“A Study on Investment Pattern of FDI’s
in Developing Countries with Special Reference to India.”
Introduction:
Foreign direct investment (FDI) plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing channels, cheaper production facilities, access to new technology, products, skills and financing. For a host country or the foreign firm which receives the investment, it can provide a source of new technologies, capital, processes, products, organizational technologies and management skills, and as such can provide a strong impetus to economic development. Foreign direct investment, in its classic definition, is defined as a company from one country making a physical investment into building a factory in another country. The direct investment in buildings, machinery and equipment is in contrast with making a portfolio investment, which is considered an indirect investment. In recent years, given rapid growth and change in global investment patterns, the definition has been broadened to include the acquisition of a lasting management interest in a company or enterprise outside the investing firm’s home country. As such, it may take many forms, such as a direct acquisition of a foreign firm, construction of a facility, or investment in a joint venture or strategic alliance with a local firm with attendant input of technology, licensing of intellectual property, in the past decade, FDI has come to play a major role in the internationalization of business. Reacting to changes in technology, growing liberalization of the national regulatory framework governing investment in enterprises, and changes in capital markets profound changes have occurred in the size, scope and methods of FDI. New information technology systems, decline in global communication costs have made management of foreign investments far easier than in the past. The sea change in trade and investment policies and the regulatory environment globally in the past decade, including trade policy and tariff liberalization, easing of restrictions on foreign investment and acquisition in many nations, and the deregulation and privatization of many industries, has probably been the most significant catalyst for FDI’s expanded role.
Proponents of foreign investment point out that the exchange of investment flows benefits both the home and the host country. Opponents of FDI note that multinational conglomerates are able to wield great power over smaller and weaker economies and can drive out much local competition. The truth lies somewhere in the middle.
For small and medium sized companies, FDI represents an opportunity to become more actively involved in international business activities. In the past 15 years, the classic definition of FDI as noted above has changed considerably. This notion of a change in the classic definition, however, must be kept in the proper context. Very clearly, over 2/3 of direct foreign investment is still made in the form of fixtures, machinery, equipment and buildings. Moreover, larger multinational corporations and conglomerates still make the overwhelming percentage of FDI. But, with the advent of the Internet, the increasing role of technology, loosening of direct investment restrictions in many markets and decreasing communication costs means that newer, non-traditional forms of investment will play an important role in the future. Many governments, especially in industrialized and developed nations, pay very close attention to foreign direct investment because the investment flows into and out of their economies can and does have a significant impact.
Changed in the Past Decade
As mentioned above, the overwhelming majority of foreign direct investment is made in the form of fixtures, machinery, equipment and buildings. This investment is achieved or accomplished mostly via mergers & acquisitions. In the case of traditional manufacturing, this has been the primary mechanism for investment and it has been heretofore very efficient. Within the past decade, however, there has been a dramatic increase in the number of technology startups and this, together with the rise in prominence of Internet usage, has fostered increasing changes in foreign investment patterns. Many of these high tech startups are very small companies that have grown out of research & development projects often affiliated with major universities and with some government sponsorship. Unlike traditional manufacturers, many of these companies do not require huge manufacturing plants and immense warehouses to store inventory. Another factor to consider is the number of companies whose primary product is an intellectual property right such as a software program or a software-based technology or process. Companies such as these can be housed almost anywhere and therefore making a capital investment in them does not require huge outlays for fixtures, machinery and plants.
In many cases, large companies still play a dominant role in investment activities in small, high tech oriented companies. However, unlike in the past, these larger companies are not necessarily acquiring smaller companies outright. There are several reasons for this, but the most important one is most likely the risk associated with such high tech ventures. In the case of mature industries, the products are well defined. The manufacturer usually wants to get closer to its foreign market or wants to circumvent some trade barrier by making a direct foreign investment. The major risk here is that you do not sell enough of the product that you manufactured. However, you have added additional capacity and in the case of multinational corporations this capacity can be used in a variety of ways.
High tech ventures tend to have longer incubation periods. That is, the product tends to require significant development time. In the case of software and other intellectual property type products, the product is constantly changing even before it hits the marketplace. This makes the investment decision more complicated. When you invest in fixtures and machinery, you know what the real and book value of your investment will be. When you invest in a high tech venture, there is always an element of uncertainty.
Therefore, the expanded role of technology and intellectual property has changed the foreign direct investment playing field. Companies are still motivated to make foreign investments, but because of the vagaries of technology investments, they are now finding new vehicles to accomplish their goals. With the help of-
Licensing and technology transfer. Licensing and tech transfer have been essential in promoting collaboration between the academic and business communities. Ever since legal hurdles were removed that allowed universities to hold title to research and development done in their labs, licensing agreements have helped turned raw technology into finished products that are viable in competitive marketplaces. With some help from a variety of government agencies in the form of grants for R&D as well as other financial assistance for such things as incubator programs, once timid college researchers are now stepping out and becoming cutting edge entrepreneurs. These strategic alliances have had a serious impact in several high tech industries, including but not limited to: medical and agricultural biotechnology, computer software engineering, telecommunications, advanced materials processing, ceramics, thin materials processing, photonics, digital multimedia production and publishing, optics and imaging and robotics and automation. Industry clusters are now growing up around the university labs where their derivative technologies were first discovered and nurtured. Licensing agreements allow companies to take full advantage of new and exciting technologies while limiting their overall risk to royalty payments until a particular technology is fully developed and thus ready to put new products into the manufacturing pipeline.
Reciprocal distribution agreements. Actually, this type of strategic alliance is more trade-based, but in a very real sense it does in fact represent a type of direct investment. Basically, two companies, usually within the same or affiliated industries, agree to act as a national distributor for each other’s products. The classical example is to be found in the furniture industry. A U.S.-based manufacturer of tables signs a reciprocal distribution agreement with a Spanish-based manufacturer of chairs. Both companies gain direct access to the other’s distribution network without having to pay distributor support payments and other related expenses found within the distribution channel and neither
company can hurt the other’s market for its products. Without such an agreement in place, the Spanish manufacturer might very well have to invest in a national sales office to coordinate its distributor network, manage warehousing, inventory and shipping as well as to handle administrative tasks such as accounting, public relations and advertising.
Joint venture and other hybrid strategic alliances. The more traditional joint venture is bi-lateral, that is it involves two parties who are within the same industry who are partnering for some strategic advantage. Typical reasons might include a need for access to proprietary technology that might tip the competitive edge in another competitor’s favor, desire to gain access to intellectual capital in the form of ultra-expensive human resources, access to heretofore closed channels of distribution in key regions of the world. One very good reason why many joint ventures only involve two parties is the difficulty in integrating different corporate cultures. With two domestic companies from the same country, it would still be very difficult. However, with two companies from different cultures, it is almost impossible at times. This is probably why pure joint ventures have a fairly high failure rate only five years after inception. Joint ventures involving three or more parties are usually called syndicates and are most often formed for specific projects such as large construction or public works projects that might involve a wide variety of expertise and resources for successful completion. In some cases, syndicates are actually easier to manage because the project itself sets certain limits on each party and close cooperation is not always a prerequisite for ultimate success of the endeavor.
Portfolio investment. Yes, we know that you’re paying attention and no we’re not trying to trip you up here. Remember our definition of foreign direct investment as it pertains to controlling interest. For most of the latter part of the 20th century when FDI became an issue, a company’s portfolio investments were not considered a direct investment if the amount of stock and/or capital was not enough to garner a significant voting interest amongst shareholders or owners. However, two or three companies with "soft" investments in another company could find some mutual interests and use their shareholder power effectively for management control. This is another form of strategic alliance, sometimes called "shadow alliances". So, while most company portfolio investments do not strictly qualify as a direct foreign investment, there are instances within a certain context that they are in fact a real direct investment.
FDI and global dreams of organizations
The simple answer is that making a direct foreign investment allows companies to accomplish several tasks:
· Avoiding foreign government pressure for local production.
· Circumventing trade barriers, hidden and otherwise.
· Making the move from domestic export sales to a locally-based national sales office.
· Capability to increase total production capacity
· Opportunities for co-production, joint ventures with local partners, joint marketing arrangements, licensing, etc;
A more complete response might address the issue of global business partnering in very general terms. While it is nice that many business writers like the expression, “think globally, act locally”, this often used cliché does not really mean very much to the average business executive in a small and medium sized company. The phrase does have significant connotations for multinational corporations. But for executives in SME’s, it is still just another buzzword. The simple explanation for this is the difference in perspective between executives of multinational corporations and small and medium sized companies. Multinational corporations are almost always concerned with worldwide manufacturing capacity and proximity to major markets. Small and medium sized companies tend to be more concerned with selling their products in overseas markets. The advent of the Internet has ushered in a new and very different mindset that tends to focus more on access issues. SME’s in particular are now focusing on access to markets, access to expertise and most of all access to technology.
Basic requirements of companies and FDI’s
Depending on the industry sector and type of business, a foreign direct investment may be an attractive and viable option. With rapid globalization of many industries and vertical integration rapidly taking place on a global level, at a minimum a firm needs to keep abreast of global trends in their industry. From a competitive standpoint, it is important to be aware of whether a company’s competitors are expanding into a foreign market and how they are doing that. At the same time, it also becomes important to monitor how globalization is affecting domestic clients. Often, it becomes imperative to follow the expansion of key clients overseas if an active business relationship is to be maintained.
New market access is also another major reason to invest in a foreign country. At some stage, export of product or service reaches a critical mass of amount and cost where foreign production or location begins to be more cost effective. Any decision on investing is thus a combination of a number of key factors including:
Assessment of internal resources,
Competitiveness,
market analysis
Market expectations. From an internal resources standpoint, does the firm have senior management support for the investment and the internal management and system capabilities to support the set up time as well as ongoing management of a foreign subsidiary? Has the company conducted extensive market research involving both the industry, product and local regulations governing foreign investment which will set the broad market parameters for any investment decision? Is there a realistic assessment in place of what resource utilization the investment will entail? Has information on local industry and foreign investment regulations, incentives, profit retention, financing, distribution, and other factors been completely analyzed to determine the most viable vehicle for entering the market (Greenfield, acquisition, merger, joint venture, etc.)? Has a plan been drawn up with reasonable expectations for expansion into the market through that local vehicle? If the foreign economy, industry or foreign investment climate is characterized by government regulation, have the relevant government agencies been contacted and concurred? Have political risk and foreign exchange risk been factored into the business plan?
5. Importance of Proposed Research Work:
Importance for Researcher:
The research will give an in-depth analytical view to the researcher for making an attempt to write a thesis on Foreign Direct Investment and its objectives, pattern and behaviour of investment in developing countries with special reference to Indian economy
Importance for Organizations:
The research will also provide the path to those organizations of developing countries which are financed by Foreign Direct Investment or highly or indirectly affected by same and it is also useful for those organizations which are investing in to the various economies for the different motives.
Importance for Others:
The research will also become a step towards the attempt done by other researchers in either the same field or the other similar areas of research related with the FDI’s or other economic financial patterns.
6. Review of Work already done on the subject:
Agrawal, P. (2005). Foreign Direct Investment in South Asia: Impact on
Economic Growth and Local Investment. In: E.M. Graham (ed.),
Multinationals and Foreign Investment in Economic Development.
Basingstoke (Palgrave Macmillan)
Kamalakanthan, A., and J. Laurenceson (2005). How Important Is Foreign
Capital to Income Growth in China and India?
Enderwick, P. (2005). Attracting “Desirable” FDI: Theory and Evidence.
Transnational Corporations 14 (2): 93-119.
Agrawal, R., and R. Shahani (2005). Foreign Investment in India: Issues and
Implications for Globalisation. In: C. Tisdell (ed.), Globalisation and
World Economic Policies: Effects and Policy Responses of Nations and
their Groupings. New Delhi (Serials Publ.):
Aizenman, J., and I. Noy (2005). FDI and Trade – Two Way Linkages? NBER Working Paper 11403, National Bureau of Economic Research,
Arabi, U. (2005). Foreign Direct Investment Flows and Sustained Growth: A
Case Study of India and China. Paper for DEGIT conference in Mexico-
City, mimeo.
Bhat, K.S., Tripura Sundari C.U., and K.D. Raj (2004). Causal Nexus between Foreign Direct Investment and Economic Growth in India. Indian Journal of Economics
ATKearney (2004). News – Most Attractive Foreign Direct Investment
Destinations.
Choong, C.-K., Z. Yusop and S.-C. Soo (2004). Foreign Direct Investment,
Economic Growth, and Financial Sector Development: A Comparative
Analysis. ASEAN Economic Bulletin
ADB (Asian Development Bank) (2004). Asian Development Outlook 2004.
Part 3: Foreign Direct Investment in Developing Asia. Manila.
Banga, R. (2003). The Differential Impact of Japanese and U.S. Foreign Direct Investments on Exports of Indian Manufacturing. Indian Council for
Research on International Economic Relations, New Delhi.
Basu, P., C. Chakraborty and D. Reagle (2003). Liberalization, FDI, and Growth in Developing Countries: A Panel Cointegration Approach. Economic Inquiry
Im, K., M.H. Pesaran and Y. Shin (2003). Testing for Unit Roots in
Heterogeneous Panels. Journal of Econometrics 115 (1): 53-74.
(http://www.buseco.monash.edu.au/units/aberu/papers/1405Abby.pdf).
Central Statistical Organisation, Government of India (var. iss.). Statistical
Pocket Book India. New Delhi.
Cambridge, MA. Alfaro, L. (2003). Foreign Direct Investment and Growth: Does the Sector Matter? Harvard Business School, Boston, MA, mimeo.
Alfaro, L., A. Chanda, S. Kalemli-Ozcan, S. Sayek (2001).
Hermes, N., and R. Lensink (2003). Foreign Direct Investment, Financial
Development and Economic Growth. The Journal of Development Studies
40(1):142-161.
Chakraborty, C., and P. Basu (2002). Foreign Direct Investment and Growth in India: A Cointegration Approach. Applied Economics
Fischer, S. (2002). Breaking Out of the Third World: India’s Economic
Imperative. (http://www.imf.org/external/np/speeches/2002/012202.htm).
FDI and Economic Growth: The Role of Financial Markets. Working Paper 01-083, Harvard Business School, Boston, MA.
Athreye, S., and S. Kapur (2001). Private Foreign Investment in India: Pain or Panacea? The World Economy
UNCTAD (2001). World Investment Report 2001. New York and Geneva
(United Nations).
Bajpai, N., and J.D. Sachs (2000). Foreign Direct Investment in India: Issues
and Problems. Development Discussion Paper 759, Harvard Institute for
International Development, Harvard University, Cambridge, MA.
Balasubramanyam, V.N., and V. Mahambare (2003). FDI in India.
Transnational Corporations
Balasubramanyam, V.N., M.A. Salisu and D. Sapsford (1996). Foreign Direct Investment and Growth in EP and IS Countries. Economic Journal
Borensztein, E., J. De Gregorio and J.W. Lee (1998). How Does Foreign Direct Investment Affect Economic Growth? Journal of International Economics
Granger, C.W.J., B.-N. Huang and C.-W. Yang (2000). A Bivariate Causality between Stock Prices and Exchange Rates: Evidence from Recent Asian
.
Dua, P., and A.I. Rashid (1998). FDI and Economic Activity in India. Indian
Economic Review 33 (2): 153-168.
Granger, C.W.J. (1988). Some Recent Developments in a Concept of Causality.
Granger, C.W.J., and A. A. Weiss (1983). Time Series Analysis of Error
Correction Models. In: S. Karlin, T. Amemiya and L.A. Goodman (eds.),
Studies in Econometrics: Time Series and Multivariate Statistics. New
York (Academic Press): 255-278.
35
(1991a). Japanese multinationals and 1992. In Multinationals and Europe 1992, B. Burgenmeier and J. L. Mucchielli, eds. London: Routledge, pp. 135-154.
(1991b). The dynamics of Pacific Rim industrialization: how Mexico can join the Asian flock of "flying geese". InMexico's External Relations in the 1990s, Riordan Roett, ed.Boulder and London: Rienner, pp. 129-154.
(1990). Multinational corporations and the "flying-geese" paradigm of economic development in the Asian Pacific region, paper presented at the 20th Anniversary World Conference on Multinational Enterprises and 21st Century Scenarios, Tokyo (July).
Balassa, Bela (1979/1989). The changing pattern of comparative
advantage in manufactured goods.
Review of Economics and Statistics, As reproduced in Comparative Advantage, Trade Policy and Economic Development. NewYork: New York University Press.(1989).
New Directions in the World Economy. NewYork: New York University Press.
Cantwell, John A. (1989). Techological Innovation and Multinational
Corporations. Oxford: Basil Blackwell.and Paz Estrella E. Tolentino (1990). Technological
Accumulation and Third World Multinationals. Discussion Paper No. 139, Department of Economics, University of Reading, Series B, III.Dunning, John H. (1981a). Explaining the international direct investment position of countries: Toward a dynamic or developmental approach.
(1987). Can the market alone manage structural upgrading? A challenge posed by interdependence. In Structural Change, Economic Interdependence and World Development,
7. Main Objectives of Proposed Research:
Following are the main objectives of proposed research
· To find out the Challenges of investment for developing countries
· To give an insight into the Status o FDI in India before fiscal reforms.
· To analyze the introduction of fiscal reforms in India and its impact on FDI’s
· To evaluate the Foreign Direct Investment and Indian Policy
· To Study of impact on economic growth from investment by
· FDI’s in India
8. Methodology:
The research will primarily be concerned with getting an insight in to the foreign direct investment and its impact on developing countries and policies adopted by FDI players in various sector in India and their changes in strategies. Study comprises the past status of Indian economy and present status for allowing the foreign investment in various areas of economy. It also comprises changes in investment pattern of foreign institution.
Following points are needed to be considered and studied to design and develop various areas of research for find out the actual impact.
1. Study past status of economy of developing countries with special reference to India.
2. Study of present status of foreign direct investment and its repercussion on economical development of developing countries.
3. An insight with in depth analysis of economic surveys of work already done by various organizations after the various steps taken by the Government to change in the Indian Economy.
4. The proposed research will be descriptive and analytical in nature.
5. Data’s collection will be with the help of analysis and data’s will be
Secondary in nature.
9. Chapter wise details of proposed research:
The proposed research will contain following chapters.
Chapter 1 Challenges of investment for developing countries
The development priorities of developing countries include achieving sustained income growth for their economies by raising investment rates, strengthening technological capacities and skills, and improving the competitiveness of their exports in world markets; distributing the benefits of growth equitably by creating more and better employment opportunities; and protecting and conserving the physical environment for future generations. The new, more competitive, context of a liberalizing and globalizing world economy in which economic activity takes place imposes
considerable pressures on developing countries to upgrade their resources and capabilities if they are to achieve these objectives. This new global context is characterized by rapid advances in knowledge, shrinking economic space and rapid changes in competitive conditions, evolving attitudes and policies, and more vocal (and influential) stakeholders.
A vital part of the new context is the need to improve competitiveness, defined as the ability to sustain income growth in an open setting. In a liberalizing and globalizing world, growth can be sustained only if countries can foster new, higher value-added activities, to produce goods and services that hold their own in open markets.
Chapter 2 Status of FDI in India before fiscal reforms.
Foreign investment in India is permitted through the following modes:[i]
a. Through the route of foreign collaborations
b. Through Joint ventures and technical collaborations
c. Through capital markets via euro issues[ii]
d. Through private placement or preferential allotment
Although, the Government of India has permitted FDI in crucial sectors such as power, aviations, telecommunications etc., the following sectors cannot benefit from inflows of FDI:
a. Arms and Ammunition:- National defense and security is solely within the control, regulation and supervision of the Central Government
b. Atomic Energy: Due to its impact on national security, this subject is under the sole control of the Central Government. The Constitution of India stipulates 3 lists for legislation of numerous subjects namely the Central list, State list and the Concurrent List. Atomic Energy finds a mark on the Central List and the Central Government has so sole control on legislation.[iii]
c. Railway Transport
d. Coal and Ignite
e. Mining of Iron, Manganese, Chrome, Gypsum, Sulphur, Gold, Diamonds, Copper and Zinc.
While the government has opened most sectors for FDI, there are certain sectoral caps[iv] that are imposed to ensure that domestic corporations are not left out of the greater participation in the privatisation schemes. Industry wide break –up in FDI ensures that inflows of FDI are concentrated only on priority sectors. In order to ensure sustained and accelerated growth in each sector, to increase the inflows of foreign capital and to introduce appropriate institutional arrangements and transparent procedures, the Government of India has structured a Committee that shall implement policies and shall grant approval for foreign investment in domestic corporations and State- owned Enterprises. This committee is called the Foreign Investment Promotion Board. [v] The Board is the sole authority to consider investment proposals.
Chapter 3 Introduction of fiscal reforms in India and its impact on
FDI’s
Prior to understanding the economic progress of India, it is vital to first identify the current economic status of India so that it is easy to retrace the process leading to the current status. India presently enjoys the status of an attractive emerging market. However, this status has been the result of numerous economic reforms adopted over the years. India intent to open its markets to foreign investment can be traced back to the economic reforms adopted during two prime periods- pre- independence and post independence.
Pre- independence, India was the supplier of foodstuff and raw materials to the industrialised economies of the world and was the exporter of finished products- the economy lacked the skill and means to convert raw materials to finished products. Post independence with the advent of economic planning and reforms in 1951, the traditional role played changes and there was remarkable economic growth and development. International trade grew with the establishment of the WTO. India is now a part of the global economy. Every sector of the Indian economy is now linked with the world outside either through direct involvement in international trade or through direct linkages with export and import transactions of other sectors in the economy.
Development pattern during the 1950-1980 period was characterised by strong centralised planning, government ownership of basic and key industries, excessive regulation and control of private enterprise, trade protectionism through tariff and non-tariff barriers and a cautious and selective approach towards foreign capital. It was a quota, permit, licence regime which was guided and controlled by a bureaucracy trained in colonial style. This inward thinking, import substitution strategy of economic development and growth was widely questioned in the 1980’s. India’s economic policy makers started realising the drawbacks of this strategy which inhibited competitiveness and efficiency and produced a much lower growth rate that was expected.
Consequently economic reforms were introduced initially on a moderate scale and controls on industries were substantially reduced by 1985 industrial policy.
This set the trend for more innovative economic reforms and they got a boost with the announcement of the landmark economic reforms in 1991. After nearly five decades of insulation from world markets, state controls and slow growth, India in 1991 embarked on an accelerated process of liberalization. The 1991 reforms ensured that the way for India to progress will be through globalization, privatisation, and liberalisation. In this new regime, the government is now assuming the role of a promoter, facilitator and catalyst agent instead of the regulator and controller of economic activities.
India has a number of advantages which make it an attractive market for foreign capital namely, political stability in democratic polity, steady and sustained economic growth and development, significantly huge domestic market, access to skilled and technical manpower at competitive rates, fairly well developed infrastructure. FDI has attained the status of being of global importance because of its beneficial use as an instrument for global economic integration.
Pre-Independence Reforms:
Under the British colonial rule, the Indian economy suffered a major set-back. An economy with rich natural resources was left plundered and exploited to the hilt under the English regime. India is originally a agrarian economy. India’s cottage industries and trade were abused and exploited as means to pave the way for European manufactured goods. Under the British rule the economy stagnated and on the eve of independence India was left with a poor economy and the textile industry as the only life support of the industrial economy.
Post – Independence Reforms:
India’s struggle post independence has been an excruciating financial battle with a slow economic growth and development which were largely due to the political climate and impact of the economic reforms. The country began it transformation from a native agrarian to industrial to commercial and open economy in the post independence era. India in the post independence era followed what can be best called as a ‘trial and error’ path. During the post independence era, the Indian Economy geared up in favour of central planning and resource allocation.
The government tailored policies that focussed a great deal on achieving overall economic self-reliance in each state and at the same time exploit its natural resource. In order to augment trade and investments, the government sought to play the role of custodian and trustee by intervening in the practice of crucial sectors such as aviation, telecommunication, banking, energy mainly electricity, petrol and gas.
The policy of central planning adopted by the government sought to ensure that the government laid down marked goals to be achieved by the economy thereby establishing a regime of checks and balances. The government also encouraged self sufficiency with the intent to encourage the domestic industries and enterprises, thereby reducing the dependence on foreign trade. Although, initially these policies were extremely successful as the economy did have a steady economic growth and development, they weren’t sustained. In the early 1970’s, India had achieved self sufficiency in food production. During the 1970’s, the government still continued to retain and wield a significant spectre of control over key industries such as power, mining, transportation and communications. [vi]
In the Early 1980’s-Macro-Economic Policies were conservative. Government control of industries continued. There was marginal economic growth & development courtesy of the development projects funded by foreign loans. The financial crisis of 1991 compelled drafting and implementation of economic reforms. The government approached the World Bank and the IMF for funding. In keeping with their policies there was expectation of devaluation of the rupee. This lead to a lack of confidence in the investors and foreign exchange reserves declined. There was a withdrawal of loans by Non Resident Indians (NRI’S).
Economic reforms of 1991:
India has been having a robust economic growth since 1991 when the government of India decided to reverse its socially inspired policy of a retaining a larger public sector with comprehensive controls on the private sector and eventually treaded on the path of liberalization, privatisation and globalisation.[vii]
During early 1991, the government realised that the sole path to India enjoying any status on the global map was by only reducing the intensity of government control and progressively retreating from any sort of intervention in the economy – thereby promoting free market and a capitalist regime which will ensure the entry of foreign players in the market leading to progressive encouragement of competition and efficiency in the private sector.
In this process, the government reduced its control and stake in nationalized and state owned industries and enterprises, while simultaneously lowered and deescalated the import tariffs. All of the reforms addressed macroeconomic policies and affected balance of payments. There was fiscal consolidation of the central and state governments which lead to the country viewing its finances as a whole. There were limited tax reforms which favored industrial growth. There was a removal of controls on industrial investments and imports, reduction in import tariffs. All of this created a favorable environment for foreign capital investment.
As a result of economic reforms of 1991, trade increased by leaps and bounds. India has become an attractive destination for foreign direct and portfolio investment..
Chapter4 Foreign Direct Investment and Indian Policy
FDI is investment of foreign assets into domestic structures, equipment, and organizations. It does not include foreign investment into the stock markets. FDI is thought to be more useful to a country than investments in the equity of its companies because equity investments are potentially “hot money” which can leave at the first sign of trouble, whereas FDI is durable and generally useful whether things go well or badly.
Emerging markets pose a significant potential for foreign investment both direct and portfolio. Foreign direct investment (FDI) is defined as the investment of foreign assets into domestic structures, equipment and organizations. However, it doesn’t include foreign investment in the stock markets. FDI is thought to be more beneficial to a country than its investment in equity of its corporations because equity is considered to be potential ‘hot money’, which can leave at the first sign of trouble. On the other hand FDI is durable and generally useful whether things go well or badly.
China currently ranks first among the top ten countries for foreign direct investment among developing countries in 2001.[viii] Mexico, Singapore, Brazil are also among the top ten. India although is also an attractive destination for foreign investment, it is not in the front line. This is a stark reality despite the fact that the Indian economic, political and social conditions stable.
India is one of the largest economies of the world. Its strategic location in the sub-continent provides it with continued access to South–Asian markets and middle-east markets. The country also enjoys a huge consumer markets. Fast moving consumer goods find a significant market share in India, providing a market conducive to trade and finance.
Foreign investment is open in India and there aren’t cumbersome procedures in force for approval of inflows of foreign capital.[ix] India is also an attractive destination for foreign investment because of its access to skilled labor at competitive costs. Being the one of the largest manufacturing sectors of the world, it has a market conducive to trade and production.
India also has in place well established legal and accounting system to ensure proper administration of foreign capital to key sectors. Also, the stability of the political environment is another factor which makes India an attractive destination for foreign capital
Chapter5 Study of impact on economic growth from investment by
FDI’s in India
Implications of Foreign Direct Investment:
Foreign direct investment affects economic growth through increased investment in the country. An increase in the inflows of FDI would essentially increase foreign savings and consequently would result in increased investment in the country. Another direct consequence of enhanced inflows of FDI is the positive impact on improvement in technology and infrastructure. FDI potentially brings new and emerging technologies to emerging and developing markets, and this can contribute to economic growth and development in the long run. Improved Technology also enhances the productivity of domestic enterprises and industries, thereby leading to efficiency and creation of competitive and open markets in sectors originally within the folds of state and central control.
Policy Regime:
Control and restraints on foreign investment has long been the subject of controversy and major political debate in India. India drafted two major legislations which directly address the issue of foreign capital namely the Foreign Exchange Regulation Act ( FERA) and the Foreign Exchange Management Act ( FEMA). The policy framework for FDI is as follows:
a. FDI in priority sectors like power and telecommunications enjoy automatic approval from the FIPB
b. All other proposals for foreign investment have to go through the FIPB approval route.
c. To provide enhanced and sustained access to foreign capital and to encourage modernisation of traditional and small scale industries, FDI up to the sectoral cap of 24% is permitted in traditional and small scale industries.
d. The Reserve Bank of India (RBI) – the apex central bank of India, grants automatic approval for all industries with respect foreign technology agreements and collaborations.
e. The licensing requirement which required industrial enterprises to apply for and obtain industrial licences was abolished to enhance competition and promote efficiency.
f. Majority investment by foreign parties is permitted. The FERA imposed equity participation limits on foreign corporations. The new FEMA has retrospectively altered this policy. As a result equity participation up to 51 % is permitted by foreign corporations.
The above policy design portrays that the government of India is making every endeavour to project India as global markets by diminishing and eliminating restrictions and restraints on the flow of foreign capital. The procedural framework for inflow of foreign capital has also been structured in a manner to ensure that foreign players are not dissuaded from investing because of cumbersome and tedious procedures. The policy also sought to ensure that the granting of approval for foreign investment was transparent and was not subject to whims, caprice and arbitrary decisions of the political; parties in power by formulating the formation of the FIPB..
10. Expected duration of work:
( Year wise schedule to be given )
S. No.
Time Duration (Tentative)
Research Work To be accomplished
01.
Till 1st March 2007`
Finalization of research Design
02.
From 2nd March 2007 to 1st Feb 2008
Facts and Data Collection
03.
From 2nd Feb 2008 to 30th June 2008
Analysis of Facts and Data’s
04.
From 1st July 2008 to 31st Oct 2008
Discussion and interpretation of Findings
05.
April 2009 First week
Submission of Report
11.Facilities available for the work :
(Details of facilities available duly attested by Principal/ HOD univ. Dept. to be enclosed)
To whom so ever it may concern
This is to certify that Mr. Aditya Sharma would be undertaking his research work for the award of Doctor of philosophy (Management) under the supervision and guidance of Dr. T.K.Jain He shall be provided with the following facilities in order to accomplish his research work if he is registered for PhD.
Library facilities, Computer, Software, Internet, Web camera, television, Audio visual Aids existing with Institution, projectors etc. Any other facilities for the research purpose may be provided, if feasible.
Principal
12. Bibliography:
Ahluwalia, Montek S.(2002),”Economic Reform in India Since 1991: Has Gradualism
Worked?”, Journal of Economic Perspectives, 16(3): 67-88
Athukorala, Prema-chandra and Sisira Jayasuriya, “Trade Policy and Industrial Growth in Sri
Lanka”, in World Economy, 23(3): 387-404
Athukorala, Prema-chandra and Sisira Jayasuriya, Macroeconomic Policies, Crises and Long
Run Growth: Sri Lanka 1966-86, The World Bank, Washington DC
Bhagwati, Jagdish (1998), “ External Sector and Income Distribution”, in Income Distribution and
High Quality Growth, Vito Tanzi and Ke-young Chu (eds.), MIT Press, Cambridge, Mass:251-290.
Bhagwati, Jagdish and T.N.Srinivasan (2002), “Trade and Poverty in the Poor Countries”,
American Economic Review, 92(2): 180-183
Bhalla, Surjit (2002), Imagine There’s No Country: Poverty, Inequality and Growth in the Era
of Globalization, Institute of International Economics, Washington, D.C.
Bardhan P. (1997), "Method in the Madness? A Political-Economy Analysis of the Ethnic
Conflicts in Less Developed Countries", World Development, 25(9): 1381-1398
Bruno, Michael, Martin Ravallion and Lyn Squire (1998), “Equity and Growth in Developing Countries: Old and New Perspectives on the Policy Issues”, in Income Distribution and High0 Quality Growth, Vito Tanzi and Ke-young Chu (eds.), MIT Press, Cambridge, Mass:
Bruton, Henry J. (1992), “Sri Lanka and Malaysia”, The Political Economy of Poverty, Equity and Growth, A World Bank Comparative Study, Oxford University Press (for the World Bank).
Datt, Gaurav and Martin Ravallion (2002), “ Is India’s Economic Growth Leaving the Poor Behind?”, Journal of Economic Perspectives, 16(3): 89-108
Deaton, Angus and Jean Dreze (2002), “Poverty and Inequality in India: A Re-Examination”, Economic and Political Weekly, September 7, 2002: p: 3729-3748.
Dunham D. and S. Jayasuriya (2000), "Equity, Growth and Insurrection: Liberalisation and the Welfare Debate in Contemporary Sri Lanka", Oxford Development Studies, 28(1): 99-110
Dunham, David and Saman Kelegama (1997), “Does Leadership Matter in the Economic Reform Process? Liberalization and Governance in Sri Lanka, 1989-93”, World Development,
vol.25 no.2, 179-190
Fujita, Mahahisa and Dapeng Hu (2001), “ Regional disparity in China 1965-1994: The effects of globalization and economic liberalization”, The Annals of Regional Science, 35:3-37
Government of Bangladesh (2002), Bangladesh: A National Strategy for Economic Growth and Poverty Reduction, Economic Relations Division, Ministry of Finance, Government of the People’s Republic of Bangladesh, Dhaka.
Government of Sri Lanka (2000), Sri Lanka: A Framework for Poverty Reduction, External Resources Department, Ministry of Policy Development and Implementation, Colombo Guha-Khasnobis, Basudeb and Faisal Bari (2000), “Sources of Growth in South Asian
Countries” (processed)
Hasan, Parvez (1998), Pakistan’s Economy at the Cross Roads: Past Policies and Present Imperatives’, Oxford University Press, Karachchi
:
Jha, Raghendra (2000), “Reducing Poverty and Inequality in India: Has Liberalization Helped?” Working Paper No. 204, WIDER, Helsinki
Joshi, Vijay and Ian Little (1994), India: Macroeconomics and Political Economy 1964-1991, World Bank, Washington, D.C.
Peiris, G.H. (2000),”poverty, Development and Inter-Group Conflict in South Asia Covariances and causal Connections”, Ethnic Studies Report, 18(1):1-45
Prennushi, Giovanna (1999), “Nepal: Poverty at the Turn of the Twenty First Century, Main Report and Background Studies”, Report Number. IDP 174, South Asia Region Internal Discussion Paper, The World Bank. Washington,
Ravallion, Martin and Gaurav Datt (1996), “How Important to India’s Poor is the Sectoral Composition of Economic Growth”, World Bank Economic Review, 8(1):1-25
Samaratunga, R.H.S. (1999), ‘Essays in trade policy and economic integration with special reference to South Asia’, Unpublished PhD thesis, La Trobe University, Melbourne.
Sen, Amartya (1983), “Poor, Relatively Speaking”, Oxford Economic Papers, 35: 153-69
Sen, Amartya (2000), Development as Freedom, Oxford University Press
Sen, Amartya (1983),”Poor, Relatively Speaking”, Oxford Economic Papers, 35:153-69
Srinivasan, T.N. (2002), “Economic Reforms and Global Integration”,
Friday, November 14, 2008
proforma of synopsis
SYNOPSIS
INTRODUCTION
The use of information technology (IT) is well recognized. The IT has become must for the survival of the business houses with the growing information technology trends. Computer is one of the major components of an Information Technology Network and gaining increasing popularity. Today, computer technology has permeated every sphere of modern man. From railway reservations to medical diagnosis from TV program to satellite launching, from match making to criminal catching - everywhere we witness the elegance, sophistication and efficiency possible only with the help of computers.
Internet, the information sea, is the most important utility of computers and networking technologies. The internet can also be used to collect information for management professionals to have better and enhanced MIS.
TITLE OF THE PROJECT
“A study of internet resources for management professionals”
RATIONALE FOR THE STUDY
This project is designed with an intention to simplify the task of management professionals by putting all the relevant information and their sources (URLs) at one place. This will be helpful to save the valuable time of such professionals which would be consumed in searching the relevant information, otherwise.
OBJECTIVES OF THE STUDY
The primary objective of this project is to provide handy information regarding the web site addresses, links and URLs to management professionals for the following:-
1) Data, surveys (economic, geographical, political, demographic and
psychographic etc.), project reports, projections and evaluations.
2) e-books, e-journals, e-magazines, e-training, e-softwares etc.
3) International associations, workshops, Exim policies, rules and regulations.
RESEARCH METHODOLOGY TO BE USED
The relevant information will be searched on the websites of various management professional bodies, official websites, training institutes, colleges and private survey organizations with the help of various search engines like google, yahoo, go, altavista, alltheweb, search, lycos, hotbot, ask and dogpile etc. This total project can be divided in to three parts under the heads Marketing, HRM and Finance. A brief description about the site contents will be followed by the URLs. The information of common interests like surveys, data and projections can be put as it is with the web site addresses.
EXPECTED CONTRIBUTION FROM THE STUDY
The study will contribute a lot in saving valuable time and resources of management professionals and management students and management training institutes. This will also be helpful to retrieve cost effective and updated information at faster speed round the clock to help the managers in making decisions. Moreover, a manager can maintain a database of the relevant information regarding his particular field of specialization.
LIMITATIONS
Sometimes the information provided on the internet is not updated. Some surveys provided by independent research houses are kept confidential by the survey agencies and thus not posted on the internet. Such information can be provided on payment to the interested organizations. However, the published studies have always their disadvantages over the commissioned studies in respect of the research objectives.
DIRECTION OF FUTURE RESEARCH
The information provided here can be further put in the form of an interactive web site and linking all the URLs to the home page in hierarchal manner. Thus it will be an effort of aggregating into one web site. Further to increase the utility, a link can be created to ask any management related question or problem which can be answered by the management experts.
BIO-DATA OF THE GUIDE
1. Name : 2. Date of Birth :
3. Full office address :
Contact No. :
4. Full residential address:
Contact No. :
5. Academic qualification & year of passing :
6. Work experience :
Designation :
Name of organization :
Period :
Signature of the Guide
INTRODUCTION
The use of information technology (IT) is well recognized. The IT has become must for the survival of the business houses with the growing information technology trends. Computer is one of the major components of an Information Technology Network and gaining increasing popularity. Today, computer technology has permeated every sphere of modern man. From railway reservations to medical diagnosis from TV program to satellite launching, from match making to criminal catching - everywhere we witness the elegance, sophistication and efficiency possible only with the help of computers.
Internet, the information sea, is the most important utility of computers and networking technologies. The internet can also be used to collect information for management professionals to have better and enhanced MIS.
TITLE OF THE PROJECT
“A study of internet resources for management professionals”
RATIONALE FOR THE STUDY
This project is designed with an intention to simplify the task of management professionals by putting all the relevant information and their sources (URLs) at one place. This will be helpful to save the valuable time of such professionals which would be consumed in searching the relevant information, otherwise.
OBJECTIVES OF THE STUDY
The primary objective of this project is to provide handy information regarding the web site addresses, links and URLs to management professionals for the following:-
1) Data, surveys (economic, geographical, political, demographic and
psychographic etc.), project reports, projections and evaluations.
2) e-books, e-journals, e-magazines, e-training, e-softwares etc.
3) International associations, workshops, Exim policies, rules and regulations.
RESEARCH METHODOLOGY TO BE USED
The relevant information will be searched on the websites of various management professional bodies, official websites, training institutes, colleges and private survey organizations with the help of various search engines like google, yahoo, go, altavista, alltheweb, search, lycos, hotbot, ask and dogpile etc. This total project can be divided in to three parts under the heads Marketing, HRM and Finance. A brief description about the site contents will be followed by the URLs. The information of common interests like surveys, data and projections can be put as it is with the web site addresses.
EXPECTED CONTRIBUTION FROM THE STUDY
The study will contribute a lot in saving valuable time and resources of management professionals and management students and management training institutes. This will also be helpful to retrieve cost effective and updated information at faster speed round the clock to help the managers in making decisions. Moreover, a manager can maintain a database of the relevant information regarding his particular field of specialization.
LIMITATIONS
Sometimes the information provided on the internet is not updated. Some surveys provided by independent research houses are kept confidential by the survey agencies and thus not posted on the internet. Such information can be provided on payment to the interested organizations. However, the published studies have always their disadvantages over the commissioned studies in respect of the research objectives.
DIRECTION OF FUTURE RESEARCH
The information provided here can be further put in the form of an interactive web site and linking all the URLs to the home page in hierarchal manner. Thus it will be an effort of aggregating into one web site. Further to increase the utility, a link can be created to ask any management related question or problem which can be answered by the management experts.
BIO-DATA OF THE GUIDE
1. Name : 2. Date of Birth :
3. Full office address :
Contact No. :
4. Full residential address:
Contact No. :
5. Academic qualification & year of passing :
6. Work experience :
Designation :
Name of organization :
Period :
Signature of the Guide
proforma of synopsis for the purpose of research
Proposed Research Work
Agriculture is backbone of Indian Economy but it is subject to a great many uncertainties.
Yet, about 75 per cent people (either self employed or as agricultural labour) in India earn their livelihood from this sector, which is maximum from all other economic sectors if put together. Households that were self-employed in agriculture, account for 28 per cent of all rural poor, while households that were primarily dependent on agriculture as labour, account for 47 per cent of all rural poor.
The criticality of agriculture in the rural transformation and the national economy seen along with its structural characteristics require substantial governmental and financial sector interventions not only to ensure household food and nutritional security of the farming community but also to generate savings and investments in this under investment sector.
Agricultural is associated with great many risks and these risks are associated with negative outcomes which results from imperfectly predictable biological, climatic, and price variables. Biological variables include pests and diseases and climatic variables are drought, flood etc. which are not under the control of the farmers. Moreover, the adverse changes in both input and output prices make condition more vulnerable for the farmers. The details of these different risks are given below:
Types of Risk
(i) Production risk:
Agriculture is often characterized by high variability of production outcomes or, production risk. Unlike most other entrepreneurs, farmers are not able to predict with certainty the amount of output that the production process will yield due to external factors such as weather, pests, and diseases. Farmers can also be hindered by adverse events during harvesting or threshing that may result in production losses.
(ii) Price or Market risk:
The next important factor of market risk in agriculture is input and output price volatility. Prices of agricultural commodities are extremely volatile resultant of both endogenous and exogenous market shocks. Local markets, which are mostly governed by local supply and demand conditions, the price risk is sometimes mitigated by the “natural hedge” effect in which an increase (decrease) in annual production tends to decrease (increase) output price (though not necessarily farmers’ revenues). In integrated markets, which are significantly affected by international production dynamics, a reduction in prices is generally not correlated with local supply conditions and therefore price shocks may affect producers in a more significant way.
Another kind of market risk arises in the process of delivering production to the right marketplace where the producer can have reasonable price for his produce. The inability to deliver perishable products to the right market at the right time can impair the efforts of producers (due to quality deterioration). The lack of basic infrastructure facilities, well-developed markets and proper market information system make this a significant source of risk.
(iii) Financial & Credit risk:
Finance is one of the most important factors of production for any business enterprise. The ways businesses finance their activities is a major concern for many economic enterprises and in this respect, agriculture also has its own peculiarities. Many agricultural production cycles stretch over long periods of time, and farmers must anticipate expenses to meet out the requirements. But they will only be able to get well if the product is marketed well. This leads to potential cash flow problems exacerbated by lack of access to insurance services, credit and the high cost of borrowing and these problems can be classified as financial risk.
(iv) Institutional risk:
Another important source of uncertainty for farmers is institutional risk, generated by unexpected changes in policy regulations that influence farmers’ activities. Changes in policies, regulations, financial services, level of price or income support payments and subsidies can significantly alter the profitability of farming activities. This is particularly true for import/export regimes and for dedicated support schemes, but it is also important in the case of sanitary and phyto-sanitary regulations that can restrict the activity of producers and impose high costs on producers.
(v) Technology risk:
Like most other entrepreneurs, farmers are also responsible for all the consequences of their activities. Adoption of new technologies in modernizing agriculture such as in introduction of genetically modified crops, more use of chemical fertilizers and pesticides, causes an increase in producer liability risk.
(vi) Personal risk:
Lastly, farmers, as any other economic entrepreneur, are exposed to personal risks affecting the life and the wellbeing of people who work on the farm, also asset risks from floods, cyclones and droughts and possible damage or theft of production equipment and any other farming assets.
Risk Management Strategies:
Farmers, from the ages, are trying to cape with above mentioned risks by adopting various risk management strategies. Earlier there were only informal methods of risk mitigation but in independent India, government have always been very supportive to the most vulnerable entrepreneurs of the country by offering various formal methods of risk management like insurance, credit, subsidies etc. Therefore, it is useful to understand strategies and mechanisms used by producers to deal with risk i.e. both formal and informal methods of risk management: (World Development Report, World Bank 2001)
i) Formal risk management - Arrangements that involve individuals or households or such groups as communities or villages.
ii) Informal risk management - Market-based activities and publicly provided mechanisms.
These formal and informal risks can further divided into two parts:
i) Ex ante - prior to the occurrence of the potential harming event. Among the ex ante reactions, it can also be useful to highlight the differences between on-farm strategies and risk-sharing strategies.
ii) Ex post - after the harming event has occurred
Table 1 Risk Management Strategies in Agriculture
Informal Mechanisms
Formal Mechanisms
Market
based
Publicly provided
Ex-Ante Strategies
On farm
· Avoiding exposure to risk
· Crop diversification and
inter-cropping
· Plot diversification
· Mixed farming
· Diversification of income
source
· Buffer stock accumulation
of crops or liquid assets
· Adoption of advanced
cropping techniques
(fertilization, irrigation,
resistant varieties)
· Agricultural extension
· Supply of quality
seeds, inputs, etc
· Pest management
systems
· Infrastructures (roads,
dams, irrigation
systems)
Sharing
risk with
others
· Crop sharing
· Sharing of agricultural
equipment, irrigation
sources, etc
· Informal risk pool
· Contract
marketing
· Futures
contracts
· Insurance
Ex-Post Strategies
Coping
with
shocks
· Reduced consumption
patterns
· Deferred / low key social &
family functions
· Sale of assets
· Migration
· Reallocation of labour
· Mutual aid
· Credit
· Social assistance
(calamity relief, food for-work, etc)
· Rescheduling loans
· Agricultural insurance
· Relaxations in grain
Procurement procedures
· Supply of fodder
· Cash transfer
As mentioned in the table 1, the farmer and farming community take various steps at their level to handle the risks but these methods are insufficient and ineffective for complete coverage from the risks. This situation becomes more vulnerable in the states which are underdeveloped as well as facing regular climate adversities. Rajasthan is one of those states. The farmers of Rajasthan are facing a number of problems like, frequent drought, low water table, low natural resource base, low level of literacy, etc.
Even the formal methods which has more potential like agricultural insurance, commodity markets and contract farming to pull the producer from out of the poverty trap and income shocks, by ensuring a fair share of the price goes to the producer. Other than these, technological advances in climate science, remote sensing technologies and ICT in developing early warning systems, increasing the effectiveness of instruments for pooling, sharing and transfer of risks, enhancing the coping capabilities of the farmers and other mitigation measures.
The state - Rajasthan
Rajasthan, the largest state of India (3,42,239 sq,km.) situated in the northwestern part of the Indian Union (23 30’ and 30 11’ North latitude and 69 29’ and 78 17’ East longitude) is largely an arid state for most of its part. The western boundary of the state is part of the Indo-Pak international boundary, running to an extent of 1,070 km. It touches four main districts of region, namely, Barmer, Jaisalmer, Bikaner and Ganganagar. The state is girdled by Punjab and Haryana states in the north, Uttar Pradesh in the east, Madhya Pradesh in the southeast and Gujarat in the southwest.
Rajasthan has exhibited spectacular progress in several areas like agricultural production, harnessing of mineral resources, development of transport and communication, and the production of energy resources but the rate of progress and plans of economic development have been slowed to a large extent by a parallel growth of human population and livestock. The rich wealth of non-renewable resources is yet to be explored and exploited. Their judicious exploitation can make the state economically self-sufficient.
Rajasthan is basically an agrarian economy. Most of its population lives in small villages and dhanies. It has a wide range of agro-climatic regions from very low rainfall in western part to high rainfall in south and southeastern parts of the state. Major part of the state is, however, covered by arid and semi-arid climatic conditions which have a characteristic low, erratic and uneven distribution of rainfall associated with lack of other water-resources for irrigated farming. Growing of only one rainfed crop in Kharif season, that too associated with high risk, has led to dependence of village community on livestock. Harsher the climatic conditions, higher were the shift towards Animal Husbandary. Due to low capital investment capacity, lesser availability of agriculture credit and lack of adequate infrastructure facilities like roads, power, etc., farming system was more subsistence oriented than the commercial farming.
The District - Bikaner
Bikaner is one of the border districts of Rajasthan. It is situated in north-west of the state. The total area of Bikaner district is 30247.90 square km. The district is divided into two natural parts – North-west desert and south-east semi-desert. There is a wide temperature different in these two parts. In summers wind storms are quite common and temperature crosses the level of 45oC and in winter it reaches to freezing point. District has a combination of extreme summers and winter.
Table 2: Land utilization in Bikaner district of Rajasthan (2000-01)
Land utilization
Area (ha)
Total land
30247.90
Cultivable land
291155.00
Cropped area
86344.00
Net cropped area
1378961.00
Forest area
82463.00
Gross irrigated area
228355.00
Net irrigated area
144324.00
Source: Bikaner, Udaiman Rajasthan, 2007
The total population of the district is about 19 lakh according to the 2001 census. The density of the district is 62.85 persons per km. District has about 56per cent literacy rate, the male literacy rate is about 70per cent and female literacy is 42.5per cent. the total working population is about 16 lakh persons.
Table 3: Indicators of Human Resources (2001)
Indicators
Unit
Numbers
Population
Persons in Lakh
19.01
Density of population
Persons per sq. km.
62.85
Literacy
Per cent
56
Total working population
Persons in Lakh
6.05
Gender ratio
Per thousand
896
Source: Bikaner, Udaiman Rajasthan, 2007
In Bikaner, both irrigated and non-irrigated farming is going on in district. About 2,714 farmers were benefited by District Agriculture department by providing subsidy for sprinkler farming.
Table 4: Farmers availed the subsidy for sprinklers in Bikaner
Year
No. of farmers
Dec. 03 to Dec. 04
299
Dec. 04 to Dec. 05
355
Dec. 05 to Dec. 06
1,951
Dec. 06 to Oct. 07
145
Source: Bikaner, Udaiman Rajasthan, 2007
About 37592 farmers were benefited from crop insurance by Agriculture insurance company of India and ICICI Lombard.
Table 5: Farmers benefited by agriculture insurance in Bikaner
Year
No. of farmers
Dec. 03 to Dec. 04
9,508
Dec. 04 to Dec. 05
16,971
Dec. 05 to Dec. 06
11,112
Source: Bikaner, Udaiman Rajasthan, 2007
1. Importance of Proposed Research Work or Relevance of the study:
Bikaner, as mentioned earlier, is one of the desert districts of Rajasthan. The district is prone to drought and facing many other water related problems like, low water table, inferior water quality etc since ages. The farmers of this region are facing very many risks in agriculture. Although in Bikaner, many developmental programmes have been launched and district is also selected for some of the pilot project like of agriculture insurance, companies like ICICI Lombard, NAIS etc. are working for selected crops to cope with the problems, but the condition of farmers is still vulnerable. Farmers are adopting various tools to tackle the risk at their own level. To know the status of adoption and type of mitigation tool for this critical situation this study will be conducted in the district if Bikaner and an effort will be made to suggest suitable mechanism for risk coping in agriculture.
2. Review of Work already done on the subject:
A comprehensive and critical review of literature provides a sound base for scientific investigation. With this understanding in mind the literature having direct or indirect bearing on the problem has been reviewed in light of the objectives of the study. It has been presented under:
Chhatwal (1973) in his study in Ludhiana district revealed that the causes of overdues from the farmer’s point of view were; low repayment capacity, low net returns due to inadequate loan, availability of loan at improper time and lack of technical guidance, social obligations, lack of consumption loan facilities, produce not sold of view, the causes of overdue were improper analysis of the project, lack of technical guidance, mis-utilization of loans, more expenditure on social obligations, lack of responsibility, lack of linking credit with marketing, lack of stick measures of recovery and lack of co-ordination between different lending agencies.
Agricultural Finance Corporation Limited (1974) reported on the basis of a study on repayment of agricultural loan and medium and large that small farmers engaged in dry farming and medium and large farmers of irrigated area were more defaulters in terms of repayment of loans.
Krishnaswami and Kundaswami (1982) have mentioned the reasons for non-repayment of loans as high cost of cultivation, low price, low yield, high rent, crop failure, non-disposal of produce, small marketable surplus and non-receipt of demand notice. However, they pointed that inadequacy of income arising due to crop failure, higher cost of cultivation and small marketable surplus were the main reasons for non-repayment of loans.
Rajawat (1991) studied attitudes of farmers towards PACS in Jaipur of Rajasthan by taking a sample of 100 rural people and remarked that favoritism and nepotism, inadequate supply of loan and ineffective managing committee of Primary Agriculture Cooperative credit Societies (PACS) as the important problems.
Yadav (1993) conducted the study to know the impact of Antyodaya programme on 100 beneficiaries in Jaipur district of Rajasthan and reported that nepotism and favoritism under antyodaya programme as the most important constraint in getting benefits, followed by delay in credit disbursal.
Sharma (1993) in his research study conducted in Maharashtra state observed that there was a spill-over effect in the identification of households. Several households below the poverty line were not identified for the programme. The average increase in income of beneficiary families due to IRDP assistance was substantial. Reasons for non-repayment of dues was low and inadequate income generated by assistance, inadequate and poor quality of assets, multiplication of assistance and malpractices at various levels of omplementation of the programme.
Vyas (1993) in his study on impact of credit policy on agricultural financing through commercial banks in Udaipur district (Rajasthan) concluded that medium size groups of farmers were good repayers of their loan.
Ramaswami et al. (2003) reported different type of risks in agriculture and try to understand agricultural risks and the ways of managing it. Production and price (or market) risks are two major risks that confront farmers. These risks could either be systemic or covariate (i.e., they are common to large groups of producers) or they could be individual-specific or idiosyncratic. The distinction is important because risk pooling and insurance arrangements (whether formal or informal) are more likely to offer protection against idiosyncratic risks rather than systemic risks. The diversity of climate, growing conditions and market structures means that there is no typical risk environment for a farmer. In the drylands without access to assured irrigation, rainfall is a dominant production risk. Similar is the case with pests and disease. Local pest and disease infestations depend on many factors including the crop variety, weather, the use of pesticides and other crop practices. Beyond a threshold level, the infestation can quickly reach epidemic proportions affecting large areas. Unlike rainfall risks, the humid and irrigated regions have no special advantage with respect to pest and disease attacks.
As the demand for agricultural products is inelastic, supply shocks are magnified in price variations. Besides production risks, supply shifts are also because of variability in planned supply, i.e., area planted to a particular crop. Variability in planned supply comes about because of errors in forecasting prices. Often, the biases in these errors are systematic as forecasts are determined by past prices. As a result, prices and planned supply can oscillate creating endogenous variability. Such uncertainty is often seen in seasonal price movements as well. The importance of price risk would depend on the extent of exposure to market forces as well as existing market institutions. International trade can increase or decrease price variability.
There are essentially six ex post ways to compensate for shortfalls in farm income: They can sell stored produce, liquidate assets, borrow for consumption, receive transfers from relatives, change jobs and/or increase their labour market participation and migrate in search of work. Households might farm a diversified portfolio of agricultural activities, adopt technologies, such as inter-cropping or drought- resistant crops, and contractual arrangements such as sharecropping that reduce the variance of income, or diversify their activities through migration or local non-agricultural employment. Any of these ex ante actions might be costly, so that the households would be sacrificing income, on average, in order to assure a less risky stream of income. In addition to the mechanisms at the level of the farm household, the need to cope with risk can also affect community interactions and social customs. Gift-based exchange that is based on reciprocity and informal borrowing and lending on implicit and flexible terms are instances of community level mechanisms that can help farm households to cope with adversity.
O’Donnell and Griffiths (2004) advocate the use of state-contingent production technologies to represent risky production and establish important theoretical results concerning producer behaviour under uncertainty. Unfortunately, perceived problems in the estimation of state-contingent models have limited the usefulness of the approach in policy formulation. We show that fixed and random effects state-contingent production frontiers can be conveniently estimated in a finite mixtures framework. An empirical example is provided. Compared to standard estimation approaches, we find that estimating production frontiers in a state-contingent framework produces significantly different estimates of elasticities, firm technical efficiencies and other quantities of economic interest.
Reddy (2004) reported that ongoing National Agricultural Insurance Scheme (NAIS) along with experimental income insurance and weather insurance, is a good step forward to insure risk of millions of farmers whose livelihood depends on the pattern and distribution of monsoon rain in India. NAIS is based on area-yield approach and is suffering from low penetration and adverse selection with consequent high claim to premium ratio. With this backdrop, the paper reviews the innovative techniques in agricultural/rural insurance, which overcome some of the disadvantages of the above insurance and which advocate simple rainfall index insurance as a better alternative to the existing agricultural insurance scheme. The rainfall insurance is in practice in many countries for years and has been very simple to understand by a common farmer. It is put into practice with minimum existing resources with very little administrative and overhead costs. It also covers agricultural laborers and non-farm workers whose income is affected adversely by failure of rainfall and it is a very effective mechanism to increase insurance penetration ratio. The rainfall insurance is also more compatible with reinsurance practices, which make primary insurers cover their local/regional risks in catastrophic events by pooling their resources with reinsurance. The reinsurance agents can also effectively transfer their risks by issuing catastrophic bond/options like instruments in stock exchanges (NSE and BSE), as our stock markets are relatively well-developed and it may effectively fit into the portfolios of some of the fund managers and hedge funds.
Mandal (2005) reported that it is now commonly conceded that most of the poverty eradication programmes could not reduce the incidence of poverty substantially for a variety of reasons. Wrong selection of beneficiary, leakage, corruption and malpractices, absence of backward and forward linkage in project and inadequacy in delivery and monitoring of credit were the few factors identified by the agricultural credit review committee. The failure to develop sustainable bank client relationship was still another deficiency.
Abedullah and Ali (2006) in their study developed a formulation to decompose variability in profit into price and production effects. The production effect is further segregated into management and weather effects. The formulation is used to compare and decompose risk in the profit of three existing cropping patterns (corn-corn, corn-fallow, and rice-fallow) in the rainfed areas of Claveria, northern Mindanao, Philippines. High variability and low profitability of the crops in a more risky season (dry in our case) can limit cropping intensities in rainfed areas. However, intensification of the crops during the less risky season (wet in our case) can provide the necessary stake to invest in the risky season crops. Although weather is the dominant factor in explaining total variability, this should not be interpreted as a general rule for all agricultural environments. In an environment where input intensity is high, and input-output markets are inefficient, management and price effects can dominate the weather effect.
Working group on Eleventh five year plan (2007-2012) reported that in India agricultural risks are exacerbated by a variety of factors, ranging from climate variability and change, frequent natural disasters, uncertainties in yields and prices, weak rural infrastructure, imperfect markets and lack of financial services including limited span and design of risk mitigation instruments such as credit and insurance. These factors not only endanger the farmer’s livelihood and incomes but also undermine the viability of the agriculture sector and its potential to become a part of the solution to the problem of endemic poverty of the farmers and the agricultural labor. The criticality of agriculture in the rural transformation and the national economy seen along with its structural characteristics require substantial governmental and financial sector interventions not only to ensure household food and nutritional security of the farming community but also to generate savings and investments in this grossly under funded sector. The poor penetration and development of various risk management tools in the country also represent the huge opportunities for the emerging agricultural insurance and commodity markets to pull the producer from out of the poverty trap by insulating him from income shocks and by ensuring that a fair share of the price goes to the producer.
3. Objectives of the study:
To study instability in agricultural production and factors responsible for instability in Bikaner district.
To identify various types of agricultural risks faced by the farmers in the area of study.
To study the awareness level of farmers about risk mitigation techniques.
To study the level of adoption of formal and informal methods of agriculture risk management by the farmers.
To study the constraints in adoption of the formal methods of risk mitigation by the farmers.
To suggest possible measures to increase the adoptability of formal mechanisms of risk mitigation by the farmers.
4. Methodology:
The methodology of proposed study will be as follows:
Sampling Framework-
For the proposed study, out of total eight tehsils, four tehsils of Bikaner district will be selected, two will be from irrigated area and two will be from unirrigated area. Through stratified random sampling, Pugal and Lunkaransar have been selected, representing irrigated area whereas Kolayat and Dungargarh have been selected, representing unirrigated area. In all the four tehsils four villages from extreme corners will be selected within the radii of 10km from tehsil headquarter. In each village, 10 farmers will be selected randomly for the study purpose.
Tehsils
Villages
Farmers
Total
Pugal
4
10
40
Lunkaransar
4
10
40
Kolayat
4
10
40
Dungargarh
4
10
40
Grand Total
160
Collection of data –
Data will be collected from both primary and secondary sources. Primary data will be collected from farmers, government officials, experts etc. The interview schedule will be used for primary data collection. The required data will be collected from selected respondents by personal interview method. Secondary data will be collected from government published matter, newspaper, magazine, internet etc
Analysis of data-
After collection of data, data will be processed and analyze using various appropriate statistical tools. For the first objective, secondary data about the various factor of production will be collected and their effect on production will be quantified. For the second objective, data about different types of risks faced by the farmers will be collected to know the major risk associated with the farming in the study area. Under third objective, awareness about the risk mitigation tools will be checked to know the knowledge level of the farmers about various techniques of risk mitigation. In fourth objective the formal and informal methods adopted by farmers will be studied to know the level of adoption of available methods. In the study, the constraint will also be studied to know the main reasons of not taking advantage of available methods under fifth objective. And lastly, an effort will be made to develop a suitable mechanism for risk management for the farmers of study area.
5. Chapter-wise details of Proposed Research:
The study will be presented in form of chapters for the purpose of clarity. The study will be divided into four chapter sand the chapter-wise details are as follows.
Executive Summary – A summary of the research work will be given in the start.
Chapter first – Introduction – in this chapter, the introduction about the agriculture risk, its types, its extend etc. will be given.
Chapter two – Methodology – in this chapter the research methodology will be explained. The introduction of the selected area will also be covered under this chapter.
Chapter three – Review of Literature – this chapter will consist of summaries of different past work done on agriculture risk management within the country as well as outside the country.
Chapter four - Results and Discussion – in this chapter, the results of the study will be presented objective wise along with the analysis and discussion. A suggestive mechanism will also be given in the last of this chapter.
Bibliography – A detailed list of references will be given in the end from which the literature will be reviewed about the subject.
6. Bibliography:
Abedullah and Mubarik Ali (2006). “Quantifying the Extent and Nature of Risk in Alternative Cropping Patterns in Claveria, Philippines”. The Pakistan Development Review 45 : 2 (Summer 2006) pp. 261–280
Agricultural finance Corporation Limited (1974). “A study on repayment of agricultural loans”, Bombay AFC Limited.
Chhatwal, M.S. (1973). “A study into the problems of repayment of loans adanced by Banking Institution to farmers in Ludhiana district”. Elevnth Annual Research report, Department of Economics and Sociology, Punjab Agriculture University, Ludhiana, pp. 51-52.
Krishnaswami, O.R. and Kundaswami (1982). “Credit support of small farmers – A study”, Krrukshetra, Vol.31 pp. 16-30
Mandal, A. (2005). “SGSY and SHG: An assessment”, kurukshetra, Vol. 53, No. 3 pp.4-9.
O’Donnell C. J. and W. E. Griffiths (2004) “Estimating state-contingent production frontiers”, Department of Economics, The University of Melbourne, Research paper number 911
Rajawat, J.S. (1991). “Attitudeof Farmers towards Promary Agriculture Credit Societies in Panchayat Samiti Sambhar lake of district Jaipur (Rajasthan)”, M.Sc. Thesis, SKN College of Jobner.
Ramaswami Bharat, Shamika Ravi and S.D.Chopra (2003). “Risk Management in Agriculture”, Discussion Paper 03-08, Planning Unit, Indian Statistical Institute, Delhi.
Reddy A. Amarender (2004). “Agricultural Insurance in India:A Perspective” The ICFAI Journal of Agricultural Economics, I (3) pp. 36-45.
Sharma, R. (1993). “Impact of IRDP on income and Employment – A case study of Maharashtra”, Indian J. of Labour Economics, 36 (2), pp. 190-200.
Vyas, S.K. (1993). “Impact of credit policy on agriculture financing through commercial bankc in Udaipur district (rajasthan)”, M.Sc. (Ag. Eco.) Thesis, Rajasthan College of Agriculture, Udaipur, RAU, Bikaner (Rajasthan).
Bikaner, Udaiman Rajasthan (2007). District Information Centre, Bikaner.
Working group on Eleventh five year plan (2007-2012). “Risk Management in Agriculture” Government of India, Planning Commission, New Delhi
Yadav, S. (1993). “Impact of Antyadaya programme in Jaipur district of Rajasthan”, M.Sc. Thesis, SKN College of Agriculture, Jobner.
Agriculture is backbone of Indian Economy but it is subject to a great many uncertainties.
Yet, about 75 per cent people (either self employed or as agricultural labour) in India earn their livelihood from this sector, which is maximum from all other economic sectors if put together. Households that were self-employed in agriculture, account for 28 per cent of all rural poor, while households that were primarily dependent on agriculture as labour, account for 47 per cent of all rural poor.
The criticality of agriculture in the rural transformation and the national economy seen along with its structural characteristics require substantial governmental and financial sector interventions not only to ensure household food and nutritional security of the farming community but also to generate savings and investments in this under investment sector.
Agricultural is associated with great many risks and these risks are associated with negative outcomes which results from imperfectly predictable biological, climatic, and price variables. Biological variables include pests and diseases and climatic variables are drought, flood etc. which are not under the control of the farmers. Moreover, the adverse changes in both input and output prices make condition more vulnerable for the farmers. The details of these different risks are given below:
Types of Risk
(i) Production risk:
Agriculture is often characterized by high variability of production outcomes or, production risk. Unlike most other entrepreneurs, farmers are not able to predict with certainty the amount of output that the production process will yield due to external factors such as weather, pests, and diseases. Farmers can also be hindered by adverse events during harvesting or threshing that may result in production losses.
(ii) Price or Market risk:
The next important factor of market risk in agriculture is input and output price volatility. Prices of agricultural commodities are extremely volatile resultant of both endogenous and exogenous market shocks. Local markets, which are mostly governed by local supply and demand conditions, the price risk is sometimes mitigated by the “natural hedge” effect in which an increase (decrease) in annual production tends to decrease (increase) output price (though not necessarily farmers’ revenues). In integrated markets, which are significantly affected by international production dynamics, a reduction in prices is generally not correlated with local supply conditions and therefore price shocks may affect producers in a more significant way.
Another kind of market risk arises in the process of delivering production to the right marketplace where the producer can have reasonable price for his produce. The inability to deliver perishable products to the right market at the right time can impair the efforts of producers (due to quality deterioration). The lack of basic infrastructure facilities, well-developed markets and proper market information system make this a significant source of risk.
(iii) Financial & Credit risk:
Finance is one of the most important factors of production for any business enterprise. The ways businesses finance their activities is a major concern for many economic enterprises and in this respect, agriculture also has its own peculiarities. Many agricultural production cycles stretch over long periods of time, and farmers must anticipate expenses to meet out the requirements. But they will only be able to get well if the product is marketed well. This leads to potential cash flow problems exacerbated by lack of access to insurance services, credit and the high cost of borrowing and these problems can be classified as financial risk.
(iv) Institutional risk:
Another important source of uncertainty for farmers is institutional risk, generated by unexpected changes in policy regulations that influence farmers’ activities. Changes in policies, regulations, financial services, level of price or income support payments and subsidies can significantly alter the profitability of farming activities. This is particularly true for import/export regimes and for dedicated support schemes, but it is also important in the case of sanitary and phyto-sanitary regulations that can restrict the activity of producers and impose high costs on producers.
(v) Technology risk:
Like most other entrepreneurs, farmers are also responsible for all the consequences of their activities. Adoption of new technologies in modernizing agriculture such as in introduction of genetically modified crops, more use of chemical fertilizers and pesticides, causes an increase in producer liability risk.
(vi) Personal risk:
Lastly, farmers, as any other economic entrepreneur, are exposed to personal risks affecting the life and the wellbeing of people who work on the farm, also asset risks from floods, cyclones and droughts and possible damage or theft of production equipment and any other farming assets.
Risk Management Strategies:
Farmers, from the ages, are trying to cape with above mentioned risks by adopting various risk management strategies. Earlier there were only informal methods of risk mitigation but in independent India, government have always been very supportive to the most vulnerable entrepreneurs of the country by offering various formal methods of risk management like insurance, credit, subsidies etc. Therefore, it is useful to understand strategies and mechanisms used by producers to deal with risk i.e. both formal and informal methods of risk management: (World Development Report, World Bank 2001)
i) Formal risk management - Arrangements that involve individuals or households or such groups as communities or villages.
ii) Informal risk management - Market-based activities and publicly provided mechanisms.
These formal and informal risks can further divided into two parts:
i) Ex ante - prior to the occurrence of the potential harming event. Among the ex ante reactions, it can also be useful to highlight the differences between on-farm strategies and risk-sharing strategies.
ii) Ex post - after the harming event has occurred
Table 1 Risk Management Strategies in Agriculture
Informal Mechanisms
Formal Mechanisms
Market
based
Publicly provided
Ex-Ante Strategies
On farm
· Avoiding exposure to risk
· Crop diversification and
inter-cropping
· Plot diversification
· Mixed farming
· Diversification of income
source
· Buffer stock accumulation
of crops or liquid assets
· Adoption of advanced
cropping techniques
(fertilization, irrigation,
resistant varieties)
· Agricultural extension
· Supply of quality
seeds, inputs, etc
· Pest management
systems
· Infrastructures (roads,
dams, irrigation
systems)
Sharing
risk with
others
· Crop sharing
· Sharing of agricultural
equipment, irrigation
sources, etc
· Informal risk pool
· Contract
marketing
· Futures
contracts
· Insurance
Ex-Post Strategies
Coping
with
shocks
· Reduced consumption
patterns
· Deferred / low key social &
family functions
· Sale of assets
· Migration
· Reallocation of labour
· Mutual aid
· Credit
· Social assistance
(calamity relief, food for-work, etc)
· Rescheduling loans
· Agricultural insurance
· Relaxations in grain
Procurement procedures
· Supply of fodder
· Cash transfer
As mentioned in the table 1, the farmer and farming community take various steps at their level to handle the risks but these methods are insufficient and ineffective for complete coverage from the risks. This situation becomes more vulnerable in the states which are underdeveloped as well as facing regular climate adversities. Rajasthan is one of those states. The farmers of Rajasthan are facing a number of problems like, frequent drought, low water table, low natural resource base, low level of literacy, etc.
Even the formal methods which has more potential like agricultural insurance, commodity markets and contract farming to pull the producer from out of the poverty trap and income shocks, by ensuring a fair share of the price goes to the producer. Other than these, technological advances in climate science, remote sensing technologies and ICT in developing early warning systems, increasing the effectiveness of instruments for pooling, sharing and transfer of risks, enhancing the coping capabilities of the farmers and other mitigation measures.
The state - Rajasthan
Rajasthan, the largest state of India (3,42,239 sq,km.) situated in the northwestern part of the Indian Union (23 30’ and 30 11’ North latitude and 69 29’ and 78 17’ East longitude) is largely an arid state for most of its part. The western boundary of the state is part of the Indo-Pak international boundary, running to an extent of 1,070 km. It touches four main districts of region, namely, Barmer, Jaisalmer, Bikaner and Ganganagar. The state is girdled by Punjab and Haryana states in the north, Uttar Pradesh in the east, Madhya Pradesh in the southeast and Gujarat in the southwest.
Rajasthan has exhibited spectacular progress in several areas like agricultural production, harnessing of mineral resources, development of transport and communication, and the production of energy resources but the rate of progress and plans of economic development have been slowed to a large extent by a parallel growth of human population and livestock. The rich wealth of non-renewable resources is yet to be explored and exploited. Their judicious exploitation can make the state economically self-sufficient.
Rajasthan is basically an agrarian economy. Most of its population lives in small villages and dhanies. It has a wide range of agro-climatic regions from very low rainfall in western part to high rainfall in south and southeastern parts of the state. Major part of the state is, however, covered by arid and semi-arid climatic conditions which have a characteristic low, erratic and uneven distribution of rainfall associated with lack of other water-resources for irrigated farming. Growing of only one rainfed crop in Kharif season, that too associated with high risk, has led to dependence of village community on livestock. Harsher the climatic conditions, higher were the shift towards Animal Husbandary. Due to low capital investment capacity, lesser availability of agriculture credit and lack of adequate infrastructure facilities like roads, power, etc., farming system was more subsistence oriented than the commercial farming.
The District - Bikaner
Bikaner is one of the border districts of Rajasthan. It is situated in north-west of the state. The total area of Bikaner district is 30247.90 square km. The district is divided into two natural parts – North-west desert and south-east semi-desert. There is a wide temperature different in these two parts. In summers wind storms are quite common and temperature crosses the level of 45oC and in winter it reaches to freezing point. District has a combination of extreme summers and winter.
Table 2: Land utilization in Bikaner district of Rajasthan (2000-01)
Land utilization
Area (ha)
Total land
30247.90
Cultivable land
291155.00
Cropped area
86344.00
Net cropped area
1378961.00
Forest area
82463.00
Gross irrigated area
228355.00
Net irrigated area
144324.00
Source: Bikaner, Udaiman Rajasthan, 2007
The total population of the district is about 19 lakh according to the 2001 census. The density of the district is 62.85 persons per km. District has about 56per cent literacy rate, the male literacy rate is about 70per cent and female literacy is 42.5per cent. the total working population is about 16 lakh persons.
Table 3: Indicators of Human Resources (2001)
Indicators
Unit
Numbers
Population
Persons in Lakh
19.01
Density of population
Persons per sq. km.
62.85
Literacy
Per cent
56
Total working population
Persons in Lakh
6.05
Gender ratio
Per thousand
896
Source: Bikaner, Udaiman Rajasthan, 2007
In Bikaner, both irrigated and non-irrigated farming is going on in district. About 2,714 farmers were benefited by District Agriculture department by providing subsidy for sprinkler farming.
Table 4: Farmers availed the subsidy for sprinklers in Bikaner
Year
No. of farmers
Dec. 03 to Dec. 04
299
Dec. 04 to Dec. 05
355
Dec. 05 to Dec. 06
1,951
Dec. 06 to Oct. 07
145
Source: Bikaner, Udaiman Rajasthan, 2007
About 37592 farmers were benefited from crop insurance by Agriculture insurance company of India and ICICI Lombard.
Table 5: Farmers benefited by agriculture insurance in Bikaner
Year
No. of farmers
Dec. 03 to Dec. 04
9,508
Dec. 04 to Dec. 05
16,971
Dec. 05 to Dec. 06
11,112
Source: Bikaner, Udaiman Rajasthan, 2007
1. Importance of Proposed Research Work or Relevance of the study:
Bikaner, as mentioned earlier, is one of the desert districts of Rajasthan. The district is prone to drought and facing many other water related problems like, low water table, inferior water quality etc since ages. The farmers of this region are facing very many risks in agriculture. Although in Bikaner, many developmental programmes have been launched and district is also selected for some of the pilot project like of agriculture insurance, companies like ICICI Lombard, NAIS etc. are working for selected crops to cope with the problems, but the condition of farmers is still vulnerable. Farmers are adopting various tools to tackle the risk at their own level. To know the status of adoption and type of mitigation tool for this critical situation this study will be conducted in the district if Bikaner and an effort will be made to suggest suitable mechanism for risk coping in agriculture.
2. Review of Work already done on the subject:
A comprehensive and critical review of literature provides a sound base for scientific investigation. With this understanding in mind the literature having direct or indirect bearing on the problem has been reviewed in light of the objectives of the study. It has been presented under:
Chhatwal (1973) in his study in Ludhiana district revealed that the causes of overdues from the farmer’s point of view were; low repayment capacity, low net returns due to inadequate loan, availability of loan at improper time and lack of technical guidance, social obligations, lack of consumption loan facilities, produce not sold of view, the causes of overdue were improper analysis of the project, lack of technical guidance, mis-utilization of loans, more expenditure on social obligations, lack of responsibility, lack of linking credit with marketing, lack of stick measures of recovery and lack of co-ordination between different lending agencies.
Agricultural Finance Corporation Limited (1974) reported on the basis of a study on repayment of agricultural loan and medium and large that small farmers engaged in dry farming and medium and large farmers of irrigated area were more defaulters in terms of repayment of loans.
Krishnaswami and Kundaswami (1982) have mentioned the reasons for non-repayment of loans as high cost of cultivation, low price, low yield, high rent, crop failure, non-disposal of produce, small marketable surplus and non-receipt of demand notice. However, they pointed that inadequacy of income arising due to crop failure, higher cost of cultivation and small marketable surplus were the main reasons for non-repayment of loans.
Rajawat (1991) studied attitudes of farmers towards PACS in Jaipur of Rajasthan by taking a sample of 100 rural people and remarked that favoritism and nepotism, inadequate supply of loan and ineffective managing committee of Primary Agriculture Cooperative credit Societies (PACS) as the important problems.
Yadav (1993) conducted the study to know the impact of Antyodaya programme on 100 beneficiaries in Jaipur district of Rajasthan and reported that nepotism and favoritism under antyodaya programme as the most important constraint in getting benefits, followed by delay in credit disbursal.
Sharma (1993) in his research study conducted in Maharashtra state observed that there was a spill-over effect in the identification of households. Several households below the poverty line were not identified for the programme. The average increase in income of beneficiary families due to IRDP assistance was substantial. Reasons for non-repayment of dues was low and inadequate income generated by assistance, inadequate and poor quality of assets, multiplication of assistance and malpractices at various levels of omplementation of the programme.
Vyas (1993) in his study on impact of credit policy on agricultural financing through commercial banks in Udaipur district (Rajasthan) concluded that medium size groups of farmers were good repayers of their loan.
Ramaswami et al. (2003) reported different type of risks in agriculture and try to understand agricultural risks and the ways of managing it. Production and price (or market) risks are two major risks that confront farmers. These risks could either be systemic or covariate (i.e., they are common to large groups of producers) or they could be individual-specific or idiosyncratic. The distinction is important because risk pooling and insurance arrangements (whether formal or informal) are more likely to offer protection against idiosyncratic risks rather than systemic risks. The diversity of climate, growing conditions and market structures means that there is no typical risk environment for a farmer. In the drylands without access to assured irrigation, rainfall is a dominant production risk. Similar is the case with pests and disease. Local pest and disease infestations depend on many factors including the crop variety, weather, the use of pesticides and other crop practices. Beyond a threshold level, the infestation can quickly reach epidemic proportions affecting large areas. Unlike rainfall risks, the humid and irrigated regions have no special advantage with respect to pest and disease attacks.
As the demand for agricultural products is inelastic, supply shocks are magnified in price variations. Besides production risks, supply shifts are also because of variability in planned supply, i.e., area planted to a particular crop. Variability in planned supply comes about because of errors in forecasting prices. Often, the biases in these errors are systematic as forecasts are determined by past prices. As a result, prices and planned supply can oscillate creating endogenous variability. Such uncertainty is often seen in seasonal price movements as well. The importance of price risk would depend on the extent of exposure to market forces as well as existing market institutions. International trade can increase or decrease price variability.
There are essentially six ex post ways to compensate for shortfalls in farm income: They can sell stored produce, liquidate assets, borrow for consumption, receive transfers from relatives, change jobs and/or increase their labour market participation and migrate in search of work. Households might farm a diversified portfolio of agricultural activities, adopt technologies, such as inter-cropping or drought- resistant crops, and contractual arrangements such as sharecropping that reduce the variance of income, or diversify their activities through migration or local non-agricultural employment. Any of these ex ante actions might be costly, so that the households would be sacrificing income, on average, in order to assure a less risky stream of income. In addition to the mechanisms at the level of the farm household, the need to cope with risk can also affect community interactions and social customs. Gift-based exchange that is based on reciprocity and informal borrowing and lending on implicit and flexible terms are instances of community level mechanisms that can help farm households to cope with adversity.
O’Donnell and Griffiths (2004) advocate the use of state-contingent production technologies to represent risky production and establish important theoretical results concerning producer behaviour under uncertainty. Unfortunately, perceived problems in the estimation of state-contingent models have limited the usefulness of the approach in policy formulation. We show that fixed and random effects state-contingent production frontiers can be conveniently estimated in a finite mixtures framework. An empirical example is provided. Compared to standard estimation approaches, we find that estimating production frontiers in a state-contingent framework produces significantly different estimates of elasticities, firm technical efficiencies and other quantities of economic interest.
Reddy (2004) reported that ongoing National Agricultural Insurance Scheme (NAIS) along with experimental income insurance and weather insurance, is a good step forward to insure risk of millions of farmers whose livelihood depends on the pattern and distribution of monsoon rain in India. NAIS is based on area-yield approach and is suffering from low penetration and adverse selection with consequent high claim to premium ratio. With this backdrop, the paper reviews the innovative techniques in agricultural/rural insurance, which overcome some of the disadvantages of the above insurance and which advocate simple rainfall index insurance as a better alternative to the existing agricultural insurance scheme. The rainfall insurance is in practice in many countries for years and has been very simple to understand by a common farmer. It is put into practice with minimum existing resources with very little administrative and overhead costs. It also covers agricultural laborers and non-farm workers whose income is affected adversely by failure of rainfall and it is a very effective mechanism to increase insurance penetration ratio. The rainfall insurance is also more compatible with reinsurance practices, which make primary insurers cover their local/regional risks in catastrophic events by pooling their resources with reinsurance. The reinsurance agents can also effectively transfer their risks by issuing catastrophic bond/options like instruments in stock exchanges (NSE and BSE), as our stock markets are relatively well-developed and it may effectively fit into the portfolios of some of the fund managers and hedge funds.
Mandal (2005) reported that it is now commonly conceded that most of the poverty eradication programmes could not reduce the incidence of poverty substantially for a variety of reasons. Wrong selection of beneficiary, leakage, corruption and malpractices, absence of backward and forward linkage in project and inadequacy in delivery and monitoring of credit were the few factors identified by the agricultural credit review committee. The failure to develop sustainable bank client relationship was still another deficiency.
Abedullah and Ali (2006) in their study developed a formulation to decompose variability in profit into price and production effects. The production effect is further segregated into management and weather effects. The formulation is used to compare and decompose risk in the profit of three existing cropping patterns (corn-corn, corn-fallow, and rice-fallow) in the rainfed areas of Claveria, northern Mindanao, Philippines. High variability and low profitability of the crops in a more risky season (dry in our case) can limit cropping intensities in rainfed areas. However, intensification of the crops during the less risky season (wet in our case) can provide the necessary stake to invest in the risky season crops. Although weather is the dominant factor in explaining total variability, this should not be interpreted as a general rule for all agricultural environments. In an environment where input intensity is high, and input-output markets are inefficient, management and price effects can dominate the weather effect.
Working group on Eleventh five year plan (2007-2012) reported that in India agricultural risks are exacerbated by a variety of factors, ranging from climate variability and change, frequent natural disasters, uncertainties in yields and prices, weak rural infrastructure, imperfect markets and lack of financial services including limited span and design of risk mitigation instruments such as credit and insurance. These factors not only endanger the farmer’s livelihood and incomes but also undermine the viability of the agriculture sector and its potential to become a part of the solution to the problem of endemic poverty of the farmers and the agricultural labor. The criticality of agriculture in the rural transformation and the national economy seen along with its structural characteristics require substantial governmental and financial sector interventions not only to ensure household food and nutritional security of the farming community but also to generate savings and investments in this grossly under funded sector. The poor penetration and development of various risk management tools in the country also represent the huge opportunities for the emerging agricultural insurance and commodity markets to pull the producer from out of the poverty trap by insulating him from income shocks and by ensuring that a fair share of the price goes to the producer.
3. Objectives of the study:
To study instability in agricultural production and factors responsible for instability in Bikaner district.
To identify various types of agricultural risks faced by the farmers in the area of study.
To study the awareness level of farmers about risk mitigation techniques.
To study the level of adoption of formal and informal methods of agriculture risk management by the farmers.
To study the constraints in adoption of the formal methods of risk mitigation by the farmers.
To suggest possible measures to increase the adoptability of formal mechanisms of risk mitigation by the farmers.
4. Methodology:
The methodology of proposed study will be as follows:
Sampling Framework-
For the proposed study, out of total eight tehsils, four tehsils of Bikaner district will be selected, two will be from irrigated area and two will be from unirrigated area. Through stratified random sampling, Pugal and Lunkaransar have been selected, representing irrigated area whereas Kolayat and Dungargarh have been selected, representing unirrigated area. In all the four tehsils four villages from extreme corners will be selected within the radii of 10km from tehsil headquarter. In each village, 10 farmers will be selected randomly for the study purpose.
Tehsils
Villages
Farmers
Total
Pugal
4
10
40
Lunkaransar
4
10
40
Kolayat
4
10
40
Dungargarh
4
10
40
Grand Total
160
Collection of data –
Data will be collected from both primary and secondary sources. Primary data will be collected from farmers, government officials, experts etc. The interview schedule will be used for primary data collection. The required data will be collected from selected respondents by personal interview method. Secondary data will be collected from government published matter, newspaper, magazine, internet etc
Analysis of data-
After collection of data, data will be processed and analyze using various appropriate statistical tools. For the first objective, secondary data about the various factor of production will be collected and their effect on production will be quantified. For the second objective, data about different types of risks faced by the farmers will be collected to know the major risk associated with the farming in the study area. Under third objective, awareness about the risk mitigation tools will be checked to know the knowledge level of the farmers about various techniques of risk mitigation. In fourth objective the formal and informal methods adopted by farmers will be studied to know the level of adoption of available methods. In the study, the constraint will also be studied to know the main reasons of not taking advantage of available methods under fifth objective. And lastly, an effort will be made to develop a suitable mechanism for risk management for the farmers of study area.
5. Chapter-wise details of Proposed Research:
The study will be presented in form of chapters for the purpose of clarity. The study will be divided into four chapter sand the chapter-wise details are as follows.
Executive Summary – A summary of the research work will be given in the start.
Chapter first – Introduction – in this chapter, the introduction about the agriculture risk, its types, its extend etc. will be given.
Chapter two – Methodology – in this chapter the research methodology will be explained. The introduction of the selected area will also be covered under this chapter.
Chapter three – Review of Literature – this chapter will consist of summaries of different past work done on agriculture risk management within the country as well as outside the country.
Chapter four - Results and Discussion – in this chapter, the results of the study will be presented objective wise along with the analysis and discussion. A suggestive mechanism will also be given in the last of this chapter.
Bibliography – A detailed list of references will be given in the end from which the literature will be reviewed about the subject.
6. Bibliography:
Abedullah and Mubarik Ali (2006). “Quantifying the Extent and Nature of Risk in Alternative Cropping Patterns in Claveria, Philippines”. The Pakistan Development Review 45 : 2 (Summer 2006) pp. 261–280
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proforma of synopsis to be submitted by the student
The motivation level of male and female academicians:
A comparative study
TABLE OF CONTENTS
Introduction………………..…………………………………………………..3
Definition and Conceptualization………………..…………………………….4
Need For an Efficient Motivation System………………..……………………6
Issues of an Efficient Motivation System………………..…………………….8
Literature Review ……………........………………….………………………10
Rationale of the Study……………………………….……………………......14
Scope of the Study…………………………………….………………………16
Hypotheses of the Study………………………………………………………17
Objectives of the Study………………………………………………………..18
Research Methodology……………………………………………...………...19
Chapterization………………………………………………............................21
Bibliography………………………………………………...…………………23
Introduction
Every person is motivated - about something. Whether it's home and family, a favorite sport, watching movies, or reading, something rings your chimes. The challenge at work is to create an environment in which people choose motivation at work. Yes, this choice is up to the individual, but the employer plays a big part in motivation, too. Motivating employees means creating a work environment that supports motivation. Motivation is one of the key ingredients in employee’s performance and productivity. Even when people have clear work objectives, the right skills, and a supportive environment, they won’t get the job done without sufficient motivation to achieve that work objective.
The importance of achieving motivational level right from the grass root to top level is essential for success. It remains imperative for sustainability of organization. Well motivated personnel are critical to the development and execution of strategies, especially in today’s rapid paced more perplexing scenario.
To understand the concept of motivation, one must know about the terms motive, and motivating also. The term motive means an inner state that energizes, activates, and that directs behavior towards goals. And motivating is a term which implies that one person induces another to engage in action (work behaviour) by ensuring that a channel to satisfy the motive becomes available and accessible to the individual. So motivating employees is an incessant and key process for any corporation. No amount of quality work can be obtained from employees unless they feel motivated enough to pour their heart and soul into what they do. Balancing the demands of changing market with the demand of the employees for reasonable treatment and respect is becoming increasingly difficult. And motivation of employees for higher level of performance becomes difficult.
In the context of motivation, it can be stated that it is an internal state or condition (sometimes described as a need, desire, or want) that serves to activate or energize behavior and give it direction (Kleinginna and Kleinginna, 1981). Motivation is an
· internal state or condition that activates behavior and gives it direction;
· desire or want that energizes and directs goal-oriented behavior;
· influence of needs and desires on the intensity and direction of behavior.
Motivating employees is a key issue for most managers. In order to achieve a high level of performance and productivity, managers nowadays, are inclined to pay more attention on this issue. Different employees need to be motivated differently. In the present study an attempt will be made to study the level of motivation between male and female professionals. The assessment of the level of motivation and need satisfaction amongst professionals will also form a part of the study.
Definitions and Conceptualization
From ancient times, the word motivation has been recognized as an important determiner of behaviour. Various psychologists and social thinkers have tried to define the concept of motivation from time to time.
According to McFarland “motivation refers to the way in which urges, drives, desires, aspirations, strivings, or need direct control or explain the behavior of human beings”.
In the words of Vitiles “motivation represents as unsatisfied need which creates a state of tension or disequilibrium, causing the individual to make in a goal-directed pattern towards restoring a state of equilibrium by satisfying the need”.
In the encyclopedia of Management it is stated, “Motivation refers to degree of readiness of an organism to pursue some designated goal and implies the determination of the nature and locus of forces, including the degree of readiness.”
According to Likert, “it is the core of management which shows that every human being gives him a sense of worth in face to face groups which are most to him….a supervisor should strive to treat individual with dignity and recognition of their personal worth.”
According to Memoria, motivation is “a willingness to expand energy to achieve a goal or reward. It is a force that assigns, activates dormant energies, and sets in motion the action of the people. It is the function that kindles a burning passion for action among the human beings of an organization.”
Many contemporary authors have also defined the concept of motivation. Motivation has been defined as: the psychological process that gives behavior a purpose and direction (Kreitner, 1995); a predisposition to behave in a purposive manner to achieve specific, unmeet needs (Huford, Bedeian, & Lindner, 1995); an internal drive to satisfy an unsatisfied need (Higgins, 1994); and the will to achieve (Hedeian, 1993).So the word motivation can operationally be defined as the inner force that drives individuals to accomplish personal and organizational goals.
All the above definitions show different features of motivation. On the basis of these definitions one can infer that motivation means intentions, desires, goals and needs that determine human behavior. Motivation can also be defined in several ways such as –
· Motivation is a psychological feature that arouses an organism to action towards a desired goal; the reason for the action; that which gives purpose and direction to behavior.
· It can be stated as the condition of being motivated.
· An act of motivating; providing incentive.
One can also study motivation from the perspective of psychology; as the intention of achieving a goal, leading to goal-directed behavior. Some human activity seems to be best explained by postulating an inner directing drive. While a drive is often considered to be an innate biological mechanism that determines the organism's activity (instinct), a motive is defined as an innate mechanism modified by learning. Human drives serve to satisfy biological needs, such as hunger, while motives serve to satisfy needs that are not directly tied to the body requirements, such as companionship. Learned motives are sometimes linked with drives; e.g., the motivation to achieve social status is often viewed as a derivative of the sex drive.
An American psychologist, Abraham Maslow, classified motives into five developmental levels, with the satisfaction of physiological needs most important and esteem and self-actualization needs least important. According to Maslow, the most basic needs must be satisfied before successively higher needs can emerge. Psychologists such as Herzberg’s work categorized motivation into two factors:
Motivators and Hygienic factors (Herzberg, Mausner, and Snyderman, 1995) Motivators or intrinsic factor could be some achievement and recognition for employee’s work, the job itself or even responsibility, advancement and growth in one’s career. Hygienic or extrinsic factor could be the pay of employee, job security, working condition, a company’s policies, and administration, supervision and interpersonal relationship.
Need for an Efficient Motivation System
It is true that nobody can stimulate anyone else to work, unless he/she knows how that person is to be motivated and to what incentive he/she will respond. Apart from this fact, a sound motivational theory (for an organization) should also consider this fact that people typically are, continuously in motivational state and the nature of motivation is fluctuating and complex. Satisfaction of one need gives rise to another need, when that is satisfied a new higher order need takes its place. These needs can be fulfilled by more than one way, different needs by different means, and different needs by one.
The management of an organization tries to utilize all the resources of production in best possible manner. This can be achieved only when employees co-operate in this work. Efforts should be made to motivate employees for contributing their maximum. The effort of management will bear fruit if the employees are encouraged to work more. The motivated employees become an asset to the organization. And organizations use an efficient motivation system to fulfill several needs of enterprises:
1. Reduce employee Absenteeism and Attrition - When the employees are not satisfied with their job then they leave it whenever they get a better or an alternative offer. The dissatisfaction among employees also increases absenteeism. The employment training of new employees costs dearly to the organization. The employees feel motivated and satisfied with their job when they are offered financial as well as non financial incentives in the form of recognition, promotion, and responsibilities. With these measures, the rate of absenteeism and attrition will be low and the employees will try to improve quality and increase productivity.
2. Goodwill of Organization - Those enterprises which give better financial and non financial facilities to their employees have a better image among themselves. Such organizations are successful in attracting and maintain competent talent. Since there is a better man-power to development program, the employees would like to join such organizations. Hence, motivational effort simplifies personnel function also.
3. Healthy Industrial Relations - A sound motivational system will create job satisfaction among employees. The employment will offer those better service conditions and various sufficient incentives. There will be an atmosphere of confidence among employer and employees. There will be no reason for conflict, and cordial relations between both sides will create a healthy atmosphere thereby, leading to healthy industrial relation.
4. Acceptability to Change - The changing social and industrial situation will require changes and improvements in the working of enterprises. There will be a need to introduce new and better methods of work from time to time. Generally, employees resist change for fear of an adverse effect on their employment. When the employees are given various opportunities of development then they can easily adapt to new situations. They will think of positive side of new change and will co operate with the management. If the employees are satisfied with their work and not offered better avenues then they will oppose every thing suggested by the management. Motivation will ensure the acceptability of new changes by the employees.
5. Meeting Employee Expectations - Employee expectation can affect employee’s motivation. The amount of effort employees exert on the specific task depends upon their expectation of the outcome. This expectation varies from person to person and if organization helps to meet these expectations then the employees will get motivated and will positively affect the productivity of the organization. Organizations can help to meet the expectations in various ways by:
(i) determining what rewards are valued by employees.
(ii) determining the employee’s desired performance standard.
(iii) ensuring that performance standards are attainable.
(iv) linking guarantee rewards to performance.
6. Gearing Quality Performance - Motivated employees will put maximum effort in creativity and achieving organizational objectives. The untapped reservoirs, physical and mental potential, / abilities are tapped to maximum. Better performance will also result in higher productivity. The cost / investment on production can be reduced if productivity is raised. The employee should be offered more incentive for increasing their performance. Motivation will act as a stimulant for improving the performance of employees.
Issues of an Efficient Motivation System
An efficient motivational system must be productive, competitive, comprehensive, and flexible. A sound motivational system has the following features:
1. Profile of the Organizational Climate - A profile of the organizational climate can be prepared through periodical diagnostic studies by analyzing motivation which prevails in the organization. This profile can be used as a basis for initial interventions in several groups to determine whether they are satisfied with it and if not, what action can be taken for melioration.
2. Proper Diagnosis – Motivation is a complex process that involves human skill. Persons differ in what motivates them. Hence, to achieve most effective results, the manager must diagnose each situation and apply the various motivation principles as required.
3. Sound Reward System – Rewards are a key motivator. The manager should develop a sound reward system. He should blend the use of intrinsic and extrinsic rewards. Rewards should be linked to performance. Key reward such as pay increases and promotion should be allocated for the achievement of specific goal. And the must thing in this is that the reward should be valued for employees. If a reward isn’t valued then it won’t motivate.
4. Differing Reinforcement of Motivation - In organizational setting different systems reinforce some motivations more than others. Attempts may be made to determine motivations that different systems reinforce while designing or changing systems. This facilitates installation of appropriate system for reinforcing relevant motivation ( i.e. achievement, power, extension, etc.) in order to accomplish organizational effectiveness. For example, a system involving person from different group to meet and discuss and arrive at a decision will reinforce extension motivation (collaboration).
5. No Overnight Results – Motivation is a continuous activity reinforced by managers. It is a process of learning; as such, the manager should not expect overnight results in attempting to motivate subordinates.
6. Manager is the key Element - The manager can influence each stage of a person’s motivation process. The manager identifies the key motivating needs, helps in directing motivated behavior, assists in learning skills, and rewards behavior. Thus, the key role of the manager should be recognized.
7. Watch out for Unintended Consequences - Performance based reward system sometimes has an unexpected- and undesirable-effect on employee behavior. Employee behavior is a complex combination of needs, competencies, role perception, and situational factors, so it is often difficult to see the unexpected results when reward system is introduced.
8. Norms of Recognition of Individuals Difference – Individuals differ in terms of attitudes, personality, behavior and other variables. They are not homogeneous. Hence, it should be recognized that they require different motivation.
9. Challenging and Attainable Goal - A good motivation system requires that challenging and attainable goals should be set for employees. Goal should be formulated jointly. Also, the appraisal process by which their performance is evaluated should be both reliable and valid.
10. Role of Money - Money is a powerful motivator. It should not be ignored. The allocation of performance- based wages increases, piece- work bonuses, and other pay incentive is important in determining employee motivation.
11. Active Cooperation of Employees - Employees are the essential part of the organization. Their active cooperation should be sought in improving the organization’s productivity. And manager should stay close to employees and remedy problems as they arise.
12. Work Culture - To motivate people, management should foster an organizational culture oriented towards performance and work. Jobs should be designed to offer challenge and variety. A good motivation system motivates the people to work with optimum efficiency and devotion.
13. Dynamic System - The motivation system should be dynamic and flexible. The needs of the people are changing from time to time. Hence, motivation should be provided in view of new and changing needs, expectation, and behavior.
14. Team Reward for Interdependent jobs - Organization should use team rewards rather than individual reward when employee works in highly interdependent jobs. Because we can’t identify or measure individual contribution very well in these situations. Team reward tends to make employee more cooperative and reduces unhealthy competition. Employees see that their incentive depends on how well they work with their co-workers.
15. Encouraging Open Communication - Open communication system improves work motivation in an organization. It may embrace communication of policies from the top level to the different organizational level; help resolve difficulties and problems at the various organizational levels; and flow of supportive feedback from the superior on performance. By increasing general satisfaction such open communication improves work motivation.
16. Role Efficacy - Role efficacy improves work motivation. It forms potential effectiveness of an individual in his role. Factor conducive to role efficacy includes: (i) the individual’s perception of his role being important in the organization. (ii) self role integration, (iii) opportunity to take initiative and become creative, (iv) integration of the role with other roles in the organization, (v) possibility to influence and work on larger goal useful to others, and (vi) opportunity to grow. An attempt may be made to measure the role efficacy of several jobs in organization in order to take appropriate measure to enhance the same.
Literature Review
Many studies of the Motivation of workers have been carried out. Behavioral scientists have studied extensively the Motivation of many professional and non-professional groups such as accountants, engineers, middle managers, insurance agents, research scientists, assembly workers and nurses. Academicians, among other groups of professionals, have been virtually ignored by researchers. However, appear to have focused on public and private university academicians fortunately; there are some studies on the comparative job satisfaction levels and Motivation Level of public and private school teachers at the elementary and secondary school levels.
These research findings, in general, suggest that teachers working in private schools tend to be more satisfied with their jobs compared to their public sector counterparts. For example, a study of 320 elementary school teachers from eight different public and private schools, using data from the Minnesota Satisfaction Questionnaire, showed that teachers working in private schools were significantly more satisfied with their jobs (Varlık, 2000). A study of 804 public secondary school and 330 private secondary school teachers in Turkey also revealed that the level of job dissatisfaction was significantly higher among public school teachers (Özdayı, 1990).
Finally, a study made on 173 teachers, 100 of them working in public and 73 of them working in private schools, found significant differences between the two sectors in terms of job satisfaction levels (Kınalı, 2000). As indicated, no specific studies were uncovered that deal directly with the differences in Motivation and job satisfaction between public and private university academicians. Motivated in part because of the lack of studies in important area of study, this research is undertaken.
According to Samita Kulkarni (Research Associate, Center for Management Development, The ICFAI Business School, Hyderabad) in her article (Employee Motivation, Global CEO, November 2005 Volume VII) balancing the demand of the changing market with the work specific facility/need/demand of the employees for reasonable assistance / treatment and respect is becoming increasingly difficulty.
Loyalty to company, which came naturally in the past, from an employee’s perspective seems to be diminishing in today’s business world. Restructuring, downsizing and layoffs from merger and acquisition are becoming the order of the day, employees don’t feel they have the job security as they did in past. The result has been that people are more open to other opportunities, and motivation of employees for higher level of performance becomes difficult when all the rules have changed and the simple exchange of loyalty and commitment does not exist any more.
In time like this, effective management of human resources is very critical. And we undoubtedly live in a very materialistic and a money motivated world and any quantity of human relation cannot recompense for the lack of financial reward. But if reward is right then by giving respect to the employee and showing concern to their needs, will add that extra something in motivating the employees to give their best.
Guisseppi A. Forgionne (Management Sciences Department, School of Business Administration, California State Polytechnic University, Pomona, California 91768). Vivian E. Peeters (School of Business Administration, California State Polytechnic University) stated in their article: Differences in Job Motivation and Satisfaction among Female and Male Managers that the influence of sex on satisfaction with job related factors, overall job satisfaction, attitudes toward various motivators, and overall job motivation among managers. Using a statistical analysis of survey data, the study identifies many significant differences between male and female managers' perceptions and attitudes. The article then compares the findings to previous research, presents some questions pertinent to policy formation, and suggests avenues for future research.
Teachers Job Satisfaction and Motivation for School Effectiveness: An Assessment by Ololube, Nwachukwu Prince Significantly, job satisfaction and motivation are very essential to the continuing growth of educational systems around the world and they rank alongside professional knowledge and skills, center competencies, educational resources as well as strategies, in genuinely determining educational success and performance. This study assessed the differences and relationship between the level of teachers' job satisfaction, motivation and their teaching performance in Rivers State of Nigeria. A questionnaire titled "TEJOSAMOQ" was used to collect data for the study. While the data for the study was analyzed using multiple statistical procedures: mean point value, standard deviation, and variance, t-test of significance and One-way-analysis of variance (ANOVA). The survey results revealed that teacher related sources of job satisfaction seem to have a greater impact on teaching performance, as teachers are also dissatisfied with the educational policies and administration, pay and fringe benefits, material rewards and advancement. (Contains 3 tables and 2 figures.) [This article was published in "Essays in Education," Volume 18, Fall 2006; published by the Department of Education at the University of South Carolina, Aiken. ISSN: 1527-9359.]
Job Satisfaction of University Academics: Perspectives from Uganda by Ssesanga, Karim; Garrett, Roger M. (Higher Education: The International Journal of Higher Education and Educational Planning, v50 n1 p33-56 Jul 2005) Although several studies in the affluent world have examined the job satisfaction and dissatisfaction of lecturers in higher education, little is known about academic job satisfaction in the low-resource countries. This study probes those factors contributing to academic satisfaction and dissatisfaction in higher education in the developing world. Using a sample of 182 respondents drawn from two universities in Uganda, this analysis reports that the factors most prevalent in the prediction of dons' satisfaction relate to co-worker behaviour, supervision and intrinsic facets of teaching. Analogously, the stimuli that create academic dissatisfaction are largely extrinsic (contextual) factors with respect to facets of remuneration, governance, research, promotion, and working environment. This article discusses these findings in the light of Herzberg's dichotomy and concludes that any given factor be it intrinsic or extrinsic can either evoke academic satisfaction or induce dissatisfaction. The present analysis finds that while age, rank, and tenure significantly predict academic job satisfaction, no evidence is adduced to support a gender influence on dons' job satisfaction. Implications for Ugandan academics' job satisfaction are formulated, recommendations made, and a further research agenda proposed.
According to Martin, Donna M. in his article: Relationship of Motivational Differences of Male and Female Community College Students to Academic Achievement
A study was conducted at a mid-western community college to determine motivational profile differences between high and low achievers. The study population of 71 full-time, degree-seeking students in the school of arts and sciences was divided into a high achieving group with grade point averages (GPA's) of 3.85 and above, and a low achieving group with GPA's of 1.0 or below; and was tested using Martin's Motivational Profile. Study results included the following: (1) positive motivational sources, such as pleasure with performance, happiness, and good prior performance, had no significant impact on academic performance; (2) low achieving males scored highest in overall positive motivational sources, while low achieving females scored lowest; (3) females in both high and low achieving groups had significantly higher negative motivation scores than males; (4) among both male and female low achievers, negative motivation was almost twice that of the high achievers; (5) overall energy levels were significantly higher in low achievers than in high achievers; (6) the group with the lowest depression level was the high achieving males and the group with the highest depression level was the low achieving males; (7) anxiety levels were significantly higher in low achievers; (8) women in both groups manifested a significantly greater level of fear than males; (9) negative conflict scores were significantly higher in low achievers; and (10) frustration levels were significantly higher in low achievers. The study report includes the motivational profile instrument as well as raw data and ANOVA tables for the motivation factors. (LAL)
Rationale of the Study
Motivation plays a vital role in enhancing the performance level of professionals and this has been proved time and again in studies undertaken by researchers. The following points focus on how the growth of organization gets affected by the motivation level of employees.
1. To satisfy Individual’s Expectations - Motivation is a reported urge to reach the expectation of individual. If the organization is using an efficient motivation system that might be obliging employees for satisfying their expectations and will also considerate for organization itself for reaching organizational objectives.
2. Imperative to Flourish - The organizations need to recognize that their growth requires the cooperation of all the employees; and such cooperation is enhanced by using the efficient motivation system in organization. In this regard, the management needs to act as an accommodating team and prevent inefficient motivational practices.
3. Key element in improving Productivity of Organization - The performance on the job is a product of skill and level of motivation. Thus the productivity is affected by the skill of a person and the motivational environment in organization. Divergence in motivation causes divergence in productivity. Therefore, the performance level is higher if the motivation level is higher. The overall spirit in productivity may be result of high motivational level.
4. Healthier Industrial Relationship - A good motivational system will create job satisfaction among employees. The employment will offer them better services, condition and various other incentives. There will be an atmosphere of confidence among employees. There will be no reason for the conflict and cordial relationship among both sides will create healthy circumstances. So motivation among employees will lead to better industrial relations.
5. Satisfying Deficit (hygiene) Needs - Deficit hygiene needs, if not adequately satisfied, may lower work motivation. Without the adequate satisfaction of these needs (i.e. salary, security, company policy, working condition etc.) it is not possible to take necessary action for improving work motivation.
6. Reducing Attrition Rate - When the employees are not satisfied with their jobs then they will leave the organization whenever they get an alternative offer. The employment training of new employees cost dearly to the organization. When the employees are satisfied with their job and they are well motivated by offering them financial and non-financial incentive then they will not leave the organization.
7. Promote norms of Recognition of Competence - The climate of work motivation can be engineered by promoting norms of recognition of competence in the job and good work performed. If individual perceive such recognition, they are motivated to work. The recognition of their contribution should be genuine and given only to those who deserve it.
8. Opportunity to Influence Decision - Work motivation can also be increased by providing opportunity to the individual to influence decision concerning them. This is possible, if some autonomy with adequate support and responsibility is there, for the individual who is also able to perceive it. Different jobs can be assessed to determine the extent to which they provide such opportunities for taking corrective measure where needed.
9. Opportunity for Development and Growth - Perception of opportunities for development and growth in the job forms a significant measure to improve work motivation. By providing a feeling to the people that their job help them learn new things and facilitate their development, their level of motivation can be raised.
10. To meet the Changes in scenario - The changing social and industrial situation will require changes and improvement in the working of enterprises. There will be a need to introduce new and better methods of work from time to time. Generally employee resists change for a fear of an adverse effect on their employment. When the employees are given various opportunity of development then they can easily adopt the new situations.
Scope of the Study
Developing insight into how different management institutions enhance the motivation level of their academicians. The study can help various management institutions in deciding what factors of motivation they must address for their academicians.
The study can help management institutions and research and development cells in the following manner:
· Assess how the management institutions are perceived in comparison with its competitors with reference to motivation system
· Corroborate current motivation system and create new ones to manage principle motivation system in their institutions.
The results of the study may serve as some guidelines to management of the institutions as to which, tools and techniques among an array of possible ones, should it focus on in building and maintaining a statutory v/s voluntary compliance to the cipher of motivation system.
The study can be helpful for coming research scholars for further research in interrelated arena.
Hypotheses of the Study
Hypotheses may be defined as a proposition or a set of proposition set forth as an explanation for occurrence of some specified group of phenomena either asserted merely as a provisional conjecture to guide some investigation or accepted as highly probable in the light of established fact. Quite often a research hypothesis is a predictive statement, capable of being tested by scientific methods, that relates an independent variable to some dependent variable.
The following hypotheses would be considered for the study.
H1 Motivation level is much higher amongst those academicians who maintain androgynous personality than only masculine or feminine personality holder.
H2 Maslow’s Hierarchy of Needs is better satisfied amongst androgynous type academicians than only masculine or feminine personality holder.
H3 Motivator factors lead higher motivation and job satisfaction, but the absence of these factors will not lead to lower motivation and dissatisfaction.
H4 Lack of hygienic factors lead to lower motivation and dissatisfaction but presence of these will not lead higher motivation or job satisfaction.
Objectives of the Study
After study the initial period of familiarization with the problem, its subject scope, nature and motive that underlie it, the researcher is in a position to formulate the objective.
The present study will be carried out by keeping in view the following objectives.
· To study the motivation level among various academicians in different management institutes
· To compare the level of motivation among male and female academicians of different
management institutes
· To examine Maslow’s and Herzberg’s theories of motivation
· To explore different issues related to higher motivation among academicians in management institutes.
· To examine the weight of each factor in order to find out what is the preference of academicians for achieving higher level of motivation
Research Methodology
Research Methodology is a way to systematically solve the research problem. It may be understood as a science of study how research is done scientifically. The scientific methods attempt to achieve a scientific interpretation of facts by “experimentation, observation, logical arguments from accepted postulates and a combination of these three in varying proposition”. In the scientific method, logic aids in formulating propositions explicitly and accurately so that their possible alternatives become clear. In research methodology we also study the various steps that are generally adopted by the researchers in studying the research problem along with the logic behind them.
Sampling
The basic idea of sampling is that by selecting some of the elements in a population, we may draw conclusion about the entire population. A sample is the group selected from the complete population to make the task of surveying less costly and more manageable. The secret is to select a sample that will have the same characteristics as the over all population.
For present study the sample will be Non probability samples based on deliberate sampling. In this type of sampling, items for the sample are selected deliberately.
Data Collection
The collection of data plays an important role in research process and there are several methods of primary data collection. In present study structured questionnaires method will be used by researcher for collecting primary data.
Respondents (Sample Size)
The sample will be selected from management institutions, Rajasthan only. And the size of sample will be -
Male Professors 250
Female Professors 250
Secondary Data
Secondary data means data that are all ready available i.e. they refer to the data which have already been collected analyzed by some one else. Secondary data may either be published data or unpublished data. In present study the secondary data will be collected from several resources such as-
News paper-
Economics Time
Times of India
Hindustan Times.
Magazines-
Business World
ICFAI Reader
Effective Executive
HRM Review
Global CEO
Journals-
Management Research
Organizational Behaviour
Vikalap
Vision
Processing of Data
1. Editing
2. Coding
3. Classification
4. Tabulation
Analysis of Data
1. Correlation analysis
2. Chi Square test
Inferential analysis
Chapterization
Chapter I Motivation an Overview
· Introduction to the background of the motivation
· Motivation -Definitions and Conceptualization
· Need for efficient motivation system
· Issues associated with motivation system
· Androgynous – Definition and Conceptualization
Chapter II Research Problem an Overview
· Problem Identification
· Scanning of existing Literature
Chapter III Objectives, Hypotheses, and Sampling
· Objectives of the Research
· Hypotheses of the Research
· Sampling
Chapter IV Data Collection, Processing, and Analysis
· Data Collection
· Processing of Data
· Analysis of Data
· Limitations of the study
Chapter V Research findings and Discussions
· Comparative Analysis of Motivation level between Male and Female academicians
· Comparative Analysis of Need satisfaction level among Male and Female academicians
· Comparative analysis of Influence of motivational and hygienic factors on Male and Female academicians
Chapter VI Summary, Conclusions and Recommendations
Appendices
· Blank schedule of questions
· Data bank etc.
Bibliography
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A comparative study
TABLE OF CONTENTS
Introduction………………..…………………………………………………..3
Definition and Conceptualization………………..…………………………….4
Need For an Efficient Motivation System………………..……………………6
Issues of an Efficient Motivation System………………..…………………….8
Literature Review ……………........………………….………………………10
Rationale of the Study……………………………….……………………......14
Scope of the Study…………………………………….………………………16
Hypotheses of the Study………………………………………………………17
Objectives of the Study………………………………………………………..18
Research Methodology……………………………………………...………...19
Chapterization………………………………………………............................21
Bibliography………………………………………………...…………………23
Introduction
Every person is motivated - about something. Whether it's home and family, a favorite sport, watching movies, or reading, something rings your chimes. The challenge at work is to create an environment in which people choose motivation at work. Yes, this choice is up to the individual, but the employer plays a big part in motivation, too. Motivating employees means creating a work environment that supports motivation. Motivation is one of the key ingredients in employee’s performance and productivity. Even when people have clear work objectives, the right skills, and a supportive environment, they won’t get the job done without sufficient motivation to achieve that work objective.
The importance of achieving motivational level right from the grass root to top level is essential for success. It remains imperative for sustainability of organization. Well motivated personnel are critical to the development and execution of strategies, especially in today’s rapid paced more perplexing scenario.
To understand the concept of motivation, one must know about the terms motive, and motivating also. The term motive means an inner state that energizes, activates, and that directs behavior towards goals. And motivating is a term which implies that one person induces another to engage in action (work behaviour) by ensuring that a channel to satisfy the motive becomes available and accessible to the individual. So motivating employees is an incessant and key process for any corporation. No amount of quality work can be obtained from employees unless they feel motivated enough to pour their heart and soul into what they do. Balancing the demands of changing market with the demand of the employees for reasonable treatment and respect is becoming increasingly difficult. And motivation of employees for higher level of performance becomes difficult.
In the context of motivation, it can be stated that it is an internal state or condition (sometimes described as a need, desire, or want) that serves to activate or energize behavior and give it direction (Kleinginna and Kleinginna, 1981). Motivation is an
· internal state or condition that activates behavior and gives it direction;
· desire or want that energizes and directs goal-oriented behavior;
· influence of needs and desires on the intensity and direction of behavior.
Motivating employees is a key issue for most managers. In order to achieve a high level of performance and productivity, managers nowadays, are inclined to pay more attention on this issue. Different employees need to be motivated differently. In the present study an attempt will be made to study the level of motivation between male and female professionals. The assessment of the level of motivation and need satisfaction amongst professionals will also form a part of the study.
Definitions and Conceptualization
From ancient times, the word motivation has been recognized as an important determiner of behaviour. Various psychologists and social thinkers have tried to define the concept of motivation from time to time.
According to McFarland “motivation refers to the way in which urges, drives, desires, aspirations, strivings, or need direct control or explain the behavior of human beings”.
In the words of Vitiles “motivation represents as unsatisfied need which creates a state of tension or disequilibrium, causing the individual to make in a goal-directed pattern towards restoring a state of equilibrium by satisfying the need”.
In the encyclopedia of Management it is stated, “Motivation refers to degree of readiness of an organism to pursue some designated goal and implies the determination of the nature and locus of forces, including the degree of readiness.”
According to Likert, “it is the core of management which shows that every human being gives him a sense of worth in face to face groups which are most to him….a supervisor should strive to treat individual with dignity and recognition of their personal worth.”
According to Memoria, motivation is “a willingness to expand energy to achieve a goal or reward. It is a force that assigns, activates dormant energies, and sets in motion the action of the people. It is the function that kindles a burning passion for action among the human beings of an organization.”
Many contemporary authors have also defined the concept of motivation. Motivation has been defined as: the psychological process that gives behavior a purpose and direction (Kreitner, 1995); a predisposition to behave in a purposive manner to achieve specific, unmeet needs (Huford, Bedeian, & Lindner, 1995); an internal drive to satisfy an unsatisfied need (Higgins, 1994); and the will to achieve (Hedeian, 1993).So the word motivation can operationally be defined as the inner force that drives individuals to accomplish personal and organizational goals.
All the above definitions show different features of motivation. On the basis of these definitions one can infer that motivation means intentions, desires, goals and needs that determine human behavior. Motivation can also be defined in several ways such as –
· Motivation is a psychological feature that arouses an organism to action towards a desired goal; the reason for the action; that which gives purpose and direction to behavior.
· It can be stated as the condition of being motivated.
· An act of motivating; providing incentive.
One can also study motivation from the perspective of psychology; as the intention of achieving a goal, leading to goal-directed behavior. Some human activity seems to be best explained by postulating an inner directing drive. While a drive is often considered to be an innate biological mechanism that determines the organism's activity (instinct), a motive is defined as an innate mechanism modified by learning. Human drives serve to satisfy biological needs, such as hunger, while motives serve to satisfy needs that are not directly tied to the body requirements, such as companionship. Learned motives are sometimes linked with drives; e.g., the motivation to achieve social status is often viewed as a derivative of the sex drive.
An American psychologist, Abraham Maslow, classified motives into five developmental levels, with the satisfaction of physiological needs most important and esteem and self-actualization needs least important. According to Maslow, the most basic needs must be satisfied before successively higher needs can emerge. Psychologists such as Herzberg’s work categorized motivation into two factors:
Motivators and Hygienic factors (Herzberg, Mausner, and Snyderman, 1995) Motivators or intrinsic factor could be some achievement and recognition for employee’s work, the job itself or even responsibility, advancement and growth in one’s career. Hygienic or extrinsic factor could be the pay of employee, job security, working condition, a company’s policies, and administration, supervision and interpersonal relationship.
Need for an Efficient Motivation System
It is true that nobody can stimulate anyone else to work, unless he/she knows how that person is to be motivated and to what incentive he/she will respond. Apart from this fact, a sound motivational theory (for an organization) should also consider this fact that people typically are, continuously in motivational state and the nature of motivation is fluctuating and complex. Satisfaction of one need gives rise to another need, when that is satisfied a new higher order need takes its place. These needs can be fulfilled by more than one way, different needs by different means, and different needs by one.
The management of an organization tries to utilize all the resources of production in best possible manner. This can be achieved only when employees co-operate in this work. Efforts should be made to motivate employees for contributing their maximum. The effort of management will bear fruit if the employees are encouraged to work more. The motivated employees become an asset to the organization. And organizations use an efficient motivation system to fulfill several needs of enterprises:
1. Reduce employee Absenteeism and Attrition - When the employees are not satisfied with their job then they leave it whenever they get a better or an alternative offer. The dissatisfaction among employees also increases absenteeism. The employment training of new employees costs dearly to the organization. The employees feel motivated and satisfied with their job when they are offered financial as well as non financial incentives in the form of recognition, promotion, and responsibilities. With these measures, the rate of absenteeism and attrition will be low and the employees will try to improve quality and increase productivity.
2. Goodwill of Organization - Those enterprises which give better financial and non financial facilities to their employees have a better image among themselves. Such organizations are successful in attracting and maintain competent talent. Since there is a better man-power to development program, the employees would like to join such organizations. Hence, motivational effort simplifies personnel function also.
3. Healthy Industrial Relations - A sound motivational system will create job satisfaction among employees. The employment will offer those better service conditions and various sufficient incentives. There will be an atmosphere of confidence among employer and employees. There will be no reason for conflict, and cordial relations between both sides will create a healthy atmosphere thereby, leading to healthy industrial relation.
4. Acceptability to Change - The changing social and industrial situation will require changes and improvements in the working of enterprises. There will be a need to introduce new and better methods of work from time to time. Generally, employees resist change for fear of an adverse effect on their employment. When the employees are given various opportunities of development then they can easily adapt to new situations. They will think of positive side of new change and will co operate with the management. If the employees are satisfied with their work and not offered better avenues then they will oppose every thing suggested by the management. Motivation will ensure the acceptability of new changes by the employees.
5. Meeting Employee Expectations - Employee expectation can affect employee’s motivation. The amount of effort employees exert on the specific task depends upon their expectation of the outcome. This expectation varies from person to person and if organization helps to meet these expectations then the employees will get motivated and will positively affect the productivity of the organization. Organizations can help to meet the expectations in various ways by:
(i) determining what rewards are valued by employees.
(ii) determining the employee’s desired performance standard.
(iii) ensuring that performance standards are attainable.
(iv) linking guarantee rewards to performance.
6. Gearing Quality Performance - Motivated employees will put maximum effort in creativity and achieving organizational objectives. The untapped reservoirs, physical and mental potential, / abilities are tapped to maximum. Better performance will also result in higher productivity. The cost / investment on production can be reduced if productivity is raised. The employee should be offered more incentive for increasing their performance. Motivation will act as a stimulant for improving the performance of employees.
Issues of an Efficient Motivation System
An efficient motivational system must be productive, competitive, comprehensive, and flexible. A sound motivational system has the following features:
1. Profile of the Organizational Climate - A profile of the organizational climate can be prepared through periodical diagnostic studies by analyzing motivation which prevails in the organization. This profile can be used as a basis for initial interventions in several groups to determine whether they are satisfied with it and if not, what action can be taken for melioration.
2. Proper Diagnosis – Motivation is a complex process that involves human skill. Persons differ in what motivates them. Hence, to achieve most effective results, the manager must diagnose each situation and apply the various motivation principles as required.
3. Sound Reward System – Rewards are a key motivator. The manager should develop a sound reward system. He should blend the use of intrinsic and extrinsic rewards. Rewards should be linked to performance. Key reward such as pay increases and promotion should be allocated for the achievement of specific goal. And the must thing in this is that the reward should be valued for employees. If a reward isn’t valued then it won’t motivate.
4. Differing Reinforcement of Motivation - In organizational setting different systems reinforce some motivations more than others. Attempts may be made to determine motivations that different systems reinforce while designing or changing systems. This facilitates installation of appropriate system for reinforcing relevant motivation ( i.e. achievement, power, extension, etc.) in order to accomplish organizational effectiveness. For example, a system involving person from different group to meet and discuss and arrive at a decision will reinforce extension motivation (collaboration).
5. No Overnight Results – Motivation is a continuous activity reinforced by managers. It is a process of learning; as such, the manager should not expect overnight results in attempting to motivate subordinates.
6. Manager is the key Element - The manager can influence each stage of a person’s motivation process. The manager identifies the key motivating needs, helps in directing motivated behavior, assists in learning skills, and rewards behavior. Thus, the key role of the manager should be recognized.
7. Watch out for Unintended Consequences - Performance based reward system sometimes has an unexpected- and undesirable-effect on employee behavior. Employee behavior is a complex combination of needs, competencies, role perception, and situational factors, so it is often difficult to see the unexpected results when reward system is introduced.
8. Norms of Recognition of Individuals Difference – Individuals differ in terms of attitudes, personality, behavior and other variables. They are not homogeneous. Hence, it should be recognized that they require different motivation.
9. Challenging and Attainable Goal - A good motivation system requires that challenging and attainable goals should be set for employees. Goal should be formulated jointly. Also, the appraisal process by which their performance is evaluated should be both reliable and valid.
10. Role of Money - Money is a powerful motivator. It should not be ignored. The allocation of performance- based wages increases, piece- work bonuses, and other pay incentive is important in determining employee motivation.
11. Active Cooperation of Employees - Employees are the essential part of the organization. Their active cooperation should be sought in improving the organization’s productivity. And manager should stay close to employees and remedy problems as they arise.
12. Work Culture - To motivate people, management should foster an organizational culture oriented towards performance and work. Jobs should be designed to offer challenge and variety. A good motivation system motivates the people to work with optimum efficiency and devotion.
13. Dynamic System - The motivation system should be dynamic and flexible. The needs of the people are changing from time to time. Hence, motivation should be provided in view of new and changing needs, expectation, and behavior.
14. Team Reward for Interdependent jobs - Organization should use team rewards rather than individual reward when employee works in highly interdependent jobs. Because we can’t identify or measure individual contribution very well in these situations. Team reward tends to make employee more cooperative and reduces unhealthy competition. Employees see that their incentive depends on how well they work with their co-workers.
15. Encouraging Open Communication - Open communication system improves work motivation in an organization. It may embrace communication of policies from the top level to the different organizational level; help resolve difficulties and problems at the various organizational levels; and flow of supportive feedback from the superior on performance. By increasing general satisfaction such open communication improves work motivation.
16. Role Efficacy - Role efficacy improves work motivation. It forms potential effectiveness of an individual in his role. Factor conducive to role efficacy includes: (i) the individual’s perception of his role being important in the organization. (ii) self role integration, (iii) opportunity to take initiative and become creative, (iv) integration of the role with other roles in the organization, (v) possibility to influence and work on larger goal useful to others, and (vi) opportunity to grow. An attempt may be made to measure the role efficacy of several jobs in organization in order to take appropriate measure to enhance the same.
Literature Review
Many studies of the Motivation of workers have been carried out. Behavioral scientists have studied extensively the Motivation of many professional and non-professional groups such as accountants, engineers, middle managers, insurance agents, research scientists, assembly workers and nurses. Academicians, among other groups of professionals, have been virtually ignored by researchers. However, appear to have focused on public and private university academicians fortunately; there are some studies on the comparative job satisfaction levels and Motivation Level of public and private school teachers at the elementary and secondary school levels.
These research findings, in general, suggest that teachers working in private schools tend to be more satisfied with their jobs compared to their public sector counterparts. For example, a study of 320 elementary school teachers from eight different public and private schools, using data from the Minnesota Satisfaction Questionnaire, showed that teachers working in private schools were significantly more satisfied with their jobs (Varlık, 2000). A study of 804 public secondary school and 330 private secondary school teachers in Turkey also revealed that the level of job dissatisfaction was significantly higher among public school teachers (Özdayı, 1990).
Finally, a study made on 173 teachers, 100 of them working in public and 73 of them working in private schools, found significant differences between the two sectors in terms of job satisfaction levels (Kınalı, 2000). As indicated, no specific studies were uncovered that deal directly with the differences in Motivation and job satisfaction between public and private university academicians. Motivated in part because of the lack of studies in important area of study, this research is undertaken.
According to Samita Kulkarni (Research Associate, Center for Management Development, The ICFAI Business School, Hyderabad) in her article (Employee Motivation, Global CEO, November 2005 Volume VII) balancing the demand of the changing market with the work specific facility/need/demand of the employees for reasonable assistance / treatment and respect is becoming increasingly difficulty.
Loyalty to company, which came naturally in the past, from an employee’s perspective seems to be diminishing in today’s business world. Restructuring, downsizing and layoffs from merger and acquisition are becoming the order of the day, employees don’t feel they have the job security as they did in past. The result has been that people are more open to other opportunities, and motivation of employees for higher level of performance becomes difficult when all the rules have changed and the simple exchange of loyalty and commitment does not exist any more.
In time like this, effective management of human resources is very critical. And we undoubtedly live in a very materialistic and a money motivated world and any quantity of human relation cannot recompense for the lack of financial reward. But if reward is right then by giving respect to the employee and showing concern to their needs, will add that extra something in motivating the employees to give their best.
Guisseppi A. Forgionne (Management Sciences Department, School of Business Administration, California State Polytechnic University, Pomona, California 91768). Vivian E. Peeters (School of Business Administration, California State Polytechnic University) stated in their article: Differences in Job Motivation and Satisfaction among Female and Male Managers that the influence of sex on satisfaction with job related factors, overall job satisfaction, attitudes toward various motivators, and overall job motivation among managers. Using a statistical analysis of survey data, the study identifies many significant differences between male and female managers' perceptions and attitudes. The article then compares the findings to previous research, presents some questions pertinent to policy formation, and suggests avenues for future research.
Teachers Job Satisfaction and Motivation for School Effectiveness: An Assessment by Ololube, Nwachukwu Prince Significantly, job satisfaction and motivation are very essential to the continuing growth of educational systems around the world and they rank alongside professional knowledge and skills, center competencies, educational resources as well as strategies, in genuinely determining educational success and performance. This study assessed the differences and relationship between the level of teachers' job satisfaction, motivation and their teaching performance in Rivers State of Nigeria. A questionnaire titled "TEJOSAMOQ" was used to collect data for the study. While the data for the study was analyzed using multiple statistical procedures: mean point value, standard deviation, and variance, t-test of significance and One-way-analysis of variance (ANOVA). The survey results revealed that teacher related sources of job satisfaction seem to have a greater impact on teaching performance, as teachers are also dissatisfied with the educational policies and administration, pay and fringe benefits, material rewards and advancement. (Contains 3 tables and 2 figures.) [This article was published in "Essays in Education," Volume 18, Fall 2006; published by the Department of Education at the University of South Carolina, Aiken. ISSN: 1527-9359.]
Job Satisfaction of University Academics: Perspectives from Uganda by Ssesanga, Karim; Garrett, Roger M. (Higher Education: The International Journal of Higher Education and Educational Planning, v50 n1 p33-56 Jul 2005) Although several studies in the affluent world have examined the job satisfaction and dissatisfaction of lecturers in higher education, little is known about academic job satisfaction in the low-resource countries. This study probes those factors contributing to academic satisfaction and dissatisfaction in higher education in the developing world. Using a sample of 182 respondents drawn from two universities in Uganda, this analysis reports that the factors most prevalent in the prediction of dons' satisfaction relate to co-worker behaviour, supervision and intrinsic facets of teaching. Analogously, the stimuli that create academic dissatisfaction are largely extrinsic (contextual) factors with respect to facets of remuneration, governance, research, promotion, and working environment. This article discusses these findings in the light of Herzberg's dichotomy and concludes that any given factor be it intrinsic or extrinsic can either evoke academic satisfaction or induce dissatisfaction. The present analysis finds that while age, rank, and tenure significantly predict academic job satisfaction, no evidence is adduced to support a gender influence on dons' job satisfaction. Implications for Ugandan academics' job satisfaction are formulated, recommendations made, and a further research agenda proposed.
According to Martin, Donna M. in his article: Relationship of Motivational Differences of Male and Female Community College Students to Academic Achievement
A study was conducted at a mid-western community college to determine motivational profile differences between high and low achievers. The study population of 71 full-time, degree-seeking students in the school of arts and sciences was divided into a high achieving group with grade point averages (GPA's) of 3.85 and above, and a low achieving group with GPA's of 1.0 or below; and was tested using Martin's Motivational Profile. Study results included the following: (1) positive motivational sources, such as pleasure with performance, happiness, and good prior performance, had no significant impact on academic performance; (2) low achieving males scored highest in overall positive motivational sources, while low achieving females scored lowest; (3) females in both high and low achieving groups had significantly higher negative motivation scores than males; (4) among both male and female low achievers, negative motivation was almost twice that of the high achievers; (5) overall energy levels were significantly higher in low achievers than in high achievers; (6) the group with the lowest depression level was the high achieving males and the group with the highest depression level was the low achieving males; (7) anxiety levels were significantly higher in low achievers; (8) women in both groups manifested a significantly greater level of fear than males; (9) negative conflict scores were significantly higher in low achievers; and (10) frustration levels were significantly higher in low achievers. The study report includes the motivational profile instrument as well as raw data and ANOVA tables for the motivation factors. (LAL)
Rationale of the Study
Motivation plays a vital role in enhancing the performance level of professionals and this has been proved time and again in studies undertaken by researchers. The following points focus on how the growth of organization gets affected by the motivation level of employees.
1. To satisfy Individual’s Expectations - Motivation is a reported urge to reach the expectation of individual. If the organization is using an efficient motivation system that might be obliging employees for satisfying their expectations and will also considerate for organization itself for reaching organizational objectives.
2. Imperative to Flourish - The organizations need to recognize that their growth requires the cooperation of all the employees; and such cooperation is enhanced by using the efficient motivation system in organization. In this regard, the management needs to act as an accommodating team and prevent inefficient motivational practices.
3. Key element in improving Productivity of Organization - The performance on the job is a product of skill and level of motivation. Thus the productivity is affected by the skill of a person and the motivational environment in organization. Divergence in motivation causes divergence in productivity. Therefore, the performance level is higher if the motivation level is higher. The overall spirit in productivity may be result of high motivational level.
4. Healthier Industrial Relationship - A good motivational system will create job satisfaction among employees. The employment will offer them better services, condition and various other incentives. There will be an atmosphere of confidence among employees. There will be no reason for the conflict and cordial relationship among both sides will create healthy circumstances. So motivation among employees will lead to better industrial relations.
5. Satisfying Deficit (hygiene) Needs - Deficit hygiene needs, if not adequately satisfied, may lower work motivation. Without the adequate satisfaction of these needs (i.e. salary, security, company policy, working condition etc.) it is not possible to take necessary action for improving work motivation.
6. Reducing Attrition Rate - When the employees are not satisfied with their jobs then they will leave the organization whenever they get an alternative offer. The employment training of new employees cost dearly to the organization. When the employees are satisfied with their job and they are well motivated by offering them financial and non-financial incentive then they will not leave the organization.
7. Promote norms of Recognition of Competence - The climate of work motivation can be engineered by promoting norms of recognition of competence in the job and good work performed. If individual perceive such recognition, they are motivated to work. The recognition of their contribution should be genuine and given only to those who deserve it.
8. Opportunity to Influence Decision - Work motivation can also be increased by providing opportunity to the individual to influence decision concerning them. This is possible, if some autonomy with adequate support and responsibility is there, for the individual who is also able to perceive it. Different jobs can be assessed to determine the extent to which they provide such opportunities for taking corrective measure where needed.
9. Opportunity for Development and Growth - Perception of opportunities for development and growth in the job forms a significant measure to improve work motivation. By providing a feeling to the people that their job help them learn new things and facilitate their development, their level of motivation can be raised.
10. To meet the Changes in scenario - The changing social and industrial situation will require changes and improvement in the working of enterprises. There will be a need to introduce new and better methods of work from time to time. Generally employee resists change for a fear of an adverse effect on their employment. When the employees are given various opportunity of development then they can easily adopt the new situations.
Scope of the Study
Developing insight into how different management institutions enhance the motivation level of their academicians. The study can help various management institutions in deciding what factors of motivation they must address for their academicians.
The study can help management institutions and research and development cells in the following manner:
· Assess how the management institutions are perceived in comparison with its competitors with reference to motivation system
· Corroborate current motivation system and create new ones to manage principle motivation system in their institutions.
The results of the study may serve as some guidelines to management of the institutions as to which, tools and techniques among an array of possible ones, should it focus on in building and maintaining a statutory v/s voluntary compliance to the cipher of motivation system.
The study can be helpful for coming research scholars for further research in interrelated arena.
Hypotheses of the Study
Hypotheses may be defined as a proposition or a set of proposition set forth as an explanation for occurrence of some specified group of phenomena either asserted merely as a provisional conjecture to guide some investigation or accepted as highly probable in the light of established fact. Quite often a research hypothesis is a predictive statement, capable of being tested by scientific methods, that relates an independent variable to some dependent variable.
The following hypotheses would be considered for the study.
H1 Motivation level is much higher amongst those academicians who maintain androgynous personality than only masculine or feminine personality holder.
H2 Maslow’s Hierarchy of Needs is better satisfied amongst androgynous type academicians than only masculine or feminine personality holder.
H3 Motivator factors lead higher motivation and job satisfaction, but the absence of these factors will not lead to lower motivation and dissatisfaction.
H4 Lack of hygienic factors lead to lower motivation and dissatisfaction but presence of these will not lead higher motivation or job satisfaction.
Objectives of the Study
After study the initial period of familiarization with the problem, its subject scope, nature and motive that underlie it, the researcher is in a position to formulate the objective.
The present study will be carried out by keeping in view the following objectives.
· To study the motivation level among various academicians in different management institutes
· To compare the level of motivation among male and female academicians of different
management institutes
· To examine Maslow’s and Herzberg’s theories of motivation
· To explore different issues related to higher motivation among academicians in management institutes.
· To examine the weight of each factor in order to find out what is the preference of academicians for achieving higher level of motivation
Research Methodology
Research Methodology is a way to systematically solve the research problem. It may be understood as a science of study how research is done scientifically. The scientific methods attempt to achieve a scientific interpretation of facts by “experimentation, observation, logical arguments from accepted postulates and a combination of these three in varying proposition”. In the scientific method, logic aids in formulating propositions explicitly and accurately so that their possible alternatives become clear. In research methodology we also study the various steps that are generally adopted by the researchers in studying the research problem along with the logic behind them.
Sampling
The basic idea of sampling is that by selecting some of the elements in a population, we may draw conclusion about the entire population. A sample is the group selected from the complete population to make the task of surveying less costly and more manageable. The secret is to select a sample that will have the same characteristics as the over all population.
For present study the sample will be Non probability samples based on deliberate sampling. In this type of sampling, items for the sample are selected deliberately.
Data Collection
The collection of data plays an important role in research process and there are several methods of primary data collection. In present study structured questionnaires method will be used by researcher for collecting primary data.
Respondents (Sample Size)
The sample will be selected from management institutions, Rajasthan only. And the size of sample will be -
Male Professors 250
Female Professors 250
Secondary Data
Secondary data means data that are all ready available i.e. they refer to the data which have already been collected analyzed by some one else. Secondary data may either be published data or unpublished data. In present study the secondary data will be collected from several resources such as-
News paper-
Economics Time
Times of India
Hindustan Times.
Magazines-
Business World
ICFAI Reader
Effective Executive
HRM Review
Global CEO
Journals-
Management Research
Organizational Behaviour
Vikalap
Vision
Processing of Data
1. Editing
2. Coding
3. Classification
4. Tabulation
Analysis of Data
1. Correlation analysis
2. Chi Square test
Inferential analysis
Chapterization
Chapter I Motivation an Overview
· Introduction to the background of the motivation
· Motivation -Definitions and Conceptualization
· Need for efficient motivation system
· Issues associated with motivation system
· Androgynous – Definition and Conceptualization
Chapter II Research Problem an Overview
· Problem Identification
· Scanning of existing Literature
Chapter III Objectives, Hypotheses, and Sampling
· Objectives of the Research
· Hypotheses of the Research
· Sampling
Chapter IV Data Collection, Processing, and Analysis
· Data Collection
· Processing of Data
· Analysis of Data
· Limitations of the study
Chapter V Research findings and Discussions
· Comparative Analysis of Motivation level between Male and Female academicians
· Comparative Analysis of Need satisfaction level among Male and Female academicians
· Comparative analysis of Influence of motivational and hygienic factors on Male and Female academicians
Chapter VI Summary, Conclusions and Recommendations
Appendices
· Blank schedule of questions
· Data bank etc.
Bibliography
Bibliography
1. Ann Gregory, “Are women different and why women are thought to be different? Theoretical and methodological perspectives” The Journal of Business Ethics, April 1990
2. B. P. Singh, T. N. Chhabara “Organizational Theory and Behavior” 5th ed. Dhanpat Rai & Company (P) Limited, 2007
3. C. B. Gupta “Human Resource Management ” 6th ed. Sultan Chand and Son’s Publishing House New Delhi, 2005
4. C. R. Kothari “Research Methodology- Methods and Techniques” 2nd ed. New Age International (P) Limited, Publishers, New Delhi 2004
5. Donald R. Cooper Pamela S.Schindler “Business Research Methods” Tata McGraw Hill edition 2003
6. Donnelly, Gibson, Ivancevich “Fundamentals of Management” 10th ed. Tata Mc Graw Hill New Delhi 1998
7. Dr. S. Shajahan “Research Methods for Management” 3rd ed. Jaico Publishing House, Mumbai 2005
8. Fred Luthans “Organizational Behavior” 8th ed. Tata Mc Graw Hill New Delhi 1998
9. Frederick Herzberg “One more time: How do you motivate employees?” Magazine- Harward Business Review.
10. G. S Sudha “Management Concept and Organizational Behavior” 1st ed. Ramesh Book Depot Jaipur 2003
11. G. S. Sudha “Human Resource Management” 1st ed. Ramesh Book Depot Jaipur, 2007
12. H. Ttomas Spottsl, Mary Ann Bowman, and Christopher Mertz “Gender and use of Instructional technologies A study of University Faculty” Journal Higher Education, December 1997.
13. Harsh Bhargava, and Shailja Singh, “Motivating B P O Employees” Magazine Global CEO The ICFAI University Press, Hyderabad, Volume VII January 2006
14. Jerald Greenberg and Robert A Baron “Behavior in organization” 8th ed. Prentice Hall of India Private Limited 2003
15. Jit S. chandan. “Organizational Behavior” 3rd ed. Vikas Publishing House Delhi 2006.
16. John A Pearce II and Richard B Robinson “Management” International Edition, Tata Mc Graw Hill New Delhi 1989
17. John W. Newstrom and Keith Davis “Organizational Behavior” (Human Behavior at Work) 10th ed. Tata Mc Graw Hill New Delhi 1998
18. K Aswathappa “Human Resource Management” 4th ed. Tata Mc Graw Hill New Delhi 2005
19. L M Prashad “Organization Behavior” 3rd ed. Sultan Chand and Sons New Delhi 2005
20. M P Ganesh “Work Motivation and Occupational Stress among Executives from Software and Manufacturing Industries” The I C F AI journal of Organizational Behavior Volume V, January 2006.
21. Man Chand Khandela “Organizational Behavior” Arihant Publishing House Jaipur 2000
22. Paul Hersey, Kenneth H.Blanchard, Dewey E Johnson “Management of Organizational behavior Utilizing Human resources” 7th ed. Prentice Hall India Private Limited
23. R S Diwedi “Human Relation and Organizational Behavior" A Global Perspective, 5th ed. Macmillan India Limited New Delhi 2001.
24. Radha Mohan Chebolu Employee Empowerment- “A workplace strategy for motivation” Magazine HRM Review The ICFAI University press, Hyderabad Volume VI February 2005
25. S. S. Khanka “Organizational Behavior” 2nd ed. Reprint 2004
26. Sanjay S Kaptan, Latha SK Murthy “Barriers to Motivation (How to Break Them)” Magazine Effective Executive The ICFAI University, Volume IX December 2006
27. Smita Kulkarni “Employee Motivation” Magazine Global CEO The ICFAI University press, Hyderabad, Volume VII November 2005
28. Stephen P. Robbins “Organizational Behavior” 11th ed. Prentice Hall of India Private Limited, New Delhi, 2006
29. Stephen P. Robbins, Seema Sanghi “Organizational Behaviour” fourth impression Prentice Hall of India Private Limited, New Delhi, 2007
30. Steve Chandler and Scott Richardson – “100 ways to motivate others” (How great leaders can produce insane results without driving people crazy) second impression Jaico Publishing House, Mumbai 2006.
31. Steven L. Mc Shane, Mary Ann, and Von Glinow “Organizational Behavior- Emerging Realities for the work place revolution” Tata Mc Graw Hill New Delhi 2001
32. Udai Pareek “Effective Organizations beyond Management to Institution Building” Oxford and I B H Publishing House Private Limited 2002
33. www.google.com
34. www. motivation .com
a proforma of research synopsis to be submitted by the students
SUB: CUSTOMER PURCHASE DECISION AND SATISFACTION
IN PETROLEUM RETAIL MARKETING(SPECIALLY LPG)
RATIONAL FOR THE STUDY:
The main rational of the study is to increase the Non domestic LPG sale in the Indian market. The oil is a precious product for growing country like India.
We are investing our big amount for foreign exchange to purchase the petroleum product from Gulf countries. some of the petroleum products are subsidized like the SKO(Kerosene),Domestic LPG etc. the subsidized product is allowed to use the weaker section of the society, But the needy person are unable to get the subsidized product and the same are to be misused by the richer persons. They used the subsidized product in Hotel Industries Cars, Geysers, Industrial uses.
Our aim of the study is to educate the customer their duties, liability and responsibility. This study is in the interest of the country.
The main advantages of the study are:
1. To educate the people of the society. The use of domestic LPG cylinders in industrial/commercial uses are neither safe nor in the interest of our country.
2. To increase the safety of product handling.
3. To motivate the purchase of Non domestic LPG product for the Industrial/Commercial uses. The GOVT agencies DSO and admin officers are time to time inspecting the such type of customers and penalized the defaulters. Here the aim of the organizas is to use the petroleum product safely.
4. Discuss the case study of LPG accident during the use of Domestic LPG uses in automobiles like people use domestic LPG cylinders in cars. Peoples purchase the car of RS. 200,000.00 for their luxury life, but they doesn’t know the purchase the non standard LPG seal kit from local market. The local vendors dose not follow the standard guide lines issued by OISD Oil Industry Safety Directorates. The domestic LPG cylinders are designed to use the LPG cylinders in kitchen only. When we use the same cylinders in cars the small amount of LPG leakage create big hazardous and people loss their life for small savings.
5. The miss use of subsidized products make the weaker roots of the oil industries like Indian Oil, BPCL and HPCL etc. the strength of any country depends the strength of Oil Industries of the country. In this quarter our organization Indian Oil Corporation Ltd booked loss of Rs. 17400 crore. If the Organization like IOCL, BPCL and HPCL book the losses is not a healthy signed.
OBJECTIVE OF THE STUDY:
The objective of the study is to increase the safety in the use of petroleum product in the society and sale of non domestic product of the organization. It is the social obligation of our organization to help the weaker section of the society ie, sale of subsidized product to the needy customer. To educate the society that you are spending Rs. 500,000 in the marriage party and to save Rs 1500/- you are miss use the domestic cylinders for the same.
By organize the safety clinic in the societies educate the people regarding the property of Petroleum products. The property of auto LPG is different with the properties of commercial and Domestic LPG. The LPG is a mixture of Propane and Butane and other gases. The ratio of the Propane and Butane if differ for their uses. If we use the domestic LPG in Auto LPG your automobile engine get damaged and the cylinders is not specifically designed for automobiles and got accidents.
RESEARCH METHODOLOGY TO BE USED:
Mangers use research by applying the methods of science to the art of management. Like other business organization Indian Oil operate in the world of uncertainity. There is no unique method which can entirely eliminate uncertainty. But research methodology, more than any other procedure, can minimize the degree of uncertainty. Research methodology reduce the probability of making a wrong choice among alternative course of action. This is particularly significant in the light of increasing competition and growing size which make the task of choosing the best course of action difficult for Oil business organization like Indian Oil Corporation.
The process of research involve the following steps:
1. Detailing nature of data: First of all we should be clear about the problem ie, increase the sales of non subsidized product like Industrial /Commercial LPG. We meet or customer what are problem faced during purchasing of Industrial /Commercial product. We make a questionnaire of min. 20 questions and ask our customer to fill themselves. What are problem you face after purchase the product. What is your suggestion to make the present system effective.
2. Data source: The data source are our valuable customers, we go to customer premises and their industries. We also collect the data from our Auto LPG Distribution Station(ALDS) our LPG distributors office. Make our stall in local MELAS for service after sales and before sales. We meet our different age group LPG customers, different area customers, different educational group customers, different user group customers. We also collect data from our valuable distributors net work. We arrange an introduction meeting regarding focus of our organization and new policy of our business organization. The data recording and collection is very important tools to achieve our objective of organization. We make strong action against defaulter agencies who can miss guide our valuable customer for their small monitory profits.
3. Data collection methods: the relevant data collection is very important steps. Collection involves the basic definitions for the concepts to be investigated, specific wordings of inquiries to communicate those concepts, delineation of the environment in which the data will be collected, specific field procedure, and design of instruments for recording the actual data. Data collection looks forward to data analysis; data requirements for various analytical technique must be anticipated in data collection phase. Special care must be taken in the collection phase to avoid sources of under statement or over statement for the various characteristics. If such basis are feared, the researcher should consider whether there are ways of introducing adjustments. These adjustments would be introduced in the analysis phase, but the data must be generated in the collection phase.
Good research demands unambiguous terms. Care must be exercised in the use of modifying adjective or adverbs. The addition or deletion of a single word can produce draustically different results without clarifying the meaning of those results.
a) Do you use Indian Oil Brand Commercial/Industrial LPG “INDANE” ?
b) Have you ever used the Indian Oil Brand Commercial/Industrial LPG “INDANE” ?
c) Do you regularly use Indian Oil Brand Commercial/Industrial LPG “INDANE” ?
d) Is Indian Oil Brand Commercial/Industrial LPG “INDANE” your favorite brand?
The researcher and the decision maker desire data that are as free from error as possible. Our LPG sales department ans DSO Bikaner already having the relevant data, which is also known as secondary data. The primary data for the case study of customer purchase decision and satisfaction in petroleum retail marketing specially Auto/commercial/Industrial LPG – must not be automatically constructed as more accurate than secondary data.
4. Tools and technique for data analysis: Data analysis seeks to determine how the units covered in the research project respond the items under investigation. In our case study individual questionnaire to be discuss. We will subdivided the population in sub groups to study possible differences by market segments. We might also wonder whether certain type of industrial/commercial/commercial customer are better prospects than others. We had obtain information from each segments. We can analysis the data with the use of multi vitiate analysis.
5. Interpretation of results: Interpretation of the result is the “so what?” of research. Research is wasted anduseless unless it influences action. It seems elementary to say that research results must have relevance for the decision to be made. Not only must the results be interpreted into action recommendation; the communication must instill confidence that the recommendation is justified. Description and analysis of associative data involves studying the relationship and degree of relationship and degree of association among several variables and therefore multivariate procedure become imperative. These are Regression analysis, Discriminant Analysis and Factor analysis.
6. Sampling: The selection of a part of a group with a view to obtaining information about the whole. The totality of all member is known as Population. The selected part which is used to ascertain the characteristics of the population is called sample. the sampling only chooses a part of the units from the population for the same study. In our study due to presence of heterogeneity we divide the population into segments and select a certain number number of sampling units from all relevant segments. This is known as stratified sampling.
THE EXPECTED CONTRIBUTION:
The contribution from the study is utmost useful in our organization. We can take preventive measure and increase the Non Domestic/Industrial/Commercial product sales. This study is more useful for our country.
LIMITATIONS:
Limitation of our study is that our country is democratic country. We are unable to take strong decision due to vote bank.
Indian Oil Corporation Limited
Indane Bottling Plant, Bikaner(Raj)
CUSTOMER PURCHASE DECISION AND SATISFACTION IN PETROLEUM RETAIL MARKETING(SPECIALLY LPG)
1. Questionnaire No.
2. Name of customer.
3. Address;
4. Educational qualification: (General)
5. Educational qualification: (Technical)
6. Date of birth:
7. When did you become the member of Indian Oil Family:
8. Type of business:
9. From which Distributer or ALDS you got your supply:
10. Which type of connection you have:
11. What is monthly consumption of LPG?
12. How many connection you have?
13. what difficulties are you facing in your project?
14. Your suggestion to overcome these difficulties:
Signature of the Investigator
Name of the Investigator
Date of Interview:
IN PETROLEUM RETAIL MARKETING(SPECIALLY LPG)
RATIONAL FOR THE STUDY:
The main rational of the study is to increase the Non domestic LPG sale in the Indian market. The oil is a precious product for growing country like India.
We are investing our big amount for foreign exchange to purchase the petroleum product from Gulf countries. some of the petroleum products are subsidized like the SKO(Kerosene),Domestic LPG etc. the subsidized product is allowed to use the weaker section of the society, But the needy person are unable to get the subsidized product and the same are to be misused by the richer persons. They used the subsidized product in Hotel Industries Cars, Geysers, Industrial uses.
Our aim of the study is to educate the customer their duties, liability and responsibility. This study is in the interest of the country.
The main advantages of the study are:
1. To educate the people of the society. The use of domestic LPG cylinders in industrial/commercial uses are neither safe nor in the interest of our country.
2. To increase the safety of product handling.
3. To motivate the purchase of Non domestic LPG product for the Industrial/Commercial uses. The GOVT agencies DSO and admin officers are time to time inspecting the such type of customers and penalized the defaulters. Here the aim of the organizas is to use the petroleum product safely.
4. Discuss the case study of LPG accident during the use of Domestic LPG uses in automobiles like people use domestic LPG cylinders in cars. Peoples purchase the car of RS. 200,000.00 for their luxury life, but they doesn’t know the purchase the non standard LPG seal kit from local market. The local vendors dose not follow the standard guide lines issued by OISD Oil Industry Safety Directorates. The domestic LPG cylinders are designed to use the LPG cylinders in kitchen only. When we use the same cylinders in cars the small amount of LPG leakage create big hazardous and people loss their life for small savings.
5. The miss use of subsidized products make the weaker roots of the oil industries like Indian Oil, BPCL and HPCL etc. the strength of any country depends the strength of Oil Industries of the country. In this quarter our organization Indian Oil Corporation Ltd booked loss of Rs. 17400 crore. If the Organization like IOCL, BPCL and HPCL book the losses is not a healthy signed.
OBJECTIVE OF THE STUDY:
The objective of the study is to increase the safety in the use of petroleum product in the society and sale of non domestic product of the organization. It is the social obligation of our organization to help the weaker section of the society ie, sale of subsidized product to the needy customer. To educate the society that you are spending Rs. 500,000 in the marriage party and to save Rs 1500/- you are miss use the domestic cylinders for the same.
By organize the safety clinic in the societies educate the people regarding the property of Petroleum products. The property of auto LPG is different with the properties of commercial and Domestic LPG. The LPG is a mixture of Propane and Butane and other gases. The ratio of the Propane and Butane if differ for their uses. If we use the domestic LPG in Auto LPG your automobile engine get damaged and the cylinders is not specifically designed for automobiles and got accidents.
RESEARCH METHODOLOGY TO BE USED:
Mangers use research by applying the methods of science to the art of management. Like other business organization Indian Oil operate in the world of uncertainity. There is no unique method which can entirely eliminate uncertainty. But research methodology, more than any other procedure, can minimize the degree of uncertainty. Research methodology reduce the probability of making a wrong choice among alternative course of action. This is particularly significant in the light of increasing competition and growing size which make the task of choosing the best course of action difficult for Oil business organization like Indian Oil Corporation.
The process of research involve the following steps:
1. Detailing nature of data: First of all we should be clear about the problem ie, increase the sales of non subsidized product like Industrial /Commercial LPG. We meet or customer what are problem faced during purchasing of Industrial /Commercial product. We make a questionnaire of min. 20 questions and ask our customer to fill themselves. What are problem you face after purchase the product. What is your suggestion to make the present system effective.
2. Data source: The data source are our valuable customers, we go to customer premises and their industries. We also collect the data from our Auto LPG Distribution Station(ALDS) our LPG distributors office. Make our stall in local MELAS for service after sales and before sales. We meet our different age group LPG customers, different area customers, different educational group customers, different user group customers. We also collect data from our valuable distributors net work. We arrange an introduction meeting regarding focus of our organization and new policy of our business organization. The data recording and collection is very important tools to achieve our objective of organization. We make strong action against defaulter agencies who can miss guide our valuable customer for their small monitory profits.
3. Data collection methods: the relevant data collection is very important steps. Collection involves the basic definitions for the concepts to be investigated, specific wordings of inquiries to communicate those concepts, delineation of the environment in which the data will be collected, specific field procedure, and design of instruments for recording the actual data. Data collection looks forward to data analysis; data requirements for various analytical technique must be anticipated in data collection phase. Special care must be taken in the collection phase to avoid sources of under statement or over statement for the various characteristics. If such basis are feared, the researcher should consider whether there are ways of introducing adjustments. These adjustments would be introduced in the analysis phase, but the data must be generated in the collection phase.
Good research demands unambiguous terms. Care must be exercised in the use of modifying adjective or adverbs. The addition or deletion of a single word can produce draustically different results without clarifying the meaning of those results.
a) Do you use Indian Oil Brand Commercial/Industrial LPG “INDANE” ?
b) Have you ever used the Indian Oil Brand Commercial/Industrial LPG “INDANE” ?
c) Do you regularly use Indian Oil Brand Commercial/Industrial LPG “INDANE” ?
d) Is Indian Oil Brand Commercial/Industrial LPG “INDANE” your favorite brand?
The researcher and the decision maker desire data that are as free from error as possible. Our LPG sales department ans DSO Bikaner already having the relevant data, which is also known as secondary data. The primary data for the case study of customer purchase decision and satisfaction in petroleum retail marketing specially Auto/commercial/Industrial LPG – must not be automatically constructed as more accurate than secondary data.
4. Tools and technique for data analysis: Data analysis seeks to determine how the units covered in the research project respond the items under investigation. In our case study individual questionnaire to be discuss. We will subdivided the population in sub groups to study possible differences by market segments. We might also wonder whether certain type of industrial/commercial/commercial customer are better prospects than others. We had obtain information from each segments. We can analysis the data with the use of multi vitiate analysis.
5. Interpretation of results: Interpretation of the result is the “so what?” of research. Research is wasted anduseless unless it influences action. It seems elementary to say that research results must have relevance for the decision to be made. Not only must the results be interpreted into action recommendation; the communication must instill confidence that the recommendation is justified. Description and analysis of associative data involves studying the relationship and degree of relationship and degree of association among several variables and therefore multivariate procedure become imperative. These are Regression analysis, Discriminant Analysis and Factor analysis.
6. Sampling: The selection of a part of a group with a view to obtaining information about the whole. The totality of all member is known as Population. The selected part which is used to ascertain the characteristics of the population is called sample. the sampling only chooses a part of the units from the population for the same study. In our study due to presence of heterogeneity we divide the population into segments and select a certain number number of sampling units from all relevant segments. This is known as stratified sampling.
THE EXPECTED CONTRIBUTION:
The contribution from the study is utmost useful in our organization. We can take preventive measure and increase the Non Domestic/Industrial/Commercial product sales. This study is more useful for our country.
LIMITATIONS:
Limitation of our study is that our country is democratic country. We are unable to take strong decision due to vote bank.
Indian Oil Corporation Limited
Indane Bottling Plant, Bikaner(Raj)
CUSTOMER PURCHASE DECISION AND SATISFACTION IN PETROLEUM RETAIL MARKETING(SPECIALLY LPG)
1. Questionnaire No.
2. Name of customer.
3. Address;
4. Educational qualification: (General)
5. Educational qualification: (Technical)
6. Date of birth:
7. When did you become the member of Indian Oil Family:
8. Type of business:
9. From which Distributer or ALDS you got your supply:
10. Which type of connection you have:
11. What is monthly consumption of LPG?
12. How many connection you have?
13. what difficulties are you facing in your project?
14. Your suggestion to overcome these difficulties:
Signature of the Investigator
Name of the Investigator
Date of Interview:
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