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What are the Recent Trends of Private Equity Funding in India ?? By Prof Chowdari Prasad & Prof. M. Durga Prasad, TAPMI

Social Media Marketing for India’s Generation Next Hysteresis Effect :

By Arpan Banerjee, KJ Somaiya Mumbai

does it work? By Aditza Maira & Nitio Jaio, IIM Iodqre

The costs of a viperous “coupling" By Prasenjeet Acharjee & Manish Mishra , TAPMI

Internet Cookies: The dark side of analytics By Mayur Challawar & Sidharth Panigrahi TAPMI

A Student’s Initiative Pratibimb | May-June 2012 | 1

Volume II, Issue X

May-June 2012

A Monthly e-Magazine

T. A. Pai Management Institute Manipal, Karnataka

About TAPMI T. A. Pai Management Institute (TAPMI) is a premier management institute situated in Manipal and is well known for its academic rigor & faculty-student interaction. The Institute has been recently ranked amongst top 1 per cent of B-schools in India & 4th in the South Zone by The Week Magazine. Founded by the visionary, Late Shri. T. A. Pai, TAPMI’s mission is to provide much needed impetus to the task of building professional management capability in the country. In the process, it has also played a role in strengthening the existing educational and health infrastructure of Manipal.

Our Mission We are committed to excellence in post graduate management education, research and practice by nurturing and developing global wealth creators and leaders. We shall continually benchmark ourselves against the best-in-class institutions. We shall foster continuous learning and reflection, achievement-orientation, creative interdependence, and respect for diversity with a holistic concern for ethics, environment and society.

Recent Updates AACSB( the Association to Advance Collegiate Schools of Business) Accreditation Standards are used as the basis to evaluate a business school’s mission, operations, faculty qualifications and contributions, programs, and other critical areas. TAPMI is the second management institute in India to receive this meritorious accreditation. A new batch of 300 students has just entered the campus to become a part of the TAPMI culture. Pratibimb | May-June 2012 | 2



MAY-JUNE, 2012

TAPMI’s e-Magazine - is the conglomeration of the various specializations in MBA (Marketing, Finance, HR, Systems and Operations). It is primarily intended to provide insights into the plethora of knowledge that relate to the various departments of Management and to give an opportunity to the students of TAPMI and the best brains across country to exhibit their creative cells. The magazine also strives to bring expert inputs from industries, thereby bringing the academia and industry together. Pratibimb the e-Magazine of TAPMI had its first issue in December 2010. The issue comprised of an interview of denoted writer Ms. Rashmi Bansal along with a series of articles by students and industry experts like MadhuSudan Rao (AVP-Delivery, Mahindra Satyam) & Ed Cohen who is a global leader and chief learning officer who led Booz Allen Hamilton & Satyam Computer Services to the first rank globally for learning & development . It also included a hugely successful and engrossing game for finance geeks called “Beat the Market” to bring out the application based knowledge of students by providing them the platform where they were expected to predict the stock prices of two selected stocks on a future date. The magazine is primarily intended for the development of all around management knowledge by providing unbiased critical insights into the modern developments. TAPMI believes that learning is a continuous process and is not limited to the four walls of the classroom. This viewpoint is further enhanced through Pratibimb wherein students manage and contribute to create a refreshing learning environment outside the classrooms which eventually leads to a holistic development process. The magazine provides a competitive platform and opportunity to the students where they can compete with the best brains of the country. The magazine also provides a platform for prominent industry stalwarts to communicate their views and learning about and from the recent developments from their respective fields of business which in turn helps to create a collaborative learning base for its readers. Pratibimb is committed in continuing this initiative by bringing in continuous improvement in the magazine by including quality articles related to various management issues and eventually creating a more engaging relationship with its readers by providing them a platform to showcase their talent. We invite all the best brains across country to be part of this initiative and help us take this to the next level.

Pratibimb | May-June 2012 | 3



It is always a pleasure to witness that certain efforts of the students are sustained and carried forward; Pratibimb is one such. The oft-beaten track, “We are here to learn,” ends up as a mere platitude when there are no visible actions and documentation. Whereas there is no dearth of actions at TAPMI, documentation is not something that many—other than scholars—choose to engage in; it is normally viewed as uninteresting, drab and a drudgery. TAPMIans have proved that they are equally capable of actions and of documentation without losing the intellectual flavour of it. Scholarship is too important a phenomenon to be left to scholars alone, especially in the field of management. As future practicing managers who will be engaged in rigorous action in different fields of business, TAPMIans have manifested both the penchant to produce research works and also get their counterparts in other leading business schools to contribute their thoughts to this endeavour. In this regard, TAPMIans have truly demonstrated the evidence for creative interdependence, an important aspect of TAPMI’s mission. I sincerely appreciate the students and the faculty of TAPMI who have made Pratibimb a possibility through their scholarly works, co-ordination efforts and support. I wish the team the very best. Dr. R. C. Natrajan. Pratibimb | May-June 2012 | 4

Editor’s corner


Dear Readers,

Manish Mishra

We would like to thank all the participants and readers for their valuable contribution. By making this magazine


monthly, we aim to provide a platform that will give you more opportunities to share knowledge and showcase your talent by competing with the best minds in the country.

Abhishek Dubey Namrata Mahapatra

Our presence has also augmented due to the popularity of social media. There has been a steady rise in our total audience, including both readers and contributors, and more number of posts have gone viral. The plethora of topics published include learning from management gurus such as Peter








innovation that helped leading brands define themselves better. In fact we encourage our contributors to write about any new upcoming events related to management. For all these amazing contributions, apart from students of TAPMI


and other eminent b-schools in the country.

PUBLISHING The articles have been selected by the Editorial Team. We wish to thank all those who helped us in improving Pratibimb through their feedback. We would like to take this opportunity to extend our gratitude to all faculty and students


at TAPMI for their continual support, guidance, motivation

Prof. Chowdari Prasad

and inspiration that has helped us to take Pratibimb to the

Dean (Branding and Promotions)

next echelon. To stay updated about the magazine, please like our page on Facebook. Also, send in your valuable suggestions/feedbacks to

Enjoy Reading!

Pratibimb | May-June 2012 | 5

TAPMI , Manipal

contents Receot Treods qf Prixate Etvitz Fvodiog io Iodia


Prqf. Chqwdari Prasad & Prqf. M. Dvrga Prasad, TAPMI

Dixerstiy maoagemeot - Catchiog vr qo votarred hvmao rqteotial


Veooa Naxeeo, TISS

Dqes Hysterisis Effect wqrk qo Iodiao Ecqoqmy?


Aditza Maira & Nitio Jaio, IIM Iodqre

The cqsts qf a xirerqvs "cqvrliog"


Praseojeet Acharjee & Maoish Mishra , TAPMI

Sqft Skills alqog with exserieoce will imrrqxe bqttqm lioe


Mqhamed Gaoi, BIM Trichy

Mqderp HR Practices : A Harbioger fqr Grqwth?


Dqlly Damaoi, N.L. Dalmia Iostitwte qf Maoagemeot Stwdies

Retaioiog Emrlqyees io the IT Sectqr


S.K.C. Yadax & Maov A.R., SJMSOM IIT Mvmbai

Sqcial Media Marketiog fqr Iodia’s Geoeratiqo Nexu Arsao Baoerjee, KJ Sqmaiya Mvmbai

Pratibimb | May-June 2012 | 6


contents Ioterpet Cqqkies: The dark side qf aoalyuics


Maywr Challawar & Sidharuh Paoigrahi , TAPMI

The Karna Theqrz fqr Bvsioess Leaders


Aoaod Tajrvriya & Pritqm Kvmar Gqgqi, NMIMS Mvmbai

Svccess stqrz qf Paotalqqos : Aoalysis qf their HR Practices & Pqlicies Axaotika Tqmar, IIM Kqlkata

Pratibimb | May-June 2012 | 7


Recent Trends Of Private Equity Funding In India by Prof. Chowdari Prasad and Prof. M. Durga Prasad , TAPMI Concept of Private Equity: The term ‗Private Equity‘ (PE) refers to shareholder capital invested in companies not listed on public exchanges. A company may seek PE for a variety of applications, namely, business expansion, developing new technologies and products to grow and remain competitive, making acquisitions of other businesses, restructuring the company etc. PE investments are best source for the capital needs of dynamic companies with high growth rates. Private Equity Funds in India: Financial sector reforms in India have afforded golden opportunities to the enthusiastic entrepreneurs. Indian dynamic economy created excellent companies that are open to global business. Raising economy, increasing opportunities for expansion of new and/or existing businesses are eagerly waiting for funding agencies. PE is one of the best sources to raise the funds. Moreover PE firms are responding positively to accommodate Indian capital investment needs. The main reason behind positive response of PE firms is optimistic trends in Indian economy. Indian rate of GDP grew from 6.5 per cent in IX plan to 7.7 per cent in X plan and in XI plan GDP grew at 8.1 per cent. There is an inverse relation between unemployment rate and GDP. Decrease in unemployment rate may cause increase in disposable income. A recent study on PE by Fourth Wheel cited that India now has a sizable middle class and Pratibimb | May-June 2012 | 8

Indicators (%) UnemployGrowth ment rate rate in (terminal GDP year)

Plan IX plan (1997-2002) X plan (2002-2007) XI plan (2007-2012)







TABLE 1 : Plan-wise GDP and Unemployment Development rate Source

percentage of its population below the poverty line is gradually reducing. At the same time, disposable income among its middle class is growing and there is a great deal of cash circulation in the economy. The country has second largest population in the world of 1.173 bn, with 65 per cent of population between 15-64 years of age. A study by the McKinsey Global Institute suggests that if India continues its recent growth, average household incomes will triple over the next two decades and it will become the world‘s largest consumer economy by 2025, up from the 12th now. McKinsey study shows that aggregate consumer spending could more than quadruple in coming years, reaching 70 trillion rupees by 2025. Expanding urban wealth and increased domestic consumption has resulted in the industrial production growth rate 9.7 per cent (CIA world fact book). There is a large demand for FMCG,

Schooling, Retail, and Real Estate. PE investors have played a significant role in the development of several sectors in India. Private Equity Investments in India 2000-2010 Graph-1 provides details about the total PE investments inducted in India for the last ten years. PE investments declined drastically in 2002, 2004 and 2009. PE firms invested US $ 10,110 million over 441 deals in India in 2010-11, this was comparatively high than the previous year (2009-10) PE investments of US $ 7970 Million over 362 deals. PE investments in 2011-12 surges in value and volume terms, which is clearly indicated in table 4. Private Equity Investments in the year 2012 The first three months of 2012 saw $2.45 billion worth of PE investments in Indian companies

across 131 deals. During the quarter, the real estate sector topped the investment charts accounting for 29 per cent of investments with a total deal value of $711 million. The banking, financial services and insurance (BFSI) sector came next with 15.7 per cent of total PE investments. (Table 2)The month of April saw $543.4 million in private equity (PE) investments in Indian companies across 39 deals. The pharmaceuticals and healthcare sector topped the investment chart, accounting for 30.6 per cent of investments with a deal value of $166.2 million. The manufacturing sector occupied the second slot, with seven deals worth $130.7 million (24.1%). Logistics companies aggregated $88 million (16.2%) worth of investments. (Table 3). PE investments during 2011 -12 have been continuously falling. According to the study by the Venture Intelligence, it was the third consecutive

Graph – 1 : Private Equity Investments in India

Sector Real estate BFSI Healthcare Retail Manufacturing Logistics Infrastructure Media & Entertainment Others Total

Allocation (%)

No. of. deals

29 15.6 15 10.2 9.6 5.5 4.9 3.2 7 100.00

18 19 12 15 14 4 8 7 34 131

Investment ($ mn) 711.0 384.2 367.2 249.6 235.5 135.7 120.3 78.5 172.0 2454

Table 2 :Private Equity – Sector wise allocations, no. of. deals and investments during the first three months of 2012 Source: Compiled from various sources & livemint.

Pratibimb | May-June 2012 | 9

Sector Pharma and Health care Manufacturing Logistics Real Estate BFSI IT & ITES Infrastructure

Allocation (%) 30.6 24.1 16.2 13.4 7 5.3 0.7

No. of. deals 3 7 2 4 2 9 1

Investment ($ mn) 166.2 130.7 88.0 73.0 38.3 29.0 3.6









Table 3: Private Equity – Sector wise allocations, no. of. deals and investments during April 2012. Source: Compiled from various sources & livemint

quarter that saw a decline in PE investments. (Table 4) Life Cycle of a Company and opportunities for Private Equity firms:

Month &Year Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012


No. of. Deals

Value ($mn)

27 33 45 33 39

802.80 466.80 612.30 580.20 929.40

51 41 39

922.70 601.90 543.40

Table 4:Private Equity investments and No. of deals during September 2011 to April 2012

The various stages of a company‘s development provide multiple opportunities for a private equity fund to invest in the company. In general the following are the important stages of the company and opportunities available for Private Equity firms.

Life cycle of a company

Opportunity for PE firm

Initial stage

Finance for research and development of concept


Financing for product development and initial marketing


Financing for growth and expansion

Purchase of shares Replacement of Cap- from another invesital tor through refinancing of debt


Acquisition of a significant portion or majority control of a business

(c) Tough Competitive Environment (d) Non-supportive regulatory environment (e) Difficulty in getting access to capital

Challenges and barriers to the PE:

(f) Poor corporate governance

The biggest challenges and barriers to the private equity firms are as follows

(g) Unwillingness of promoter/CEO to sell stake

(a) Mismatch of valuation expectations (b) Volatile Macro Economic Factors Pratibimb | May-June 2012 | 10

(h) Limited availability of investment professionals (i) Unwillingness of promoter/CEO to allow management oversight by a PE investor

Recent KPMG survey clearly states that PE executives believe that the national economy will remain stagnant in the near future. Mr. Harish H.V., Partner, India Leadership team, Grant Thornton India, quoted ― still there is hope that India offers immense opportunities for PE investments because in India, 60 per cent of corporate are looking at PE as a source of funding in 2012‖.

We believe that the draft (Alternative Investment Funds) Regulations, 2011 tabled for public comments by SEBI is a good move towards the regulatory environment.



There is a high and increasing demand for private equity/venture capital funding in India in the postliberalized era. The primary growth drivers for private equity in India are Industrial growth and increasing opportunities for enthusiastic entrepreneurs. The role of private equity increased significantly over the last two decades. Private equity funds invested in almost all the sectors in India. Technology, Infrastructure, Telecom, Healthcare, Retail etc. are some of the sectors highly benefited because of Private Equity funding. PE played a vital role in providing employment opportunities too.

 Bain

There is a need for controlling body for private equity industry like capital market regulator SEBI. It is also necessary for the Government to clearly spell out the definition of Private Equity in India in comparison to Venture Capital Fund Rules 2000, guidelines for management of PE Funds from within India and abroad, compliance to the FIPB / DIPP Guidelines, terms for repatriation of capital and interest/dividend funds in foreign exchange, and taxation laws as also relaxations, if any, by CBDT and so on.

 National

& Company, IVCA. (2011). “Indian Private Equity Report 2011” Retrieved from


(2011). “Private Equity analyst highlights” Retrieved from http:// ArticlesPublications/Documents/private-equityanalyst-highlights.pdf.

 Grant

Thornton & IVCA. (2011). “Private Equity in the Indian corporate landscape” Retrieved from -Fourth-Wheel-a-Grant-Thornton-Report-.pdf. Stock Exchange “Venture Capital and Private Equity Financing in India” Retrieved from NS_may2009_2.pdf

 Business

standard “2010 sees $8 bn PE investment in India” Retrieved from http://

 The

Wall Street Journal ―PE investments fall to $543 mn in April‖ Retrieved from http://

“Success is a lousy teacher. It seduces smart people into thinking they can't lose.” - Bill Gates Pratibimb | May-June 2012 | 11

Diversity Management - Catching up on the untapped human potential by Venna Naveen, TISS(2nd year) PART 1 The present times offer a huge potential to companies and nations to develop but this has its own limitations and complications as the expectations in terms of potential and growth differ quite widely via standards of living, cultures and values, and legal systems as well as unexpected global cause-and-effect linkages. An issue of high importance to one may be of the least priority to the other. What one generally observes at work is the diversity of opinion towards issues. Cascading this to business organizations, contradicting we find all organizations are with a motive of making profits but one of crucial diverse resource which organizations face is human resource. Resource in our view means everything which is put to use to achieve those profits. This article shall deal with the diversity of human resources. People belonging to different areas, educational levels, sexes, caste, creed, sect, etc. are diverse in the ways such as attitude towards issues, their sensitivity to traditional beliefs, etc. which generally make up the human resources of an organization. Diversity means difference, differences create challenges, and these challenges open avenues of opportunities (William Sonnenschein). Diversity has increasingly become a ‗hot-button‘ issue in corporate, political and legal arenas and since the recent years the view of diversity is dramatically changing to a more proactive concept and it is now a valued term as compared to that of the 1960‘s where it was more about the differences (Allen et al., 2004; Govend, 2005). In a study conducted by this group on several corporate offices it was found that 43% of the respondents reported that diversity was mentioned in the mission statement of their company and 43% Pratibimb | May-June 2012 | 12

reported to have a diversity department within their company. In addition to this, 57% of the companies in the sample reported that they had steering committees that oversaw the company‘s diversity initiative and 62% reported that they conduct diversity awareness training. Managing diversity means enabling the diverse workforce to perform to its full potential in an equitable work environment where no group has an advantage or a disadvantage. (Torres & Bruxelles,1992). The Process of diversification has 6 stages: denial, recognition, acceptance, appreciation, valuing and utilization (Porras, 1991). A vast source of literature shows that managing diversity is not simple; one size does not fit all but at the same time, irrefutable measurable benefits can be derived from properly implemented policies to promote diversity (Jamrog, 2002). Often, an organization generally undergoes a ―cultural transformation‖ before it can successfully achieve the full benefits of diversity (Carnevale& Stone, 1994). To be successful in harnessing the potential of diversity, managers need to ―unlearn‖ practices rooted in an old mind set, change the ways organizations operate, shift company culture, revise policies, create new structures, and redesign human resource systems (Aghazadeh, 2004) PART II The following parts shall discuss upon some of the diverse groups which make up an organization and explains common myths and solutions thereof to make use of the diverse strengths. Gender Diversity: Are difference in the working style of men and women only perceived or do they really exist? If we try to study the way men and women work, we will be able to discover distinction in their managing styles for similar

jobs. And if such distinctions exist, how correct it is to attribute these differences to stereotypes associated with gender? Different studies yield different results. Some reject the view of traditional gender stereotypes having any effect on the working style of men and women, however there are many who support this view claiming the existence of these stereotypes as the very basis in which men and women define jobs, grow, learn, take decisions, carry out business and handle leadership positions. According to one study on impact of gender on management styles, it was observed that while defining jobs women put more emphasis on team management whereas men define jobs from the perspectives of being entrepreneurial or from the level of inclination that one has to concentrate on administering systems. The operating style of women was observed to be more people oriented where as men were found to be more opinionated and influential, keeping close connection with policies and practices of the organization. The decision style of women was described as having close relationship with the aspect of familiarization and for men it was described as based on analysis and rules. In the context of team leadership, women were more inclined towards having a participative approach aimed at developing and honing the skills of people whereas men showed authoritative and directive leadership style preferring to keep some distance with their subordinates. In dealing with clients, women acted in a more understanding manner more showing care and concern for needs of youth and people from different ethnic backgrounds. Men mostly meant business with their clients focusing more on deliverables with having more confidence in their knowledge towards dealing with the needs of the clients (Sparrow & Rigg, 1994) Another study focussing only on the leadership style of men and women revealed that there is no overall difference in the leadership styles and effectiveness of women and men at leadership positions. Differences exist but it is the Pratibimb | May-June 2012 | 13

organizational culture that shape beliefs and practices towards leadership style of men and women. (Jonsen & Maznevski, 2010). Disability Diversity: The disability as a concept in current scenario is no longer defined in terms of born biological differences rather is construed more of as a socially constructed in terms of the differences of an individual and the group. Managing diversity as an approach heralds a new beginning of the various equality initiatives towards the disadvantaged group and specifically towards the disabled people. The basic attempt is to understand the tension between the individual and group level approaches to equality within the purview of the managing diversity (MD) approach. The equality initiatives which have been given a renewed significance have been questioned on economic viability grounds citing the huge barriers in terms of cost and business case for such measures where initiatives need to be highly diverse and may in the end benefit few disabled employees due to the heterogeneous nature of the group. When we discuss about diversity in a holistic sense it is important to consider the issue of smooth and proper integration of disabled people. It is perhaps more significant than managing diversity of such employees. LGBT Diversity: Its scope has been vastly expanded to include the dimensions of alternate sexuality such as Lesbian, Gay, Bisexual and Transgender as a part of workforce diversity. Many countries have enacted laws and regulations have been put in place with enhanced activism on the part of various organizations to bring total inclusion in the work environment. Existence of diversity and equal opportunity policies will encourage complete integration by helping them to come out with their sexual preferences. Moreover provision of same sex benefits, positive employertrade union relations and existence of LGBT groups, LGBT supervisors and peers help in this initiative. However, LGBT employees may be prevented to come out due to lack of career progression, lack of

senior LGBT staff, previous negative experiences of discrimination and harassment and behaviour of co-workers. So the purpose of mentioning the study has been to provide evidence of the experience of LGBT workers in UK and confirming that employers need to create such an inclusive environment in order to attract and retain such people and build and derive benefits out of such a wide talent pool (McKearney et. al, 2006). Linguistic Diversity: Popular myth says that the diversity in languages in a workplace impedes the culture of knowledge-sharing and performance in multicultural companies, and that linguistic diversity is a challenge to knowledge-sharing in a multicultural organisation. A study conducted (Lauring & Selmer, 2011) studied the effect of multiplicity of languages on a multicultural organization‘s knowledge-sharing culture and work performance, and tested positive for both. Certain other studies have argued that linguistic diversity is positively related to cognitive diversity, thus stressing its positive effect on available knowledge resources. However, it was seen that the use of English as a common language is positively and significantly related to knowledge-sharing and performance in a multicultural organization, as well as the diversity of languages being positively associated with knowledge-sharing and performance. Diversity in terms of Age of employees: The use of work teams in the organizational setting has been increasing, and the average age of the population and the workforce in the Western world has been increasing. When the two come together, one may draw assumptions that since it is difficult for older team members to adapt to flexibility of schedule and changing technology and new work methods, age may be a problem in work teams. However, it was found in a study by Gellert and Kuipers (Gellert & Kuipers, 2008) that older age has a positive bearing on short-term and long-term consequences in work teams. More specifically, it was seen that for satisfaction and involvement, teams with higher average age find Pratibimb | May-June 2012 | 14

more enjoyment in their work and feel good in their teams and in the company. Also, in the areas of mutual learning, feedback and decision making, teams profit from more experienced, senior workers. Teams with a higher average age also produce better quality of final product, but on the flipside, have more problem keeping up with the fast work pace required in teams and new-age organizations, and hence, choose a more timebalanced work schedule, thus reducing the risk of sick-leave and burnout, which ultimately, benefits the organization. Ethnic Diversity: Ethnic diversity has moved beyond employers attempting to paint the organization a homogenous colour, and expecting employees to attempt to be the same, for the sake of homogeneity. Employees are unwilling to leave their cultural and ethnic identity at the door when they come to work, as it is a large part of their self and identity. In any organization, employees form a certain psychological contract, a mental set of mutual obligations and implicit promises which they feel that both parties to the contract (employer and employee) must fulfill. This psychological contract is particularly amplified in case of minority employees and a study by a team concurs to the fact (Chrobot-Mason, 2003). Violation of psychological contract terms specific to diversity issues have a strong positive impact on minority employees‘ perceptions of breach of the psychological contract and on employee dissatisfaction, lack of commitment, and organizational cynicism. The interpretation of a perceived breach is moderated by elements of organizational trust and perceived justice. Surprisingly, it was found that when organizational trust was high, minority employees who perceived a breach of contract were more likely to feel cynicism. This is consistent for when perceptions of organizational justice are high. PART III On the whole diversity management does pose

various challenges to the organization amidst all the measurable benefits it offers to an organization. The prime challenge is that of managing the diversity itself; mismanaged diversity can have long-reaching effects on employee satisfaction and productivity. Employees who perceive themselves as valued members of their organization are harder working, involved, and innovative. Unfortunately, minoritygroup members often feel less valued than majority-group members due to stereotyping, ethnocentrism, and prejudice some notable areas of concern as far as diversity is concerned are first, there is an increase in the cost of training. Second, a company may encounter is reverse discrimination. Third, diversity in the workplace could lead to increase in conflicts which may result in increase in turnover and absenteeism (Aghazadeh, 2004).

White, 1999) and rapid response and adaptation to change (Adler, 1997; Jackson et al). Diversity brings differences in styles and in ways of looking at and doing things which can help organizations do more than they ever dreamed possible. Diversity can help organizations develop new products and services that better meet the needs of customers and clients. Organizations with diverse workforce can provide superior services because they understand customers better. Hiring diverse workforce helps to tap niche markets (Mueller, 1998).

As against the odds which organizations face owing to diversity, the benefits which one can harness from diverse workforce are numerous and in fact could be a source of competitive advantage because different viewpoints find different approaches to solve a problem (Allen et al., 2004; Pierce et al., 2004; Aghazadeh, 2004). Promoting diversity attracts talented workers, reduces turnover, and unleashes creativity (Silverstein, 1995; Diversity Inc., 2002; White, 1999). Attention to diversity increases employee satisfaction and loyalty (McBride and Bostian, 1998). A multicultural company can penetrate and widen their markets with the knowledge of political, social, legal, economic and cultural environments (White, 1999). Diverse teams make it possible to enhance flexibility (Fluery, 1999;

 Chrobot-Mason, D. L. (2003). Psychological contract violations

References  Aghazadeh S. M(2004), Managing workforce diversity as an essential resource for improving organizational performance; International Journal of Productivity and Performance Management, 53(6), pp. 521 - 531

 Allen et. Al (2004), Diversity Practices: Learning responses for modern organizations, Development Organizations; 18(6) pp. 13-15.



for minority employees. Journal of Managerial Psychology, 2245.

 Carol Woodhams, A. D. (2000). Disability and Diversity - A difference too far? Personnel Review , 402-416.

 Gellert, F. J., & Kuipers, B. S. (2008). Short- and long-term consequences of age in work teams. Career Development International, 132-149.

 Govendo J. A (2005), Workforce, diversity and corporate creativity; Handbook of Business Strategy, pp. 213-217

 Ilona Buciuniene, R. K. (2010). Integrating people with disability into workforce : case of a retail chain. Equality , Diversity and Inclusion , 534-538.

 Jonsen, K., & Maznevski, M. L. (2010). Gender differences in leadership – believing is seeing: implications for managing diversity. Retrieved February 22, 2012, from

 Kundu S. C (2003), Workforce diversity status: a study of employees‘ reactions; Industrial Management and Data Systems, 103(4), pp. 215-226.

"It is not the strongest of the species that survives, nor the most intelligent, but the ones most responsive to change." - Charles Darwin Pratibimb | May-June 2012 | 15


Does Hysteresis Effect work on Indian Economy? by Aditya Maira & Nitin Jain , IIM, Indore The Indian economy has been seeing many changes over the years owing to both domestic as well as international forces. One of the key indicators of economic health is the nominal exchange rate of the country. It is a wellestablished fact that India follows a managed floating rate system in which it does not intervene until there is a significant deviation from the standard rates. The Central Bank, Reserve Bank of India in our case does this by buying or selling currencies. In an increasingly integrated global economy, currency rate fluctuations affect the economic health of the country. Hence, almost all governments now follow the managed floating system to control sharp deviations in nominal exchange rates. There are merits as well as demerits of this system. However, we have attempted to understand the effect of changes in the net exports during the last 6-8 months owing to the exchange rate variation. Hysteresis effect – In the aftermath of a large and persistent overvaluation of the dollar in 1980-85, several US firms were at a disadvantage in world trade as dollar prices of imports declined. These are normal effects of a currency appreciation. However, the hysteresis argument states that when there is a change is exchange rate, there is a considerable amount of lag before the economy reacts to such a change. Once foreign firms have become established in the United States and consumers have become accustomed to their goods, even a reversal of the exchange rate to the initial level will not be enough to enable US firms to recapture the share of the market. Similarly, when US markets have lost foreign market share and even left some foreign markets entirely, going

Pratibimb | May-June 2012 | 16

back to the initial level will not be enough to bring US firms back. To return to the initial trading pattern, exchange rates will have to overshoot in the opposite direction, making it profitable to incur the costs of starting up export operations and competing with foreign firms that supply imports. The evidence on

Figure: J-curve effect on net exports due to devaluation

these hysteresis effects remains tentative. The hysteresis effect supports the argument proposed by the J-curve effect where the net exports fall and later rise whenever the exchange rate is devalued. Trend of net exports since July 2011 – The graph shown below shows the variation in exports, imports and nominal exchange rate from November 2010 to Jan 2012. The figures mentioned in the graph are in $ millions. An average value has been considered for each data point for the purpose of analysis. As we can see from the graph, the exchange rate remains steady at around Rs. 45 per dollar for the period until July 2011 following which there is a sharp devaluation in currency. The exports depend primarily on two factors namely Real exchange rate (R) and foreign GDP (Yf). On the other hand, the imports are

affected by Real exchange rate and domestic GDP (Y). Prior to July 2011, the net exports varied owing to changes in domestic GDP (Y) and foreign GDP (Yf). Since the outlook of the economy had been good until this period, both imports and exports rose

causing the net exports to rise. Thus, trade balance improved during this period even though there was trade deficit (X<M). The graph below shows the trend of rising exports and imports during the period of October 2010 to July 2011. For the entire period from July 2011 to Jan 2012, net exports has been more or less constant, only varying slightly owing to changes in domestic GDP, despite a devaluation in currency. This can be attributed to the steady & high level of inflation persistent in the Indian economy during the period. This has caused a high domestic demand causing prices to rise further. However, from July 2011 to October 2011, the exports fell from $29344 million to $ 19870. Beyond this, the exports rose to $ 25347. The Jcurve effect can be noticed in this change. Let us assume Qx to be quantity exported at an average price of P. If Pf is foreign price level, ER is nominal exchange rate and Qm is the quantity imported, we can see that Net Exports NX = Qx.P â&#x20AC;&#x201C; Qm.Pf.ER Pratibimb | May-June 2012 | 17

When the currency is devalued, ER increases. This causes imports to increase but the exports remain constant in the short run. Thus Net export decreases initially. This occurred because there was a consumer response lag. The price effect dominated quantity effect causing consumers to

take time to accommodate to cheaper domestic goods. Following this drop in exports for 4 months, the consumers switched to buying foreign goods. Thus, exports increased and imports decreased. This caused the trade balance to improve subsequently. During this phase, the quantity effect dominated the price effect. This effect will now last long as the lag due to consumer response has now been surpassed. Thus the hysteresis effect can be seen to affect the dynamics of net exports even in the Indian economy but impact in not so prominent. Heavy imports of capital goods, fertilizers, petroleum and some other essential commodities have contributed to the rise of imports in India. India imports three fourth of its requirement for oil and a recent shortfall of coal has further led to an increase in import figures. For last few months the confidence of the investors in the Indian market is at all-time low which is combined with the recent spurt of corruption cases on politicians. This has led to a huge outflow of money from the Indian

market, which in turn has increased the exchange rate or the value of the rupee has depreciated. Future of Indian economy, if the recent trend continues, should see an increase in GDP figures due to increased exports from Indian subcontinent. India‘s managed floating exchange rate system has actually benefitted the exporters, but the recent increase in the import of oil and coal combined with increase in exchange rate will only mean further increase in inflation. This would prove to be a huge set back since India is already following a contractionary monetary policy. Since India has a managed floating exchange rate with free capital flow, fiscal policy will remain ineffective. In addition, expansionary fiscal policy would delay the growth further. In contrast, monetary policy will be highly effective but again it would hit investments. Seeing the recent trends, it is clear that India‘s net exports does not increase drastically with an increase in exchange rate. It only leads to increase in inflation due to increase import bills on coal and oil. For a developing economy like India, a rupee appreciation seems best for some time to come which can be assured only through positive market sentiments. India has been always an attractive destination for investment but for this the sentiments of the investors and market need to be corrected. Foreign investments in the form of FII‘s and FDI‘s are needed for the economy to grow further. This will only be possible by improving market sentiments. The composition of government expenditure needs to lay greater emphasis on increasing the productive capacity of the economy, through increased investments in agriculture, education and infrastructure. This would make sure that we are less dependent on foreign markets for basic needs. To create fiscal space to invest in these critical areas, the government will have to reduce subsidies. Monetary policy will remain less effective in inflation control, if fiscal policy does not focus on improving supply of key goods and Pratibimb | May-June 2012 | 18

services – agriculture, skilled labour and infrastructure – but stimulates consumption demand. Increasing agricultural productivity will require the policy to foster a supportive environment of better irrigation, better technology and infrastructure. A developing country has to live with some inflation and using monetary policy to control inflation would only lead to reduced investments. The only way to fill the demand and supply gap is to increase productivity. Linking wages to productivity will be critical for managing demand pressures. Increasing productivity will enable the economy to control inflation and enjoy higher growth. Else, the economy could lapse again into a phase of lower growth. We should use innovative techniques, look towards east and west on how to increase productivity, learn from our mistakes and try to create an atmosphere for growth. The hysteresis effect on Indian economy may not be directly traced due to its over-dependence on imports. A developing economy like India should try to decrease trade deficit and device mechanisms to increase productivity, maintain high investor confidence, eradicate corruption and try to control inflation by filling the demand supply gap. References 

Macroeconomics, 9th editon by Rudiger Dornbusch, Stanley Fischer and Richard Startz

The Costs of a Viperous "Coupling" : The Global Economic Crisis and India's Leadership Crisis by Prasenjeet Acharjee & Manish Mishra , TAPMI The deterioration in the economic situation has been partly attributed to the developments taking place abroad.

The threat of a double-dip recession in the US, underlined by the Standard & Poor‘s downgrade of its economy, resulting later in a global meltdown of stock markets, never-ending Eurozone crisis poses a real challenge to India‘s economic policymakers. S&P has downgraded India's rating from stable to negative, citing a high debt burden, slowing fiscal reforms, and

diminishing growth prospects. India finds itself in the midst of an economic crisis of staggering proportions better coined as stagflation. Pratibimb | May-June 2012 | 19

Talks were going rounds about endorsing a new currency on the backdrop of a bankrupted Greece and Germany was reluctant to offer Greece more help. However, the favorable election in Greece has restored new belief and a ray of hope among investors. Eurozone crisis has affected Indian economy to some extent as Indian economy is today more integrated with the global economy and Eurozone accounts for a significant share of the global economy and is also India's major trade and investment partner. However, let us not concentrate on situations that are out of our hands. Let us look into some of the issues plaguing the Indian economy and which can be controlled and handled. India‘s GDP has hit a rock bottom level of 5.3 as of June, 2012. There has been a steady decrease in

the Indian GDP since 2010.

There are many reasons for this. IMF (International Monetary Fund) is of the view that India‘s debt management policy is not as efficient as some of the other BRIC countries.

As can be seen from the graph above, among emerging economies India‘s government debt stands highest at 67.57% of its GDP closely followed by the Brazilian government debt at 65.09%. Debt levels in Russia and China are comfortably poised at 8.37% and 22.03% respectively. However, DK Joshi, chief economist at CRISIL, is of the opinion that India‘s government Pratibimb | May-June 2012 | 20

debt is on the higher side but the good news is that it has been reducing consistently. Government debt to GDP ratio of other major countries shows that India‘s debt scenario is not that bad as well. Apart from the debt issue, India‘s inflation level is quiet high, highlighting that of the Indian Government and RBI‘s effort to control inflation have proved to be inadequate so far. However, the good news is that the inflation has been on a declined by more than 50% since from

2010 but still not reached at the desired level considering the state the state that the Indian economy finds itself in.

industrial sector will be one sector which will be majorly hit by this. Also, the Indian governmentâ&#x20AC;&#x2DC;s borrowing cost will increase

Inflation Rate OF Major economies

One of the major pain points in this economic scenario has been the Indiaâ&#x20AC;&#x2DC;s high fiscal deficit and high current account deficit. The major reason behind high fiscal deficit is that there has been a 200% increase in subsidies since 200708.Current account deficit has swelled up because of high demand for gold among a few other factors. Another major concern is that Indian Rupee has been falling sharply. There is a 22% drop in rupee against dollar since early 2011. Rupee depreciation has pushed up the rupee cost of imports. The net effect of rupee depreciation will be that profit margins of companies that import commodities or components would shrink which in turn, could result in price increases for the consumer and push up inflation. This will also increase governmentâ&#x20AC;&#x2DC;s fiscal burden. The Pratibimb | May-June 2012 | 21

because of this rupee depreciation. Another major problem has been the steady increase in interest rates. The interest rates have increased by 60% since March 2010. The repercussions of this can be manifold. To start with, the cost of borrowing will increase and mortgage interest payments will increase. There will be an increases incentive to save rather than to spend. High interest rates will affect both consumers and firms so economy will experience a fall in consumption and investment. There has been a substantial drop in investments, 29.5% of GDP, gross fixed capital formation, the lowest in 7 years. Some of the other pain points in the present economic scenario are power sector crisis and decline in portfolio inflows. At present, 30000MW of power amounting to Rs 47,738cr power plant is idling or underutilized. Also, there has been a decline of more than 50% in portfolio

inflows from 2010. The portfolio inflows stand at Rs 47,738cr in 2011-12 against Rs 110,120 crore in previous year. Some of the above problems can be controlled by taking stringent and brave decisions and policy reforms. Analysts believe that high fiscal deficit can be controlled by speeding up Adhar pilots, reducing diesel and urea subsidies and decontrolling diesel. Controlling fiscal deficit will curtail current account deficit. Demand of gold should be curbed and distribution margin on financial products should be restored to further to control current account deficit. Inflation can be controlled to a great extent by easing supply side constraints as inflation in India is majorly attributed to supply side. APMC Act should be removed and retail sector should be opened to FDI. High interest rate can be controlled to certain extent if there is strong commitment to fiscal consolidation which in turn will help RBI cut rates. Investments can also be increased in a number of ways. For a start, clarity on coal can kick start power investments. Cash-rich PSUs should be urged and supported to help them fasttrack plans which are stuck in some stage or the other. Government should switch from subsidy to investment by stepping-up investment in roads, towns, infrastructure and broadband infrastructure. Power sector issues can be sorted to a great extent by supplying coal to plants working at sub-optimal capacity. Steps should be taken to revamp state electricity boards so as to ensure that power producers can sell to them without payment worries. Portfolio inflows can be increases by Pratibimb | May-June 2012 | 22

allowing employees to migrate from EPF to NPS for long-term savings to be deployed in stocks. Some analysts believe that the dynamics of Indian industry can be altered by the introduction of Goods and Services Tax. Also, if the conditions in the Land Acquisition Bill were to be implemented as it is, India will find it extremely difficult to meet the targets that it has set for investments in infrastructure and manufacturing sectors over the coming years. The consequent impact on job creation will be devastating. There was an expectation that RBI will cut rates. But eventually RBI did not cut rates which sent the stock market tumbling down for some time. However, J P Morgan has estimated that a 10% depreciation of the rupee in nominal (NEER) terms over the past three months is equivalent to 100 basis points of rate cuts, calling it 窶不omething that should bring pause to those who still believe substantial rate cuts are warranted debunking the myth that a rate cut will go a long way in improving the current situation. FICCI believes that providing fiscal stimulus for investments across sectors such as allowing accelerated depreciation, re-introducing investment allowance and scrapping MAT for infrastructure projects will increase investment activity without significantly affecting government finances. But all these solution requires Indian government to take bold decisions and make strong policy reforms which it has been incapable of doing so far. In fact, one of the major reasons cited for the current state of Indian economy is that the government is in the grips of a policy paralysis, unable to push through reforms that would pave

the way for more investment, or flip-flopping on measures that would do the same. Some analysts and experts think that blaming Europe is only buying time. The root cause of this policy paralysis has been attributed to leadership crisis in the UPA government. There has been a lack of coherent, coordinated and determined behavior from leaders holding top positions in the government. Events since the announcement of the 2012/13 budget in March suggest a deeper dysfunction: a leadership vacuum that has led to empty promises and muddled policy decisions, most notably on tax reforms. Analysts believe that the need of the hour is to change guard in key roles in government. Sonia Gandhi's backing to tough policy reform measures would be highly desired in these circumstances. The market sentiment can be gauged by the fact a change of guard at the finance ministry has lifted stock market sentiment noticeably, probably the most in the last 12 months. Probably selfawareness could avert a "macro-economic train wreck" as far as the Indian Economy is concerned. However, all is not gloomy after all. J P Morgan has upgraded Indian equities to "overweight" from "neutral" in spite of the risk factors facing the economy, encouraged by a number of more positive factors including historic valuations. The bank has predicted a year-end target for BSE index at 19,000 points, a 12% increase from current level. It expects the broader 50-share NSE index to trade in a 4,800-5,200 range in the nearterm. However, the bank is of the opinion that slowing policy reforms remain a hindrance to economic growth and would be a key to a recovery. The problems, analysis and suggestions that have been outlined above are certainly not exhaustive

Pratibimb | May-June 2012 | 23

but capture some of the core issues of the current economic scenario. References:  news/32317744_1_fiscal-consolidation-fiscal-deficitgovernor-duvvuri-subbarao  news/32317741_1_fotis-kouvelis-pasok-antonis-samaras  news/32317895_1_rate-cuts-interest-rates-basis-points  news/32299603_1_cash-reserve-ratio-inflation-and-growthcrr      news/31984210_1_fiscal-deficit-supply-coal-fiscalconsolidation  news/32369033_1_fund-managers-poll-participants-pollresult  news/32352216_1_jpmorgan-indian-equities-private-banks   

Soft-skills Along with Experience will improve bottom-line by Mohamed Gani, BIM Trichy Abstract ―In the service industry, soft skills and subtlety create 60% selling value, the balance 40% is technicality used to deliver the service‖ a survey report came in The Financial express dated November 7, 2010 .There is a lack in soft skills which in turn make nearly 33.33 percentage of youths unemployable (Reported), and people generally use communication skill as synonym for soft skills. Lack of soft skills can be associated with the lesser importance given to soft skills by employees and the company itself. Some of the soft skills are directly linked to bottom line and some are indirectly linked. It is important to be aware of soft skills and its importance for profit making and well being of company .Knowing the importance of it will guide any company to achieve a new level of profits and employee satisfaction which gradually leads to customer satisfaction. The soft skills in IT industry not only increase the bottom line but also decrease the attrition rate. Introduction Soft skills are attitudes and behaviors displayed in interactions among individuals that affect the outcomes of such encounters. These differ from hard skills, which are the technical knowledge and abilities required to perform specific job related tasks more formally stated in job descriptions. In the past, it was felt that managers and employees did not need soft skills as long as they could do their work, but now even positions in hard, taskoriented areas such as accounting (Cole, 1999) and

Pratibimb | May-June 2012 | 24

information systems (Solomon,2002) require soft skills as well as technical skills. Despite the increasing importance of soft skills, very little systematic research has conceptualized such skills and even less has measured these skills. Given this gap in the IT industry this article introduces ―Impact of soft skills in IT companies bottom-line‖ as the concept that could provide a better understanding of this broader set of skills required of IT professionals. Employee‘s ability to handle soft skill side of business such as integrity, influencing, communication, team management delegating, appraising, presenting, motivating is now recognized as key to making businesses more profitable and better places to work. Soft skills can be acquired through experience but to quantify it how many years of experience required it will take to build a good soft skills development , it depends on person to person and the company where he works and how much importance is given by the company to these skills. In companies like TCS, Infosys, Wipro soft skills are made mandatory for entry level professionals and hence during the initial training they go through various modules of soft skills training. Knowing the importance of this Mukund Menon (Global head, talent acquisition - Satyam Computer Services) said that ―There is a huge disconnect in terms of what they are taught and what the industry wants. Weak soft skills, particularly communication and articulation skills, and lack of industry knowledge are a major drawback to our pool of engineers,‖ .

Problem studied Lack of soft skills can be associated with the lesser importance given to soft skills by employees and the company itself. Some of the soft skills are directly linked to bottom line and some are indirectly linked. It is important to be aware of soft skills and its importance for profit making and well being of company .Knowing the importance of it will guide any company to achieve a new level of profits and employee satisfaction which gradually leads to customer satisfaction. The soft skills in IT industry not only increase the bottom line but also decrease the attrition rate. The company spends lot on hard skills but they would be at loss when attrition rate is higher among IT professionals who take away all the training and knowledge imparted and time and infrastructure shared for their training. Research on 181 jobs at 121 companies worldwide showed that two out of three abilities vital for success were emotional competencies such as trustworthiness, adaptability and a talent for collaboration. According to a study of what corporations seek when they hire MBAs, the three most desired capabilities are communication skills, interpersonal skills and initiative all of which are elements of soft skills. Assessments of these top performers revealed that they were better at such things as teamwork, staying late to finish a project and sharing shortcuts with coworkers. In short, the best performers didn't compete they collaborate.

first 35 and next 25) and secondary data collected from research articles, newspaper. Years of experience to know whether they have any of the industry exposure to be considered as valid opinion about soft skill requirement in industry. Most important skill one should posses in IT industry to those who worked in IT and also it was answered by fresher's who are aspiring to become an IT professional. What are the ways by which soft skills can be improved to know whether any organized way of learning soft skills exist before getting into job. What type of industry that students have worked before joining, to know out of the total batch how much percentage is from IT background. Reason for leaving the job, to know what is the main reason for leaving the job whether they are interested in management or they don‘t like to work in soft skills those who leave their job to pursue b school education is simply the attrition for the IT companies. Survey shows that most of the b school students are having IT background and BIM is not an exception out of 70% of experienced persons nearly 80% has IT work experience and more than 90% of them hold engineering degree. Rating of soft skill in a scale of 5,to know how much importance is given to soft skill by the experienced students and would be IT professionals. Emotional intelligence and soft skills relation and soft skills and business relation. Data Sources


a) Primary data

Does soft skill affect bottom-line directly? Or it has something to do with Emotional intelligence and experience thereby affecting the bottom-line.

Surveyed done among the first and second year students of BIM 35 persons from BIM campus

Methodology of Data collection

―In the service industry, soft skills and subtlety create 60% selling value, the balance 40% is technicality used to deliver the service‖ a survey report came in The Financial express dated November 7, 2010(Combat Sengupta). The soft skills play major roles in any company‘s profit, especially IT companies. IT companies spend

Sampling Strategy The students who have worked in IT companies and those who are aspiring IT professionals were chosen for the online survey from BIM students. The number of sample taken was 60(separately; Pratibimb | May-June 2012 | 25

b) Secondary Data

around 17-18 billion rupees (Live Mint) on training of which around 6 billion INR is spent on soft skill training. An independent study conducted on CEOs, by Stanford Research Institute and Carnegie Mellon in the US, found that long-term job success depends 75 percent on people skills. Harvard University had even more startling results—85 percent of jobs and promotions happened because of the candidate‘s attitude and soft skills. Defining Soft Skills for IT Professionals Wagner and Sternberg, renowned cognitive psychologists, first identified a broader set of managerial, interpersonal or ―soft‖ skills.‖ They observed that graduates who performed well academically in school (school smarts) did not necessarily perform well in the workplace (streets marts). School smarts may not translate technical or academic intelligence into street smarts because the problems faced in everyday work life often have little relation to the knowledge or skills acquired through formal education or the abilities used in classroom activities. Soft skills are, therefore, different from the kind of intelligence associated with academic success. Based on Wagner and Sternberg‘s theory, we contend that having technical knowledge and skills are important and necessary; but technical knowledge and skills are insufficient for success in IT. Successful IT professionals require soft skills in addition to technical knowledge and skills. We formally define the soft skills of IT professionals as the managerial, intrapersonal, and interpersonal skills that are used to resolve IT-related work problems. The soft skills needed by a project manager include skills related to communication, organizational culture, leadership, problem solving, and decision making, team building, flexibility and creativity, and trustworthiness (Belter, 2001; Music, Fisher, Thomas, & Peters, 2007). It is the acquisition and mastery of soft skills that are thought to improve The likelihood of success of an IT project (Suchow et al., 2005) Unfortunately, in many Pratibimb | May-June 2012 | 26

organizations, good programmers or analysts are promoted to IT project managers, yet the skills needed to be successful in these analytical jobs are not always helpful in developing the Soft skills needed to be a strong IT project manager (Kappelman, McKeeman, & Zhang, 2006). These skills are often learned via experience on the job (Madeira, 2001). Top 50 soft skills: 1. Math.

26. Personal integrity.

2. Safety.

27. Good work history.

3. Courtesy.

28. Positive work ethic.

4. Honesty.

29. Interpersonal skills.

5. Grammar.

30. Motivational skills.

6. Reliability.

31. Valuing education.

7. Flexibility.

32. Personal chemistry.

8. Team skills.

33. Willingness to learn.

9. Eye contact.

34. Common sense.

10. Cooperation.

35. Critical thinking skills.

11. Adaptability.

36. Knowledge of fractions. 37. Reporting to work on time. 38. Use of rulers and calculators. 39. Good personal appearance.

12. Follow rules. 13. Self-directed. 14 Good attitudes. 15. Writing skills. 16. Driver's license. 17. Dependability. 18. Advanced math. 19. Self-supervising. 20. Good references. 21. Being drug free. 22. Good attendance. 23. Personal energy. 24. Work experience. 25. Ability to measure.

40. Wanting to do a good job. 41. Basic spelling and grammar. 42. Reading and comprehension. 43. Ability to follow regulations. 44. Willingness to be accountable. 45. Ability to fill out a job application. 46. Ability to make production quotas. 47. Basic manufacturing skills training. 48. Awareness of how business works. 49. Staying on the job until it is finished. 50. Ability to read and follow instructions.

The Workforce Profile defined about 50 "soft skills", which employers seek. They are applicable to any field of work, according to the study, and are the "personal traits and skills that employers state are the most important when selecting employees for jobs of any type."

Correlation between Months of experience and soft skills known

Discussion Findings The correlation relationship shows that soft skills improve business and it is required for promotion.

**. Correlation is significant at the 0.01 level (2-tailed).

Emotional intelligence and Soft skills We all know that emotional intelligence and soft skills are two sides of the same coin. Now Studies of close to 500 organizations worldwide indicate that people who score highest on EQ measures rise Pratibimb | May-June 2012 | 27

to the top of corporations. In fact, enough research has been conducted in the area of EQ that a standardized testing instrument can actually determine an individual's EQ rating or score, similar to the IQ method of determining a person's level of intelligence. The instrument, known as the Baron EQ-I, was developed by Dr. Reuben Bar-On, the person who coined the term "EQ" more than 12 years ago. The test, which is the first scientific measure of emotional intelligence, provides a measure of one's overall emotional intelligence and covers 15 different emotionalskill areas found to be most important in successfully coping with life's demands. These factors are clustered into various categories such as intrapersonal, interpersonal, adaptability, stress management and general mood. Soft skills and Experience The soft skills needed by a project manager include skills related to communication, organizational culture, leadership, problem solving, and decision making, team building, flexibility and creativity, and trustworthiness (Belter, 2001; Music, Fisher, Thomas, Peters

2007).Soft skills required by a fresh graduate include clarity in communication, dining etiquette and general etiquette ,team work .The strategic apex need to possess skills like negotiation skill, relationship skills like user relationship management ,communications managing stakeholder expectations. Human skills are those interpersonal skills needed to be able to manage a group of people or interact in a one-on-one format. Team building and communication skills are examples of human skills. Conclusion The results from the survey shows that soft skills are interpreted for communication skills and it is evident from the responses, nearly 99% of the respondents have mentioned communication skills as important soft skill. And 40% of respondents have gone through training in their colleges and student run clubs and another 60% have learnt through online articles and videos. The rating given by 90% of respondents for the importance of possessing in promotion is 4 or 5 in a scale of 5.Findings show that though the importance of soft skills is felt by the respondents there are no enough awareness imparted in them and colleges and IT companies have failed to motivate people to think that soft skills are more important than hard skills in an organization, that is why so much of attrition is happening in IT. The attrition rate also happens due to the candidates interest on higher salaries and higher studies, care should be taken by the IT companies recruitment side to choose candidates who are enough motivated to work long and loyal to the company in short if a company could make his

employee to think that company is his own then he will not leave the organization. For that to happen every company should start a module on soft skills not only in the beginning of the training but continuous module for assistant software professional to senior executives and one of the researches shows that the senior IT person‘s response to the client is far better and quicker than the entry level profession and the reason he mentioned as soft skill hence in order to spread this sort of skills ,the practical knowledge possessed by the seniors need to be shared with juniors so that quick learning happens. Experienced people need to share the soft skills developed with juniors to improve the bottomline. The survey I have taken shows that emotional intelligence and experience are essential for the soft skill development hence my hypothesis holds well. References        

   

Article Cauldron Hard Case For Soft Skills An exploratory study identifying soft skill competencies in entry-level managers By Melvin R. Weber and Dory A. Finley Learning soft skills at work -Clive Muir ,Stetson University Practical Intelligence in IT : Assessing Soft Skills of IT Professionals by Damien Joseph, Soon Nag, Roger H. L. Chang, and Sandra A. Slaughter Technical and non-technical education and the employability of engineering graduates: an Indian case study V. K. Gokaldas India‟s Soft skills, IT‘s bottom-line booster Combat Sengupta Nov 07, 2010 System Administration Soft Skills- Christina Lear Rediff Wikipedia

Success in business requires training and discipline and hard work. But if you’re not frightened by these things, the opportunities are just as great today as they ever were. – David Rockefeller Pratibimb | May-June 2012 | 28

Modern HR practices A Harbinger for Growth? By Dolly Damani, N. L. Dalmia Institute

With the growing importance of human capital as a success factor for today‘s organizations, modernization of existing practices has become more critical for corporate as it offers a way to vault into the global league. Some of the points that have been emphasized are: Aligning HR Strategies to Business Strategies Leadership: Do we have the leadership in place that can deliver this business strategy? If not, what needs to change? Is the ―leadership structure‖ right to deliver the strategy? Do employees rate their senior leaders highly on being in touch and effective? Culture: Does our internal employee culture line up in support of the external customer marketing messages? The two should be a mirror image. If we promise our customers ―speed, agility, and innovation‖ do we practice that internally as well; e.g., is our culture all about ―speed, agility, and innovation‖? How does that show up every day? Have we provided the ―vocabulary‖ of how to talk about the culture in a way that focused choices can be made that shows up in our mission, vision, and values? Would employees state that our organization has a clearly defined culture? Communication & Engagement: Both “top down” and even more importantly, “bottoms up”: Are people feeling actively informed, involved and engaged? Do employees feel like their voice is heard? Workforce Planning: Do we have the right numbers of people with the right skill sets in the right place at the right time to deliver on the business strategy? What needs to change? Pratibimb | May-June 2012 | 29

Talent: Does the business strategy require some new type of talent? How will we develop or acquire that talent? If we are to develop the talent, what training and development processes are needed? If we are to acquire talent, what recruitment processes are needed? Do employees feel that they can use their most valued skills and abilities? Retention: Will turnover undermine the business strategy? Rather than trying to fix ―all turnover,‖ where is the turnover that will most affect delivery of the business strategy? What needs to change in leadership, working conditions, or pay to have an impact on retention? Do employees feel like they are valued and that they make a difference for the company? Performance Management: Have the tools and processes for performance management been revised to reflect this year‘s business strategy? What might that look like? Should everyone in the organization share one or two goals in common? Do people have ―line of sight‖ between what they do every day and the business strategy? How can HR contribute to large scale performance improvement programs (such as GE‘s Work-Out, Change Acceleration, or Six Sigma programs)? Team Development: Are the spaces between boundaries being managed well? Is the work within and between teams progressing smoothly? What could improve effectiveness across the entire cycle of work so the customer notices the difference? HR profession faces some real challenges. At the heart of it, HR must get relevant now or risk continued marginalization.

Now we need a roadmap. The evolution we are undergoing requires not only the intellectual and strategic capability to envision a different role, but also the intestinal fortitude to step out, lead, and enact a new role. HR can be the professional HR process designer and owner, and oversee implementation and rollup reporting, but in most cases the ―work‖ of the process is done by employees and managers (e.g., recruiting, selection, performance appraisal, career development, succession planning, merit increases, stock option distributions). So, who is accountable: the leader, manager, employee, or HR? All have a stake in the success of these processes but companies vary greatly in the extent to which these performance expectations are made explicit as part of a manager‘s job. Today it is a world of AND: Having to do the lower-left legally required transactional parts AND the upper-right value-added transformational parts of HR. Note that the lower-left accountabilities tend to be the ―hygiene factors‖ that if done perfectly are not noticed, but if messed up will attract a lot of

advantage. The ―lower left‖ content represents important technical expertise that often can be delivered in transactional kinds of ways. The ―upper right‖ content also requires technical expertise, but can be delivered only if the HR professional has established a level of internal consulting skills and personal credibility. The most striking aspect is our emphasis on the accountabilities that are necessary for HR to take upon itself a strategic position on issues. An important task for HR is therefore to create the sense of the organizational collective that is able to measure up to existing socio-economic challenges. In this sense, HR plays a very important constructionist role in trying to create the atmosphere in which organizational action takes place. To increase the bottom line, is a challenge of an HR which includes delivering the transactional and administrative services required in a low cost way that requires the HR functional knowledge and the business knowledge, and delivering a more transformational business partner and change agent roles as it inclines towards becoming

attention. In contrast, the upper-right accountabilities tend to be the ones that when done well give the organization a great strategic

a strategic business partner.

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Retaining employees in IT sector by S Krishna Chaitanya Yadav & Manu A R, SJSOM IIT

BACKGROUND – CHARTERING THE EMPLOYMENT BOOM IN INDIA With the onset of globalization, we have witnessed a revolutionary leap in the IT industry with an unprecedented growth story besides triggering of employment boom. Its evolution has taken off the burden on the government of providing employment to the teeming millions of Indian youth. IT emerged as the mainstay of Indian economic prowess aiding the government to hit the historic GDP growth levels of 9%. It has not only recognized the latent talent of Indian youth but also shown them new vistas of opportunities around the world. The technological supremacy of India has attracted big businesses around the world to outsource technically challenging work to the country. Indian IT brains have graduated to the level of providing business solutions after being looked up on as a prime destination for technical solutions. The sector emerges as the highest contributor to the India‘s growth and holds a high promise in the forthcoming years. We can unarguably call IT sector as a powerful engine of employment generation and a favored refuge to all employment seekers. Pratibimb | May-June 2012 | 31

PLETHORA OF OPPORTUNITIES IN INFORMATION TECHNOLOGY – BOON OR BANE? The infinite potential Indian IT landscape back lashed after having exposed the companies to the vulnerability of ‗employee attrition‘. Today IT employees are paying deliberate snub to the values like loyalty and trust towards employer. Gone are the days when an employee use to have unflinching respect and unbiased faith in the employer. The employee had unhesitatingly walked an extra mile in meeting the firm‘s goals. He used to develop a strong inclination to prioritize employer‘s objectives ahead of his goals. This IT evolution can be described as a boon from the perspective of the employee where he or she is presented with abundant opportunities rewarding the finest IT skills. The insidious threat emerging from the development is the employee attrition, where employees are always on the run to grab best and beneficial opportunities leaving the plight of the current employer to winds. The bond between employer and employee is becoming transactional and wispy. Employers are not subjected to any consternation or emotional trauma in the event of employee departure. It has become the norm of the day because any slightest discomfort persuades the employee to go to the length of hopping the jobs. It is the reason why company‘s management gives prime importance to the contingency plan so as to weather the storm called employee attrition.

India‘s IT sector is growing by leaps and bounds. Its unparalleled growth is a feel-good factor but we can‘t afford to welcome the vacillating attitude of the employees to gamble with the jobs. This issue has acquired gargantuan importance as its impact is apparently evident on the shrinking profits of the firm. Now let us see how we can apply brakes to the employee‘s penchant to hop the job and how we can ensure that the employee fulfills his career and personal goals. In the following sections we will see different measures or strategies which can go a long way in keeping the employee-employer bond longlasting. TOP 10 REASONS COMPELLING IT EMPLOYEES TO LEAVE JOBS 1.Monotony of work and absence of challenges at work 2.Work-life balance due to increased load 3.Denial of employee‘s wishes to work on preferred domain or technology 4.Lack of transparency in the evaluation of employee‘s performance 5.Lure of more money by other IT firms 6.Discrimination in rewarding employees or display of nepotism 7.Incompatibility with the boss 8.Higher Education and missing clarity in the growth path 9.Hostile working conditions and unfriendly employee policies 10.Location preference

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MEASURES TO BE ADOPTED TO RETAIN THE EMPLOYEES IN IT SECCTOR COMPETITIVE PAY SCALE AND OTHER BENEFITS Compensation invariably holds a special importance in the perception of an employee. IT firms in recent times are taking excuse to delay the salary hikes and to stop special incentives to employees due to the onset of economic crisis. It is an undeniable truth that lucrative salary occupies prime position in an employee‘s wish list. Today in India indigenous IT industries are losing out their employees to MNCs which are offering lucrative packages and other benefits. If the firm is not proven as a best pay master it should at least compensate that with insurance policies for employee families, health benefits, other allowances etc. All firms should realize that they have enjoyed lucrative returns throughout the good times due to the hard efforts of the workforce. IT firms should not compromise in giving extra monetary benefits to the employees taking the inflationary prices and sky-rocketed living costs. INCLUSION OF EMPLOYEES A company should show the magnanimity to share the profits with the employees by issuing firm‘s shares. In this way both management and employees hold responsibility and strive to increase the profits as they too are the shareholders. This issuance of shares gives the employees a feeling of inclusivity and drives away the passivity towards work. In any company a feeling of oneness and a right to express one‘s opinions will catapult an employee‘s confidence and develops a visceral feeling to reinforce the bond with company. From the employer‘s perspective it is always right to ask employees to go the last mile if they too are enjoying the fruits of their labor. It keeps the spark alive and brings in self-motivation to realize the firm‘s objectives. With the implementation of this measure it turns out to be a mutual win situation rather than a winwin situation.

COUNSELLING BY TRAINED PROFESSIONALS Every employee can‘t perform equally with others due to professional and personal shortcomings. In all the companies employees who are constrained due to personal setbacks and who are psychologically affected are usually counseled by their own managers. In such cases, instead of getting the employee counseled by his or her own managers it is better to get the employee counseled by trained experts. The company board thinks that no one can understand an employee‘s conditions and constraints better than his or her own managers. This is a flawed assumption. As the employees always work under the constant observation and guidance of managers, the managers can‘t give a fresh perspective to the problems faced by the employees. Thus all managers who are good at project management can‘t perform well when it comes to people management. In this way the firm can bring in trained experts who can develop good insight into the employee problems and would give better advice on personal and professional fronts. This kind of counseling also helps to sort out any misunderstandings and misgivings between managers and employees. Ninety percent (90%) of the employees leaving the job cite incompatibility with manager and idiosyncrasies of manager as the main reasons. Sometimes employees are concerned about manager compatibility than spousal compatibility. All employees want flexibility and freedom to work in their own style and don‘t like to work against the ranting and naggings of management. The managers should focus on results and productivity but should not bother about their presence at desk or their working hours except for the meetings and client calls. If the company can narrow down these differences between managers and subordinates they can certainly retain the employees.

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Most of the employees give paramount importance to the nature of the job and the opportunities it provides rather than the monetary returns. If the management fails in providing job satisfaction it leads to employees disinterest and dissent in performing to the best. The firm can‘t prescribe right organizational behavior without understanding employees concern. Now a day the wave of higher education is sweeping over the IT employees. This is because employees want to expedite their careers with the higher degree qualification and want to stave off the grinding monotony of their regular work. There are 2 kinds of employees who want to go for higher education and the firm can try out the below ways to help these employees to fulfill their ambitions. 1. The first kind of employees have a chief intent to go for higher education like MBA or M. Tech for climbing the corporate hierarchy ladder in least possible time or for attaining lucrative positions. The firm should understand at this juncture if they can put the employee‘s career on fast track by accessing the employee‘s ability in meeting higher challenges. If the employee is successful in achieving the growth target then the firm should make no qualms in offering him the required opportunities like promotion, onsite offer, technology change, domain change etc. This kind of employees leaves work in pursuit of higher monetary benefits after education.

2. The second category of employees is the ones who are passionate about higher education to nurture their entrepreneurial spirits and to pursue different disciplines which are not in line with his or her everyday work. The firm faces a tough challenge in retaining this kind of people because they would intend to take a leap from technology to business management or business to technology research. One good way out for the corporate is to offer a distance learning program or can afford to provide full time program. These programs like full-time or parttime should be offered by entering into tie-ups with the reputed institutes across the world. Example: Infosys tied up with BITS Pilani, IIM Bangalore and many more to offer the employees desired course and won the favor of employees who want to realize their higher education goals. The IT firms should fund some part of the expenses and provide sabbatical leave to employees who want to pursue higher education. This set-up will certainly encourage employees to associate with the company for longer time. TRANSPARENCY IN EVALUATION Transparency in evaluation of employees has acquired massive importance in IT field. IT firms are missing out on thousands of their valuable employees every year only the premise that they are unable to put in tested and tried mechanism in evaluating them. Most of the IT firms even including the titans of the industry like TCS, Infosys, WIPRO, HCL, and Cognizant are proven to be abysmal in accessing employee‘s worth. From the IT firms perspective it is acceptable that increased employee strength is putting more pressure on the evaluation systems to cater the need of the hour. The real reputation of an IT firm comes only with its prowess in preparing a transparent, stable, standard system in measuring the employee‘s performance. Over-rating or under-rating any employee will adversely affect the company‘s image and can lose the employee‘s confidence in the firm. Pratibimb | May-June 2012 | 34

The inefficiency in evaluating is due to inherent weakness in the evaluator‘s observation and decision-making skills. IT firms can‘t afford to put inefficient managers who lack the skill of understanding the complexity of the work and productivity of the team members. Any manager who is evaluating the team should be ambidextrous in understanding both the technical and managerial challenges of any assignment. The managers should update the assignments and productivity of each employee on a daily or weekly basis. The acumen in judgment and sheer analytical ability are the hallmarks of an ideal manager who not only provides right feedback but also wins the respect of the team FRUITIFICATION OF EFFORTS After all every team member wants to know where their arduous efforts are getting absorbed. They want to know how their efforts are contributing and making a difference in the panorama of business. Indian IT services are renowned for providing unparalleled technical and business solutions, which have expedited all the businesses ranging from banking to retail worldwide. In order to show the team members how their efforts reaped dividends, the management should arrange videoconference calls with clients. The managers should ensure that team members get a direct appreciation from the client and also request the clients to demonstrate how their business excelled due to the individual efforts. ENDEARING WORK PLACE Any employer should bear one most important thing that work place should be like a home away from home or in other words an ‗extension of home‘. A work place should be endearing, stimulating, relaxing, inspiring, rejuvenating etc. It should provide healthy and safe working conditions which certainly draw special attention from employee‘s perspective as no one wants to put their health at stake at any cost.

For example the lush green and sprawling campuses of Infosys are always an eye-feast to watch and a delight to work. The facilities for employees at Infosys always stand out and fascinates all for their dedication to make work place sparkling and picturesque. It is one of the greatest pulling factors which compensates for other setbacks in regards to employee expectations. FRIENDLY HR POLICIES HRs especially in IT organizations have greater challenges and their actions have profound impact on organizational goals. Devising and executing employee-friendly policies are very crucial to create a lasting impression on minds of employees. Examples of employee-friendly policies are like maternity leaves, recognition and rewarding employee excellence, flexibility of working hours, work from home option, conducting quarterly parties at unit levels, arranging for games and competitions, reimbursement of health expenses, employeeinsurance policies etc ACT WITH GRACE AND GRATITUDE Despite so many efforts and measures from the management sometimes it is inevitable to stop employees from quitting the organization due to some genuine reasons. HRs of the company should act with grace while treating the employees who have filed separation with the

company. The employees should not be humiliated or ignored just because they are quitting, rather they should be thanked for their best efforts. The HRs should indeed congratulate on their success and show their gratitude for their contribution. They should make it a point to reward them with some certificates or mementos as a token of gratitude. These acts leave an indelible impression on the minds of employees and influence the employee to invariably come back to the firm in the future. The above measures are few suggestions which can be practiced to retain the employees in IT sector. Adoption of these measures may not entirely avert employee attrition but will help in at least taking care of existing employees. It is hugely acceptable that retention of employees is easier said than done but a careful observation of the ongoing trends and loop holes in the existing system will help in combating the attrition. One thing which should be borne by IT firms is that the bigger the employee base the bigger the challenges are. IT companies now a days are recruiting in bulk but at the same time they are faltering in bringing in rightful changes in the policies which are conducive to expanding employee base. Finally all the IT companies will have reassess their corporate strategy and organizational code to provide an endearing and enriching atmosphere to their employees.

Paying in advance A motorist, driving by a Texas ranch, hit and killed a calf that was crossing the road. The driver went to the owner of the calf and explained what had happened. He then asked what the animal was worth. "Oh, about $200 today," said the rancher. "But in six years it would have been worth $900. So $900 is what I'm out." The motorist sat down and wrote out a check and handed it to the farmer. "Here," he said, "is the check for $900. It's postdated six years from now." Pratibimb | May-June 2012 | 35


Social Media Marketing for India’s Generation Next by Arpan Banerjee, K.J. Somaiya, Mumbai 14 yr old Shivam Sarangi spends 16 hrs of his day locking himself in at a corner of his half lit room in front of his laptop in a small apartment somewhere in a Mumbai suburb. He has few friends and in the opinion of his teachers and family he is one of the most ‗unsocial‘ beings at his age. He neither reads the newspaper nor watches news on TV, let alone having any distantly remote connections with the so called media. Yet, young Shivam has been contracted by a Multi National as their ―Social Media‖ expert for Indian operations. Social Media: the new buzz word in the Marketing community. The top Marketing heads don‘t have a clue about it, the media vehicle hardly costs a dime and an entire section of the society is completely hooked to it. So, what is it? Some think it is all about creating Facebook pages and having a twitter account, while the experts quote it the ―Human side of Media and the social side of Marketing‖ and in between lays a huge chasm where ignorance and hatred thrive.

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Social Media: What it is and what not? The origins of Social Media are older than the internet itself. Social Media can be dated back to the pre-web era of the Usenet, Internet Relay Chat, and BBS systems. However in the ―modern‖ sense, blogs were the first medium of the now so popular Social Media. Blogs came way before social networking exploded with MySpace, Facebook, and Twitter. Blogs exploded with the new found powers of the internet to lead the production of content that was not only an alternative to traditional media but also benefitted from interlinked conversation and comments potentially from people around the world. Social Media is not Internet advertising. Neither is it about internet networking : having a zillion ‗Likes‘ on your Facebook page or a million people to follow you on twitter is definitely a good starting block, but that‘s just about it. The key word is Ongoing. Social media efforts need to be ongoing for continuous customer attachment. And it is no magical silver bullet that involves no work, no time, and no sense. All successful Social media efforts require a conscious, planned and regular approach for well defined set of target audience, who would understand, appreciate and act. Without that it just becomes Noise to a whole population who curse and block your messages that „spam‟ their accounts. The most fascinating part of social media is the stage that it provides to perform on.

A global Stage in a small, flat world, where anyone willing to put in work can become a media producer/personality without having the so called necessary college degrees and ‗essential‘ educational qualifications required to break into the popular media industry. Social media news and networking sites are the best ways to get content exposure. It‘s not money and geography that determines if your content spreads… it just has to be deemed good enough to be shared by regular people. The key is to make a commitment to create a quality experience for readers and subscribers for them to come back and ensure that ongoing attachment. Creating strong relationships with an audience is critical to everything in Social Media. The process of regular interaction creates a valued environment that benefits existing readers and customers rather than constantly hunting for new ones, we‘d much and keep pulling them back. The advertisement is not done in the traditional sense; instead, the readers do the job of ―spreading the buzz‖ around. With the relationship and content set in place, comes the most essential aspect of selling that underlines the entire marketing effort: the product. It might be a product, a service, a download, an idea, or a worthy cause. Whether you are asking for dollars, euros, yen, or the valuable time and attention of your consumers, your value proposition rests in delivering something that towers above your asking price thus increasing the buyer willingness to pay for it. The Younger Generation: Touted the future torchbearers of the Indian economic renaissance, India‘s Generation next has always been the best target as well as the pioneers of this newfound media form primarily because of their extensive exposure to the internet that forms an integral part of their social and intellectual lives.

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Much appreciated for their competitiveness and equally criticized for their ignorance of the Indian ethos thus endorsing a global, more western culture, teenagers in an Indian metropolis have more in common with teenagers in any American or European city rather than their own parents in terms of their choices and dislikes. They love their gadgets; are fashion conscious thus buy fancy apparels, and subconsciously aspire to a lifestyle that resides just a few feet away inside the TV screen or the laptop monitor. Of the thousand plus luxury brands that have arrived in India over the past decade hoping to wet their feathers in this shower of money on Consumer goods, many have been built exclusively for kids. The total kids' apparel market-size is estimated at about US$ 4 billion, of which branded segments constitutes US$ 800million. Other segments in the kid‘s retail division covers a whole spectrum of products that touches every aspect of their lifestyle from Toys to TV channels, watches to theme parks and is growing rapidly at 10 per cent per annum. The Market is Huge and possibilities endless, but so are the obstacles. The biggest question still persists: How to influence these kids who would in turn influence their parents to get them what they so dearly want? As the world goes digital with every passing year where plastic money and internet networks thrive over their traditional counterparts, the present kids of the world are the ones who are most hooked to this newly formed lifestyles and thus reigning in the easiest and supposedly cheapest solution: Social Media. But promoters need to be very cautious while using this form of promotion. On one hand there are the anxious parents trying to monitor their activities on the internet given the wide variety of undesired content that their children get exposed to while on the other end, there are psychologists and social critiques who are criticizing the negative effects on health and psychological disorders that happen due to the overuse of media and technology.

Although most view the heavy usage internet as detrimental and wasteful, the youngsters have been profoundly benefitted by their new found powers to impact the society. Whether through online courses, video, text or other social media,

students are getting involved and learning how to succeed in ways not seen before — all by starting with their passions. A new World Vision study confirms that almost half of all teens are becoming more interested in helping causes, thanks to social media. Sharing ideas, Raising money: Social media is also a great way to get feedback on ideas or to enlist others to join a cause. Websites like Facebook then becomes a place for youth to get

input on ideas and share progress. However the biggest challenge is the kids themselves. They are smart, can distinguish the genuine from the hoax and most importantly have much lesser attention spans than the older generations. They need to be addressed very carefully and whatever promotion is done to them can create or ruin relations and perceptions for a very long time to come. And the ones who understand these mentalities are the kids themselves which is precisely the reason why companies are using their young brains to step up their online marketing efforts. Experts are however not the requirement of the day, there already are enough of them. What is required is a fleet of people who should be ever present on the internet: sharing information, ready with updates and answering queries at the earliest. This is what neo consumerism is all about: being present for the customer at all times and what better and easier way to do that than yielding the power of global connectivity through the internet. Marketers need to understand that today‘s kids will be tomorrow‘s adults. They may be dependent and even monitored by their parents right now, but that dependency will slowly wither away and the brands which have been able to make a lasting impression in capturing these young minds will ultimately succeed.

“Paying attention to simple little things that most men neglect makes a few men rich.” - Henry Ford Satisfaction does not come with achievement, but with effort. Full effort is full victory. - Mahatma Gandhi Pratibimb | May-June 2012 | 38

Internet Cookies: The dark side of analytics by Mayur Challawar & Sidharth Panigrahi , TAPMI ―Your browser's cookie functionality is turned off. Please turn it on.” Frequent messages such as these are prevalent in internet today. While one side of the internet (which reaches out to users) is turning simple and friendly, the other side (backend) is turning greedy for information. Put simply, the quest of gathering information coupled with the mask of simplified appearance makes the situation a dicey one. On one end where the internet users in the nation are burgeoning, companies look to ‗tap‘ this market to gain more revenues. Gone are the days when the traditional brick and mortar outlets were enough to satiate the hunger of companies. Today, the word ‗online‘ has adopted the mode of channel to reach users out with the offerings.

But later during the week when the same incident repeated for another flight search between Mangalore and Chennai, he was convinced of website leveraging information and communication technology to market the offerings. Analytics is the keyword of the day. Reports, journals, articles, cases and discussions on the topic are soaring every second. The increasing prowess of smart machines to procure user data gives companies a strong reason to bank on them. One would prefer to get data of millions of users across the nation rather than physically toil from door to door to get the data (such as census). As companies look to poach user data, the question of privacy comes into play. Analytics, in past, has had to weather several cases of privacy.

Figure 1: The tale of cookies (source: Gmail)

A month back a friend of ours browsed internet for the airfare between Mangalore and Chennai. After browsing the price he closed the browsing session and took a break. After returning from break he decided to check emails. Interestingly, he saw an ad on the mailbox depicting lower price between Mangalore and Chennai. First, he ignored it thinking to be a coincidence. .

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Companies are turning cautious with their approach of mixing up the target offering along with the host of offerings and target. For example, we would be seeing the ―Mangalore to Chennai‖ advertisement along with a list of other ads. However, the frequency of ―Mangalore to Chennai‖ advertisement would be much higher as compared to others featured to the user.

This brings our discussions to two questions: 1. Are we, the internet users, aware of this mechanism of our behavioral data being sniffed; and 2. what level of privacy do we need? The computer industry is expected to register a CAGR of eighteen percent for next decade. Young segment aged between 18-30 years constitutes 50-60% of the market. Active Internet subscribers in India have risen to 4.2 mn and have achieved over 30% penetration among PC owning establishments and homes. Internet subscriber base is growing fast. As many as 84% of those who use the Internet at home use it for mails only purpose. Among the main Internet service providers are VSNL, Satyam and Dishnet. has entered into a tie-up with Caltiger, which was providing free Internet service. India offers gamut of opportunities to local and global player to meet their ‗impossibly seeming‘ targets (for instance coke plans to double its sales in next 10 years).

Figure 2: Internet usage across the nation is seeing a study growth (source: India stat)

A cookie is a piece of software that websites use to track user behavior. A third party cookie is a cookie that is placed on your machine by a domain other than the one you are visiting. Google Analytics is a good example of the use of third party cookies. Although we have slowly started devoting more time to go through the ―terms and conditions‖, we seldom perform other activities such as erasing the browsing history and cookies. Thus, the contagion arising from those unfinished tasks encourages companies promoting pop-ups, adwords, banner displays and videos. Pratibimb | May-June 2012 | 40

Browsing history and cookies, which keep on accruing our internet behavior, help websites to load quickly. Consider for example a restaurant. The first time you go to a restaurant (say restaurant#1), the waiter takes time understanding you and your preferences. These preferences are then ingrained in the mind of waiter. The next time you go to the same restaurant, you spend less time as the waiter is accustomed to your requirements. The cookies are similar to the brain and browsing history to the preferences. Visit to restaurant can be considered as visit to internet website. Now let‘s take another case. You show up in another restaurant. The new restaurant has a tie up with restaurant#1 and gets your behavioral data. The waiter in the new restaurant thus wastes no time and serves you a perfect delicacy. The new restaurant can be thought of next website, which extracts the experience of previous website by sniffing cookies and caters to you in accordance. The problem arises when your data is shared across the world, without your consent. Internet companies have a valid point to argue that it is the user who has ultimate power as she/he has control over the history and cookies folder and can erase them as per their wish, but lack of awareness makes the issue complicated. Education has been the root case for most of the issues across the nation. Poverty, hunger, terrorism, victimization have bred under the dent of education. Today education is used as a powerful tool to fight all the issues across the nation (Chhattisgarh being one of the prime example of using education as a tool to combat Naxalism). It is the need of educating people which drew institutions such as RBI to introduce interactive cartoon in form of money kumar on website.

. It would be interesting to see if each of us would have the same level of courage (that we have while posting messages in public) when we are asked to convey the same message to a room filled with our contacts. Our world stars and ends with the internet browser or application. It wasn‘t until yesterday till we realized the aspect of cookies after listening to an interview of Facebook founder Mark Zukerberg, where he emphasized on how Facebook allowed users to Figure 3: Increasing participation of householders is an ‗control‘ the data which they wanted to share. incentive for companies to use internet to connect to the Unfortunately, others in the bandwagon drill down potential users source: India stat) the information present in hardware, a step which is Unfortunately cyber laws in the nation is not seldom anticipated by users of those hardware robust as that in other nation‘s (we do see machines. ourselves marching with US, China, Britain, Russia and others in many matters). Lack of Awareness is needed to empower user as to choose robust regulatory framework has made India a the level of privacy, which would be the key to vulnerable ground for the internet vultures answer the second question. In 2001, an EU wide privacy directive came into effect which intended to hovering around sky of hacking. make the use of third party cookies on a website Diffusion of innovation is the process by which without the prior consent of the user, illegal. an innovation is adopted and gains acceptance by Looking at the bleak policies of our administration, members of a certain community, innovations it looks unlikely that such a step is anywhere round that are perceived by individuals as having the corner. The biggest puzzle that thus remains greater relative advantage, compatibility and less unsolved now is: who is supposed to empower complexity may be adopted more rapidly than people of India in the world of cookies and how? others (Rogers 2003:5 :16).Information and communication technologies (ICTs) like the References computer and the internet have been widely  Gikenye, W. (2011). The Diffusion of Mobile adopted by people in western countries, while in Phones for Business and Information developing countries they have taken much Management in Kenya. Proceedings Of The longer to be adopted. India has taken its share of European Conference On Information time to adapt and accept internet as a key mode Management & Evaluation, 511-520. of gateway to the world.  Whelan, Beatrice. (2011). The End of Google Analytics? Tweak your BIZ. Retrieved May Coming back to the first question of our 23,2012, from readiness to share the data, we expect to get technology/2011/03/29/the-end-of-googlemixed response. However we are still in nascent analytics/ stages of understanding the intricacies of cookies and browsing history. Today Skype is used to make video calls, connecting parents with children, client with vendors and others. Facebook, twitter, LinkedIn and other social networking sites have diversified our horizon and encouraged us to shout at the rooftop/convey our message to a broader audience. Pratibimb | May-June 2012 | 41

The Karma Theory for Business Leaders by Anand Tajpuriya & Pritom Kumar Gogoi, NMIMS, Mumbai

The Indian business leaders have often resorted to the Hindu mythological epics namely Ramayana, Mahabharata and the Arthashastra to garner support for ‗the ends justify the means’ approach. Ramayana and Mahabharata are replete with examples of dubious means which the Gods used to achieve the very justifiable end. Arthashastra prescribes brutal action against the enemy as also the use of guile and treachery. These epics are upheld as the standards to evaluate business decisions but these standards are flawed as they conveniently concentrate on just certain aspects of the discourse. The Objectivistic Ethics proposed by Ayn Rand gave the standards to evaluate actions. The crux of her philosophy is ―An ultimate goal is the final goal or end to which all lesser goals are the means – and it sets the standard by which all lesser goals are evaluated. An organism‘s life is its standard of value: that which furthers its life is the good, that which threatens it is the evil‖

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“An ultimate goal is the final goal or end to which all lesser goals are the means – and it sets the standard by which all lesser goals are evaluated. An organism’s life is its standard of value: that which furthers its life is the good, that which threatens it is the evil” Ayn Rand Although Ayn Rand had propounded this standard for a living organism, the accounting principle of a ―going concern‖ gives life to a modern organization. For man survival is the ultimate goal while for an organization ‗making money sustainably for its stakeholders‘ is the ultimate goal. Man‘s consciousness guides him in this journey while it is the business leaders who provide the organization its path, vision and mission.

When we say that an intended outcome or a goal is hard to achieve, it is the because of the methods needed to achieve it. Had there been proven and easy methods to achieve any kind of goal, we would not have needed ―Leaders‖. A leader possesses the ability to foresee, what lies in future and to provide the best possible solution to address a particular issue. There can be myriad methods to achieve the same goal and a leader should scrutinize the pros and cons of each method. A particular method may achieve the outcome but it might be short-sighted in its horizon. The world has seen the catastrophic consequences of the mindless pursuit of profits in the case of Enron and recently in the American Mortgage Lending market.

What the leaders should understand is that all of us have a spiritual self. Business leaders may stain the spiritual self by adopting unethical means to achieve success. The ultimate goal of a business is ‗making money for the stakeholders‘ which in turn implies that the businesses are means for the furtherance of the human race - survival. Whatever causes a leader may champion, there is no greater cause than the cause of humanity. No goal can be greater than the goal to serve humanity. Then what should the business leaders always keep in their minds? Well the answer is “The Karma Theory” which states that, ―Every action must bear consequences to the deed‖. Leaders must do what is right but without attachment to the results. Finally they should understand that ―long term sustainable profits‖ are a function of good karmas and the fruits of these karmas should be shared with all the stakeholders.

The Domino effect of Karma - What goes around comes around

The requirements of this job Employer: "In this job we need someone who is responsible." Applicant: "I'm the one you want. On my last job, every time anything went wrong, they said I was responsible." Source:

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Success Story of Pantaloons: Analysis of their HR practices & policies by Avantika Tomar, IIM Kolkata

The Parent Company: Pantaloons Retail India Ltd (PRIL)

customers, which helps create a unique shopping experience.

Pantaloons Retail India Ltd. is one of India‘s largest organized modern-format retailers promoted by Mr. Kishore Biyani. From the beginning in 1987, PRIL has today evolved as one of the leading manufacturer-retailer and are among the pioneers in setting up a nation-wide chain of large format stores in India. PRIL focuses on meeting the customer requirements for a large component of their spending across fashion, food, general merchandise, home in both value and lifestyle segments. The company retails a range of branded and private label apparel, footwear, perfumes, cosmetics, jewellery, leather products and accessories, home products, books, music and toys in our stores. They also retail household items, consumer durables, and home furnishings, apart from food and personal care products. This is complemented by cafes, food stalls, entertainment, personal care and various beauty related services. Promotions and events are an integral part of the service offering to

PRIL has presence in following two segments:

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1. Lifestyle Retailing - Pantaloons, Central, Fashion Station, aLL, MeLA 2.

Value retailing - Big Bazaar, Food Bazaar

Strategy: Future Group‘s vision is to, ―deliver Everything, Everywhere, Every time to Every Indian Consumer in the most profitable manner.‖ The group considers ‗Indianness‘ as a core value and its corporate credo is - Rewrite rules, Retain values! Pantaloons is positioned as a department store which caters to the middle and upper-middle class sections of the society. Its core offerings are branded merchandise, retailing international, national and regional brands as well as private and proprietary labels. It is a store focusing on providing a value for money proposition as it provides quality fashion products at an affordable price as compared to the competitors. Since

Pantaloons provides products to a potentially large number of customers at affordable prices, it falls in the High Turnover - Low Margin Category. The assortment and variety in each of the categories is high, depth is emphasized upon in case of core merchandise categories such as men‘s formal wear, men‘s casuals and sportswear. Hence Pantaloons falls in the High Assortment – High Variety quadrant. “Celebrate the Fresh Look, Fresh Feel & Fresh Attitude at Pantaloons Fresh Fashion!” Big Bazaar is a hypermarket which provides one stop shopping at discounted prices. It was founded in 2001. The aim of Big Bazaar is to provide best products at best prices, it is clearly depicted from its tag lines like ― Sabse sasta, sabse acha‖ and ―isse sasta aura accha kahin nahin‖. Big bazaar sells its products at very low prices compared to market rate. Such kind of pricing is done with the objective of gaining maximum market share. With such a policy Big Bazaar attracts more than a thousand customers (per store) a day on an average. Big Bazaar focuses a lot on bundling products and offering discounts. They have a concept of Wednesday bazaar in which they offer maximum discounts on Wednesdays. This is done to make sure that inventory is rotated periodically. Big bazaar targets price conscious segment that contributes to the majority of Indian population. In effect, it can be said that the target segment of Big Bazaar is the population which is at or below middle class level. ―At Big Bazaar, you will definitely get the best products at the best prices - that‘s what we guarantee.‖ Success at PRIL – HR Policies and Practices In order to deliver these services, the HR practices should be in alignment with the strategic aims of the organization. As the author of this case, I believe that these HR policies and

Pratibimb | May-June 2012 | 45

practices have come a long way in making PRIL a successful and profitable enterprise. Recruitment and Selection Several sources (almost all sources possible) of talent are used for recruiting employees at PRIL. Each of these sources has been discussed in detail here. A.) Drop-ins and Walk-ins: This forms the first band of sources of hiring for the firm. While drop -in candidates are evaluated based on their CV, walk-in candidates take personal interviews. This source of hiring is random. B.) Advertisements: The firm has advertising partners and associations to attract applications. The various media of channels are explored (TV Advertisements for Candidate Awareness, Online mailers for job applications) however, only a few are used for final attraction. C.) Job Portals – Online websites etc. are used. D.) Referrals – This is an interesting application of current human resource to attract future employees. An employee who has just joined through a reference is more likely to abstain from shifting jobs soon, than an employee through some other route. In fact, he/she often tends to stay on until the employee who referred him stays. Thus, it is a subtle tool to increase loyalty. E.) Internal Job Postings (IJP) – Vacancies are made open for internal applications before going for external recruitment. This serves two purposes: Internal postings are more economical for the firm and the position for new job is higher than current position of the applicant. This provides an opportunity for the employee to promote him/herself and aspire for elevation. An appropriate assessment of the current employee is done, his/her previous appraisals taken into account and s/he is subjected to a round of tests, exercises and personal interview. F.) Employment Consulting Agencies – Employment consulting agencies understand the

functioning as if they are physical job portals. These agencies have people who have been in the employment market for many years now, thus having built a powerful network, from which they can give references for any exotic/rare profile that one may need. Generally, this is the last resort alternative, as recruiters charge a hefty commission on all dealings. G.) Head Hunting – This method is effective when the required job description and competencies/traits are very clear in one‘s head since this is an unstructured search mechanism, based entirely on extended networks of the people around you. Often one needs to go through 12-15 contacts, before landing with the contact of the target. Such methods are generally used for very high positions. H.) Institutes/Campuses – Pantaloons has tieups with institutes like KJ Somaiya and SP Jain for entry level position. These institutes provide a rich pool of talented candidates due to the PGPRM course i.e. Post Graduate Program in Retail Management. Certain in-house courses in these institutes are also encouraged for recruitment namely: Future Learning & Development Limited (FLDL): This is a vocational, management skill course. The primary objective is to increase employability of youth. There is a specialized backward integration in this course. Future Education Limited (FEL): This teaches teachers for FLDL. There is a second level of Backward Integration in this case. Induction, Training & Development The induction programme – PRARAMBH looks primarily at ASK (Attitude, Skills, Knowledge). While this lasts for 2-3 days in most organizations, PRIL accords it a very high importance, with the following programme durations, based on related product mixes and variety: Value format – 15 days (Big Bazaar) – 15 days, Lifestyle format – 10 days (Pantaloons) and Hometown – 21 days Pratibimb | May-June 2012 | 46

The programmes look into aspects such as Organization focus (customer satisfaction or customer delight), Values, Selling and comprehension skills, Products and Standard Operating Procedures – Store openings, stock taking, fire drills etc. In all induction programmes, a strong sense of parity is created among the participants, which include all employees from entry-level positions to middle and senior level management. At the end of every induction programme, an exam is conducted, testing the various competencies and values inculcated in the preceding days. In this test, all employees with scores below the average are made to go through an additional stint of training. Further, all employees are given a ―Training Passport‖ at the end of this session, which keeps a track of the training programmes attended over the course of his/her career with PRIL. The programme concludes with a formal welcome by the CEO. Training Modules 1. Intensive training for new product policies or introductions, such as ―Fashion@Big Bazaar‖, which was a major step forward for the format as a whole. 2. Regular training sessions are conducted to keep employees up to date on latest product knowledge and offerings. 3. Department Managers conduct weekly sessions on product offerings and department/ store level strategies. PRISM This is a Developmental/Succession Planning tool employed by PRIL to generate an able second line of talent for employees. This line can be trained and deployed efficiently whenever a vacancy arises, or in case of contingencies. There are Development Centers to cater to specific competency development requisitions. Specific training requests are sent by business to FLDL, via the Head Office. The requisite content is

developed, approval of business managers is taken, and the module then deployed. Value Training The 3B/3V system focuses on propagating values of the firm to the employees. The 3B/3V‘s stand for 1. Belief/Vishwaas, 2. Behavior/Vyavahaar and 3. Business/Vyaapar. There is CBO (Chief Belief Officer) whose main task is to promote these values within the employees of the firm. The CBO also promotes certain values of Indianness, and nationality that the firm strongly believes in. Human Resource Allocation The employees, on selection are placed into either format based on their level of understanding, communication and ability to hard sell. Within the departments, the Department Manager is given instructions whether a particular employee can rotate amongst sections. Based on this information and his interaction with the employee he fixes a place for the employee in the store. This position usually remains fixed except on special occasions.‘ Big Days‘ is a concept introduced by PRIL, where the public is encouraged and enticed to run wild in the outlets, with Big Bazaar‘s ―Sabse Sasta 3 Din‖ (SS3D), and Pantaloons‘ ―End of Season Sale‖ (EOSS). Naturally enough, these days experience a big spike in manpower requirements. And this is where the institute tieups take an interesting turn. PRIL ensures that it has a 2-week ―shop floor experience‖ component in any course it designs. And this fortnight is always scheduled for the slot when these Big Days are scheduled. Thus, all concerns of contractual workers, part-timers, et al are chucked out of the window, and PRIL gets its people for handling the heaviest days of its business, for free. Free! The savings were calculated to be close to Rs. 8, 20,000 per year. Performance Management - Retention

Pratibimb | May-June 2012 | 47

Pantaloons strive to foster a feeling of well-being in its employees through care and respect. They have several structured processes including employee mentoring and grievance management programmes which are intended to facilitate a friendly and cohesive organization culture. Offsite activities are encouraged to improve interpersonal relationship. We also acknowledge the efforts exerted by the employees by organizing an annual celebration called ‗Pantaloon Day‘ where they recognize employees who have shown exceptional talent, sincerity and dedication. Pantaloons have implemented an employee suggestion programme called ‗Prerna‘ wherein the employee can give their suggestions. Every quarter the best suggestion received per zone per format is awarded prize called ―Golden Cap‖. Rehiring PRIL has an active strategy of tracking the talent that leaves it. It has been observed that in over 80% of such cases, the person switches jobs once again within a year, indicating to an extent, the lack of nurturing and wholesome environment provided at PRIL. The issues looked into when considering any such rehire case include certain factors relative to the previous job viz. the smooth leaving of the employee with respect to his/her relations with co -workers, previous pending dues and the performance levels and consistency of the employee in the previous stint. The position postrehire is decided by a panel after detailed performance study. Generally, a gap of around one year does not entail too much change, with the only difference being a nominal increment in salary. In cases of gaps exceeding 2-3 years, a more elaborate study needs to be done. In all such cases, the issue of equity with employees previously at the same level as the rehired is looked after.

Cycle of Success Two Pantaloon Stores and two Big Bazaar stores in Kolkata were visited as a part of this study. As mystery shoppers, the aim of these visits was to find out the level and difference of service quality provided in these stores. Services were observed on the parameters of SERVQUAL - RATER (Responsiveness, Assurance, Tangibility, Empathy and Reliability) according to Parasuraman et al. (1988).

allowed to handle different products, and as each product needs certain specific knowledge for better selling, multi-skilling takes place. Pantaloon has more staff per department. This increases the concentration of employees within the store lending more employees per product ratio. Pantaloons and Big Bazaar have strategically positioned their employees taking into account the product on display and the sophistication of the employee. Thus a better

FIGURE 1: Cycle of Success Adapted from Schlesinger & Heskett, 1991, Sloan Management Review

Employee interaction suggested that there had been special emphasis on cross-selling and upselling of the products that the customer desires. This is practiced aplenty in Pantaloons, the extent of cross-selling and up-selling is somewhat limited in Big Bazaar. There is the practice of job rotation in Pantaloons. Staffs are generally Pratibimb | May-June 2012 | 48

conversant employee will handle suits and blazers section whereas a regular employee will handle regular apparel like jeans, shirts. The targets are set weekly and monthly. These are set for a team as well as for the brand staff too (who are given targets by the parent company). These targets are based on the margins obtained by

selling rather than the product volumes. The targets are higher towards the beginning of the month. This is because of the fact that the customers tend to buy more during the initial half of the month. Thus, the targets set are in the ratio of 3:3:2:2. Trainees are called in case of lack of sales force or in case of sale days when the footfall is expected to be extremely high. There are Customer Service Desks in Pantaloons and Big Bazaar that handles certain replaceable goods and other customer complaints. The Customer Service Desk in Pantaloons is local to every floor and is situated adjoining the cash counter. Pantaloons reach out to customers that, if dissatisfied, need a certain amount of coaxing and buying back to retain. Hence, the employees at the Customer Service Desk are more empathetic and visibly patient with customers. Such employees usually have a spontaneous natural reaction to their job requirements and do not face emotional labor. Thus, we see how Pantaloons, as an organization has entered into a cycle of success (Figure 1). As per this HR cycle, there are sustainable human resource practices which are self-reinforcing in nature and make organizations successful. The specific practices in this cycle of success are hiring high skilled permanent employees, giving them broadened job designs, quality control

through empowerment, higher earnings and lead pay policies, intensive selection (with attitude as criteria), extensive training, there is emphasis on high service quality and hence, low turnover, and internal labour market opportunities. References Parasuraman, A. 1988 ‗SERVQUAL: A multipleitem scale for measuring consumer perceptions of service quality‘, Journal of Retailing. Volume 64, Issue 1 Schlesinger, L.A. and Heskett, J. L. 1991 ‗Breaking the cycle of failure in services‘ Sloan Management Review. Volume 32, Issue 3

Acknowledgements I would like to thank Mr. Kankan Ghosh and Mr. Kaushik Ghosh, HR Managers at PRIL along with my group at IIM-C. Their constant support was essential to the collection of meaningful data. It is highly appreciated that PRIL managers took time out of their busy work schedules to sit with the group on long initiation sessions, discussing the details of the various HR policies and processes.

The ten ifs of employment 1.

If it rings, put it on hold.


If it clunks, call the repairman.


If it whistles, ignore it.


If it's a friend, stop work and chat.


If it's the boss, look busy.


If it talks, take notes.


If it's handwritten, type it.


If it's typed, copy it.


If it's copied, file it.


If it's Friday, forget it!

Pratibimb | May-June 2012 | 49


Introduction `Does the stock market overreact?' De Bondt and Thaler in 1985 gave start to a new wave of thinking known as behavioural finance. Weak form inefficiency of the stock market was discovered by them after analysing how people are systematically overreacting to unexpected and dramatic news events which were surprising and profound. The Efficient Market Hypothesis as proposed by Fama (1970) asserts that the stock prices reflect the relevant information. The asset prices follow a random walk path i.e. they are merely random numbers. The study conducted by Caginalp G. and H. Laurent (1998) by the predictive power of price patterns finds patterns and confirms that they are statistically significant even in out-ofsample testing and report. The pattern of the stock index might help in predicting some of the effects of the various events. The calendar anomalies tends to exist which goes against the efficient market hypothesis. The researchers have used Gregorian calendar to investigate the calendar anomalies. There are various countries and societies which follow their own calendar on the basis of their religion. For example, the Hebrew calendar is followed by the Jewish society, which is strictly based on luni-solar, the Christian society follows the Gregorian, which is based on solar, and similarly Hindu and Chinese follow their own. The Hindu calendar is called ―Panchanga” and it is based on both movements of the sun and the moon. The festival of ―Diwali‖ is typically occurs at the end of October and beginning of November. The special ritual called ―Mahurat Trading‖ can be observed on major stock exchanges like NSE, BSE, NCDEX to name a few lasts for about an hour. It is performed as a symbolic ritual since many years. It marks a link with the rich past and brokers look at it on a positive note. It marks an auspicious beginning to the Hindu New Year. The investors place token orders and buy stocks for their children, which are sometimes never sold and intraday profits are booked, however small they may be. Thus, it is widely believed that trading on this day will bring wealth and prosperity throughout the year. It is interesting to observe the behaviour of trading activities during the period preceding and succeeding Mahurat Trading. The purpose of this study is to know the effect of the festival prior and post diwali on the the returns.

Econometric methodology

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I have measured stock return as the continuously compounded daily percentage change in the share price /

index (S&P CNX NIFTY) as shown below:

Visit: Rt = (lnPt – lnPt-1) x 100 …………………… (1) Team Where, Rt = return at time t



Pt, Pt-1 = closing value of the stock price index at time t, t-1.

Bag No. 9 in its portfolio. Further, the National I have used S&P CNX Nifty as it has gotPost the most liquid stocks Stock Pratibimb Exchange | May-June is largest 2012 in | 50 terms of Market capitalisation and Volume. I have used the data of the Manipal—576104

Tapmi Pratibimb MayJune 2012  

Tapmi Pratibimb MayJune 2012

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