mobile broadband technology.
The number of mobile Internet users in India is projected to
double and cross the 300 million mark by 2017 from 159 million
users at present according to a new report by Internet and Mobile
Association of India (IAMAI) and consultancy firm KPMG
Though India has low Internet penetration at 19% compared
with other developed and developing economies that have up to
90% penetration, the country has the third-largest internet user
base in the world, with more than 300 million users, of which
more than 50% are mobile-only internet users. This impressive
growth would drive India to become one of the leading internet
markets in the world with more than 50% of internet user base
being mobile-only Internet users( KPMG)
The growth will also be driven by the government's Digital India
initiative, collaboration among mobile internet ecosystem
stakeholders and innovative content and service offerings from
mobile-based services players.
Digital India is an umbrella programme that encompasses
providing internet access to all by creating infrastructure,
delivering government services on the web and mobile phone,
promoting digital literacy and increasing electronic
manufacturing capability.
Conclusion
However, there are challenges in the mobile internet ecosystem
that could impede growth substantially :
1) Telecom operators are finding themselves cash-strapped in
making heavy investment for network infrastructure upgrade due
to high license fees, charges and levies which total up to 28-29%
of the total revenue.
This is in addition to uncertainties around regulation and policy
primarily concerning merger and acquisition guidelines,
spectrum management and tax regulations that is adding to the
telecom companies' woes.
The content and service providers, despite being a source for
cutting-edge innovation, also face significant challenges
including slower and overloaded telecom networks,
experimentation with monetization models and underdeveloped
billing and customer care systems.
What perhaps worsens the situation is limited collaboration
between the different pillars of the ecosystem; each component
trying to take the challenges of demand, supply and customer
satisfaction head-on by itself.
To overcome various challenges, the business models of various
companies in the ecosystem would need to be redefined.
2) Over 60 per cent mobile users in India are facing network
problems while accessing internet across locations, says a
study(Source: Firstpost.com – April, 2015)
Users face differing mobile data issues depending upon location.
About 63 per cent people face quality and reliability issues (like
voice drops, connection breaks, inconsistent speed, non
availability of 3G) inside their house, according to a study by
Erricsson across 33 major cities.
The study shows 62 per cent users in mid-size and small cities face
issues of inconsistent speeds and app usage while outdoors and
63 per cent have web page load time issues indoors.
Consumers are willing to pay but there are certain barriers that
are coming in way of growth of mobile broadband in the country.
Network performance continues to be a challenge and is a key
driver of consumer perception (Erricson Study).
For those who do not use mobile broadband, affordability and
digital literacy are prime obstacles to adoption.
Further 48 per cent of those using mobile internet on 2G or 3G
are unable to perceive any difference between 2G and 3G
services.
Affordability poses a major barrier to mobile broadband
adoption, particularly in a market as diverse as India where
hugely varied socioeconomic factors affect price sensitivity. 88
percent of Indian smart phone owners who do not use mobile
broadband feel that it is too expensive.
49IFIM International Journal of Management FOCUS | October 2016 - March 2017
Studies have shown that 70 per cent people use mobile
broadband to access video and 27 per cent more are willing to
start accessing it but not doing at present due to barriers of cost
and network.
3) Digital Literacy (Source :GSMA Study – July, 2015)
Non-users often lack the digital skills to be able to access the
mobile internet and discover what is available. This can be
compounded by a lack of motivation due to the perception of
limited relevant content
Digital literacy can be particularly problematic on feature
phones, where more steps are required to access the internet and
knowledge of what one is trying to access on the internet is often
required to conduct the search action
India stands on the verge of the internet era where it is poised for
transforming large parts of its economy and society. Achieving
large scale internet penetration and usage can enable India to
double the contribution of Internet to its GDP. All stakeholders
– government and policy makers, individuals, entrepreneurs and
enterprises have to collaborate to achieve this.
Some of the action point for future success could be:
• Extending infrastructure for low cost, high speed
connectivity to semi-urban and rural parts of India.
• Concerted actions by policy makers and businesses to
improve infrastructure and increase the reach of
Internet.
• Reduce the cost of internet access and usage even more.
• Enable large scale digital literacy to promote end user
engagement.
• Introduce internet based applications in nontraditional
areas such as agriculture, utilities, healthcare etc.
• Create a favourable environment for mobile internet based
businesses
References:
1. NASSCOM, 10,000 Startups, Edition 2015, “Start- up India- The Momentous rise of the India Start up Ecosystem”
2. McKinsey Global Institute, May 2013, “Disruptive technologies: Advances that will transform life, business, and the global
economy”
3. Scott M. Andes and Daniel Castro, September 2010, “ Opportunities and Innovations in the Mobile Broadband Economy”
4. Chicago, May 2007, Report of the Mayors Advisory Council on Closing the Digital Divide, “ The City that Networks: Transforming
Society and Economy through Digital Excellence.
5. Prasad Krishna, May 22, 2013, The Centre for Internet & Society in collaboration with Ford Foundation, “India's Internet Growth
& Challenges”
6. Anil Chopra, 2015, PC Quest, “Smart Cities as the Ultimate Form of Digital Transformation”
7. Pricetalkie.com : December, 2015
8. Firstpost.com : April, 2015
9. Business Standard editions : 2015-2016
10. Economic Times editions : 2015-2016
11. Livemint.com : January, 2016
12. GSMA Study – July, 2015
13. https://en.wikipedia.org/wiki/Medical_tricorder
14. https://en.wikipedia.org/wiki/Mobile_payment
50 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Employability Skills: A Comparative Study of Students from Metro and Tier-II cities in India
Archana Shrivastava* Manujata Midha** Richa Verma***| |
India in order to understand the quality of students provided to
the employment market. In Indian context, employability skills
mainly contribute for an employer's work performance with main
emphasis given on literacy (means knowledge here) and language
skills together with an explicit technical training and domain
specific skills. In India where the language and dialect changes
with a move of every 200 km, along with the state educational
stipulations, we observe an immense variation in student's
development of tier I, tier II and tier III cities of this country. Tier I
cities, a term in India, is mainly used for metropolitan cities which
are highly commercialized with latest input of technology, large
industries, business organizations and development perspectives.
Tier II cities are cities mainly categorized on the basis of fast
growing urban centres and tier III cities are categorized as cities at
a developing st age . 'Fol lowing the government ' s
recommendations of 6th Central Pay Commission of 2008 the
cities of India were categorized on the grounds of Compensatory
C i t y A l l o w a n c e a n d H o u s e R e n t A l l o w a n c e ' .
(www.mapsofindia.com). However, after 2011 census, the
population of the city has been set as the criteria for the
segregation of Indian cities, broadly termed as tier I, tier II and tier
III cities. The students studying in different tier cities accordingly
develop their abilities for professional work due to the distinctive
exposure gathered through a multiplicity of living standards.
This research study is an effort to understand the variation of the
quality of students and their employability skills from tier I and
tier II cities. This research study will highlight the factors showing
a clear comparison between the employability skills of budding
employers from different cities. In today's era the demand for the
recruiters in job market is based on the employability skills of the
AbstractIn today's competitive world, job requirement and the role of
employment market are decided by employability skills.
Employability skills set is a combination of different types of
behavior, interpersonal skills and analytical ability of judgment,
apart from many more qualities which lead an employer to be
superior in performance. Employability skills are also termed as
generic skills in a person that allows them to avail a competitive
edge in their job markets. In addition to the domain specific skills
which are generally shown in the expertise of subjects and training
of specialized topics, every student is expected to develop some
employability skills such as decision making, listening skills, time
management, assertiveness, problem solving skills, team work,
focus and patience to list a few. Such employability skills, required
for organizations, industries and other concerns are no longer
confined to a particular job profile but is learnt by stepping on-to
the outside world and is evaluated by the osmosis of a real world.
India is one of the largest educational systems with enormous job
opportunities yet there is a huge deficit of employable talent in
Indian companies. The need gap is the lack of employability skills
among Indian students. The NASSCOM predicts “India will
confront a huge shortage of skilled workforces in the next
decade”. The number of students graduating in India is twice as
much as US and 3 times more than UK but still the country faces
about 60% of unemployment. A better part can be blamed on the
lack of employability skills among students or a diverse section of
students spread into a vast geographical area who are unable to get
the right opportunity to be placed.
The purpose of this research activity is therefore, to find out the
significant employability skills in the students of different cities in
Key words: Employability, Skills, Metro cities, Tier-II cities, India
*Asst. Professor-Business Communication at Birla Institute of Management Technology.**Asst. Professor-Business Communication at Birla Institute of Management Technology.,***Asst. Professor HSS Dept.UIET, CSJMU Kanpur
51IFIM International Journal of Management FOCUS | October 2016 - March 2017
students, and this research activity will help analyze the self-
assessment of students as well as their peer's perspective of their
skills.
• To compare employability skills of a post graduate student's
self-assessment with peer's assessment in both teams from
tier I and tier II cities.
• To identify the difference between the categories of
employability skills of both teams from tier I and tier II cities.
• To analyze the valuable factors of special employability skills
of a particular student through Principal Component
Analysis.
The purpose of conducting this research is to assemble the data
for the two teams of tier I and tier II cities, so that we can know the
exact importance of these skills of every student in terms of their
recruiters. This research paper will also prove useful for the
educational institutes for further development of their students
in terms of the demand of organizations. For the students also this
research activity will make them realize and analyze their own
generic skills and their peer's perspectives which show the level of
their employability skills and provide them ways to enhance their
skills for better placements.
Boud and Symes, 2000, p. 14 draw a distinction between work-
based and learning in the workplace as “a form of learning that
occurs on a day-to-day basis at work as employees acquire new
skills or develop new approaches to solving problems.”
It has been noted that most of the researchers in this area believe
that the business employer look for potential employability skills
rather than domain specific skills. In India also, the same trend of
increasing importance of employability skills is realized. India's
The methodology of this research involves three
stages:
Introduction
current economic boom can be attributed largely to the volume of
educated knowledge workers it produces each year (Shalini Verma
2012). Still the fact is out of total graduates it produces, between
10%-25% cannot be employed by any technology firm in the
country. The country no doubt is facing national skills deficit.
Some significant facts about the employability status in India are
shocking. According to NASSCOM, ONLY 10% graduates with
non- specialized degrees are considered employable by leading
companies. Report 2007 considers youth unemployability as a
bigger crises than unemployment, a consultancy firm Aspiring
Minds in the employability study conducted in 2011 reports that
merely 4.22% of engineering graduates are employable i product
companies and only 17% in IT services. Study conducted by
McKinsey reports 15% finance professionals and 10% graduates
can be employed for general positions. Study conducted by
McKinsey reports 15% finance professionals and 10% graduates
can be employed for general positions.
Blom A. and Saeki H.(April 2011) in their policy research working
paper supported by World Bank, emphasize that one of the
impediments in India's further economic growth is 'insufficient
supply of quality skills' in the industry. “In India shortages of skills
are among the main constraints to continued growth of the
economy…. employers complain that most newly graduated
engineers lack suitable skills.” This is due to the economic
disparity among the metros and the tier 11 and tier 111 cities. To
bridge this gap the Indian National Skills Development
Corporation (NSDC) is working to meet the skill shortage. Indian
institute of Job Training (IIJT), a subsidiary of TeamLease
Services, India's largest staffing company has set up various multi
skills development centres across the country.
Simon Cassidy (2006) quotes (Sherer and Eadie, 1987, p. 16):
(1987) for defining employability skills as the skills “which cut
horizontally across all industries and vertically across all jobs from
entry level to chief executive officer”. Cassidy (2006) also
emphasizes that it is the “responsibility of the educational
institutions to develop such skills.”
The interest of our research activity is to analyze the sense of
responsibility to the educational institutions to develop the
specific employability skills to their students. All India
management association (AIMA) refers to “the most challenging
national requirement is the need to mobilize effectively the young
and qualified human resources. There is a huge gap between what
the industry needs and what is available in terms of skilled
candidates”. For the overall growth of the country, manpower
should be enabled not only with the technical skills but also with
non-technical, i.e., transferrable skills. Employers seek “evidences
of competencies and skills rather than just qualification”
(Shrivastava A. & Midha M., 2014). The purpose of our research
paper is to meet these criteria of understanding the quality of
1-Julka & Pankaj Mishra, 'Only 25% IT graduates readily employable: Nasscom', Economic Times , 7 April 2011 http://articles.economictimes.indiatimes.com/2011-04-07/news/29392668_1_engineering-colleges-employability-study-nasscom (retrieved on 11 September 2015)
2- http://www.studymode.com/essays/The-Paradox-Of-Employee-Poaching-In-156836.html Retrieved on 11 September 2015 3- http://www.studymode.com/essays/The-Paradox-Of-Employee-Poaching-In-156836.html Retrieved on 11 September 2015
52 IFIM International Journal of Management FOCUS October 2016 - March 2017|
employment skills in tier I and tier II cities.
This research work is first of its kind to compare the employability
skills among a set of students in tier I and II cities. It is a qualitative
research conducted by critically observing ten factors identified as
the most valuable variables for enhancing employability skills of
the teams of the students. These variables are decision-making,
listening, interpersonal skills, teamwork, analytical ability, focus,
patience, time management, assertiveness and problem-solving
skills. This research will lay the foundation for identifying the gaps
in the skills of these students in different cities, for the
academicians and researchers to further understand how to
minimize the gaps and match the requirements of the recruiters.
The paper will also try to extract significant components of
employability skills with the possibility of using the output for
further research in this area.
Employability Skills is a term which is defined by different authors
in different ways. According to Mason , taking the employers'
point of view into consideration, 'employability' refers to 'work-
readiness', which consists of “possession of the skills, knowledge,
attitudes and commercial understanding” that can help the
students in making valuable contributions to their organisations
soon after joining them. . Quoting Peter Knight from Hobsons
Directory 2005, highlight that “ability to cope with uncertainty;
ability to work under pressure; action-planning skills;
communication skills; IT skills; proficiency in networking and
team working; readiness to explore and create opportunities; self-
confidence; self-management skills; and willingness to learn” are
the most valued skills by the employers at the time of hiring
process. For , while quoting Cotton (2001) on his extensive
research, the employability skills are the non-technical skills which
include oral communication, reading, writing and arithmetic,
learning skills, problem solving, decision making, affective skills,
dependability, positive attitude, team work, interpersonal skills,
self-discipline and self-management.
in their study emphasize that these skills are very important
because today the jobs require individuals to do multi-tasking.
They emphasized that the employability skills which are
transferable are as important as the technical skills from the
perspective of employers because these skills allow students to
apply their technical skills effectively and efficiently at the
workplace. They identified four such transferrable skills, i.e.,
interpersonal skills, team-work, creative skills and critical
thinking abilities, as the most significant skills. Employability
Skills is a broad term which has been defined in different ways
over the years and basically include a spectrum of skills which are
required by the students for employment and career progression.
Some studies are done in the past to examine the employability
skills of the industry ready students. in their research on the
students of South Africa revealed that there is very little that has
been done to develop employability skills of the students. Their
results show that “97% of the unemployed matriculates and
graduates in South Africa had no idea as to what these
employability skills are” and don't even realise that these skills
Literature Review
have a strong impact on their employability. in their study
followed 'triangular design approach' for examining the
employability skills by studying the attitudes of students, faculty
and HR managers and identified eight basic employability skills:
'literacy and numeracy', 'critical thinking', 'management',
'leadership', 'interpersonal', 'IT', 'systems thinking' and 'work ethic
disposition'. They believe that an integrated triangular approach
is required by understanding the attitudes of students, needs of
the employer and the approach followed by the faculty, to
empower students with these eight employability skills. It is very
important to understand the expectations of the industry as well
the techniques followed by educational institutions to groom
students in order to make the students ready for employment.
have highlighted in their research in Malaysia that it is the
responsibility of the universities to enable students with
knowledge, intellectual skills and also the generic skills such as
ability to communicate, possession of attitudes and values of
responsible citizens. The information received by the universities
from the employers play a significant role in understanding the
future trends, so that appropriate changes in the curriculum can
be made.
, in their policy research working paper on Indian graduates,
supported by World Bank, mention that it has become
demanding now to find out the kinds of skills expected by the
employers from teachers, administrators and policy makers. Their
findings have suggested that the assessment, teaching-learning
process and curricula should be refocused away from lower-order
thinking skills like remembering and understanding, and towards
higher-order skills like creativity, analytical and problem-solving
skills. They also emphasize that more interaction with employers
is required to understand the demand for the skills in the
industry.
In an assessment of the state of management education in a
seminal work titled 'Rethinking the MBA: Business Education at
a Crossroads' , the authors feel that business schools are in the
business of developing leaders and entrepreneurs and to be
successful in their mission they need to reassess the facts,
frameworks, and theories that they teach , while at the same time
rebalancing their curricula so that more attention is paid to
developing their skills, capabilities, and techniques that lie at the
heart of the practice of management (the “doing” component)
and the values, attitudes, and beliefs that form managers'
worldviews and professional identities (the “being” component).
Enhancing soft skills for engineering and management students
in India is a major challenge as the Indian industry demands ''first
day-first hour productivity'' from its prospective employees. These
soft skills are the pleasing presentation of hard skills. These soft
skills are also called people skills, life skills, interpersonal skills,
employability skills, and emotional intelligence. Some of the
companies in India, such as Sun Microsystems, Mastek, Polaris
and Infosys, have made soft skills training as part of their training
module for the new employees. The right teaching and training
methods can influence the students to imbibe these skills
effectively . This study suggests some of the training methods like
53IFIM International Journal of Management FOCUS | October 2016 - March 2017
case study methodology, role plays, management games,
sensitivity training, Just A Minute (JAM), debates, group
discussions and outward bound training, which can help develop
these skills effectively. The findings of his research highlight that
along with an effective synchronization amongst the four
stakeholders, i.e., teachers, students, industry and directors of
educational institutions, the fifth force, i.e. the Training and
Placement Officer (TPO) need to be included for giving soft skills
training and bridging the gap between the students and the
industry.
In India, the general perception which goes in the industry is that
there is a difference in the level of skills possessed by the students
in a metro/tier-I city and in a tier-II city. Recruiters get multiple
dimensions of profiles. Not many studies have been done in the
past to substantiate the perception. Some of the differences
identified by T V Rao, Siddhartha Saxena , Vijay Sherry Chand,
Rajeshwari Narendran, Kandaswamy Bharathan , and B H Jajoo
in the skills possessed by Tier- I and Tier- II cities in India point
that the key differences are in the area of exposure and confidence
the employees bring to the job. The ones from the Tire-II schools
do not seem to be that confident and have poor exposure to the
business world. They felt that Tier-III students have more
entrepreneurial abilities. They are more aware of ground realities
and are thus able to solve real life problems . A significant study
needs to be done to substantiate the difference between the
capabilities and skills of students from tier-I and tier-II cities of
India, so that the educational institutes across India come to
know about the gap between their curricula and the industry
expectations and are able to devise strategies to groom their
students effectively and to pay more emphasis on the weaker skills
to make them industry-ready.
In order to achieve competitive advantage in the industry,
students must enhance their employability skills along with their
technical or domain-specific skills. In India, the general
perception which goes in the industry is that there is a difference
in the level of skills possessed by the students in a metro/tier-I city
and in a tier-II city. But there is hardly any research done in the
past to substantiate the perception. This research was conducted
to compare the employability competencies of the students at
post-graduate level of a metro city and of a tier-II city.
The purpose of this research is, firstly, to compare the
employability skills of students at post-graduate level of metro and
two-tier cities in India, and secondly, to find out the significant
skills from the ones mentioned above which enhance the
employability of students. This research will identify the gaps in
the skills and will lay the foundation for further research to bridge
these gaps.
This research will help the students to analyse their skills from
their own as well as their peers' perspectives, and will also throw
light, for the recruiters, on the difference and importance of these
skills in the students of metro and two-tier cities in India.
This research paper will also prove useful for the educational
Problem Statement:
Purpose, Coverage and Scope:
institutes of both metro and two-tier cities in India, for the
development of appropriate employability skills in the students,
which are much in demand by the recruiters these days and to
work in the direction to fill the gap in the skills, if any.
The research conducted will also try to extract significant
components of employability skills with the possibility of using
the output for further research in this area.
As one of the purposes of the research was to examine and
compare the employability skills of the post graduate level
students of the metro and two-tier cities in India, 50 students
each from metro and two tier cities were selected. The research
started with the hypothesis in mind:
H0: There is a difference in the employability skills of students at
post-graduate level of metro and two-tier cities in India.
H1: There is no difference in the employability skills of students at
post-graduate level of metro and two-tier cities in India.
The data for the metro city was collected from one of the good B-
Schools located in Delhi NCR. While selecting the samples
educational background of the students were checked. As the
population was mixed, consisting of the students from all over
India the care was taken to pick up only those students who had
their previous education in metro cities only. Kanpur University
was selected to get the data for the two tire cities. Located at the
heart of the country, Kanpur University accommodates students
from many small cities located in central India. These cities are
mainly small or two tire cities. Before starting the assessment
procedure, the students were asked to register the self-assessment
of their employability skills. They were then divided in the teams.
Each team comprised 10 students. As the post graduate students
were selected for the study, the average age group of the
participants was between 21-24 years. Of the total population
selected, 80 were females and 120 were males. The short term
project was assigned to each team which they were expected to
complete in stipulated time. While working in teams they
displayed various skills including the ones mentioned above.
After the task got over the team members were expected to give a
collective feedback of each member of the team with whom they
had worked to complete the task. The collective feedback was
taken in the absentia of the candidate being evaluated. Peer
evaluation is significant because most of the time we live with the
self perceived image but are judged by the image which others
perceive about us. In this process perceptions of colleagues were
used to substantiate or refute the claims made by the team
members in the beginning of the activity. Entire activity was done
under the strict guidance and observation on mentors/ faculty.
Total data collected was 200(50 self + 50 peer=100 each from
metro and two- tier).The results were compiled for further
analysis.
To reach to the final data, average scores of self and peer
assessment were calculated. Self assessment scores were added to
MethodologyProcedure
Research Technique
54 IFIM International Journal of Management FOCUS October 2016 - March 2017|
the group assessment. The group assessment scores were assumed
to be two times more as team of 9 members collectively gave peer
assessment for each candidate. The formula used for converting
the data is:
Average Score= 1SA+2PA/3, where SA is Self Assessment and PA
is Peer Assessment.
The Independent sample t-test was conducted to compare the
means between the two unrelated groups on the same continuous
dependent variables. Findings of the test are displayed in the next
section.
Next part of the research focused upon finding factors among
observed variables. The data contained ten variables to check
employability skills of the post graduate students of Metro and two
tiers cites. The purpose then was to reduce the number of
variables. Principal Component Analysis was conducted to group
variables with similar characteristics together.
Findings
Independent-samples t-testExhibit 1Group Statistics
Exhibit 2
55IFIM International Journal of Management FOCUS | October 2016 - March 2017
6. Patience two tier cities (M=4.0, SD=.84) and metro
(M=4.7,SD= .52) conditions; p=.00, and
7. Problem solving skills two tier cities (M=3.5, SD=1.1) and
metro (M=4.2, SD= .87) conditions; p=.00.
Based on the results of T-Test we accept the null hypothesis over
H1.
Next part of the research focused upon finding factors among
observed variables. The data contained ten variables; each
variable measures some part of the common aspect of
“employability skills.” The purpose then was to reduce the
number of variables. Principal Component Analysis was done to
group variables with similar characteristics together. The test was
also conducted with the possibility of using the output for further
research in this area.
The first step was to check whether the sample is big enough to
perform Principal Component Analysis. Kaiser- Meyer- Olkin
(Exhibit 3) measure of sampling adequacy (KMO-test) was thus
performed. As the KMO was .647 which is > .5 the sample was
found to be adequate.
Principal Component Analysis
Exhibit3KMO and Bartlett's Test
Exhibit 4Communalities
Communalities represent the total influence on a single observed
variables from all the factors associated with it. In our case four
variables which were highly influenced are Analytical skills,
Problem solving skills, Patience and assertiveness. (Exhibit 4)
Total Variance Explained
Exhibit5
Total Variance Explained
Interpretation for t-test
An independent-samples t-test was conducted to compare the
employability skills of the students from two tier cities with that of
the metro cities. The results suggest that out of 10 employability
skills analysed there are only three skills in which students were
almost at par. These skills are Decision making, Time
Management and Assertiveness. In rest of the seven skills the p
value mentioned is < .05 which shows that there is a significant
difference in the scores. These skills are:
1. Listening for two tier cities (M=4.0, SD=.84) and metro
(M=4.7,SD= .52) conditions; p=.00,
2. Interpersonal skills two tier cities (M=3.6, SD=.94) and
metro (M=3.9,SD= .46) conditions; p=.02,
3. Teamwork two tier cities (M=3.6, SD=.11) and metro
(M=4.4,SD= .67) conditions; p=.00,
4. analytical skills two tier cities (M=3.6, SD=1.1) and metro
(M=6.8,SD= 1.1) conditions; p=.00,
5. focus two tier cities (M=3.8, SD=1.0) and metro (M=4.2,SD=
. 67) conditions; p=.03,
56 IFIM International Journal of Management FOCUS October 2016 - March 2017|
aComponent Matrix
Exhibit 6
Extraction Method: Principal Component Analysis.
Finally, the Component Matrix shows the factor loadings for each
variable. We went across each row, and highlighted the factor that
each variable loaded most strongly on. Based on these factor
loadings, we (three authors) think the factors represent:
• The first 4 subtests (listening, working in team, analytical
ability, and Patience) loaded strongly on Factor 1. As these
skills are natural skill we called them “Intrinsic skills”
• Assertiveness and Problem solving loaded strongly on Factor
2. These two skills were demonstrated explicitly so we
termed it as “Demonstrative skills”
• Interpersonal skills loaded strongly and time management
loaded fairly on Factor 3, which we will term “People's skills”
• Factor 4 is strongly loaded on Decision Making which we
will simply term “Decision making skills.”
So, according to the study done, the four extracted components
for analysing employability skills of the candidates can be Intrinsic
Skills, Demonstrative Skills, and People Skills and Decision
Making Skills.
1) The research was done in two cities of India, one representing
the metro/tier-I city and the other tier-II city. The result might
have been different if the data was collected from more number of
cities of India.
2) Peer assessment was done by the students from the same cities.
The result would have been different if the peer assessment was
done by the mixed groups of metro and tier-II cities.
3) The duration of the project in which the students were judged
by their peers was very short.
The overall study suggests that there is difference in the
employability skills of the students from two tier and metro cities
in India. Out of ten skills studied the mean differences are highly
significant for seven skills. Students from metro/tier-I city were
found to be better from the tier-II city in these seven skills. The
results that have come out in the study will prove instrumental for
the educational institutions of the two-tier cities in India, to
design delivery methodologies to support the development of
these skills and attributes in their students.
Self evaluation & substantiating it with Peer evaluation is
significant methodology to test the skills because most of the time
we live with the self perceived image but are judged by the image
which others perceive about us. In this process perceptions of
colleagues are used to substantiate or refute the claims made by
the team members in the beginning of the activity. The students
from both metro/tier-I and tier-II cities can use the methodology
to analyse their skills from their own as well as their peers'
perspectives and can work upon improving on the skills in which
they are lacking behind.
Considerably less research has been done on the employability
skills in India. The four extracted components i.e. Intrinsic skills,
Demonstrative skills, People skills and Decision making skills can
be used for further research in this area. The study also
recommends that college curriculum should address the four
factors to make student skills more relevant to the workplace.
Limitations:
Conclusion
In the process of extracting the components (Exhibit 5), we see,
the first eigenvalue is equal to 2.951, and corresponds to 29.508%
of the variance in the original data. The second eigenvalue,
corresponding to the second factor, is associated with 14.853% of
the variance in the original data, the third factor with 11.817%
and fourth with 11.173%.Together, the first four factors explain
67.351% of the variance in the original data. This gives and ides of
how many components can be extracted. In our case it was clear
that we can extract four components.
Extraction Method: Principal Component Analysis.
Examining a scree plot (Fig 1) also, in which the eigenvalues are
plotted from largest to smallest and looking for a "bend" in the
eigenvalues to determine where to stop the retention of factors for
our data, the solution is obvious, and we would only retain the
first four factors.
Figure1
57IFIM International Journal of Management FOCUS | October 2016 - March 2017
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58 IFIM International Journal of Management FOCUS October 2016 - March 2017|
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Chapter in Books:Bhattacharyya, Asish K, 2004, 'Corporate Financial Reporting' in Reed and Mukherjee, eds,
Corporate Governance, 'Economic Reforms and Development', pp 94-115
Websites:Gerwig, K, and R Carlson, 2001, 'AT&T & Comcast: Dividing Their Businesses to Conquer',
Current Analysis, Dec 20
http://www.currentanalysis.com/Current Compete/Eventview.cfm?reportid=6744&nav=1 Last
accessed on Jan 24, 2004
Authors should give a declaration that papers sent to us for publication have not been published
or sent for publication elsewhere.
In addition to the soft copy of the paper, two hard copies should also be sent to the editor to
facilitate the reviewing process.
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62 IFIM International Journal of Management FOCUS October 2016 - March 2017|
Management 2022: Growth and Sustainability Challenges
15th-16th September, 2017
63IFIM International Journal of Management FOCUS | October 2016 - March 2017
•Business Analytics
•Digital Transformation
•Entrepreneurship
•Role of Government and Public Policy
•Sustainability & Corporate Ethics Issues
•Emerging Management Challenges
Themes Call for Papers
This conference calls for contributions in the following categories
• Academic and Practitioners
Research papers •Teaching Cases
•Practitioner Cases
•Poster Presentation
Publication Opportunities
Selected papers will be published in the following journals.
•International Journal of
Emerging Market •South Asian Journal of Management
• FOCUS-International Journal of
Management
Important Dates
Conference dates: September 15-16, 2017 •Last date for submission of Extended
Abstract: 15th July , 2017 •Last date for submission of Full Paper:
15th August, 2017
Registration Amount
Categories Before 15th Aug, 2017 After 15th August,2017
Registration Amount*
Industry members
Academics Research
Scholars
Participants (National)
Registration Amount*
Rs. 5000 Rs. 6000
Rs. 3500 Rs. 4000
Rs. 2000 Rs. 2500
Rs.1500 Rs.2000
Participants (International) $250 $300
Scholars International $200 $250
IFIM Business SchoolAn ISO accredited Institution
#8P & 9P, KIADB Industrial Area, Electronics City 1st Phase, Bangalore-560 100Tel: 91-80-41432888 41102820/ 21/ 22/ 23 Direct: 41432825 Fax: 91-80-41432844
www.ifimbschool.com
IFIM Business School, Bangalore was founded in 1995 with its first batch of students graduating in 1997. It is an AICTE
approved institution which today finds its place among the Top 20 from amongst the 500+ Business Schools that were
started post 1990 in the private sector. Today students from across the country have come to IFIM to go on to graduate as
one of the fine managers at corporate India.
IFIM Business School offers distinct PGDM programs:
1 Two year full-time program Post Graduate Diploma in Management (PGDM)
2 Two year full-time program Post Graduate Diploma in Management - Finance (PGDM - Finance)
3 Two year full-time program Post Graduate Diploma in Management – International Business (PGDM - IB)
4 A 24 months ‘CAREER ACCELERATOR’ programme Alternate weekend classes PGDM for Working Professionals
5 15-months Executive Post Graduate Diploma in Management in Business Analytics
IFIM Business School has acquired a unique ‘institutional equity’ with all its incumbent attributes: excellent Curriculum
and Faculty inputs, Infrastructure, Industry Internship Program, Academia-Industry interface and Placements. IFIM
Business School is persistent in its endeavour to be the best and therefore has taken many bold and progressive initiatives to
include collaboration with leading academic, research and corporate bodies for conducting Continuing Education
programs, Research, Corporate Training, Consultancy and offering a Ph. D program in Management.
IFIM Business School has achieved a unique distinction. It has probably become the first management institute in the
country to make sports and wellness a compulsory activity for its students. A certified fitness trainer monitors the progress
of the students. This is supported with a Centre for personality development which works in the holistic development of
the students. Overall, IFIM provides a three pronged platform for its students to excel. The two year full time Post Graduate
Diploma in Management (PGDM) program for working professionals being offered by IFIM is a unique program. This
allows the working professional to continue with their respective jobs whilst they study for a full time PGDM degree at IFIM
Business School. The program is designed to accommodate the job environment of the professional. The program is
designed in a manner in which the working professional can aim to move up the echelons of management.
The Centre for Developmental Education, under the aegis of which IFIM Business School operates, has a new member-
IFIM College. IFIM College was started in year 2010 and is successfully imparting graduate programs in the areas of
Commerce, Management and Computer Applications. These programs are approved by the Bangalore University.
IFIM Campus is located in the IT hub of Bangalore- Electronics City. With an environment-friendly campus situated
among the top blue chip companies, IFIM has made a steady progress. The placement record of the college has been very
impressive and the students have carved a niche for themselves in the corporate world. The B-School has a strong alumni
network and the illustrious alumni look up to their alma mater for the sound management foundation they have received.