Connecting People

2009-01-20T05:41:00.000-08:00

2009-01-20T05:38:00.000-08:00

2008-11-08T21:35:00.000-08:00

Two Wheelers in India
India is the 2nd largest twowheeler
market in the world The feeling of freedom and being one with the Nature comes only from riding a two-wheeler. Indians prefer the two wheelers because of their small manageable size, low maintenance, and pricing and easy loan repayments. Indian streets are full of people of all age groups riding a two-wheeler. Motorized two wheelers are seen as a symbol of status by the populace. Thus, in India, we would see swanky four wheels jostling with our ever reliable and sturdy steed: the two-wheeler.
Two-Wheeler Industry in India: An IntroductionThe Indian two-wheeler industry has been in the limelight recently because of its impressive performance. Hero Honda has been the largest manufacturer of motorcycles in the world for quite some time. Its motorcycle model Splendor has also been the largest selling model in the world. The last few years have also seen a large quantity of two-wheelers being exported. In neighbouring countries like Bangladesh and Sri Lanka, the Indian two-wheeler manufacturers have captured the market. Even in Africa and South America Indian motorcycles have been well received. Some of the Indian manufacturers like TVS Motors and Bajaj Auto are in the process of setting up assembly and manufacturing plants. The number of models being introduced by Indian two-wheeler manufacturers every year is also high. At this crucial juncture when the Indian two-wheeler industry is making its mark in the global market, this book ?Two-Wheeler Industry in India ? An Introduction? will make interesting reading. The book has been divided into three sections. The first section traces the evolution of the industry, its growth and the reasons for the industry being competitive. The second section delves into the issues facing the industry and future of the industry. It also throws light on the exports of two-wheelers, Government policies affecting the growth of the industry and electric scooters and motorcycles. The third section discusses the major players, Hero Honda, TVS Motors, Bajaj Auto and Electro herm India.
Indian automobile industry witnessed a growth of 23.37% in 2-wheeler segment. India is the second-largest 2-wheeler manufacturers in the world and also the largest motorcycle manufacturer in the World. Indian 2-wheeler segment includes a range of vehicles such as scooters- geared and ungeared, motorcycles and mopeds. In India there are 7 scooter manufacturers, 9 motorcycle manufacturers, 3 moped manufacturers. Bajaj Auto, Hero Honda, TVS, etc are the leading manufacturers. They have also dominated the global arena after Piaggio. Production in Indian automobile industry During cfinancial year 2005-06, Indian 2-wheeler production showed a growth of 16.40% over the
preceding year. 2-wheeler segment have been showing an upward production trend. At present, there are more than 7.6 million 2-wheeler, manufactured in Indian automobile sector.
Definition of Industry

As per Section 2(j) of Industrial Disputes Act,1947 “Industry” means any systematic activity carried on by co-operation between an employer and his workmen(whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production ,supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not,-

(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit, and includes-
(a) any activity of the Dock Labour Board established under section 5-A of the Dock Workers ( Regulation of Employment)Act,1948( 9 of 1948);
(b) any activity relating to the promotion of sales or business or both carried on by an establishment,

History
The Britannica Encyclopedia describes a motorcycle as a bicycle or tricycle propelled by an internal-combustion engine (or, less often, by an electric engine).The motors on minibikes, scooters, and mopeds, or motorized velocipedes, are usually air-cooled and range from 25 to 250 cubic cm (1.5 to 15 cubic inches) in displacement; the multiple-cylinder motorcycles have displacements of more than 1,300 cubic cm. The automobile was the reply to the 19th-century dream of self-propelling the horse-drawn carriage. Similarly, the invention of the motorcycle created the self-propelled bicycle. The first commercial design was a three-wheeler built by Edward Butler in Great Britain in 1884. This employed a horizontal single-cylinder gasoline engine mounted between two steer able front wheels and connected by a drive chain to the rear wheel.The 1900s saw the conversion of many bicycles, or pedal cycles by adding small, centrally mounted spark ignition engines. There was then felt the need for reliable constructions. This led to road trial tests and competition between manufacturers. Tourist Trophy (TT) races were held on the Isle of Man in 1907 as reliability or endurance races. Such were the proving ground for many new ideas from early two-stroke-cycle designs to supercharged, multivalent engines mounted on aerodynamic, carbon-fibre reinforced bodywork.
Invention of Two Wheelers
The invention of the first two-wheeler is a much-debated issue. "Who invented the first motorcycle?" may seem like a simple question, but the answer is quite complicated. Two-wheelers owe their descent to the "safety" bicycle, i.e., bicycles with front and rear wheels of the same size, with a pedal crank mechanism to drive the rear wheel. Those bicycles, in turn descended from high-wheel bicycles. The high-wheelers descended from an early type of pushbike, without pedals, propelled by the rider's feet pushing against the ground. These appeared around 1800, used iron-banded wagon wheels, and were called "bone-crushers," both for their jarring ride, and their tendency to toss their riders. Gottlieb Daimler (who later teamed up with Karl Benz to form the Daimler-Benz Corporation) is credited with building the first motorcycle in 1885, one wheel in the front and one in the back, although it had a smaller spring-loaded outrigger wheel on each side. It was constructed mostly of wood, the wheels were of the iron-banded wooden-spoked wagon-type, it definitely had a "bone-crusher" chassis! This two-wheeler was powered by a single-cylinder Otto-cycle engine, and may have had a spray-type carburetor. (Wilhelm Maybach

, Daimler's assistant, was working on the invention of the spray carburetor at the time). If two wheels with steam propulsion can be called a motorcycle, then the first one may have been American. One such machine was demonstrated at fairs and circuses in the eastern US in 1867. This was built by one Sylvester Howard Roper of Roxbury, Massachusetts. There is an existing example of a Roper machine, dated 1869. A charcoal-fired two-cylinder engine, whose connecting rods directly drive a crank on the rear wheel, powers it. This machine predates the invention of the safety bicycle by many years, so its chassis is also based on the "bone-crusher" bike.

Origin of Motor-Scooters
Edward Butler, an Englishman, built the first motor tricycle in 1884. The first gasoline-engine motorcycle to appear publicly was built by Gottlieb Daimler, of Bad Cannstatt, Germany, in 1885. The French and Belgians, followed by British, German, Italian, and American makers, designed the first practical engines and motorcycles.The popularity of the vehicle grew, especially after 1910. During World War I all branches of the armed forces in Europe, principally for dispatching, used the motorcycle. After the war it enjoyed a sport vogue until the Great Depression began in 1929. After World War II a revival of interest in motorcycles lasted into the late 20th century, with the vehicle being used for high-speed touring and sport competitions.The practice of attaching auxiliary engines to bicycles in western Europe and parts of the United States led to the development during the 1950s of a new type of light motorcycle, the moped. Originating in Germany as a 50-cubic-centimetre machine with simple controls and low initial cost, it was largely free of licensing and insurance regulations except in Great Britain.The more sophisticated motor scooter originated in Italy soon after World War II, led by manufacture of a 125-cubic-centimetre model. Despite strong competition from West Germany, France, Austria, and Britain, the Italian scooters maintained the lead in the diminishing market. The scooter has small wheels from 20 to 36 cm (8 to 14 inches) in diameter, and the rider sits inside the frame. Power units are placed low and close to the rear wheel, which is driven by bevel gearing or chain. Capacities vary from 50 to 225 cubic cm, and four-speed gearing is common.

Initial Hits

Most of the development during this earliest of eras concentrated on three and four-wheeled designs, since it was complex enough to get the machines running without having to worry about them falling over. The next really notable two-wheeler was the Millet of 1892. It used a 5-cylinder engine built as the hub of its rear wheel. The cylinders rotated with the wheel, and its crankshaft constituted the rear axle.The first really successful production two-wheeler though, was the Hildebrand & Wolfmueller, patented in Munich in 1894. It had a step-through frame, with its fuel tank mounted on the downtube. The engine was a parallel twin, mounted low on the frame, with its cylinders going fore-and-aft. The connecting rods connected directly to a crank on the rear axle, and instead of using heavy flywheels for energy storage between cylinder-firing, it used a pair of stout elastic bands, one on each side outboard of the cylinders, to help out on the compression strokes. It was water-cooled, and had a water tank/radiator built into the top of the rear fender.In 1895, the French firm of DeDion-Buton built an engine that was to make the mass production and common use of motorcycles possible. It was a small, light, high revving four-stroke single, and used battery-and-coil ignition, doing away with the troublesome hot-tube. Bore and stroke figures of 50mm by 70mm gave a displacement of 138cc. A total loss lubrication system was employed to drip oil into the crankcase through a metering valve, which then sloshed around to lubricate and cool components before dumping it on the ground via a breather.DeDion-Buton used this 1/2 horsepower power plant in road going tikes, but the engine was copied and used by everybody, including Indian and Harley-Davidson in the U.S. Although a gentleman named Pennington built some machines around 1895 (it's uncertain whether any of them actually ran), the first US production motorcycle was the Orient-Aster, built by the Metz Company in Waltham, Massachusetts in 1898. It used an Aster engine that was a French-built copy of the DeDion-Buton, and predated Indian (1901) by three years, and Harley-Davidson (1902) by four.

TRENDS IN THE TWO-WHEELER INDUSTRYCompanies raising capacity to meet the growing demand All the major two-wheeler manufacturers, viz. Bajaj Auto, HHML, TYS, HMSI and others, have increased their manufacturing capacities in the recent past. The total capacity of these players stood at 7.8 million units per annum (FY2003) as against total market sales of 3.8 million units in FY2002. Most of the players have either expanded capacity, or converted their existing capacities for scooters and mopeds into those for manufacturing motorcycles. The move has been prompted by the rapid growth reported by the motorcycles segment since FY1995.HHML increased the capacity of its plants from 1.8 million units in FY2003 to 2.25 million in FY2004 and has been able to achieve 92% capacity utilisation. In light of the increase in demand for motorcycles, the company plans to set up a new plant. Since its entry in the Indian market during FY2002, HMSI has aggressively expanded its capacity.(need)Two-wheelers Purchase Trend
Growing working population
Increased access to credit and lower interest loans
Increased consumer embrace of financial products
Upward migration of household income levels
Fast paced urbanization to rise from 28% to 40% by 2020
Middle class expanding by 30 - 40 million every year

2008-11-07T05:53:00.000-08:00

Introduction THE Retention Malady
Don't shrug it away; it's real. Three out of every 4 software companies surveyed, and almost 1 in every 2 manufacturing and services companies confess that their retention-related woes are acute. Indeed, more than 90 per cent of the companies surveyed admit that they all have some sort of people problem although these percentages indicate the perceptions within, and not the retention-levels of, these organisations. SAMEs (Small And Medium Enterprises)-with a turnover of less than Rs 100 crore and fewer than 100 employees-feel the threat of attrition stronger than the others. On the one hand, the fewer number of employees on their rolls makes every departure significant; on the other, SAMEs are happy hunting-grounds for larger firms that can offer the best employees in such units more in terms of monetary as well as non-monetary compensation.
While the actual turnover-rates are much lower than the perceived threat of attrition, across industries and management-levels, they showed a rising trend that should worry every CEO. Undoubtedly, the junior management level is most vulnerable to poaching: turnover-rates range from 7 per cent in manufacturing companies to 13 per cent in hi-tech organisations. That's because junior managers, typically, experience more problems related to fit and culture than their senior colleagues. Of course, they are also more susceptible to monetary inducements at this stage of their careers.
Analysed on the basis of size, their track-records indicate that retention-levels have declined the most in mid-sized companies (with turnovers of between Rs 200 crore and Rs 500 crore). And they have either remained the same (83 per cent) or increased (17 per cent) in organisations with turnovers of more than Rs 1,000 crore. The logic in hindsight: a small organisation is an exciting workplace, with their fewer number making every employee feel wanted. And large organisations have elaborate people-management practices in place, which define the role that each individual is expected to play, and the route his or her career is likely to take within the organisation. But mid-sized companies are trapped in limbo: they are placid places to work in and, more often than not, do not have the kind of systems that their larger cousins do.
Marketing and services companies, though, would do well to look beyond the simplistic assumption that retention is a critical issue only in hi-tech industries. That may be the case in absolute terms but, while the retention-levels in 16 per cent of the infotech and telecom companies sampled have declined, they have fallen in 26 per cent of the marketing and services companies. Across industries, though, the function which witnesses the maximum attrition varies. In manufacturing and marketing companies, it is the production function. In services companies, it is the finance function. And in infotech companies, it is the line function of information technology. Evidently, the problem of retention is quite wide-spread in corporate India.

Reasons for employee movement:
Following are the reasons for professionals to change his/her job.
No growth opportunity/lack of promotion
For higher Salary
For Higher education
Misguidance by the company
Policies and procedures are not conducive
No personal life
Physical strains
Uneasy relationship with peers or managers
Retention a challenge:
Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs will become the dominant players in their respective markets.The fierce competition for qualified workers results from a number of workplace trends, including:
A robust economy
Shift in how people view their careers
Changes in the unspoken "contract" between employer and employee
Corporate cocooning
A new generation of workers
Changes in social mores
Life balance
Concurrent with these trends, the emerging work force is developing very different attitudes about their role the workplace. Today's employees place a high priority on the following:
Family orientation
Quality of life issues
Autonomy
To hold onto your people, you have to work counter to prevailing trends causing the job churning. Smart employers make it a strategic initiative to understand what their people want and need -- then give it to them.
THE Retention Responsibility
Carry the Pareto Principle to an extreme: as 20 per cent of your employees account for 80 per cent of your success, focus 80 per cent of your retention efforts on 20 per cent of your people. Across industry-types, manufacturing, marketing, and services companies believe that it makes little sense to retain all their employees all the time. The real objective: retain only those people who contribute to the company's performance in terms of improving the quality of goods and services, or increasing the level of customer satisfaction.
However, hi-tech companies insist that their strategies must focus on retaining all employees. Their logic is that organisations get the kind of employee-performances they deserve. Given the high costs involved in mid-career hires, especially in software and telecom companies, it does make sense to create an environment where all their employees can continuously upgrade their skills-sets rather than let go of them.
Expectedly, the hr department and the senior management are the organisational centres vested with the responsibility of retention management. However, the process is shared: in most organisations, the hr department, the individual functions, the top management, teams, and the trade unions manage the retention function, individually and together. The choice of the unit varies across industries: 50 per cent of the companies where the union has a role to play belong to the manufacturing sector; teams are popular with manufacturing (37 per cent) and services (35 per cent) companies; and 32 per cent of the companies where the senior management involves itself in retention are infotech and telecom companies. Obviously, the high attrition-rates and the almost-perennial demand for skilled manpower in these industries is why.
Size too matters. 89 per cent of the companies where the senior managers concerned themselves with retention had turnovers of less than Rs 500 crore. And 69 per cent of them had less than 500 employees. Obviously, it is easier for senior managers to concern themselves directly with retention management when they do not have to deal with too many employees. Expectedly, teams and trade unions have a significant role to play in large companies (more than 500 employees and turnovers exceeding Rs 500 crore).
What can be done?

Though, it is impossible to scrap problems totally, there are certain ways by which BPO managements can tackle attrition. Since the BPO environment is unique, these companies need to develop innovative ways to tackle them. Human Resources department of a BPO must address these issues, and along with the management need to evolve strategies to retain employees at all levels.

At the time of Recruitment

Select the right people through competency screening.
Use psychometric tests to get people who can work at night and handle the monotony.
Offer an attractive, competitive, benefits package.
Make clear of performance enhanced incentives and other benefits. Keep these promises, later.
BPOs can set up offices in smaller towns, or recruit from there, where opportunities are few.
At the office

An employees work must be communicated to him clearly and thoroughly. The details of the job, its importance, the way it should be done, maximum time that can be allotted to complete it etc., must be made clear. If there are changes to any of these, let the employee know at the earliest
Give the employees necessary tools, time and training. The employee must have the tools, time and training necessary to do their job well - or they will move to an employer who provides them.
Have a person to talk to each employee at regular intervals. Listen and solve employee complaints and problems, as much as possible. Fairness and impartial treatment by seniors is important. Help employees manage stress, both at work and if possible, off work too. Give them special concessions, when in need. Treat the employees well & provide dignity of job.
The quality of the supervision an employee receives is critical to employee retention. Frequent employee complaints arise on this issue.
Provide the employees a stress free work environment. People want to enjoy their work. Make work and work place cheerful and fun-filled as possible.
Make sure that employees know that their work is important for the organisation. Feeling valued by their employer is key to high employee motivation and morale. Recognize their strengths and help them to improve those they lack.
Employees must feel rewarded, recognised and appreciated. Giving periodical raise in salary or position helps to retain staff.
Offer excellent career growth prospects. Encourage & groom employees to take up higher positions/openings. If they dont get opportunity for growth within the organisation, they will look elsewhere for it.
Work-life balance initiatives are important. Innovative and practical employee policies pertaining to flexible working hours and schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependants, etc. are important for most people. Work-life balance policies would have a positive impact on retaining skilled employees, as well as on attracting high-calibre recruits.
Implement competency models, which are well integrated, with HR processes like selection & recruitments, training, performance appraisal and potential appraisal.

Main retention strategiesThis is not an exhaustive list, one can add or delete any of the below mentioned strategies. Secondly, the need of the hour is to have "right basics". Every individual is different, his needs are different, and his emotions, his problems are different. So, dear HR-Professionals…sit down and concentrate on your basics.
Communications - Getting Your People to Care Communication is the first step toward creating the kind of environment that people care about, and if they care, they just may stay. I'm not talking about a lot of New Age stroking designed to bring out the inner person or false praise that creates a misplaced sense of security. Instead, keep your people in the loop about what's happening with the company. At any time, all of your employees should have a pretty good idea of how business has been, and they should be aware of what issues the company is attempting to address.That means that you regularly keep your people up to date with important events affecting the company. If November was good, let them know, and while you're at it, tell them what you expect to happen in December. Share good news, as well as points of concern. If you've got "issues," talk about them before they start making you crazy. And if they don't get resolved, figure out whether the problem stems from a couple of individuals or from your system.Set Clear Expectations
How often do you appraise your employees/team-members?
What are your expectations from your employees/team-members? What are the parameters to measure their performance? Have you communicated to them?
What will be the consequences, if they fail?
What will be the rewards, if they exceed the expected level?

Proper RewardingA research reports says that in today's scenario,
70% of your employees are less motivated today than they used to be.
80% of your employees could perform significantly better if they wanted to.
50% of your employees only put enough effort into their work to keep their job.

As you might be aware of Employee Reward covers how people are rewarded in accordance with their value to an organization. It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward systems. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship.The aim of employee reward policies and practices, if any in your organization is to help attract, retain and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees. Personnel and development professionals will be involved frequently in reward issues, whether they are generalists or specialize in people resourcing, learning and development or employee relations. Keep following parameters in mind, while designing a reward policy:Build a high degree of recognition value into every reward you offer. Reduce entitlements and link as many rewards as possible to performance.Troubleshoot your reward system to make sure that what it is rewarding is what you really want to happen.Reward promptly.
Give employees a choice of rewards..Increase the longevity of your rewards
Be continually vigilant of demotivators that may undermine your organization's best efforts to provide power rewards, and reduce them promptly.
Nature of Supervision: The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well liked or a nice person, starting with clear expectations of the employee, the supervisor has a critical role to play in retention. Anything the supervisor does to make an employee feel unvalued will contribute to turnover. Frequent employee complaints center on these areas.
Lack of clarity about expectations,
Lack of clarity about earning potential,
Lack of feedback about performance,
Failure to hold scheduled meetings, and
Failure to provide a framework within which the employee perceives he can succeed.

THE Retention Measures
Companies now adopt more than one technique to create an internal environment that will retain their employees. As per the survey, the most popular retention-oriented initiatives include:
INCREASING THE ORGANISATION'S LEVEL OF PROFESSIONALISM.
MOVING FROM FAMILY TO PROFESSIONAL MANAGEMENT.
MAKING PERFORMANCE APPRAISALS OBJECTIVE.
INVOLVING EMPLOYEES IN THE DECISION-MAKING PROCESS.
ENSURING A MATCH BETWEEN AUTHORITY AND ACCOUNTABILITY.
MEASURING EMPLOYEE SATISFACTION.
ACHIEVING A MATCH BETWEEN INDIVIDUAL AND ORGANISATIONAL GOALS.
DESIGNING A COMPETITIVE COMPENSATION PACKAGE.
INCREASING ORGANISATIONAL TRANSPARENCY.
PROMOTING EMPLOYEES FROM WITHIN.
HELPING EMPLOYEES ACQUIRE NEW SKILLS.
OFFERING STOCK OPTIONS.
FOCUSING ON WELFARE MEASURES..
BEST PRACTICES. The best organisations recognise the fact that the retention techniques that will work best for them depend on the dynamics of the industry of which they are a part, and the level of management at which they wish to focus their efforts. These organisations tier their retention strategies to suit their employees at various levels of the organisation. Often, recognising the individuality of employees is the best retention strategy.
A focus on retention management can serve as a good starting-point for improving the quality of systems and processes in an organisation. Retaining their best employees requires companies to launch initiatives along several dimensions: introducing good house-keeping practices in offices and shop-floors; making performance-appraisal systems transparent, objective, and participative; professionalising the senior management team; and ensuring that employees take pride in their work.
Fast-growth companies, which are among the top-performers in their industry, will find it easier to retain employees than others provided they practise the essentials of retention management: objective appraisal, and good pay-packages. Everyone loves to work for a winner. But the only way a company can improve its performance is by hiring and retaining the best human capital, and motivating it to deliver its best. If that isn't a vicious circle, nothing is. And best-in-class retention management is right at its centre

Conclusion

As they say, happiness can be contagious. So make sure the work place is a happy one, which every employee would love to spend time. Human resources department along with senior management must take steps to make sure of this.

Effective human resource management must be practiced at both strategic and day-to-day levels. HR management practices must reflect company policy as to how it will manage and relate to its employees. The HR strategy should evolve from a transactional support role to partnering in the organisations business strategy. HR must take steps to be aware of employee problems and try to solve them, creatively

References

1. “Effective employee retention stratigeies, key to reduce attrition in BPO firms – Offshoring Times
2. “Retention strategies in ITES-BPO Industry “ – Sanjeev Sharma – BPOInida.org
3. “Retention Management” – R Sukumar – Business Today.

2008-11-07T05:52:00.000-08:00

Definition of Industry

As per Section 2(j) of Industrial Disputes Act,1947 “Industry” means any systematic activity carried on by co-operation between an employer and his workmen(whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production ,supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not,-

(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit, and includes-
(a) any activity of the Dock Labour Board established under section 5-A of the Dock Workers ( Regulation of Employment)Act,1948( 9 of 1948);
(b) any activity relating to the promotion of sales or business or both carried on by an establishment,

Two Wheelers in India
The feeling of freedom and being one with the Nature comes only from riding a two-wheeler. Indians prefer the two wheelers because of their small manageable size, low maintenance, and pricing and easy loan repayments. Indian streets are full of people of all age groups riding a two-wheeler. Motorized two wheelers are seen as a symbol of status by the populace. Thus, in India, we would see swanky four wheels jostling with our ever reliable and sturdy steed: the two-wheeler.
Two-Wheeler Industry in India: An IntroductionThe Indian two-wheeler industry has been in the limelight recently because of its impressive performance. Hero Honda has been the largest manufacturer of motorcycles in the world for quite some time. Its motorcycle model Splendor has also been the largest selling model in the world. The last few years have also seen a large quantity of two-wheelers being exported. In neighbouring countries like Bangladesh and Sri Lanka, the Indian two-wheeler manufacturers have captured the market. Even in Africa and South America Indian motorcycles have been well received. Some of the Indian manufacturers like TVS Motors and Bajaj Auto are in the process of setting up assembly and manufacturing plants. The number of models being introduced by Indian two-wheeler manufacturers every year is also high. At this crucial juncture when the Indian two-wheeler industry is making its mark in the global market, this book ?Two-Wheeler Industry in India ? An Introduction? will make interesting reading. The book has been divided into three sections. The first section traces the evolution of the industry, its growth and the reasons for the industry being competitive. The second section delves into the issues facing the industry and future of the industry. It also throws light on the exports of two-wheelers, Government policies affecting the growth of the industry and electric scooters and motorcycles. The third section discusses the major players, Hero Honda, TVS Motors, Bajaj Auto and Electro herm India.
Indian automobile industry witnessed a growth of 23.37% in 2-wheeler segment. India is the second-largest 2-wheeler manufacturers in the world and also the largest motorcycle manufacturer in the World. Indian 2-wheeler segment includes a range of vehicles such as scooters- geared and ungeared, motorcycles and mopeds. In India there are 7 scooter manufacturers, 9 motorcycle manufacturers, 3 moped manufacturers. Bajaj Auto, Hero Honda, TVS, etc are the leading manufacturers. They have also dominated the global arena after Piaggio. Production in Indian automobile industry During cfinancial year 2005-06, Indian 2-wheeler production showed a growth of 16.40% over the
preceding year. 2-wheeler segment have been showing an upward production trend. At present, there are more than 7.6 million 2-wheeler, manufactured in Indian automobile sector.

History
The Britannica Encyclopedia describes a motorcycle as a bicycle or tricycle propelled by an internal-combustion engine (or, less often, by an electric engine).The motors on minibikes, scooters, and mopeds, or motorized velocipedes, are usually air-cooled and range from 25 to 250 cubic cm (1.5 to 15 cubic inches) in displacement; the multiple-cylinder motorcycles have displacements of more than 1,300 cubic cm. The automobile was the reply to the 19th-century dream of self-propelling the horse-drawn carriage. Similarly, the invention of the motorcycle created the self-propelled bicycle. The first commercial design was a three-wheeler built by Edward Butler in Great Britain in 1884. This employed a horizontal single-cylinder gasoline engine mounted between two steer able front wheels and connected by a drive chain to the rear wheel.The 1900s saw the conversion of many bicycles, or pedal cycles by adding small, centrally mounted spark ignition engines. There was then felt the need for reliable constructions. This led to road trial tests and competition between manufacturers. Tourist Trophy (TT) races were held on the Isle of Man in 1907 as reliability or endurance races. Such were the proving ground for many new ideas from early two-stroke-cycle designs to supercharged, multivalent engines mounted on aerodynamic, carbon-fibre reinforced bodywork.

Invention of Two Wheelers
The invention of the first two-wheeler is a much-debated issue. "Who invented the first motorcycle?" may seem like a simple question, but the answer is quite complicated. Two-wheelers owe their descent to the "safety" bicycle, i.e., bicycles with front and rear wheels of the same size, with a pedal crank mechanism to drive the rear wheel. Those bicycles, in turn descended from high-wheel bicycles. The high-wheelers descended from an early type of pushbike, without pedals, propelled by the rider's feet pushing against the ground. These appeared around 1800, used iron-banded wagon wheels, and were called "bone-crushers," both for their jarring ride, and their tendency to toss their riders. Gottlieb Daimler (who later teamed up with Karl Benz to form the Daimler-Benz Corporation) is credited with building the first motorcycle in 1885, one wheel in the front and one in the back, although it had a smaller spring-loaded outrigger wheel on each side. It was constructed mostly of wood, the wheels were of the iron-banded wooden-spoked wagon-type, it definitely had a "bone-crusher" chassis! This two-wheeler was powered by a single-cylinder Otto-cycle engine, and may have had a spray-type carburetor. (Wilhelm Maybach

, Daimler's assistant, was working on the invention of the spray carburetor at the time). If two wheels with steam propulsion can be called a motorcycle, then the first one may have been American. One such machine was demonstrated at fairs and circuses in the eastern US in 1867. This was built by one Sylvester Howard Roper of Roxbury, Massachusetts. There is an existing example of a Roper machine, dated 1869. A charcoal-fired two-cylinder engine, whose connecting rods directly drive a crank on the rear wheel, powers it. This machine predates the invention of the safety bicycle by many years, so its chassis is also based on the "bone-crusher" bike.

Origin of Motor-Scooters
Edward Butler, an Englishman, built the first motor tricycle in 1884. The first gasoline-engine motorcycle to appear publicly was built by Gottlieb Daimler, of Bad Cannstatt, Germany, in 1885. The French and Belgians, followed by British, German, Italian, and American makers, designed the first practical engines and motorcycles.The popularity of the vehicle grew, especially after 1910. During World War I all branches of the armed forces in Europe, principally for dispatching, used the motorcycle. After the war it enjoyed a sport vogue until the Great Depression began in 1929. After World War II a revival of interest in motorcycles lasted into the late 20th century, with the vehicle being used for high-speed touring and sport competitions.The practice of attaching auxiliary engines to bicycles in western Europe and parts of the United States led to the development during the 1950s of a new type of light motorcycle, the moped. Originating in Germany as a 50-cubic-centimetre machine with simple controls and low initial cost, it was largely free of licensing and insurance regulations except in Great Britain.The more sophisticated motor scooter originated in Italy soon after World War II, led by manufacture of a 125-cubic-centimetre model. Despite strong competition from West Germany, France, Austria, and Britain, the Italian scooters maintained the lead in the diminishing market. The scooter has small wheels from 20 to 36 cm (8 to 14 inches) in diameter, and the rider sits inside the frame. Power units are placed low and close to the rear wheel, which is driven by bevel gearing or chain. Capacities vary from 50 to 225 cubic cm, and four-speed gearing is common.

Initial Hits

Most of the development during this earliest of eras concentrated on three and four-wheeled designs, since it was complex enough to get the machines running without having to worry about them falling over. The next really notable two-wheeler was the Millet of 1892. It used a 5-cylinder engine built as the hub of its rear wheel. The cylinders rotated with the wheel, and its crankshaft constituted the rear axle.The first really successful production two-wheeler though, was the Hildebrand & Wolfmueller, patented in Munich in 1894. It had a step-through frame, with its fuel tank mounted on the downtube. The engine was a parallel twin, mounted low on the frame, with its cylinders going fore-and-aft. The connecting rods connected directly to a crank on the rear axle, and instead of using heavy flywheels for energy storage between cylinder-firing, it used a pair of stout elastic bands, one on each side outboard of the cylinders, to help out on the compression strokes. It was water-cooled, and had a water tank/radiator built into the top of the rear fender.In 1895, the French firm of DeDion-Buton built an engine that was to make the mass production and common use of motorcycles possible. It was a small, light, high revving four-stroke single, and used battery-and-coil ignition, doing away with the troublesome hot-tube. Bore and stroke figures of 50mm by 70mm gave a displacement of 138cc. A total loss lubrication system was employed to drip oil into the crankcase through a metering valve, which then sloshed around to lubricate and cool components before dumping it on the ground via a breather.DeDion-Buton used this 1/2 horsepower power plant in road going tikes, but the engine was copied and used by everybody, including Indian and Harley-Davidson in the U.S. Although a gentleman named Pennington built some machines around 1895 (it's uncertain whether any of them actually ran), the first US production motorcycle was the Orient-Aster, built by the Metz Company in Waltham, Massachusetts in 1898. It used an Aster engine that was a French-built copy of the DeDion-Buton, and predated Indian (1901) by three years, and Harley-Davidson (1902) by four.

Indian T Indian Two Wheeler Industry

Indian Two wheeler industry, Key players and Types of two-wheelers
India is the second largest producer and manufacturer of two-wheelers in the world. Indian two-wheeler industry has got spectacular growth in the last few years. Indian two-wheeler industry had a small beginning in the early 50's. The Automobile Products of India (API) started manufacturing scooters in the country.Bikes are a major segment of Indian two wheeler industry, the other two being scooters and mopeds. Indian companies are among the largest two-wheeler manufacturers in the world. Hero Honda and Bajaj Auto are two of the Indian companies that top the list of world companies manufacturing two-wheelers.The two-wheeler market was opened to foreign companies in the mid 1980s. The openness of Indian market to foreign companies lead to the arrival of new models of two-wheelers into India. Easy availability of loans from the banks, relatively low rate of interest and the discount of prices offered by the dealers and manufacturers lead to the increasing demand for two-wheeler vehicles in India. This lead to the strong growth of Indian automobile industry.Kinetic Honda was introduced in the Indian market during the mid 80s. The main feature of Kinetic Honda is its ease of use. This helped the youngsters and the women to buy scooters.

Key players in the Two-wheeler Industry :After facing its worst recession during the early 1990s, the two-wheeler industry bounced back with a 25% increase in volume sales in February 1995. The scooters are considered as family vehicles. There are many two-wheeler manufacturers in India. Major players in the 2-wheeler industry are Hero Honda Motors Ltd (HHML), Bajaj Auto Ltd (Bajaj Auto) and TVS Motor Company Ltd (TVS). The other key players in the two-wheeler industry are Kinetic Motor Company Ltd (KMCL), Kinetic Engineering Ltd (KEL), LML Ltd (LML), Yamaha Motors India Ltd (Yamaha), Majestic Auto Ltd (Majestic Auto), Royal Enfield Ltd (REL) and Honda Motorcycle & Scooter India (P) Ltd (HMSI).Types of Two-wheelers in India: There are mainly three types of two-wheelers available in India. They are Motorcycles, Scooters and Scooterettes/Mopeds.Motorcycles in India: Bikes comprise a major segment of Indian two wheeler industries.

Company : Bajaj Auto Ltd
Company : HERO HONDA
* Bajaj Avenger* Bajaj CT 100* Bajaj Platina* Bajaj Discover DTSi* Bajaj Pulsar DTSi* Bajaj Wave* Bajaj Wind 125* Sonic DTSi
* Hero Honda Achiever* Hero Honda CD Dawn* Hero Honda CD Deluxe* Hero Honda Glamour* Hero Honda Glamour-Fi* Hero Honda Karizma* Hero Honda Passion Plus* Hero Honda Pleasure* Hero Honda Super Splendor* Hero Honda Splendor NXG* Hero Honda CBZ X-Treme
Company : Kinetic Motor Company
Company : TVS MOTOR
Company : Yamaha Motor India
* Kinetic Aquila* Kinetic Boss* Kinetic Challenger* Kinetic Comet* Kinetic GF* Kinetic Stryker* Kinetic Velocity
* TVS Apache* TVS Centra* TVS Fiero* TVS Star* TVS Victor
* Yamaha CruxS* Yamaha G5* Yamaha Gladiator
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Scooters in India: The scooter and the scooterette share in the Indian two-wheeler market is 13.4%. The main models available in India are Bajaj Chetak, Honda Eterno, Kinetic Blaze, LML NV SPL and LML Select II.Scooterettes/Mopeds: TVS Motors launched India's first 50cc, 2-seater moped: TVS Moped 50. TVS also launched India's first indigenous scooterette: Scooty in 1994. This segment has about one-fourth share in the Indian two-wheeler industry. The major models available in India are Bajaj Wave, Bajaj Kristal DTSi, Bajaj Blade DTSi, Hero Honda Pleasure, Kinetic Kine, Kinetic 4S, Kinetic Nova, Kinetic Zoom, Kinetic V2 Range, Kinetic King 100, Kinetic Luna Super, Kinetic Luna TFR, Yo Smart, Honda Dio, Honda Activa, TVS Scooty and TVS XL.

INTRODUCTIONThe Indian automotive industry consists of five segments: commercial vehicles; multi-utility vehicles & passenger cars; two-wheelers; three-wheelers; and tractors. With 5,822,963 units sold in the domestic market and 453,591 units exported during the first nine months of FY2005 (9MFY2005), the industry (excluding tractors) marked a growth of 17% over the corresponding previous. The two-wheeler sales have witnessed a spectacular growth trend since the mid nineties.Two-wheelers: Market Size & GrowthIn terms of volume, 4,613,436 units of two-wheelers were sold in the country in 9MFY2005 with 256,765 units exported. The total two-wheeler sales of the Indian industry accounted for around 77.5% of the total vehicles sold in the period mentioned.
Figure 1Segmental Growth of the Indian Two Wheeler Industry (FY1995-2004)
After facing its worst recession during the early 1990s, the industry bounced back with a 25% increase in volume sales in FY1995. However, the momentum could not be sustained and sales growth dipped to 20% in FY1996 and further down to 12% in FY1997. The economic slowdown in FY1998 took a heavy toll of two-wheeler sales, with the year-on-year sales (volume) growth rate declining to 3% that year. However, sales picked up thereafter mainly on the strength of an increase in the disposable income of middle-income salaried people (following the implementation of the Fifth Pay Commission's recommendations), higher access to relatively inexpensive financing, and increasing availability of fuel efficient two-wheeler models. Nevertheless, this phenomenon proved short-lived and the two-wheeler sales declined marginally in FY2001. This was followed by a revival in sales growth for the industry in FY2002. Although, the overall two-wheeler sales increased in FY2002, the scooter and moped segments faced de-growth. FY2003 also witnessed a healthy growth in overall two-wheeler sales led by higher growth in motorcycles even as the sales of scooters and mopeds continued to decline. Healthy growth in two-wheeler sales during FY2004 was led by growth in motorcycles even as the scooters segment posted healthy growth while the mopeds continued to decline. Figure 1 presents the variations across various product sub-segments of the two-wheeler industry between FY1995 and FY2004.Demand DriversThe demand for two-wheelers has been influenced by a number of factors over the past five years. The key demand drivers for the growth of the two-wheeler industry are as follows:
▪
Inadequate public transportation system, especially in the semi-urban and rural areas;
▪
Increased availability of cheap consumer financing in the past 3-4 years;
▪
Increasing availability of fuel-efficient and low-maintenance models;
▪
Increasing urbanisation, which creates a need for personal transportation;
▪
Changes in the demographic profile;
▪
Difference between two-wheeler and passenger car prices, which makes two-wheelers the entrylevel vehicle;
▪
Steady increase in per capita income over the past five years; and
▪
Increasing number of models with different features to satisfy diverse consumer needs.
While the demand drivers listed here operate at the broad level, segmental demand is influenced by segment-specific factors.MARKET CHARACTERISTICSDemandSegmental Classification and CharacteristicsThe three main product segments in the two-wheeler category are scooters, motorcycles and mopeds. However, in response to evolving demographics and various other factors, other subsegments emerged, viz. scooterettes, gearless scooters, and 4-stroke scooters. While the first two emerged as a response to demographic changes, the introduction of 4-stroke scooters has followed the imposition of stringent pollution control norms in the early 2000. Besides, these prominent sub-segments, product groups within these sub-segments have gained importance in the recent years. Examples include 125cc motorcycles, 100-125 cc gearless scooters, etc. The characteristics of each of the three broad segments are discussed in Table 1.
Table 1
Two-Wheelers: Comparative Characteristics

Scooter
Motorcycle
Moped
Price*(Rs. as in January 2005)
> 22,000
> 30,000
> 12,000
Stroke
2-stroke, 4-stroke
Mainly 4-stroke
2-stroke
Engine Capacity (cc)
90-150
100, 125, > 125
50, 60
Ignition
Kick/Electronic
Kick/Electronic
Kick/Electronic
Engine Power (bhp)
6.5-9
7-8 and above
2-3
Weight (kg)
90-100
> 100
60-70
Fuel Efficiency (kms per litre)
50-75
50-80+
70-80
Load Carrying
High
Highest
Low

*Ex-showroom MumbaiCompiled by INGRES
Segmental Market ShareThe Indian two-wheeler industry has undergone a significant change over the past 10 years with the preference changing from scooters and mopeds to motorcycles. The scooters segment was the largest till FY1998, accounting for around 42% of the two-wheeler sales (motorcycles and mopeds accounted for 37% and 21 % of the market respectively, that year). However, the motorcycles segment that had witnessed high growth (since FY1994) became larger than the scooter segment in terms of market share for the first time in FY1999. Between FY1996 and 9MFY2005, the motorcycles segment more than doubled its share of the two-wheeler industry to 79% even as the market shares of scooters and mopeds stood lower at 16% and 5%, respectively.
Figure 2 Trends in Segmental Share in Industry Sales (FY1996-9MFY2005)
While scooter sales declined sharply by 28% in FY2001, motorcycle sales reported a healthy growth of 20%, indicating a clear shift in consumer preference. This shift, which continues, has been prompted by two major factors: change in the country's demographic profile, and technological advancements.Over the past 10-15 years the demographic profile of the typical two-wheeler customer has changed. The customer is likely to be salaried and in the first job. With a younger audience, the attributes that are sought of a two-wheeler have also changed. Following the opening up of the economy and the increasing exposure levels of this new target audience, power and styling are now as important as comfort and utility.The marketing pitch of scooters has typically emphasised reliability, price, comfort and utility across various applications. Motorcycles, on the other hand, have been traditionally positioned as vehicles of power and style, which are rugged and more durable. These features have now been complemented by the availability of new designs and technological innovations. Moreover, higher mileage offered by the executive and entry-level models has also attracted interest of two-wheeler customer. Given this market positioning of scooters and motorcycles, it is not surprising that the new set of customers has preferred motorcycles to scooters. With better ground clearance, larger wheels and better suspension offered by motorcycles, they are well positioned to capture the rising demand in rural areas where these characteristics matter most.Scooters are perceived to be family vehicles, which offer more functional value such as broader seat, bigger storage space and easier ride. However, with the second-hand car market developing, a preference for used cars to new two-wheelers among vehicle buyers cannot be ruled out. Nevertheless, the past few years have witnessed a shift in preference towards gearless scooters (that are popular among women) within the scooters segment. Motorcycles, offer higher fuel efficiency, greater acceleration and more environment-friendliness. Given the declining difference in prices of scooters and motorcycles in the past few years, the preference has shifted towards motorcycles. Besides a change in demographic profile, technology and reduction in the price difference between motorcycles and scooters, another factor that has weighed in favour of motorcycles is the high re-sale value they offer. Thus, the customer is willing to pay an up-front premium while purchasing a motorcycle in exchange for lower maintenance and a relatively higher resale value.SupplyManufacturersAs the following graph indicates, the Indian two-wheeler industry is highly concentrated, with three players-Hero Honda Motors Ltd (HHML), Bajaj Auto Ltd (Bajaj Auto) and TVS Motor Company Ltd (TVS) - accounting for over 80% of the industry sales as in 9MFY2005. The other key players in the two-wheeler industry are Kinetic Motor Company Ltd (KMCL), Kinetic Engineering Ltd (KEL), LML Ltd (LML), Yamaha Motors India Ltd (Yamaha), Majestic Auto Ltd (Majestic Auto), Royal Enfield Ltd (REL) and Honda Motorcycle & Scooter India (P) Ltd (HMSI).
Figure 3 Shares of Two-Wheeler Manufacturers in Industry Sales (FY2000-9MFY2005)
Although the three players have dominated the market for a relative long period of time, their individual market shares have undergone a major change. Bajaj Auto was the undisputed market leader till FY2000, accounting for 32% of the two-wheeler industry volumes in the country that year. Bajaj Auto dominance arose from its complete hold over the scooter market. However, as the demand started shifting towards motorcycles, the company witnessed a gradual erosion of its market share. HHML, which had concentrated on the motorcycle segment, was the main beneficiary, and almost doubled its market share from 20% in FY2000 to 40% in 9MFY2005 to emerge as the market leader. TVS, on the other hand, witnessed an overall decline in market share from 22% in FY2000 to 18% in 9MFY2005. The share of TVS in industry sales fluctuated on a year on year basis till FY2003 as it changed its product mix but has declined since then.TechnologyHitherto, technology transfer to the Indian two-wheeler industry took place mainly through: licensing and technical collaboration (as in the case of Bajaj Auto and LML); and joint ventures (HHML).A third form - that is, the 100% owned subsidiary route - found favour in the early 2000s. A case in point is HMSI, a 100% subsidiary of Honda, Japan. Table 2 details the alliances of some major two-wheeler manufacturers in India.Besides the below mentioned technology alliances, Suzuki Motor Corporation has also followed the strategy of joint ventures (SMC reportedly acquired equity stake in Integra Overseas Limited for manufacturing and marketing Suzuki motorcycles in India).
Table 2
Technological tie-ups of Select Players

Nature of Alliance
Company
Product
Bajaj Auto
Technological tie-up
Kawasaki Heavy Industries Ltd, Japan
Motorcycles
Technological tie-up
Tokya R&D Co Ltd, Japan
Two-wheelers
Technological tie-up
Kubota Corp, Japan
Diesel Engines
HHML
Joint Venture
Honda Motor Co, Japan
Motorcycles
KEL
Technological tie-up
Hyosung Motors & Machinery Inc
Motorcycles
KEL
Tie up for manufacturingand distribution
Italjet, Italy
Scooters
LML
Technological tie-up
Daelim Motor Co Ltd
Motorcycles
Hero Motors
Technological tie-up
Aprilia of Italy
Scooters

Compiled by INGRES
With the two-wheeler market, especially the motorcycle market, becoming extremely competitive and the life cycle of products getting shorter, the ability to offer new models to meet fast changing customer preferences has become imperative. In this context, the ability to deliver newer products calls for sound technological backing and this has become one of the critical differentiating factor among companies in the domestic market. Thus, the players have increased their focus on research and development with some having indigenously developed new models as well as improved technologies to cater to the domestic market. Further, with exports being one of the thrust areas for some Indian two-wheeler companies, the Indian original equipment manufacturers (OEMs) have realised the need to upgrade their technical capabilities. These relate to three main areas: fuel economy, environmental compliance, and performance. In India, because of the cost-sensitive nature of the market, fuel efficiency had been an interest area for manufacturers.It is not only that the OEMs are increasing their focus on in-house R&D, they also provide support to the vendors to upgrade the technology and also assist them striking technological alliances.TRENDS IN THE TWO-WHEELER INDUSTRYCompanies raising capacity to meet the growing demandAll the major two-wheeler manufacturers, viz. Bajaj Auto, HHML, TYS, HMSI and others, have increased their manufacturing capacities in the recent past. The total capacity of these players stood at 7.8 million units per annum (FY2003) as against total market sales of 3.8 million units in FY2002. Most of the players have either expanded capacity, or converted their existing capacities for scooters and mopeds into those for manufacturing motorcycles. The move has been prompted by the rapid growth reported by the motorcycles segment since FY1995.HHML increased the capacity of its plants from 1.8 million units in FY2003 to 2.25 million in FY2004 and has been able to achieve 92% capacity utilisation. In light of the increase in demand for motorcycles, the company plans to set up a new plant. Since its entry in the Indian market during FY2002, HMSI has aggressively expanded its capacity.Niche markets also witnessing intense competitionA significant trend witnessed over the past five years is the inclination of consumers towards products with superior features and styling. Better awareness about international models has raised expectations of consumers on some key attributes, especially quality, styling, and performance. High competitive intensity has prompted players to launch vehicles with improved attributes at a price less than the competitive models.In an effort to satisfy the distinct needs of consumers, producers are identifying emerging consumer preferences and developing new models. For instance, in the motorcycles segment, motorcycles with engine capacity over 150cc, is a segment that has witnessed significant new product launches and hence, become more competitive. The indigenously launched Pulsar 150 had met with success on its launch and thereafter, a host of models have been launched in this segment by various players. While Bajaj Auto launched the Pulsars (150 and 180 cc) with digital twin spark technology (DTSi) that offers a powerful engine and fuel efficiency of 125 cc models, model launches by other players include LML's Graptor/Beamer, HMSI's Unicorn besides the HHML's CBZ (improved version launched in 2003-04) and TVS' Fiero F2. Moreover, in the recent past, the motorcycle segment has witnessed launch of vehicles with higher engine capacity (higher than 150cc) and power (higher than 15bhp). These include models such as Bajaj Auto Eliminator and Royal Enfield's Thunderbird followed by HHML's Karisma. Besides these, KEL has launched premium segment motorcycles GF 170 and GF Laser besides launching products from the portfolio of its technology partner (Hyosung's Aquila and Comet 250). The products in this segment cater for style conscious consumers. Quite a few players are developing models combining features such as higher engine capacity" optimum mix of power and performance, and superior styling. However, the extent of shift to these products would depend on the positioning of such products in terms of price.In the scooters segment, the market for plastic-bodied variomatic scooters continues to witness growth in the scenario of overall decline in scooter volumes. Higher volumes and growth are especially true for certain scooter models, such as Honda Activa, that brought in new technology (besides variomatic transmission) to further differentiate themselves. Thus, the need to differentiate and create a niche has led to companies strengthening their research and development (R&D) capabilities and reducing the development time for new models.Increasing focus on exportsFor the first nine months of FY2005, two-wheeler exports increased by 37% over the corresponding previous, led mainly by motorcycles even as exports of other two-wheelers were healthy. While motorcycle exports increased by 40%, scooter and moped exports increased by 29% and 27% respectively.Motorcycle exports by Bajaj Auto, HHML and TVS have reported a tobust growth in FY2005 and are expected to increase further in the medium term.
Table 3
Two-Wheeler Exports from India (in numbers)

FY2000
FY2001
FY2002
FY2003
FY2004
CAGR (FY2000-04)
9MFY2005
Scooters
20,188
25,625
28332
30116
53148
27.4
44832
Motorcycles
35,295
41,339
56,880
126122
187287
51.4
188807
Mopeds
27,754
44,174
18,971
23330
24234
-3.3
22739
Total
83,237
111,138
104183
179568
264669
33.5
256378

Source: SIAM
Although the Indian two-wheeler manufacturers have forayed on their own in their target export markets, there have been instances of tie-ups with the technology partners. Bajaj Auto's tie-up with Kawasaki to jointly market Bajaj products in Philippines is a case in point. Under the tie-up, M/s Kawasaki Motors Philippines Corporation has been appointed as exclusive distributors to market select Bajaj two-wheelers that include Byk, Caliber 115 and Wind 125. These vehicles are being sent to Philippines in the completely built unit (CBU) form. Other strategy of expanding international presence considered by few players is that of setting up assembly lines in select South East Asian countries either on their own or in partnership with local players. Besides, plans of select overseas technology partners to source from their Indian partners and plans of global majors to develop their Indian manufacturing unit as a sourcing hub may also lead to increase in two-wheeler exports from India.Companywise two-wheeler exports since FY2000 are presented in the following Table 4.
Table 4
Company-wise two-wheeler exports (FY2000-9MFY2005)

FY2000
FY2001
FY2002
FY2003
FY2004
CAGR (FY2000-04)
9MFY2005
Bajaj Auto
14924
16112
28527
53366
90210
56.8
87225
HHML
10061
10324
13023
21165
39254
40.5
43441
HMSI
0
0
1293
10916
31414
n.a
27734
TVS
7265
6621
7765
9636
28093
40.2
36666
Yamaha
15197
20446
20321
45546
32906
21.3
27539
Others
35790
57635
32752
39053
42792
4.6
33773
Total
83237
111138
103681
179682
264669
33.5
256378

Source: SIAM
Vehicle Emission NormsEmission norms for all categories of petrol and diesel vehicles at the manufacturing stage were introduced for the first time in India in 1990 and were made stricter in 1996. When the 1996 norms were introduced, it resulted in certain models being withdrawn from the market. With Stage I India 2000 emission norms coming into place, the cost of developing suitable technology has remained high.The emission norms that are currently in force for two-wheelers and three-wheelers are more stringent than the Euro II norms. The roadmap suggested for emission norms for two/three-wheelers by the Expert Committee on Auto Fuel Policy is as follows:
For two-/three-wheelers the emission norms are recommended to be the same in the entire country:For new vehicles:Bharat Stage II norms throughout the country from April 1, 2005Bharat Stage III norms to be applicable preferably from April 1, 2008 but not later than April 1, 2010.For reducing pollution from in-use vehicles
▪
New pollution under control (PUC) checking system for all categories of vehicles to be put in place by April 1, 2005

▪
Inspection & maintenance (I&M) system for all categories of vehicles to be put place by April 1, 2010

▪
Performance checking system of catalytic converters and conversion kits installed in vehicles to be put in place by April 1, 2007.
Table 5 presents the emission norms for two-wheelers that were in place in the past, the India 2000 emission norms, and the norms that have been implemented for April 2005 (Stage II) and proposed for 2008 (Stage III).
Table 5
Exhaust Emission Norms

Vehicle
Pollutants
Old Norms
1996
2000
2005*
2008/10**
Tow-wheelers(gm/Km)
CO
12-30
4.5
2.0
1.5
1
HC+Nox
8-12
3.6
2.0
1.5
1
Three-wheelers(petrol)
CO
12-30
6.8
4.0
2.25
1.25
HC+Nox
8-12
5.4
1.5
2
1.25
Three-wheelers(Diesel)
CO

1
1.1
HC+Nox

0.85
1
PM

0.10
0.05

CO: Carbon Monoxide; HC: Hydrocarbon; Nox: Nitrogen Oxide, PM: Particulate Matter, * Maximum Sulphur parts per million (ppm) permissible of 150 and ** Maximum Sulphur ppm permissible of 50 Compiled by INGRES
To be able to meet the exhaust norms, the Auto Fuel Policy has suggested following technologies:
Table 6
Technologies for meeting the emission norms for Spark Ignited Vehicles

2/3 - wheelers

Level of Emission Norms
2-Stroke Technology
4-Stroke Technology
Euro I/India 2000
Intake, exhaust, combustionoptimisation Catalytic converter
4-Stroke enginetechnology
Euro II/Bharat Stage II
Secondary air injection CaatalyticConverter
Hot tube Secondaryair injection
Euro III/Bharat Stage III
Fuel injection Catalytic converter
Fuel injectionCarburetor + catalytic converter
Euro IV/Bharat Stage IV
To be developed
Learn burn Fuel injection+ catalytic converter

Source: National Auto Fuel Policy
The adoption of new technologies for compliance with stricter emission norms may affect the prices of vehicles. Some two-wheeler manufacturers are testing electronic fuel injection systems for motorcycles. To begin with, electronic systems are likely to be introduced in premium segment motorcycles.Fiscal PolicyThe Union Budget for 2001-02 had lowered the excise duty on two-wheelers (with engine capacity in excess of 75 cc) from 24% to 16%. The manufacturers responded to this by passing on a relatively large part of the excise cut to customers. The Union Budget thereafter have left the excise duty on two-wheelers unchanged. But the Union Budget 2004-05 provides for a weighted deduction of 150% for investments in R&D. This may facilitate increasing R&D allocations and allow for improvement in the technical as well as product development skills of the Indian companies.Indian Auto Policy 2002The Government of India approved a comprehensive automotive policy in March 2002, the main proposals of which are as under:Foreign direct investment : Automatic approval is proposed to be granted to foreign equity investment up to 100% for manufacture of automobiles and components.Import tariff : Import tariffs are proposed to be fixed at a level such that they facilitate the development of manufacturing capabilities as opposed to mere assembly.Incentives for R&D : The weighted average tax deduction under the Income Tax Act, 1961 for automotive companies is proposed to be increased from current level of 125% (The weighted average deduction for R&D was increased to 150% in the Union Budget 2004-05). Further, the policy proposes to include vehicle manufacturers for a rebate on the applicable excise duty for every 1% of the gross turnover of the company expended during the year on R&D. Environmental aspects : Adequate fiscal incentives are proposed to promote the use of low-emission auto fuel technology (in line with the Auto Fuel Policy). The auto policy states the Government's intent to align domestic policy with the international practice of imposing higher road tax on old vehicles so as to discourage their use.

Hero Honda: A SWOT analysis

Today if one talks about Indian two-wheeler industry, reference to Hero Honda Motors Limited is by default. It is not only the market leader in the two wheeler segment in India but also is the number one two wheeler company in the world by volumes. The company’s name is synonymous with fuel-efficient bikes and longevity. The company has a presence in all bike segments viz. economy (CD 100SS, CD Dawn) executive (Super Splendor, Splendor+) and premium (Karizma, CBZ). Splendor is the most successful product of the company and accounts for almost 50% of the company’s turnover.

Background
Hero Honda is a two-decade-old story. It came into existence as a joint venture agreement between the Munjal family’s Hero Group and Honda Motor Company (HMC) of Japan, each having 26% stake in the company. A ten year agreement was first entered in the year 1984, whereby HMC brought in technical expertise and Hero Honda brought in local talent to manage all other functions including marketing, finance, and human resources. The agreement was once again renewed in 2004 and has been extended till 2014.
Performance vis-à-vis Industry
The Indian two wheeler industry has seen a paradigm shift from being a regime of regulation and tight control in the 1980s to a more liberalised and a competitive present day era. After missing out on the initial boom in two wheeler segment during the period of 1993-1996, Hero Honda has emerged as a world leader. The gap between motorcycles sold by Hero Honda and its closest rival is approximately 1 m units (23% of industry size). One of the reasons for the tremendous performance of Hero Honda is the significant increase of share of motorcycles in the two-wheeler segment, from 42% in FY99 to 77% in FY04. No doubt, that the shift in preference of Indian populace from scooters and mopeds towards motorcycles has facilitated the growth of Hero Honda. However its performance vis-à-vis industry indicates that the performance of Hero Honda was better than the industry peers, barring two years. In the seven-year period ending FY04, it has achieved a CAGR of 30% in two-wheeler volumes against 11% of the industry.
Past 5 year performance…
As can be seen from the table below, the company the sales as well as the profits have increased enormously. The company net sales has shown a CAGR of 27% and net profits have shown a CAGR of 39% led by its motorcycle led dominance. The operating margin of the company has improved by 290 basis point to 16.8%.
(Rs m)
FY00
FY01
FY02
FY03
FY04
Motor Cycles sold (m)
0.76
1.03
1.43
1.68
2.07
Net sales
22,464
31,687
44,654
51,017
58,324
Other income
204
221
767
956
1,681
Total revenues
22,668
31,907
45,422
51,973
60,005
Operating profit
3,070
4,285
6,807
8,636
9,801
Depreciation
347
443
510
580
733
PBIT
2,724
3,843
6,297
8,056
9,068
Interest
47
25
15
17
17
PBT
2,880
4,038
7,049
8,995
10,732
Extraordinary Items
-34
-268
-105
(149)
(7)
Tax
925
1,301
2,315
3,038
3,441
Net Profit
1,921
2,469
4,629
5,808
7,283
Operating profit margin
13.7%
13.5%
15.2%
16.9%
16.8%
Net profit margin
8.6%
7.8%
10.4%
11.4%
12.5%
Number of shares (m)
39.9
199.7
199.7
199.7
199.7
Face Value (Rs)
10.0
2.0
2.0
2.0
2.0
DPS (Rs)
10.0
3.0
17.0
18.0
20.0
EPS (Rs)
48.1
12.4
23.2
29.1
36.5
Fully Diluted EPS (Rs)
9.6
12.4
23.2
29.1
36.5

Strong Fundamentals
As evident from the table company has a strong balance sheet. Further the company has a consistent record of paying dividend.
Ratios
FY00
FY01
FY02
FY03
FY04
RONW
20.0%
100.0%
100.0%
100.0%
100.0%
ROCE
37.8%
36.5%
58.5%
59.0%
55.5%
Debt Equity (x)
0.1
0.1
0.2
0.2
0.2
Interest coverage (x)
57.8
151.9
417.0
465.7
527.2
Dividend payout
0.9%
0.6%
0.4%
0.4%
0.3%
BVPS
111.1
30.5
33.8
42.5
57.0
The company has clarified about its intention of setting a third plant in addition to its existing two plants. The company has embarked upon a green field expansion plan and has earmarked Rs 2 bn for the same. It should be noted that the company has a strong cash flow position, it generated Rs 9 bn from operation in FY04 and is virtually a debt free company.

Indian automobile industry witnessed a growth of 23.37% in 2-wheeler segment. India is the second-largest 2-wheeler manufacturers in the world and also the largest motorcycle manufacturer in the World. Indian 2-wheeler segment includes a range of vehicles such as scooters- geared and ungeared, motorcycles and mopeds. In India there are 7 scooter manufacturers, 9 motorcycle manufacturers, 3 moped manufacturers. Bajaj Auto, Hero Honda, TVS, etc are the leading manufacturers. They have also dominated the global arena after Piaggio. Production in Indian automobile industry During cfinancial year 2005-06, Indian 2-wheeler production showed a growth of 16.40% over the
preceding year. 2-wheeler segment have been showing an upward production trend. At present, there are more than 7.6 million 2-wheeler, manufactured in Indian automobile sector.

Production trend of 2-wheelers in Indian automobile industry
Sales in Indian automobile industry- Domestic and ExportsDuring financial year 2005-06, 2-wheeler sales in Indian market showed a growth of 13.63%, with an increase in exports by more than 40%. In the same period, cumulative sales of 2-wheelers in Indian market amounted to 7.05 millions, with 0.5 million units exported by Indian manufacturers.Sales trend of 2-wheelers in Indian market

Export trend of 2-wheelers

Sales

Two- wheeler sales in the country have sky rocketed in the recent years, and the annual sales of motorcycles in India expected to cross the 10 million mark by 2010. The low penetration of two-wheelers in the country 31 two-wheelers per 1000 citizens (2004) leaves immense scope for the growth of the market. Overall the industry sales of two-wheelers have grown by 15% from 6.57 million in 2004/2005 to 7.57 million in 2005/2006. The buoyant Indian economy with a growth rate of around 8% per annum is further expected to fuel the growth of two wheelers in the country.

The share of motorcycles have increased over the years, while that of other two-wheelers like geared scooters, scooterettes and mopeds have shown a negative growth or remained stagnant. The two-wheelers have penetrated 7% of rural house hold and 24% of urban markets, thus it leaves an immense scope for the market to grow.Bajaj Auto one of the leading producers of automobiles in the country has been able to sell close to 2.3 million vehicles in 2005/2006, the sales of the company grew by almost 31%. The company registered a 32% growth in the sales of motorcycles much above the industry average of 19%. Bajaj Auto has emerged as a market leader in the entry level or price segment motorcycle with the Bajaj CT 100 accounting for nearly 40% of the market share. It also commands a 62% market share in the premium segment of motorcycles with products like the Bajaj Pulsar DTSI. TVS Motors which has lots of firsts to its credit in the two-wheeler sector in the country was able to sell 1.34 million units during the same period thus registering an overall growth of 15% from the previous year. In the motorcycle segment the company's growth in sales was in sync with the industry average. The introductions of motorcycles like the TVS Star range of motorcycles have helped the company in gaining a healthy market share in this segment. Where the company has emerged as a clear winner by holding onto its leadership position is in the moped segment.The company has posted a 10% growth in sales accounting for a market share of about 77%. The company also expects to arrest the decline of its one time best seller TVS Victor through its new variant Victor GLS. If this figures have daunted you the best is yet to come, the country leader in two-wheelers hero honda have crossed the three million mark during the year 2005/2006 which is a good few lakhs more than its nearest competitor Bajaj Auto. The company accounted for nearly 40% of then two-wheeler market. In the motorcycle segment the company has been able to attain a market share of about 50%. The segment in which hero honda has emerged as a clear winner is the Deluxe segment, which is the largest segment in the motorcycles category, with its flagship family of motorcycles splendor selling over 1.2 million units which is just a shade less than all the two wheelers sold by TVS during the same year. The motorcycle category is expected to see a further growth and according to industry experts it will drive all other category of two-wheelers to the periphery. The table below shows the over all trend of Industry Sales over a 5 year period. The figures are provided by the Society of automobile Manufactures Association (SIAM). Two-wheeler domestic sales trend Motorcycles
2001-02
2002-03
2003-04
2004-05
2005-06
2887194
3647493
4170445
4964753
5815417
Scooters
2001-02
2002-03
2003-04
2004-05
2005-06
908268
825648
886295
922428
908159
Mopeds
2001-02
2002-03
2003-04
2004-05
2005-06
408263
338985
307509
322584
332741

HERO HONDA

The joint venture between India's Hero Group and Honda Motor Company, Japan has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide.
During the 80s, Hero Honda became the first company in India to prove that it was possible to drive a vehicle without polluting the roads. The company introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the imagination of commuters across India, and Hero Honda sold millions of bikes purely on the commitment of increased mileage.
Over 20 million Hero Honda two wheelers tread Indian roads today. These are almost as many as the number of people in Finland, Ireland and Sweden put together!
Hero Honda has consistently grown at double digits since inception; and today, every second motorcycle sold in the country is a Hero Honda. Every 30 seconds, someone in India buys Hero Honda's top -selling motorcycle – Splendor. This festive season, the company sold half a million two wheelers in a single month—a feat unparalleled in global automotive history.
Hero Honda bikes currently roll out from its three globally benchmarked manufacturing facilities. Two of these are based at Dharuhera and Gurgaon in Haryana and the third state of the art manufacturing facility was inaugurated at Haridwar, Uttrakhand in April this year. These plants together are capable of producing out 4.4 million units per year.
Hero Honda's extensive sales and service network now spans over 3000 customer touch points. These comprise a mix of dealerships, service and spare points, spare parts stockiest and authorized representatives of dealers located across different geographies.
Hero Honda values its relationship with customers. Its unique CRM initiative - Hero Honda Passport Program, one of the largest programs of this kind in the world, has over 3 million members on its roster. The program has not only helped Hero Honda understand its customers and deliver value at different price points, but has also created a loyal community of brand ambassadors.
Having reached an unassailable pole position in the Indian two wheeler market, Hero Honda is constantly working towards consolidating its position in the market place. The company believes that changing demographic profile of India, increasing urbanization and the empowerment of rural India will add millions of new families to the economic mainstream. This would provide the growth ballast that would sustain Hero Honda in the years to come. As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly points out, "We pioneered India's motorcycle industry, and it's our responsibility now to take the industry to the next level. We'll do all it takes to reach there.''

HERO HONDA'S MISSION
Hero Honda’s mission is to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities. This mission is what drives Hero Honda to new heights in excellence and helps the organization forge a unique and mutually beneficial relationship with all its stake holders.

HERO HONDA'S MANDATE
Hero Honda is a world leader because of its excellent manpower, proven management, extensive dealer network, efficient supply chain and world-class products with cutting edge technology from Honda Motor Company, Japan. The teamwork and commitment are manifested in the highest level of customer satisfaction, and this goes a long way towards reinforcing its leadership status.

2008-11-07T05:50:00.000-08:00

2008-11-02T01:37:00.001-07:00

Webster's Collegiate Dictionary defines "ethics" as the "discipline dealing with what is good and bad and with moral duty and obligation," "a set of moral principles or value" or "a theory or system of moral values." Ethics assists individuals in deciding when an act is moral or immoral, right or wrong. Ethics can be grounded in natural law, religious tenets, parental and family influence, educational experiences, life experiences, and cultural and societal expectations.Ethics in business, or business ethics as it is often called, is the application of the discipline, principles, and theories of ethics to the organizational context. Business ethics have been defined as "principles and standards that guide behavior in the world of business." Business ethics is also a descriptive term for the field of academic study in which many scholars conduct research and in which undergraduate and graduate students are exposed to ethics theory and practice, usually through the case method of analysis.Ethical behavior in business is critical. When business firms are charged with infractions, and when employees of those firms come under legal investigation, there is a concern raised about moral behavior in business. Hence, the level of mutual trust, which is the foundation of our free-market economy, is threatened.Although ethics in business has been an issue for academics, practitioners, and governmental regulators for decades, some believe that unethical, immoral, and/or illegal behavior is widespread in the business world. Numerous scandals in the late 1990s and early 2000s seemed to add credence to the criticism of business ethics. Corporate executives of WorldCom, a giant in the telecommunications field, admitted fraud and misrepresentation in financial statements. WorldCom's former CEO went on trial for alleged crimes related to this accounting ethics scandal.A similar scandal engulfed Enron in the late 1990s and its former CEO, Ken Lay, also faced trial. Other notable ethical lapses were publicized involving ImClone, a biotechnological firm; Arthur Andersen, one of the largest and oldest public accounting firms; and Healthsouth, a large healthcare firm located in the southeast United States. These companies eventually suffered public humiliation, huge financial losses, and in some cases, bankruptcy or dissolution. The ethical and legal problems resulted in some corporate officials going to prison, many employees losing their jobs, and thousands of stockholders losing some or all of their savings invested in the firms' stock.Although the examples mentioned involved top management, huge sums of money, and thousands of stakeholders, business ethics is also concerned with the day-to-day ethical dilemmas faced by millions of workers at all levels of business enterprise. It is the awareness of and judgments made in ethical dilemmas by all that determines the overall level of ethics in business. Thus, the field of business ethics is concerned not only with financial and accounting irregularities involving billions of dollars, but all kinds of moral and ethical questions, large and small, faced by those who work in business organizations.
The discussion that follows is organized into three parts: (1) the major theories or "moral philosophies" that are applied to business ethics; (2) a well-established model of ethical decision-making in business; and (3) the factors that affect individual ethical decision-making in the business context.APPROACHES TO ETHICAL DECISION-MAKINGPhilosophers have studied and written about ethics for thousands of years. The moral philosophies or ethical "theories" that have been developed form the foundation for ethics in business. Table 1 shows some of the major ethical philosophies that are applied to business ethics. Each of the ethical philosophies is briefly considered in this section.TELEOLOGY.Teleological theories of ethics focus on the consequences caused by an action and are often referred to as "consequentalist" theories. By far the most common teleological theories are egoism and utilitarianism.EGOISM.Egoism defines right and wrong in terms of the consequences to one's self. Egoism is defined by self-interest. An egoist would weigh an ethical dilemma or issue in terms of how different courses of action would affect his or her physical, mental, or emotional well being. Thus, an egoist, when faced with a business decision, would tend to choose the course of action that he or she believes would best serve self-interest.Although it seems likely that egoism would potentially lead to unethical and/or illegal behavior, this philosophy of ethics is, to some degree, at the heart of a free-market economy. Since the time of political economist Adam Smith, advocates of a free market unencumbered by governmental regulation have argued that individuals, each pursuing their own self-interest, would actually benefit society at large.This point of view is notably espoused by the famous economist Milton Friedman, who suggested that the only moral obligation of business is to make a profit and obey the law. However, it should be noted that Smith, Friedman, and most others who advocate unregulated commerce, acknowledge that some restraints on individuals' selfish impulses are required.
Table 1Approaches to Ethics in BusinessAdapted from: Ferrell, Fraedrich, and Ferrell, 2002, p. 57.Teleological Actions are judged as ethical or unethical based on their results.Egoism Actions are judged as ethical or unethical based on the consequences to one's self. Actions that maximize self-interest are preferred.Utilitarianism Actions are judged as ethical or unethical based on the consequences to "others." Actions that maximize the "good" (create the greatest good for the greatest number) are preferred.Deontological Actions are judged as ethical or unethical based on the inherent rights of individual and the intentions of the actor. Individuals are to be treated as means and not ends. It is the action itself that must be judged and not its consequences.Justice Actions are judged as ethical or unethical based on the fairness shown to those affected. Fairness may be determined by distributive, procedural, and/or interactional means.Relativism Actions are judged as ethical or unethical based on subjective factors that may vary from individual to individual, group to group, and culture to culture.UTILITARIANISM.In the utilitarian approach to ethical reasoning, one emphasizes the utility, or the overall amount of good, that might be produced by an action or a decision. For example, companies decide to move their production facilities from one country to another. How much good is expected from the move? How much harm? If the good appears to outweigh the harm, the decision to move may be deemed an ethical one, by the utilitarian yardstick.This approach also encompasses what has been referred to as cost-benefit analysis. In this, the costs and benefits of a decision, a policy, or an action are compared. Sometimes these can be measured in economic, social, human, or even emotional terms. When all the costs are added and compared with the results, if the benefits outweigh the costs, then the action may be considered ethical.One fair criticism of this approach is that it is difficult to accurately measure costs and benefits. Another criticism is that the rights of those in the minority may be overlooked.Utilitarianism is like egoism in that it advocates judging actions by their consequences, but unlike egoism utilitarianism focuses on determining the course of action that will produce the greatest good for the greatest number of people. Thus, it is the ends that determine the morality of an action and not the action itself (or the intent of the actor).Utilitarianism is probably the dominant moral philosophy in business ethics. Utilitarianism is attractive to many business people, since the philosophy acknowledges that many actions result in good consequences for some, but bad consequences for others. This is certainly true of many decisions in business.
DEONTOLOGY.Deontological theories of ethics focus on (1) the rights of all individuals and (2) the intentions of the person(s) performing an action. Deontological theories differ substantially from utilitarian views on ethics and would not allow, for example, the harming of some individuals in order to help others. To the deontologist, each person must be treated with the same level of respect and no one should be treated as a means to an end.Deontology proposes that the principles of ethics are permanent and unchanging—and that adherence to these principles is at the heart of ethical behavior. Many deontologists believe that the rights of individuals are grounded in "natural law." Deontology is most closely associated with the German philosopher Immanuel Kant.JUSTICE.Justice-based theories of ethics concern the perceived fairness of actions. A just (ethical) action is one that treats all fairly and consistently in accord with ethical or legal standards. Justice theories of ethics are closely associated with the philosopher John Rawls.To determine the fairness of an action, one often appeals to distributive, procedural, and/or interactional rules. Distributive fairness is based on the outcomes received by individuals and their perceptions of these outcomes. Procedural fairness is based on the processes (policies, procedures, rules) employed to reach decisions. Individuals evaluate the fairness of these processes in addition to (or instead of) the outcomes received.Finally, interactional fairness relates to the personal treatment one receives in the administration of a decision-making process. Interpersonal fairness has to do with the respect and consideration shown in the administration of decisions. Informational fairness has to do with the explanations and accounts provided for the decisions made.The study of organizational justice has become a major field within organizational behavior. To date, however, there has not been a complete integration between justice perceptions and ethical theory.RELATIVISM.Teleological, utilitarian, and justice theories of ethics are all "universal" theories, in that they purport to advance principles of morality that are permanent and relatively enduring. Relativism states that there are no universal principles of ethics and that right and wrong must be determined by each individual or group.The relativist believes that standards of right and wrong change over time and are different across cultures—and does not accept that some ethical standards or values are superior to others. The concept of relativism can probably be summarized as "What's right for one may not be right for another," or "When in Rome, do as the Romans do."INDIVIDUAL ETHICAL DECISION-MAKINGThere are many approaches to the individual ethical decision-making process in business. However, one of the more common was developed by James Rest and has been called the four-step or four-stage model of individual ethical decision-making. Numerous scholars have applied this theory in the business context. The four steps include: ethical issue recognition, ethical (moral) judgment, ethical (moral) intent, and ethical (moral) behavior.ETHICAL ISSUE RECOGNITION.Before a person can apply any standards of ethical philosophy to an issue, he or she must first comprehend that the issue has an ethical component. This means that the ethical decision-making process must be "triggered" or set in motion by the awareness of an ethical dilemma. Some individuals are likely to be more sensitive to potential ethical problems than others. Numerous factors can affect whether someone recognizes an ethical issue; some of these factors are discussed in the next section.ETHICAL (MORAL) JUDGMENT.If an individual is confronted with a situation or issue that he or she recognizes as having an ethical component or posing an ethical dilemma, the individual will probably form some overall impression or judgment about the rightness or wrongness of the issue. The individual may reach this judgment in a variety of ways, as noted in the earlier section on ethical philosophy.ETHICAL (MORAL) INTENT.Once an individual reaches an ethical judgment about a situation or issue, the next stage in the decision-making process is to form a behavioral intent. That is, the individual decides what he or she will do (or not do) in regard to the perceived ethical dilemma.According to research, ethical judgments are a strong predictor of behavioral intent. However, individuals do not always form intentions to behave that are in accord with their judgments, as various situational factors may act to influence the individual otherwise.
ETHICAL (MORAL) BEHAVIOR.The final stage in the four-step model of ethical decision-making is to engage in some behavior in regard to the ethical dilemma. Research shows that behavioral intentions are the strongest predictor of actual behavior in general, and ethical behavior in particular. However, individuals do now always behave consistent with either their judgments or intentions in regard to ethical issues. This is particularly a problem in the business context, as peer group members, supervisors, and organizational culture may influence individuals to act in ways that are inconsistent with their own moral judgments and behavioral intentions.Some specific factors that influence the individual ethical decision-making process, as outlined above, are presented in the final section of this essay.

FACTORS AFFECTING ETHICAL DECISION-MAKINGIn general, there are three types of influences on ethical decision-making in business: (1) individual difference factors, (2) situational (organizational) factors, and (3) issue-related factors.INDIVIDUAL DIFFERENCE FACTORS.Individual difference factors are personal factors about an individual that may influence their sensitivity to ethical issues, their judgment about such issues, and their related behavior. Research has identified many personal characteristics that impact ethical decision-making. The individual difference factor that has received the most research support is "cognitive moral development."This framework, developed by Lawrence Kohlberg in the 1960s and extended by Kohlberg and other researchers in the subsequent years, helps to explain why different people make different evaluations when confronted with the same ethical issue. It posits that an individual's level of "moral development" affects their ethical issue recognition, judgment, behavioral intentions, and behavior.According to the theory, individuals' level of moral development passes through stages as they mature. Theoretically, there are three major levels of development. The lowest level of moral development is termed the "pre-conventional" level. At the two stages of this level, the individual typically will evaluate ethical issues in light of a desire to avoid punishment and/or seek personal reward. The pre-conventional level of moral development is usually associated with small children or adolescents.The middle level of development is called the "conventional" level. At the stages of the conventional level, the individual assesses ethical issues on the basis of the fairness to others and a desire to conform to societal rules and expectations. Thus, the individual looks outside him or herself to determine right and wrong. According to Kohlberg, most adults operate at the conventional level of moral reasoning.The highest stage of moral development is the "principled" level. The principled level, the individual is likely to apply principles (which may be utilitarian, deontological, or justice) to ethical issues in an attempt to resolve them. According to Kohlberg, a principled person looks inside him or herself and is less likely to be influenced by situational (organizational) expectations.The cognitive moral development framework is relevant to business ethics because it offers a powerful explanation of individual differences in ethical reasoning. Individuals at different levels of moral development are likely to think differently about ethical issues and resolve them differently.SITUATIONAL (ORGANIZATIONAL) FACTORS.Individuals' ethical issue recognition, judgment, and behavior are affected by contextual factors. In the business ethics context, the organizational factors that affect ethical decision-making include the work group, the supervisor, organizational policies and procedures, organizational codes of conduct, and the overall organizational culture. Each of these factors, individually and collectively, can cause individuals to reach different conclusions about ethical issues than they would have on their own. This section looks at one of these organizational factors, codes of conduct, in more detail.Codes of conduct are formal policies, procedures, and enforcement mechanisms that spell out the moral and ethical expectations of the organization. A key part of organizational codes of conduct are written ethics codes. Ethics codes are statements of the norms and beliefs of an organization. These norms and beliefs are generally proposed, discussed, and defined by the senior executives in the firm. Whatever process is used for their determination, the norms and beliefs are then disseminated throughout the firm.An example of a code item would be, "Employees of this company will not accept personal gifts with a monetary value over $25 in total from any business friend or associate, and they are expected to pay their full share of the costs for meals or other entertainment (concerts, the theater, sporting events, etc.) that have a value above $25 per person." Hosmer points out that the norms in an ethical code are generally expressed as a series of negative statements, for it is easier to list the things a person should not do than to be precise about the things a person should.Almost all large companies and many small companies have ethics codes. However, in and of themselves ethics codes are unlikely to influence individuals to be more ethical in the conduct of business. To be effective, ethics codes must be part of a value system that permeates the culture of the organization. Executives must display genuine commitment to the ideals expressed in the written code—if their behavior is inconsistent with the formal code, the code's effectiveness will be reduced considerably.At a minimum, the code of conduct must be specific to the ethical issues confronted in the particular industry or company. It should be the subject of ethics training that focuses on actual dilemmas likely to be faced by employees in the organization. The conduct code must contain communication mechanisms for the dissemination of the organizational ethical standards and for the reporting of perceived wrongdoing within the organization by employees.Organizations must also ensure that perceived ethical violations are adequately investigated and that wrongdoing is punished. Research suggests that unless ethical behavior is rewarded and unethical behavior punished, that written codes of conduct are unlikely to be effective.ISSUE-RELATED FACTORS.Conceptual research by Thomas Jones in the 1990s and subsequent empirical studies suggest that ethical issues in business must have a certain level of "moral intensity" before they will trigger ethical decision-making processes. Thus, individual and situational factors are unlikely to influence decision-making for issues considered by the individual to be minor.Certain characteristics of issues determine their moral intensity. In general, the research suggests that issues with more serious consequences are more likely to reach the threshold level of intensity. Likewise, issues that are deemed by a societal consensus to be ethical or unethical are more likely to trigger ethical decision-making processes.In summary, business ethics is an exceedingly complicated area, one that has contemporary significance for all business practitioners. There are, however, guidelines in place for effective ethical decision making. These all have their positive and negative sides, but taken together, they may assist the businessperson to steer toward the most ethical decision possible under a particular set of circumstances.

2008-11-02T01:37:00.000-07:00

2008-11-01T23:42:00.000-07:00

2008-11-01T23:41:00.000-07:00

2008-11-01T23:39:00.000-07:00

2008-11-01T23:38:00.000-07:00

2008-11-01T23:36:00.000-07:00

2008-11-01T23:34:00.000-07:00

2008-11-01T23:29:00.001-07:00

2008-10-29T07:16:00.001-07:00

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT (NABARD) NABARD, an apex development bank, was set up on the recommendations of CRAFICARD Committee on July 12, 1982 under NABARD Act 1981 with a capital of Rs.100 crore contributed by Central Govt. and RBI, with its main office in Mumbai, by merging the Agriculture Credit Deptt and Rural Planning and Credit Cell of RBI and took over the entire functions of Agriculture Refinance and Development Corporation (ARDC). NABARD is managed by Board of Directors consisting of Chairman, Managing Director other directors. NABARD raises funds through National Rural Credit - Long Term operations, National Rural Credit-Establishment fund, through bonds and debentures guaranteed by Central Govt, borrowing from RBI, Central Govt. or any other organisation approved by Central Govt and funds from external sources. It credit functions include providing credit to agriculture, small and village and cottage industries through banks by way of refinance facilities to commercial banks, RRBs, Coop Banks, Land Development Banks and other Financial Institutions like KVIC. Its developmental functions are co-ordination of various institutions, acting as agent of Govt. and RBI, providing training and research facilities. The regulatory functions include inspection of RRBs and Coop Banks, receipt of returns and making of recommendations for opening new branches. EXPORT IMPORT BANK OF INDIA It is apex institution for co-ordinating the working of institutions in India engaged in financing exports and import of goods and services. With initial authorized capital of Rs. 200 crore (increased to Rs.500 and then to Rs.2000 crore) Exim Bank was established on Jan 01, 1982 (and started functioning wef March 01, 1982) under Export Import Bank of India Act 1982, which took over the export finance activities of IDBI. It raises funds by way of bonds and debentures, borrowing from RBI or other institutions, raising foreign deposits. It undertakes following kind of functions:-direct finance to exporter of goods. -direct finance to software exports and consultancy services. -finance for overseas joint ventures and turnkey construction project -finance for import and export of machinery and equipment on lease basis -finance for deferred payment facility -issue of guarantees -multi-currency financing facility to project exporters. -export bills re-discounting -refinance to commercial banks in India -guaranteeing the obligations. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI) SIDBI was established under SIDBI Act 1988 and commenced its operations wef April 02, 1990 with head quarters in Lucknow and branches all over the country, as a subsidiary of IDBI. It took over the IDBI business relating to small scale industries including National Equity Scheme and Small Inds Development fund. The objective of establishment of SIDBI, in particular, is to strengthen and broad-base the existing institutional arrangement to meet the requirement of SSI and tiny industries. Its functions include: -administration of SIDF and NEF for development and equity support to small and tiny industry. -providing working capital through single window scheme -providing refinance support to banks/development finance institutions. -undertaking direct financing of SSI units. -coordination of functions of various institutions engaged in finance to SSI and tiny units. NATIONAL HOUSING BANK (NHB) NHB, the apex bank for Housing, was established on July 09, 1988 under NHB Act 1987, as a wholly owned subsidiary of RBI with head quarters in New Delhi. The bank was set up with the main purpose of setting up of an institution to operate as a principal agency to promote housing finance institutions and to provide financial and other support to these institutions. NHB can raise sources by issue of bonds and debentures, borrowing from RBI under short term loans and long term operations, borrowing from Central govt and other approved institutions. Its functions are: -promotion and development of housing finance institutions. -refinance to banks and other housing finance institutions for credit facilities granted by them for housing. -inspection of books of accounts of housing finance institutions -technical, administrative and advisory assistance to housing finance institutions. -providing underwriting and guarantee facilities to housing finance institutions. -arranging financing and resources for institutions engaged in housing facilities. -advising Central and other govt. in the matter of housing and housing finance. -collection and publication of information and data relating to housing finance. -maintaining control over corporate housing finance institutions. INDUSTRIAL INVESTMENT BANK OF INDIA (formerly IRBI) IIBI was initially set up as Industrial Reconstruction Corporation Limited during 1971 when it was renamed Indl Reconstruction bank of India wef Mar 20, 1985 under IRBI Act 1984 to take over the function of IRC. During 1997 the bank was converted to a joint stock company by naming it Industrial Investment Bank of India. Its earlier functions were to provide finance for industrial rehabilitation and revival of sick industrial units by way of rationalisation, expansion, diversification and modernisation and also to co-ordinate the work of other institutions for this purpose. agricultural and rural requirements. INDUSTRIAL FINANCE CORPORATION OF INDIA Ltd (IFCI)IFCI was established under IFCI Act 1948 during July 1948 as India’s first development bank. The main objective for which IFCI was established, are to make medium and long term credit available to the industrial undertakings and to assist them in creation of industrial facilities. Its functions include: -direct financial support (by way of rupee term loans as well as foreign currency loans) to industrial units for undertaking new projects, expansion, modernisation, diversification etc. -subscription and underwriting of public issues of shares and debentures. -guaranteeing of foreign currency loans and also deferred payment guarantees. -merchant banking, leasing and equipment finance During 1994, IFCI was converted into a joint-stock company and came out with a public issue of shares. It is managed by a Board of Directors. It floated institutions such as TFCI, ICRA etc. INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA (ICICI)ICICI was set up during 1955 as a private company with a view to provide support to industry in India by way of rupee and foreign currency loans, particularly the private international investment and World Bank funds to assist the industry in the country in private sector. It functions include: -assistance to industrial undertakings for new projects, expansion, modernisation, diversification etc. in the shape of rupee loans or foreign currency loans. -subscription and underwriting of capital issues -guaranteeing the payment for credits. -merchant banking, equipment leasing and project counselling. It floated a number of institutions successfully which include credit rating agency CRISIL, ICICI Banking Corporation, SCICI (since merged with it) a Mutual Fund etc. During Sept 1998 it changed its name to ICICI Ltd. Of late, it has started providing working capital support to industrial undertakings. INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI)IDBI is the apex institution in the area of long term industrial finance. It was established under the IDBI Act 1964 as a wholly owned subsidiary of RBI and started functioning on July 01, 1964. Under Public Financial Institutions Laws (Amendment) Act 1976, it was delinked from RBI. IDBI is engaged in direct financing of the industrial activities as well as in re-finance and re-discounting of bills against finance made available by commercial banks under their various schemes. The objectives of this institution are to create a principal institution for long term finance, to coordinate the institutions working in this field for planned development of industrial sector, to provide technical and administrative support to the industries and to conduct research and development activities for the benefit of industrial sector. It raises funds by way of market borrowing by way of bonds and deposits, borrowing from Govt. and RBI, borrowing abroad in foreign currency and lines of credit. Its functions include: -direct loans (rupee as well as foreign currency) to industrial undertakings as defined in the Act to finance their new projects, expansion, modernisation etc. -soft loans for various purposes including modernisation and under equipment finance scheme -underwriting and direct subscription to shares/debentures of the industrial companies. -sanction of foreign currency loans for import of equipment or capital goods. -short term working capital loans to the corporates for meeting their working capital requirements. -refinance to banks and other institutions against loans granted by them. Of late, with the reforms in the financial sector, IDBI has taken steps to re-shape its role from a development finance institution to a commercial institution. It has floated its own bank IDBI Bank as also a Mutual Fund. During the financial year 1999-2000 IDBI’s total sanctions were Rs.28308 cr (19.2% increase), the total assets were Rs.72169 cr, net worth at Rs.9025 cr, capital adequacy ratio of 14.5%, DER 6.8:1 and PBT Rs.1027 cr (1301 cr previous years). To meet emerging challanges, it has been introducing new products, setting up Mergers & Acquistions Divn, increasing fee based business such as corporate advisory services, credit syndication, debenture-trushtee ship etc., setting up of IT sector subsidiary-IDBI Intech Ltd, venture capital fund, joint ventures and transfer of not less than 51% of IDBI’s share capital in SIDBI to PSBs as a result of SIDBI (Amendment) Act 2000 effective from 27.03.2000.
Financial Institutions
Financial sector plays an indispensable role in the overall development of a country. The most important constituent of this sector is the financial institutions, which act as a conduit for the transfer of resources from net savers to net borrowers, that is, from those who spend less than their earnings to those who spend more than their earnings. The financial institutions have traditionally been the major source of long-term funds for the economy. These institutions provide a variety of financial products and services to fulfil the varied needs of the commercial sector. Besides, they provide assistance to new enterprises, small and medium firms as well as to the industries established in backward areas. Thus, they have helped in reducing regional disparities by inducing widespread industrial development.
The Government of India, in order to provide adequate supply of credit to various sectors of the economy, has evolved a well developed structure of financial institutions in the country. These financial institutions can be broadly categorised into All India institutions and State level institutions, depending upon the geographical coverage of their operations. At the national level, they provide long and medium term loans at reasonable rates of interest. They subscribe to the debenture issues of companies, underwrite public issue of shares, guarantee loans and deferred payments, etc. Though, the State level institutions are mainly concerned with the development of medium and small scale enterprises, but they provide the same type of financial assistance as the national level institutions.
National Level Institutions
A wide variety of financial institutions have been set up at the national level. They cater to the diverse financial requirements of the entrepreneurs. They include all India development banks like IDBI, SIDBI, IFCI Ltd, IIBI; specialised financial institutions like IVCF, ICICI Venture Funds Ltd, TFCI ; investment institutions like LIC, GIC, UTI; etc.
1. All-India Development Banks (AIDBs):- Includes those development banks which provide institutional credit to not only large and medium enterprises but also help in promotion and development of small scale industrial units.
§ Industrial Development Bank of India (IDBI):- was established in July 1964 as an apex financial institution for industrial development in the country. It caters to the diversified needs of medium and large scale industries in the form of financial assistance, both direct and indirect. Direct assistance is provided by way of project loans, underwriting of and direct subscription to industrial securities, soft loans, technical refund loans, etc. While, indirect assistance is in the form of refinance facilities to industrial concerns.
§ Industrial Finance Corporation of India Ltd (IFCI Ltd):- was the first development finance institution set up in 1948 under the IFCI Act in order to pioneer long-term institutional credit to medium and large industries. It aims to provide financial assistance to industry by way of rupee and foreign currency loans, underwrites/subscribes the issue of stocks, shares, bonds and debentures of industrial concerns, etc. It has also diversified its activities in the field of merchant banking, syndication of loans, formulation of rehabilitation programmes, assignments relating to amalgamations and mergers, etc.
§ Small Industries Development Bank of India (SIDBI):- was set up by the Government of India in April 1990, as a wholly owned subsidiary of IDBI. It is the principal financial institution for promotion, financing and development of small scale industries in the economy. It aims to empower the Micro, Small and Medium Enterprises (MSME) sector with a view to contributing to the process of economic growth, employment generation and balanced regional development.
§ Industrial Investment Bank of India Ltd (IIBI):- was set up in 1985 under the Industrial reconstruction Bank of India Act, 1984, as the principal credit and reconstruction agency for sick industrial units. It was converted into IIBI on March 17, 1997, as a full-fledged development financial institution. It assists industry mainly in medium and large sector through wide ranging products and services. Besides project finance, IIBI also provides short duration non-project asset-backed financing in the form of underwriting/direct subscription, deferred payment guarantees and working capital/other short-term loans to companies to meet their fund requirements.
2. Specialised Financial Institutions (SFIs):- are the institutions which have been set up to serve the increasing financial needs of commerce and trade in the area of venture capital, credit rating and leasing, etc.
§ IFCI Venture Capital Funds Ltd (IVCF):- formerly known as Risk Capital & Technology Finance Corporation Ltd (RCTC), is a subsidiary of IFCI Ltd. It was promoted with the objective of broadening entrepreneurial base in the country by facilitating funding to ventures involving innovative product/process/technology. Initially, it started providing financial assistance by way of soft loans to promoters under its 'Risk Capital Scheme' . Since 1988, it also started providing finance under 'Technology Finance and Development Scheme' to projects for commercialization of indigenous technology for new processes, products, market or services. Over the years, it has acquired great deal of experience in investing in technology-oriented projects.
§ ICICI Venture Funds Ltd:- formerly known as Technology Development & Information Company of India Limited (TDICI), was founded in 1988 as a joint venture with the Unit Trust of India. Subsequently, it became a fully owned subsidiary of ICICI. It is a technology venture finance company, set up to sanction project finance for new technology ventures. The industrial units assisted by it are in the fields of computer, chemicals/polymers, drugs, diagnostics and vaccines, biotechnology, environmental engineering, etc.
§ Tourism Finance Corporation of India Ltd. (TFCI):- is a specialised financial institution set up by the Government of India for promotion and growth of tourist industry in the country. Apart from conventional tourism projects, it provides financial assistance for non-conventional tourism projects like amusement parks, ropeways, car rental services, ferries for inland water transport, etc.
3. Investment Institutions:- are the most popular form of financial intermediaries, which particularly catering to the needs of small savers and investors. They deploy their assets largely in marketable securities.
§ Life Insurance Corporation of India (LIC):- was established in 1956 as a wholly-owned corporation of the Government of India. It was formed by the Life Insurance Corporation Act,1956 , with the objective of spreading life insurance much more widely and in particular to the rural area. It also extends assistance for development of infrastructure facilities like housing, rural electrification, water supply, sewerage, etc. In addition, it extends resource support to other financial institutions through subscription to their shares and bonds, etc. The Life Insurance Corporation of India also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom . Besides the branch operations, the Corporation has established overseas subsidiaries jointly with reputed local partners in Bahrain, Nepal and Sri Lanka.
§ Unit Trust of India (UTI):- was set up as a body corporate under the UTI Act, 1963, with a view to encourage savings and investment. It mobilises savings of small investors through sale of units and channelises them into corporate investments mainly by way of secondary capital market operations. Thus, its primary objective is to stimulate and pool the savings of the middle and low income groups and enable them to share the benefits of the rapidly growing industrialisation in the country. In December 2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February 2003.
§ General Insurance Corporation of India (GIC) :- was formed in pursuance of the General Insurance Business (Nationalisation) Act, 1972(GIBNA ), for the purpose of superintending, controlling and carrying on the business of general insurance or non-life insurance. Initially, GIC had four subsidiary branches, namely, National Insurance Company Ltd , The New India Assurance Company Ltd , The Oriental Insurance Company Ltd and United India Insurance Company Ltd . But these branches were delinked from GIC in 2000 to form an association known as 'GIPSA' (General Insurance Public Sector Association).
State Level InstitutionsSeveral financial institutions have been set up at the State level which supplement the financial assistance provided by the all india institutions. They act as a catalyst for promotion of investment and industrial development in the respective States. They broadly consist of 'State financial corporations' and 'State industrial development corporations'.
State Financial Corporations (SFCs) :- are the State-level financial institutions which play a crucial role in the development of small and medium enterprises in the concerned States. They provide financial assistance in the form of term loans, direct subscription to equity/debentures, guarantees, discounting of bills of exchange and seed/ special capital, etc. SFCs have been set up with the objective of catalysing higher investment, generating greater employment and widening the ownership base of industries. They have also started providing assistance to newer types of business activities like floriculture, tissue culture, poultry farming, commercial complexes and services related to engineering, marketing, etc. There are 18 State Financial Corporations (SFCs) in the country:-
1. Andhra Pradesh State Financial Corporation (APSFC)
2. Himachal Pradesh Financial Corporation (HPFC)
3. Madhya Pradesh Financial Corporation (MPFC)
4. North Eastern Development Finance Corporation (NEDFI)
5. Rajasthan Finance Corporation (RFC)
6. Tamil Nadu Industrial Investment Corporation Limited
7. Uttar Pradesh Financial Corporation (UPFC)
8. Delhi Financial Corporation (DFC)
9. Gujarat State Financial Corporation (GSFC)
10. The Economic Development Corporation of Goa ( EDC)
11. Haryana Financial Corporation ( HFC )
12. Jammu & Kashmir State Financial Corporation ( JKSFC)
13. Karnataka State Financial Corporation (KSFC)
14. Kerala Financial Corporation ( KFC )
15. Maharashtra State Financial Corporation (MSFC )
16. Orissa State Financial Corporation (OSFC)
17. Punjab Financial Corporation (PFC)
18. West Bengal Financial Corporation (WBFC)
State Industrial Development Corporations (SIDCs) :- have been established under the Companies Act, 1956, as wholly-owned undertakings of State Governments. They have been set up with the aim of promoting industrial development in the respective States and providing financial assistance to small entrepreneurs. They are also involved in setting up of medium and large industrial projects in the joint sector/assisted sector in collaboration with private entrepreneurs or wholly-owned subsidiaries. They are undertaking a variety of promotional activities such as preparation of feasibility reports; conducting industrial potential surveys; entrepreneurship training and development programmes; as well as developing industrial areas/estates. The State Industrial Development Corporations in the country are:-
1. Assam Industrial Development Corporation Ltd (AIDC)
2. Andaman & Nicobar Islands Integrated Development Corporation Ltd (ANIIDCO)
3. Andhra Pradesh Industrial Development Corporation Ltd (APIDC)
4. Bihar State Credit and Investment Corporation Ltd. (BICICO)
5. Chhattisgarh State Industrial Development Corporation Limited (CSIDC)
6. Goa Industrial Development Corporation
7. Gujarat Industrial Development Corporation (GIDC)
8. Haryana State Industrial & Infrastructure Development Corporation Ltd. (HSIIDC)
9. Himachal Pradesh State Industrial Development Corporation Ltd. (HPSIDC)
10. Jammu and Kashmir State Industrial Development Corporation Ltd.
11. Karnataka State Industrial Investment & Development Corporation Ltd. (KSIIDC)
12. Kerala State Industrial Development Corporation Ltd. (KSIDC)
13. Maharashtra Industrial Development Corporation (MIDC)
14. Manipur Industrial Development Corporation Ltd. (MANIDCO)
15. Madhya Pradesh State Industrial Development Corporation Ltd. (MPSIDC)
16. Nagaland Industrial Development Corporation Ltd. (NIDC)
17. Orissa Industrial Infrastructure Development Corporation
18. Omnibus Industrial Development Corporation (OIDC), Daman & Diu and Dadra & Nagar Haveli.
19. Pudhucherry Industrial Promotion Development and Investment Corporation Ltd. (PIPDIC)
20. Uttar Pradesh State Industrial Development Corporation
21. Punjab State Industrial Development Corporation Ltd. (PSIDC)
22. Rajasthan State Industrial Development & Investment Corporation Ltd. (RIICO)
23. Sikkim Industrial Development & Investment Corporation Ltd. (SIDICO)
24. Tamil Nadu Industrial Development Corporation Ltd. (TIDCO)
25. State Infrastructure & Industrial Development Corporation of Uttaranchal Ltd. (SIDCUL)
26. Tripura Industrial Development Corporation Ltd. (TIDC)

2008-10-29T07:16:00.000-07:00

2008-10-29T06:44:00.000-07:00

TCS VISION
"TCS will be recognized and respected as professional, innovative, profitable information, and knowledge based logistics/services enterprise. TCS embeds internet based technologies into its internal operating structures and as business solutions for customers; with customer, employee and shareholder interests at the core of its operations; demonstrating a clear concern for ethical conduct and good corporate citizenship; with the objective of growing into a regional and global player, with emphasis on the Middle East, Europe and North America".
TCS Mission
To provide our customers a service of excellence at a world-class level based on honesty and dedicated work practices and the continued search for the increase of efficiency in the logistics of cargo transportation.
Codes of Conduct

Code of Conduct for Non-Executive Directors
Non-Executive Directors of a company will always act in the interest of the company and ensure that any other business or personal association which they may have, does not involve any conflict of interest with the operations of the company and his role therein.

Non-Executive directors will comply with all applicable laws and regulations of all the relevant regulatory and other authorities as may be applicable to such Directors in their individual capacities.

Non-Executive directors will safeguard the confidentiality of all information received by them by virtue of their position.

WorkplaceTCS managers will review the work environment and suggest improvements in line with this policy. The policy will also initiate energy conservation, waste recycling, and paper reduction, in priority areas. The measures and initiatives emerging as a result of this policy will be documented as processes. These processes will also ensure compliance with applicable health, safety, and environment regulations in all offices of TCS. A continual improvement plan will be initiated to achieve excellence in environment management.
CSR activities:
TCS has always recognized the responsibility Corporates should have towards the wider communities they operate in. Be it girl child education in South Asia in collaboration with UNICEF or adult literacy programs in South India, TCS believes in using IT as an instrument for social development and change. Other TCS' community initiatives have been in areas addressing environmental and civic problems; setting up and maintaining infrastructure for urban beautification, pollution reduction and healthcare; waste management in the office environment, tree plantation and water treatment.

Corporate Governance
Strong leadership and corporate governance are essential to providing value to our investors.
TCS receives Golden Peacock Global Award for corporate social responsibility
Tata Consultancy Services (TCS) has been selected winner of the 'Golden Peacock Global Award for Corporate Social Responsibility (Asia) - 2007' for corporate social responsibility (CSR) in the 'Large Business' category by the Institute of Directors, the international body of company directors.
TCS was conferred the award based on an assessment, by an independent jury, of the company's integration of CSR concerns with corporate functioning, responsiveness to the needs of different stakeholders, and development of innovative partnership models to fulfil social responsibilities.TCS Environmental Policy
TCS' commitment to environment stems from the Tata Group’s abiding concern for environment and society. TCS is into Information Technology (IT) consulting business and services, which by its nature of operation has low impact on the environment. TCS will strive to provide a healthy work environment to all its employees and conduct environment friendly business at all its offices. To achieve these goals, TCS has published this Environmental Policy. In line with its continuous improvement and experience certainty process initiative, TCS will continuously enhance its Environmental Policy, which encompasses air, water, natural resources, people and their interrelation.

· Respect Health, Safety, and Environment issues of employees, clients, vendors and local community.
· The Company will set, monitor, review objectives and targets related to environment management.
· TCS will assess and seek to minimize the impact of its business activities on environment by optimizing energy and power consumption and the use of consumables and hardware through recycling or reuse.
· Our Environmental Policy will be communicated to all our employees, business associates and made available to the public on request.

Corporate Sustainability

Both on its own and as part of the Tata organization, TCS actively implements programs and initiatives for the betterment of society, communities, and the environment, and has been since its inception in 1968.
TCS believes in giving back to all communities in which it operates, and in using IT as an instrument for social development and progress. We are deeply committed to education, the environment, and setting up and maintaining infrastructure for urban beautification, pollution reduction and healthcare; waste management in the office environment, tree plantation and water treatment.

DOWN SIZING
An IBM employee told The Hindu that about 1,500 employees have been shown the door in the past month. Pampered with fancy salaries and cushy working conditions, these employees find the developing situation deeply disturbing. Pay cuts, as in the Tata Consultancy Services now, are virtually unheard of. “Though the company has the right to deduct the ‘variable component,’ we are worried at an impending downsizing,” says Ravi K. of TCS. Twenty per cent of the variable pay of all TCS employees has been deducted.
IT employees find themselves worried about their future as companies are undergoing a retrenchment therapy. IT giants IBM and Tata Consultancy Services (TCS) have already asked many of their employees to leave. Though yet to be confirmed officially, 1,500 employees in IBM were asked to find other jobs, while TCS has already sent 500 employees off. Another major who made a drastic cut in employees is Yahoo, laying off 1000 employees.

Pay cuts, as in the TCS now, are virtually unheard of. "Though the company has the right to deduct the 'variable component,' we are worried at an impending downsizing," says Ravi K of TCS. Twenty percent of the variable pay of all TCS employees has been deducted.

Mergers and acquisitions

Tata company
Acquired company
Country
Stake acquired
Value
2000

February
Tata Tea and Tata Sons
Tetley Group
UK
100 per cent(wholly-owned)
GBP271 million
2001

November
Tata Sons (TCS)
Computer Maintenance Corporation (CMC)
India

2002

February
Tata Sons
Tata Communications(formerly VSNL)
India
100 per cent (wholly-owned)
GBP271 million

September
Indian Hotels
Regent Hotel (renamed Taj Lands End)
India
Effective 100 per cent stake
Rs450 crore

December
Tata Teleservices
Hughes Telecom (India)
India
50.83 per cent
Rs858.83 crore
2003

July
Tata Communications(formerly VSNL)
Gemplex
US

2004

January
TCS
Airline Financial Support Services India (AFS)
India
100 per cent (wholly-owned)
GBP271 million

March
Tata Motors
Daewoo Commercial Vehicle Company
Korea
100 per cent (wholly-owned)
KRW120 billion ($102 million / Rs465 crore)

March
Tata Communications(formerly VSNL)
Dishnet DSL's ISP division
India

March
TCS
Aviation Software Development Consultancy India (ASDC)
India

June
Tata Chemicals
Hind Lever Chemicals
India
Amalgamation

July
TCS
Phoenix Global Solutions
India

November
Tata Communications(formerly VSNL)
Tyco Global Network
US

2005

February
Tata Steel
NatSteel Asia Pte
Singapore
100 per cent (wholly-owned)
S$468.10 million

February
Tata Motors
Hispano Carrocera
Spain
21 per cent
Euro12 million (Rs70 crore)

March
Tata Chemicals
Indo Maroc Phosphore S.A. (IMACID)
Morocco
Equal partner
$38 million (Rs166 crore)

April
Tata Motors
Tata Finance
India
Merger

July
Indian Hotels
The Pierre
US
$9 million
Lease of the property

July
Tata Industries
Indigene Pharmaceuticals Inc
US
<30 per cent
Not disclosed

July
Tata Communications(formerly VSNL)
Teleglobe International
US

August
Tata Tech
INCAT International
UK

August
Trent
Landmark
India
76 per cent
$24.09 million (Rs103.60 crore)

September
TACO
Wündsch Weidinger
Germany

Euro7 million

September
Tata Communications(formerly VSNL)
Tata Power Broadband
India

October
Tata Tea through Tata Tea (GB)
Good Earth Corporation & FMali Herb Inc
US
100 per cent (wholly-owned)
$31 million

October
TCS
Financial Network Services
Australia

October
TCS
Pearl Group
UK
Structured deal

November
TCS
Comicrom
Chile

December
Indian Hotels
Starwood Group (W Hotel)
Sydney
100 per cent (wholly-owned)
$29 million

December
Tata Chemicals
Brunner Mond
UK
63.5 per cent (December 2005)
Rs508 crore (December 2005)

36.5 per cent (March 2006)
Rs290 crore (March 2006)
2006

January
Tata Metaliks
Usha Ispat, Redi Unit
India
100 per cent (wholly-owned)
Rs115 crore

January
Tata Interactive
Tertia Edusoft Gmbh
Germany
90 per cent
Not disclosed

Tertia Edusoft AG
Switzerland
90.38 per cent

February
TCS
Tata Infotech
India

April
Tata Steel
Millenium Steel
Thailand
67.11 per cent
$167 million (Baht6.5 billion)

May
Tata Tea through Tata Tea (GB)
JEMCA
Czech Republic
Assets: intangible and tangible
GBP11.60 million

June
Tata Coffee
Eight O' Clock Coffee Company
US
100 per cent (wholly-owned)
$220 million (Rs1015 crore)

September
Tata Tea through Tata Tea (GB)
Joekels Tea Packers
South Africa
33.3 per cent
GBP0.91 million
2007

January
Tata Steel
Corus
UK
100 per cent

March
Tata Steel
Rawmet Industries
India

Rs101 crore

April
Indian Hotels
Campton Place Hotel
US

$58 million

April
Tata Power
Acquired Coastal Gujarat Power
India

April
Tata Tea through Tetley Group
Vitax and Flosana trademarks
Poland

April
Tata Communications (formerly VSNL) through Neotel
Transtel Telecoms (TT)
South Africa

$33 million(approximately)

June
Tata Power
PT Kaltim Prima Coal and PT Arutmin Indonesia
Indonesia
30 per cent equity stake

October
TRF
York Transport Equipment (Asia)
Singapore
51 per cent stake

2008

January
Tata Chemicals
General Chemical Industrial Products
US
100 per cent stake

January
Tata Projects
Artson Engineering
India

March
Tata Motors
Jaguar and Land Rover brands
UK

$2.3 billion (approximately)

March
Telco Construction Equipment Company (Telcon)
Serviplem SA
Spain
79 per cent

March
Telco Construction Equipment Company (Telcon)
Comoplesa Lebrero SA
Spain
60 per cent

June
Tata Communications
China Enterprise Communications Limited (CEC)
China
50 per cent equity interest

ENVIRONMENT
The Tata ethos places a special emphasis on environmental and ecological issues. The Group's efforts to preserve and regenerate the environment find expression in the slew of projects and programmes it has undertaken in and around its facilities and operations. A focus area for the Group, in this context, is the climate change crisis.

Overview: The Tata Group's beliefs on sustainability have led to a corporate policy that emphasises environment preservation. Tata companies work on projects that include repairing green cover, reducing effluents and emissions, maintaining local ecologies and improving long term corporate sustainability.

Policies: The Tata Group has a set of explicit guidelines on environmental and ecological issues, and a broad range of policies aimed at helping Tata companies protect, conserve and restore our natural resources.

Climate change: The Tata Group is facing up to the challenge of climate change and making it integral to its processes. Coordinating and directing the climate change efforts of the Group's companies are some of the senior-most Tata leaders.

2008-10-26T02:24:00.001-07:00

RETAIL IN INDIA-EMERGING CHALLENGES
INTRODUCTION:The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the country’s GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry.
The total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centers, multi-storied malls and the huge complexes that offer shopping, entertainment and food all under one roof.
A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key factors in the growth of the organized Retail sector in India. The growth pattern in organized retailing and in the consumption made by the Indian population will follow a rising graph helping the newer businessmen to enter the India Retail Industry.
In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating operations.
Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery, are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more attention to the brand building process. The emphasis here is on retail as a brand rather than retailers selling brands. The focus should be on branding the retail business itself. In their preparation to face fierce competitive pressure, Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing positioning, to communicate quality as well as value for money. Sustainable competitive advantage will be dependent on translating core values combining products, image and reputation into a coherent retail brand strategy.
EMERGING CHALLENGES FOR RETAIL IN INDIA:
Indian Retail Industry is going to face many challenges in terms of Political, Economic, Socio-Cultural, Technical in the recent period. The major Challenges that the industry is facing are
High Cost of Real Estate.
Lack of Trained Human Force.
Protestation from Political Parties in Protection of Unorganized sector.
Restriction of FDI in retail by the government.
Unable to Provide Goods which are liked by the rural customers, who constitute 90% of India’s Population.
Absence of Developed Supply chain and Integrated IT Management.
High Cost of Real Estate:-
Retail Industry is facing trouble in acquiring required land to establish their malls. The actual space required for each type of Retail format is as follows.
• Large supermarkets, typically (3,500 - 5,000 sq. ft)
• Mini supermarkets, typically (1,000 - 2,000 sq. ft)
• Convenience store, typically (750 - 1,000 sq. ft)
Real estate is becoming a major problem for retailers because the persons involved in real estate business say that they get more profits if they sell same land to the residential areas compared to commercial purposes. If the Retailers are in a position to ready to pay, they have to pay huge amounts to purchase the land to set up their malls. If they want to take the land for lease retailers have to pay the amount more than the amount paid by the customers who take the land for residential purpose. Another reason why retailers are facing with land problem is that there is no adequate government land, hence government is also not in a position to provide land to retailers.
Lack of Trained Human force:-
Employees who need to work in these malls need some training. Educated youth are high in the country but they are not showing interest to work in these malls. Hence employers are looking at rural youth who are educated. But these employees do not have the required qualities like interacting with different customers when customers come to malls or does not have the clear knowledge about different products and other required training.
Protestation from Political Parties in Protection of Unorganized Sector:-
Organized retail is facing much protestation from different political parties. These Political Parties are protesting against the organized retail because they want to protect the Unorganized sector which is in existence from many years and if the organized retail is promoted Unorganized retailers are going to face many problems and so many people who are involved in this sector are going to lose their jobs.
Not only the Political Parties but some Trade Associations also protested against these companies. Here is a case of Reliance, how the association protested against it in Kerala. In Kerala India's largest State-level traders' association, the Kerala Vyapari Vyavasayi Ekopana Samiti (KVVES), has threatened to boycott all Reliance products if Reliance Fresh goes ahead with its plans to set up shop in Kerala. The KVVES has asked Reliance Fresh authorities to publicly announce, by June 1, that they will not open a single outlet in kerala. The traders warned reliance that if they do not stop their plan to open stores in kerala they will stop the use of reliance petroleum and reliance cell phones whose main consumers are the traders. The KVVES on Thursday wrote to Reliance Fresh authorities to shelve their plans to open some 200 outlets in the State, mainly Kochi, Kozhikode and Thiruvananthapuram. The outlets would sell vegetables, fruits, groceries, dairy products, confectionary and other daily needs.
Restriction of FDI in Retail by the Government:-
FDI is not allowed in retail industry to maximum possible extent because of which economy for the retail sector may not be increased. India’s retail trade is largely in the hands of the unorganized sector. Large super markets, malls and departmental stores are a recent phenomenon. They are mostly owned and managed by Indian promoters. In India there are approximately 40 million people and 11 million outlets in India’s retail sector. A person selling fruits and vegetables on a cart or a more stationary wayside shopkeeper selling grocery articles or food items represents the majority of retail traders in India. Each of these vendors occupy not more than 30-40 square feet of space at best, less than that of the parking space appropriated by the car of a consumer who comes to the big malls. Being unorganized they have no access to bank loans and are constantly under threat of eviction from the government.
100 % FDI in retailing in not allowed per say, foreign retailers can operate in India through joint ventures, where the Indian partner is a export house, Franchising/Local manufacturing/Sourcing from small-scale sector, Cash and carry operations. Wal-Mart’s tie up with Bharti and its 22 subsequent tie up with India will be through Cash and Carry operations. In India Retailing is not regarded as an industry very few banks are willing to invest in this sector. As per the present policy, retailing is subject to lot of laws and regulations at central, state and municipal/local levels. Some of these laws and restrictions are listed below.
- Restrictive zoning legislation limits availability of land for retail/ commercial purposes
- Restrictions on interstate movement of food grains deprive farmers from getting remunerative prices.
- Restrictive Labour laws
- Urban land ceiling regulations, restrictions on shop opening timings, requirements for shops
to close once a week
- There is no uniform tax structure - multiple layers of taxes.

Absence of Developed Supply chain and Integrated IT Management:
supply chain management for consumer goods in India is extremely challenging, due to complex taxation structures, large geographic distances, and high fragmentation of the consumer base. Exports, not local food needs, are made the objective. Thus while the supply chain for local markets are highly evolved and sophisticated, in the context of exports, it is perceived as deficient. The Bank has called this a "logistical tax".
Three factors explain India’s high logistical tax:
(a) geography, which is important but not decisive;
(b) poor transport and storage infrastructure, as well as policies that have led to the uneven utilization of existing infrastructure, and the slow creation of new infrastructure; and
(c) high marketing costs due to the fragmentation of the supply chain.
Threat of the Corporate Hijack of Retail:
The Threat of the Corporate Hijack of Retail Giant corporations like Wal-Mart and Reliance have started to try and take over the Indian retail sector. Currently the value of the retail market is estimated at around $ 270 billion with a growth 6 rate of 5.7 per cent per annum according to the Indian retail report. The size of small retail is big, the size of big retail is small, a mere Rs. 250 billion in 2004 or 3% and Rs. 485 billion or 4.7% per cent of the retail market in 2006. However, the large scale corporate retail is projected to grow at the rate of 28% to 30% per annum, reaching Rs. 1000 billion or $ 70 billion by 2010 from the current size of US $ 8.7 billion. The tenfold increase in corporate retail will be at the cost of small scale retail, which employs nearly 10% of India’s population. A number of cultural categories and policy instruments are being used to make corporate retail grow.
The first strategy is to define the small scale self-organized retail as "unorganized" and the large scale corporate retail as "organized". The real difference is however not unorganized vs organized. It is self-organized vs. corporate. Can an unorganized system provide food to millions of Indians since ages, and at the same time provide adequate returns to millions of farmers? Can an unorganized system act as the major link between rural and urban societies, where both of them are so much interdependent on each other? The question that arises then is why the existing system of business of food grains, fruits and vegetables is termed unorganized. Is it only the mega retail enterprises of the corporate giants, which are organized? Or unorganized retail is a term used by the corporations for their vested interest. So that they can organize it according to themselves, and control the whole food market from farm to fork in India.
As per the definition retail industry comprises of organised and unorganised sectors. Corporate retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner operated general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.
In India around 97%-98% of the retail industry is unorganized. Among the organized ones The already established retailers in India are Pantaloon Retail, Shoppers’ Stop, Spencers, HyperCITY, Lifestyle, Subhiksha , Trent while the new entrant is Reliance Retail. Wal-Mart with its Indian partner Bharti(the company that owns Airtel) is expected to come up with its first store by the beginning of 2008. It is ridiculous to think that the existing system is unorganised, as there is no farmer in the country, who does not have an access to a mandi, and there is no mandi in the country which is not connected to other mandis. The supply chain is so well arranged that no part of the country is devoid of basic necessities. Where ever there has been a demand, the supply has reached and it has reached on just prices. In a country with large numbers of people, and high levels of poverty, this model of retail democracy is the most appropriate in terms of ecological sustainability and economic viability.
The Changing Indian consumer
The following are the factors which drive the big retailers for seeing India as a lucrative market for its business. Indians with an ability to spend over USD 30,000 a year (PPP terms) on conspicuous consumption represent 2.8% of the entire population. But with a population base of 1.07 billion people, this number amounts to 30 million people, a market next only to USA, Japan and China. Apart from the government policy (mentioned in the following section) the retail growth is also driven by the following factors
Economic growth: This has meant greater disposable incomes for the Indian middle class, which currently comprises 22% of the total population. This figure is expected to increase to 32% by 2010. Disposable incomes are expected to rise at an average of 8.5% p.a. till 2015.
Demographics: More than 50% of the population is less than 25 years of age and strong growth is expected to continue in this age bracket.
Urbanization: The Indian urban population is projected to increase from 28% to 40% of the total population by 2020 and incomes are simultaneously expected to grow in these segment.
Credit availability: Retail loans have doubled in the last three years to reach USD 38.7 bn by 2005. All the above figures represent only about the rich and middle class of the country. Because of the Big consumer market that India offers, the government gives no heed to the concerns of unorganized 97% of the retail trade in India. People of all classes depend upon these traders for their daily supplies. When the government sees the numbers only on financial and profitable terms the numbers of the social cost that has to be sacrificed are huge.

CPM on Corporate retail
Communist party of India (Marxist) has been vehement in their criticism of FDI in retail. They are advocating a framework for a National Policy on Regulating Organized Retail. Small retailers need protection and policy support in order to compete with organized retail. The Ministry of Housing and Urban Poverty Alleviation has formulated a National Policy for Urban Street Vendors. The policy proposes several positive steps to provide security to street vendors considering it as an initiative towards urban poverty alleviation. However, what is required is a more comprehensive policy, which addresses the needs of small retailers, especially in terms of access to institutional credit and knows how to upgrade their businesses.
A regulatory framework for organized retail should also be framed. Since the operations of organized retailers impact upon various sectors of the economy, policy guidelines should be framed involving all the relevant Departments, namely Commerce, Agriculture and Urban Development. Moreover, since regulation of the large format retailers would mainly be in the domain of the states and local bodies, State Governments have to be consulted and involved in the process of framing. According to the CPM, In addition, the UPA Government should also abandon the moves to permit FDI in retail trade through the back door, as in the case of the joint venture between Wal-Mart and Bharti whereby the former proposes to operate in the cash-and-carry segment while the latter in the front-end. It is more than obvious that this proposed joint venture is nothing but a subterfuge, to circumvent the existing policy regime, which does not allow FDI in retail. The entry of giant MNCs like the Wal-Mart, TESCO, Carrefour etc, besides accelerating manifolds the already rapid growth of organized retail, would also sabotage any attempt by the Government to regulate the sector in order to protect the interests of the small retailers and farmers.
The UPA Government should take a categorical position on this issue. Not allowing MNCs to operate in the retail sector should be the starting point of the national policy on retail. CPM does not want a single large format retailer to be allowed to capture a large market share. They want to restrict the number of retail outlets that a 24 single private entity can open in a city, state as well as region and does not want a national level monopoly be allowed to develop in the retail sector. There are Several Government marketing agencies, which exist, both at the Central as well as State levels With a few exceptions, these agencies have been experiencing decay, owing to various factors. CPM wants these marketing agencies should be revived and encouraged to grow and compete with private large format retailers.
The latter half of the 20th century saw the emergence of super markets as the dominant grocery retail form in North America and Europe. As the income of the consumers rose and the shoppers sought for convenience and new tasted the supermarkets were able to expand the products offered. Saturated home markets, fierce competition and restrictive legislation have relentlessly pushed major food retailers into the globalization mode. Since the mid-1990s, numerous governments have opened up their economies as well, to the free markets and foreign investment that has been a plus for many a retailer.
The Kerala Example
While the Central governments is looking out ways in which Global retail chains can be attracted to the country by making their entry hassle free, the state of Kerala is all set to bring in a law to ban corporate retailers, both Indian and MNCs, in the state. The law department is working on the bill, The Kerala State Essential Commodities Act —2007, which is expected to get a cabinet clearing soon, before being introduced in the assembly. This would be the first attempt of its kind in the country. According to Food minister Mr Divakaran, the Left in Kerala doesn’t intend to draw the line for big retailers at peddling food grains, as Buddhadeb Bhattacharjee did for Bengal. The new legislation will be a blanket ban and the new bill is expected to, more than make up for "the lack of teeth" in the Central Essential Commodities Act.
In Kochi, Reliance has already opened six of its proposed 70 supermarkets and hypermarkets in the state and the government does not want any more new licenses issued to any of the retail chains. The existing chains will be wiped out in a phased manner and all the local bodies are directed, not to issue any more licenses. The government alleges that reliance operates all its stores in the cities and not in the rural areas. The government is banking on the fact that the left rules all the five corporations in the state which should help them in wiping out the existing chains slowly. The legislation has the backing of the state’s powerful traders lobby, the Vyapari Vyavasayi Ekopana Samiti. According to the Food Minister, the government is putting things in place to make up for the absence of big retail corporates in the state by having 35,000 PDS shops use that space and going to add 17,000 more large outlets to the 3,000 that the State Civil Supplies Corporation now runs, thus stopping the Corporates from tapping the state’s huge rural market. The government has also decided to take on the corporate brand pull by setting up the state's largest hypermarkets on its own, at Thiruvananthapuram, Kottayam and Kochi. That is besides some 14 huge 'People's Bazaars' to come up in each district, selling provisions, vegetables and everything else for day-to-day living, with appropriate price support from the government. This example of kerala shows that there is an alternate arrangement possible and entry of big Indian corporations and MNC’s are not inevitable.

2008-10-26T02:21:00.001-07:00

INTRODUCTION
Performance management reminds us that being busy is not the same as producing results. It reminds us that training, strong commitment and lots of hard work alone are not results. The major contribution of performance management is its focus on achieving results -- useful products and services for customers inside and outside the organization. Performance management redirects our efforts away from busyness toward effectiveness.
Recently, organizations have been faced with challenges like never before. Increasing competition from businesses across the world has meant that all businesses must be much more careful about the choice of strategies to remain competitive. Everyone (and everything) in the organization must be doing what they're supposed to be doing to ensure strategies are implemented effectively.
This situation has put more focus on effectiveness, that systems and processes in the organization be applied in the right way to the right things: to achieve results. All of the results across the organization must continue to be aligned to achieve the overall results desired by the organization for it to survive and thrive. Only then it be said that the organization and its various parts are really performing.
Performance measurement is the process of assessing progress toward achieving predetermined goals. Performance management is building on that process, adding the relevant communication and action on the progress achieved against these predetermined goals.
Performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc. Information in this topic will give you some sense of the overall activities involved in performance management.
Performance Management System
· clarifying the relationship between the employee’s work assignment and the purpose and goals of the work unit and the Agency,
· measuring all employees’ performance by comparing the actual results to the expectations,
· documenting the amount of improvement since the last appraisal,
· comparing the employee’s performance with others doing the same or similar jobs,
· rewarding employees who exceed expectations,
· motivating employees to achieve excellent performance,
· making fair and equitable personnel management decisions,
· enhancing communication between the employee and the supervisor as well as between the supervisor and the manager, and
· establishing, monitoring progress, and meeting organizational goals by top management.
Types of Performance Management

Application Performance Management (APM) refers to the discipline within systems management that focuses on monitoring and managing the performance and availability of software applications. APM can be defined as workflow and related IT tools deployed to detect, diagnose, remedy and report on application performance issues to ensure that application performance meets or exceeds end-users’ and businesses’ expectations.
Business performance management (BPM) is a set of processes that help businesses discover efficient use of their business units, financial, human and material resources.
Operational performance management (OPM) focus is on creating methodical and predictable ways to improve business results, or performance, across organizations.
SCOPE OF PERFORMANCE MANAGEMENT
Typically, we think of performance in organizations, we think on the performance of employees. However, performance management should also be focused on: 1. the organization2. departments (computer support, administration, sales, etc.)3. processes (billing, budgeting, product development, financial management, etc.)4. programs (implementing new policies and procedures to ensure a safe workplace; or, for a nonprofit, ongoing delivery of services to a community)5. products or services to internal or external customers6. projects (automating the billing process, moving to a new building, etc.)7. teams or groups organized to accomplish a result for internal or external customers
Key Benefits of Performance Management
1. PM focuses on results, rather than behaviors and activitiesA common misconception among supervisors is that behaviors and activities are the same as results. Thus, an employee may appear extremely busy, but not be contributing at all toward the goals of the organization. An example is the employee who manually reviews completion of every form and procedure, rather than supporting automation of the review. The supervisor may conclude the employee is very committed to the organization and works very hard, thus, deserving a very high performance rating.
2. Aligns organizational activities and processes to the goals of the organizationPM identifies organizational goals, results needed to achieve those goals, measures of effectiveness or efficiency (outcomes) toward the goals, and means (drivers) to achieve the goals. This chain of measurements is examined to ensure alignment with overall results of the organization.
3. Cultivates a system-wide, long-term view of the organization. Richard A. Swanson, in Performance Improvement Theory and Practice (Advances in Developing Human Resources, 1, 1999), explains an effective performance improvement process must follow a systems-based approach while looking at outcomes and drivers. Otherwise, the effort produces a flawed picture. For example, laying off people will likely produce short-term profits. However, the organization may eventually experience reduced productivity, resulting in long-term profit loss.
4. Produces meaningful measurementsThese measurements have a wide variety of useful applications. They are useful in benchmarking, or setting standards for comparison with best practices in other organizations. They provide consistent basis for comparison during internal change efforts. They indicate results during improvement efforts, such as employee training, management development, quality programs, etc. They help ensure equitable and fair treatment to employees based on performance.
Other Benefits of Performance Management
Performance Management (PM): 1. Depersonalizes issues. Supervisor's focus on behaviors and results, rather than personalities.
2. Validates expectations. In today's age of high expectations when organizations are striving to transform themselves and society, having measurable results can verify whether grand visions are realistic or not.
3. Helps ensure equitable treatment of employees because appraisals are based on results.
4. Optimizes operations in the organization because goals and results are more closely aligned.
5. Cultivates a change in perspective from activities to results.
6. Performance reviews are focused on contributions to the organizational goals, e.g., forms include the question "What organizational goal were contributed to and how?"
7. Performance is seen as an ongoing process, rather than a one-time, shapshot event.
Goal
Overall Goal and Focuses of Performance Management
The overall goal of performance management is to ensure that the organization and all of its subsystems (processes, departments, teams, employees, etc.) are working together in an optimum fashion to achieve the results desired by the organization.

Ongoing Activities of Performance Management
Achieving the overall goal requires several ongoing activities, including identification and prioritization of desired results, establishing means to measure progress toward those results, setting standards for assessing how well results were achieved, tracking and measuring progress toward results, exchanging ongoing feedback among those participants working to achieve results, periodically reviewing progress, reinforcing activities that achieve results and intervening to improve progress where needed. Note that results themselves are also measures.

Process
The three stages which are critical in managing performance in the organizational contact are:
1. Establishing Communicating Organizational Goals.
Each department, agency, and institution is required to complete an annual plan of work. This plan should contain the organization’s goals. After communicating them throughout the organization, these goals should set the direction of the organization and of the individual work plans for employees. Goals are usually communicated downward but should be established based on feedback from throughout the organization.
2. Monitoring Progress toward these Goals. Throughout the work cycle, top management should continually monitor progress toward these goals through its employees’ work performance. If sufficient progress in not made or cannot be made, the goals may need to be revised and/or redirected based on the feedback received. If additional resources are needed and the goal is important to the organization, management should see that they are provided.
3. Evaluating Organizational Goals. At the end of the work cycle, management must decide if organizational goals were met based on whether or not employees performance met expectations. After outputs have been determined, management uses information obtained from throughout the organization to determine their accountability to the
public, funding sources, and to the employees who did the work. After recognizing team effort, the cycle then begins again for the next year.
The Office of State Personnel is not responsible for implementing or monitoring this process. It is included because without these organizational goals, there would be groups of people performing different tasks unrelated to each other and the mission of the
organization.

Performance management and improvement can be thought of as a cycle:
Performance planning where goals and objectives are established
Performance coaching where a manager intervenes to give feedback and adjust performance
Performance appraisal where individual performance is formally documented and feedback delivered In its most basic form, performance appraisal (or review) activities include documenting achieved results (hopefully, by also including use of examples to clarify documentation) and indicating if standards were met or not. The appraisal usually includes some form of a development plan to address insufficient performance.
Performance development plan Typically, this plan conveys how the conclusion was made that there was inadequate performance, what actions are to be taken and by whom and when, when performance will be reviewed again and how. Note that a development plan for employee performance management may be initiated for various reasons other than poor performance. (More on
A performance problem is any gap between Desired Results and Actual Results. Performance improvement is any effort targeted at closing the gap between Actual Results and Desired Results.
Components of performance management
Employee performance management includes:
planning work and setting expectations,
continually monitoring performance,
developing the capacity to perform,
periodically rating performance in asummary fashion, and
rewarding good performance
In an effective organization, work is planned out in advance. Planning means setting performance expectations and goals for groups and individuals to channel their efforts toward achieving organizational objectives. Getting employees involved in the planning process will help them understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done.
The regulatory requirements for planning employees' performance include establishing the elements and standards of their performance appraisal plans. Performance elements and standards should be measurable, understandable, verifiable, equitable, and achievable. Through critical elements, employees are held accountable as individuals for work assignments or responsibilities. Employee performance plans should be flexible so that they can be adjusted for changing program objectives and work requirements. When used effectively, these plans can be beneficial working documents that are discussed often, and not merely paperwork that is filed in a drawer and seen only when ratings of record are required.
In an effective organization, assignments and projects are monitored continually. Monitoring well means consistently measuring performance and providing ongoing feedback to employees and work groups on their progress toward reaching their goals.
Regulatory requirements for monitoring performance include conducting progress reviews with employees where their performance is compared against their elements and standards. Ongoing monitoring provides the opportunity to check how well employees are meeting predetermined standards and to make changes to unrealistic or problematic standards. And by monitoring continually, unacceptable performance can be identified at any time during the appraisal period and assistance provided to address such performance rather than wait until the end of the period when summary rating levels are assigned.
In an effective organization, employee developmental needs are evaluated and addressed. Developing in this instance means increasing the capacity to perform through training, giving assignments that introduce new skills or higher levels of responsibility, improving work processes, or other methods. Providing employees with training and developmental opportunities encourages good performance, strengthens job-related skills and competencies, and helps employees keep up with changes in the workplace, such as the introduction of new technology.
Carrying out the processes of performance management provides an excellent opportunity to identify developmental needs. During planning and monitoring of work, deficiencies in performance become evident and can be addressed. Areas for improving good performance also stand out, and action can be taken to help successful employees improve even further.
From time to time, organizations find it useful to summarize employee performance. This can be helpful for looking at and comparing performance over time or among various employees. Organizations need to know who their best performers are.
Within the context of formal performance appraisal requirements, rating means evaluating employee or group performance against the elements and standards in an employee's performance plan and assigning a summary rating of record. The rating of record is assigned according to procedures included in the organization's appraisal program. It is based on work performed during an entire appraisal period. The rating of record has a bearing on various other personnel actions, such as granting within-grade pay increases and determining additional retention service credit in a reduction in force.
In an effective organization, rewards are used well. Rewarding means recognizing employees, individually and as members of groups, for their performance and acknowledging their contributions to the agency's mission.
A basic principle of effective management is that all behavior is controlled by its consequences. Those consequences can and should be both formal and informal and both positive and negative.
Good performance is recognized without waiting for nominations for formal awards to be solicited. Recognition is an ongoing, natural part of day-to-day experience. A lot of the actions that reward good performance — like saying "Thank you" — don't require a specific regulatory authority. Nonetheless, awards regulations provide a broad range of forms that more formal rewards can take, such as cash, time off, and many nonmonetary items. The regulations also cover a variety of contributions that can be rewarded, from suggestions to group accomplishments.

2008-10-26T02:18:00.001-07:00

Introduction THE Retention Malady
Don't shrug it away; it's real. Three out of every 4 software companies surveyed, and almost 1 in every 2 manufacturing and services companies confess that their retention-related woes are acute. Indeed, more than 90 per cent of the companies surveyed admit that they all have some sort of people problem although these percentages indicate the perceptions within, and not the retention-levels of, these organisations. SAMEs (Small And Medium Enterprises)-with a turnover of less than Rs 100 crore and fewer than 100 employees-feel the threat of attrition stronger than the others. On the one hand, the fewer number of employees on their rolls makes every departure significant; on the other, SAMEs are happy hunting-grounds for larger firms that can offer the best employees in such units more in terms of monetary as well as non-monetary compensation.
While the actual turnover-rates are much lower than the perceived threat of attrition, across industries and management-levels, they showed a rising trend that should worry every CEO. Undoubtedly, the junior management level is most vulnerable to poaching: turnover-rates range from 7 per cent in manufacturing companies to 13 per cent in hi-tech organisations. That's because junior managers, typically, experience more problems related to fit and culture than their senior colleagues. Of course, they are also more susceptible to monetary inducements at this stage of their careers.
Analysed on the basis of size, their track-records indicate that retention-levels have declined the most in mid-sized companies (with turnovers of between Rs 200 crore and Rs 500 crore). And they have either remained the same (83 per cent) or increased (17 per cent) in organisations with turnovers of more than Rs 1,000 crore. The logic in hindsight: a small organisation is an exciting workplace, with their fewer number making every employee feel wanted. And large organisations have elaborate people-management practices in place, which define the role that each individual is expected to play, and the route his or her career is likely to take within the organisation. But mid-sized companies are trapped in limbo: they are placid places to work in and, more often than not, do not have the kind of systems that their larger cousins do.
Marketing and services companies, though, would do well to look beyond the simplistic assumption that retention is a critical issue only in hi-tech industries. That may be the case in absolute terms but, while the retention-levels in 16 per cent of the infotech and telecom companies sampled have declined, they have fallen in 26 per cent of the marketing and services companies. Across industries, though, the function which witnesses the maximum attrition varies. In manufacturing and marketing companies, it is the production function. In services companies, it is the finance function. And in infotech companies, it is the line function of information technology. Evidently, the problem of retention is quite wide-spread in corporate India.

Reasons for employee movement:
Following are the reasons for professionals to change his/her job.
No growth opportunity/lack of promotion
For higher Salary
For Higher education
Misguidance by the company
Policies and procedures are not conducive
No personal life
Physical strains
Uneasy relationship with peers or managers
Retention a challenge:
Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs will become the dominant players in their respective markets.The fierce competition for qualified workers results from a number of workplace trends, including:
A robust economy
Shift in how people view their careers
Changes in the unspoken "contract" between employer and employee
Corporate cocooning
A new generation of workers
Changes in social mores
Life balance
Concurrent with these trends, the emerging work force is developing very different attitudes about their role the workplace. Today's employees place a high priority on the following:
Family orientation
Quality of life issues
Autonomy
To hold onto your people, you have to work counter to prevailing trends causing the job churning. Smart employers make it a strategic initiative to understand what their people want and need -- then give it to them.
THE Retention Responsibility
Carry the Pareto Principle to an extreme: as 20 per cent of your employees account for 80 per cent of your success, focus 80 per cent of your retention efforts on 20 per cent of your people. Across industry-types, manufacturing, marketing, and services companies believe that it makes little sense to retain all their employees all the time. The real objective: retain only those people who contribute to the company's performance in terms of improving the quality of goods and services, or increasing the level of customer satisfaction.
However, hi-tech companies insist that their strategies must focus on retaining all employees. Their logic is that organisations get the kind of employee-performances they deserve. Given the high costs involved in mid-career hires, especially in software and telecom companies, it does make sense to create an environment where all their employees can continuously upgrade their skills-sets rather than let go of them.
Expectedly, the hr department and the senior management are the organisational centres vested with the responsibility of retention management. However, the process is shared: in most organisations, the hr department, the individual functions, the top management, teams, and the trade unions manage the retention function, individually and together. The choice of the unit varies across industries: 50 per cent of the companies where the union has a role to play belong to the manufacturing sector; teams are popular with manufacturing (37 per cent) and services (35 per cent) companies; and 32 per cent of the companies where the senior management involves itself in retention are infotech and telecom companies. Obviously, the high attrition-rates and the almost-perennial demand for skilled manpower in these industries is why.
Size too matters. 89 per cent of the companies where the senior managers concerned themselves with retention had turnovers of less than Rs 500 crore. And 69 per cent of them had less than 500 employees. Obviously, it is easier for senior managers to concern themselves directly with retention management when they do not have to deal with too many employees. Expectedly, teams and trade unions have a significant role to play in large companies (more than 500 employees and turnovers exceeding Rs 500 crore).
What can be done?

Though, it is impossible to scrap problems totally, there are certain ways by which BPO managements can tackle attrition. Since the BPO environment is unique, these companies need to develop innovative ways to tackle them. Human Resources department of a BPO must address these issues, and along with the management need to evolve strategies to retain employees at all levels.

At the time of Recruitment

Select the right people through competency screening.
Use psychometric tests to get people who can work at night and handle the monotony.
Offer an attractive, competitive, benefits package.
Make clear of performance enhanced incentives and other benefits. Keep these promises, later.
BPOs can set up offices in smaller towns, or recruit from there, where opportunities are few.
At the office

An employees work must be communicated to him clearly and thoroughly. The details of the job, its importance, the way it should be done, maximum time that can be allotted to complete it etc., must be made clear. If there are changes to any of these, let the employee know at the earliest
Give the employees necessary tools, time and training. The employee must have the tools, time and training necessary to do their job well - or they will move to an employer who provides them.
Have a person to talk to each employee at regular intervals. Listen and solve employee complaints and problems, as much as possible. Fairness and impartial treatment by seniors is important. Help employees manage stress, both at work and if possible, off work too. Give them special concessions, when in need. Treat the employees well & provide dignity of job.
The quality of the supervision an employee receives is critical to employee retention. Frequent employee complaints arise on this issue.
Provide the employees a stress free work environment. People want to enjoy their work. Make work and work place cheerful and fun-filled as possible.
Make sure that employees know that their work is important for the organisation. Feeling valued by their employer is key to high employee motivation and morale. Recognize their strengths and help them to improve those they lack.
Employees must feel rewarded, recognised and appreciated. Giving periodical raise in salary or position helps to retain staff.
Offer excellent career growth prospects. Encourage & groom employees to take up higher positions/openings. If they dont get opportunity for growth within the organisation, they will look elsewhere for it.
Work-life balance initiatives are important. Innovative and practical employee policies pertaining to flexible working hours and schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependants, etc. are important for most people. Work-life balance policies would have a positive impact on retaining skilled employees, as well as on attracting high-calibre recruits.
Implement competency models, which are well integrated, with HR processes like selection & recruitments, training, performance appraisal and potential appraisal.
Main retention strategiesThis is not an exhaustive list, one can add or delete any of the below mentioned strategies. Secondly, the need of the hour is to have "right basics". Every individual is different, his needs are different, and his emotions, his problems are different. So, dear HR-Professionals…sit down and concentrate on your basics.
Communications - Getting Your People to Care Communication is the first step toward creating the kind of environment that people care about, and if they care, they just may stay. I'm not talking about a lot of New Age stroking designed to bring out the inner person or false praise that creates a misplaced sense of security. Instead, keep your people in the loop about what's happening with the company. At any time, all of your employees should have a pretty good idea of how business has been, and they should be aware of what issues the company is attempting to address.That means that you regularly keep your people up to date with important events affecting the company. If November was good, let them know, and while you're at it, tell them what you expect to happen in December. Share good news, as well as points of concern. If you've got "issues," talk about them before they start making you crazy. And if they don't get resolved, figure out whether the problem stems from a couple of individuals or from your system.Set Clear Expectations
How often do you appraise your employees/team-members?
What are your expectations from your employees/team-members? What are the parameters to measure their performance? Have you communicated to them?
What will be the consequences, if they fail?
What will be the rewards, if they exceed the expected level?

Proper RewardingA research reports says that in today's scenario,
70% of your employees are less motivated today than they used to be.
80% of your employees could perform significantly better if they wanted to.
50% of your employees only put enough effort into their work to keep their job.

As you might be aware of Employee Reward covers how people are rewarded in accordance with their value to an organization. It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward systems. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship.The aim of employee reward policies and practices, if any in your organization is to help attract, retain and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees. Personnel and development professionals will be involved frequently in reward issues, whether they are generalists or specialize in people resourcing, learning and development or employee relations. Keep following parameters in mind, while designing a reward policy:Build a high degree of recognition value into every reward you offer. Reduce entitlements and link as many rewards as possible to performance.Troubleshoot your reward system to make sure that what it is rewarding is what you really want to happen.Reward promptly.
Give employees a choice of rewards..Increase the longevity of your rewards
Be continually vigilant of demotivators that may undermine your organization's best efforts to provide power rewards, and reduce them promptly.
Nature of Supervision: The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well liked or a nice person, starting with clear expectations of the employee, the supervisor has a critical role to play in retention. Anything the supervisor does to make an employee feel unvalued will contribute to turnover. Frequent employee complaints center on these areas.
Lack of clarity about expectations,
Lack of clarity about earning potential,
Lack of feedback about performance,
Failure to hold scheduled meetings, and
Failure to provide a framework within which the employee perceives he can succeed.

THE Retention Measures
Companies now adopt more than one technique to create an internal environment that will retain their employees. As per the survey, the most popular retention-oriented initiatives include:
INCREASING THE ORGANISATION'S LEVEL OF PROFESSIONALISM.
MOVING FROM FAMILY TO PROFESSIONAL MANAGEMENT.
MAKING PERFORMANCE APPRAISALS OBJECTIVE.
INVOLVING EMPLOYEES IN THE DECISION-MAKING PROCESS.
ENSURING A MATCH BETWEEN AUTHORITY AND ACCOUNTABILITY.
MEASURING EMPLOYEE SATISFACTION.
ACHIEVING A MATCH BETWEEN INDIVIDUAL AND ORGANISATIONAL GOALS.
DESIGNING A COMPETITIVE COMPENSATION PACKAGE.
INCREASING ORGANISATIONAL TRANSPARENCY.
PROMOTING EMPLOYEES FROM WITHIN.
HELPING EMPLOYEES ACQUIRE NEW SKILLS.
OFFERING STOCK OPTIONS.
FOCUSING ON WELFARE MEASURES..
BEST PRACTICES. The best organisations recognise the fact that the retention techniques that will work best for them depend on the dynamics of the industry of which they are a part, and the level of management at which they wish to focus their efforts. These organisations tier their retention strategies to suit their employees at various levels of the organisation. Often, recognising the individuality of employees is the best retention strategy.
A focus on retention management can serve as a good starting-point for improving the quality of systems and processes in an organisation. Retaining their best employees requires companies to launch initiatives along several dimensions: introducing good house-keeping practices in offices and shop-floors; making performance-appraisal systems transparent, objective, and participative; professionalising the senior management team; and ensuring that employees take pride in their work.
Fast-growth companies, which are among the top-performers in their industry, will find it easier to retain employees than others provided they practise the essentials of retention management: objective appraisal, and good pay-packages. Everyone loves to work for a winner. But the only way a company can improve its performance is by hiring and retaining the best human capital, and motivating it to deliver its best. If that isn't a vicious circle, nothing is. And best-in-class retention management is right at its centre

Conclusion

As they say, happiness can be contagious. So make sure the work place is a happy one, which every employee would love to spend time. Human resources department along with senior management must take steps to make sure of this.

Effective human resource management must be practiced at both strategic and day-to-day levels. HR management practices must reflect company policy as to how it will manage and relate to its employees. The HR strategy should evolve from a transactional support role to partnering in the organisations business strategy. HR must take steps to be aware of employee problems and try to solve them, creatively
References
"Effective employee retention stratigeies, key to reduce attrition in BPO firms – Offshoring Times
"Retention strategies in ITES-BPO Industry " – Sanjeev Sharma – BPOInida.org
"Retention Management" – R Sukumar – Business Today.

2008-10-26T02:16:00.000-07:00

INDIA NEXT ECONOMIC SUPER POWER
INDIA NEXT ECONOMIC SUPER POWER
The following text of a talk given by Professor Williamson at a conference for history teachers presents historical background and detail on the striking rise of certain sectors of the Indian economy. He discusses, as well, the prospects for the near future: Is a six percent growth rate, once considered by economists to be remarkably good, too high in this still generally poor land? -- Ed.
In some ways India had a fully developed capitalist economy, and it had some of the oldest capitalist institutions in Asia, such as the Bombay Stock Exchange, founded in 1875.India in 1947 was characterized by very low per capita income. There were a lot of people, so there was always a big GDP, but per capita income was very low. So there was a modern economy, but it was very thin. The banking system was one of the later things to be nationalized, in the late 1960s and early 1970s.
Finally, in 1966, a year before the UK's famous devaluation, came India's. An attempt was made to undertake some liberalization of the economy at that time, and India sought U.S. aid. But since India wouldn't support the Vietnam War, President Johnson withheld aid. So the envisaged flow of aid that would help make it possible to liberalize the economy wasn't there, and India went back to slow growth for another 15-20 years. But in the early years, the economy grew rather slowly, at what became known as the Hindu rate of growth, merely 3-4 percent per year. At the time, the Indian population was growing at 2.5 percent per year. If GDP is only going up 3.5 percent a year, that doesn't give much scope for an improvement in living standards and cutting poverty, the ultimate objectives of economic growth.

Growth didn't in fact accelerate much from the 1980s average to the 1990s average. But the 1980s ended in a crisis because some factors were clearly unsustainable, and although some of us worry about some features of the present economy, there's no suggestion that the present growth rate is unsustainable. The 1997 East Asian financial crisis really stopped growth in its tracks in many countries. Those countries, some of them more voluntarily than others, had all liberalized their capital accounts, allowing money to flow in and out fairly liberally. In contrast, in India, if you brought money in, you could take it out again, but domestic Indians weren't allowed to take their money out freely, and India in any event hadn't borrowed a great deal. So it wasn't vulnerable to the 1997 crisis.
In the second half of the 1990s one also began seeing the rise of the IT sector. The Indian Institutes led to a flow of highly qualified manpower, many of whom found vocation in the IT sector. India at long last found its niche in the world economy, which wasn't in exporting manufactures, like the East Asian countries, but instead was in the services sector, and IT in particular. One important consequence of the 1990s is the sharpening of regional differences within India. The fast-growing states were in the south and west: Maharashtra, Haryana, Delhi, Gujarat, etc. The large states of the Ganghetic plain-- Bihar, Uttar Pradesh, Madhya Pradesh, and Orissa--became relatively poorer during the 1990s. Policy, which became more attuned to rewarding success over the 1990s, may have exacerbated these regional differences.
Finally, India is still a poor country. The average person still earns less than $2 a day. The figure is controversial, but the World Bank reckons that a quarter of the population are poor by its measure of $1/day in 1985 prices--that's a destitution level, rather than a poverty level.

The Three Sectors of Indian Economy
Agriculture : More than 58% of country's population depends on agriculture, a sector producing only 22% of GDP. The agriculture and allied sector witnessed a growth of 9.1% 2003-04, which fell steeply to 1.1% in the current fiscal year. Favourable monsoon facilitated an impressive growth rate of 9.6%. While acceleration in agriculture growth to 4 - 4.5% is imperative, even with such growth rate; share of agriculture in total GDP is likely to reduce further. Therefore, there is a need to absorb excess agricultural labour in other sectors, notably industry. , public investment in agriculture needs to be augmented, especially in rural infrastructure, irrigation, and agricultural research & development. Better access to institutional credit for more farmers, is also high on priority list. The New trade policy gives focus to agriculture and all the hurdles in Indian agriculture will be crossed gradually.
Industry :Index of industrial production which measures the overall industrial growth rate was 10.1% as compared to 6.2% in previous years. The double digit in IIP was aided by a robust growth of 11.3% in the manufacturing sector followed by mining and quarrying and electricity generation. But industrial production saw a decline in Dec 2004 when IIP dipped to 8 %. Thus one of the critical challenges facing Indian economic policy consists in devising strategies for sustained industrial growth. Final phase-out of the MFA and India's conformity with the international intellectual property system from Jan 1st Jan 2005, have been two significant developments in the world of commerce & industry. Textile industry is the largest industry in terms of employment economy from the current US $37 billion to $ 85 billion by 2010 creation of 12 million new jobs in the textile sector and modernization & consolidation for creating a globally competitive textile industry.
Automobile sector has demonstrated the inherent strengths of Indian labour and capital. The pharma industry and the IT industry are two sunrise sectors for India. Among the sectors that have experienced the greatest transformation in India, the pharmaceutical is perhaps the most significant. The three main sub sectors of industry viz Mining & quarrying, manufacturing, and electricity, gas & water supply recorded growths of 5%, 8.8% and 7.1% respectively.
Services: Service sector has maintained a steady growth pattern since 96-97, except into a fall in 2000-01. Trade hotels, transport & communications have witnessed the highest growth of level 10.9% in 2004, followed by financial services (With a overall growth rate of (6.4) % and community, social & personal services (5.9)% of all the three sectors, services have been the highest contributor to total GDP growth rate. the services sector's share of employment rose faster than its share of output in India there has been a relatively slow growth of jobs in the service sector. This is primarily because of the rise in labour productivity in services in sectors such as information technology that is dependent on skilled labour. Growth in tourism and tourism - related services such as hotels, holds a large potential for employment generation.
It is important that India sees BPO in a larger perspective, than the Internet, as India's share is just $ 3.5 billion compared to the global market of US $ 178 billion. Also India outsourcing companies need to work more closely with their customers. In the complex BPOs, customers would like to have hybrid processes to control value. Indian companies need the right mix of domain expertise and process expertise.
Finally impact of the globalisation, privatisation, liberalisation, influenced the three sectors
the rapid changes occurred in Indian economy. This helped Indian economy to grow faster in order to attain the chair of a super power
structural changes
In Indian economy the structural changes broadly divided in two types they are mainly govt sectors and private sectors mainly this structural changes occur by the impact of globalisation privatisation and liberalisation. The structural changes in govt sectors , the philosophy of govt has changed. why because, the impact of technology and rationalisation the govt has to give more importance to industrial sector .As a part from agriculture sector the govt support of financial availability to the industries the credits and norms and also provided to the development of industries.
Instead of developing the agriculture it shifted to the development of telecommunication, transportation, power etc; it also relaxation to establish the special economic zones in way of promoting the industrial development in Indian economy now a days income of the middle class also tripled. The level of income increased this is due to increase in population , which is a big asset to Indian economy.
As change in private sector mainly the enterprenual philosophy and corporate people are ready to take risk by mergers and acquisitions , take over’s , amalgamations etc; is occurring in Indain economy which is a good sign for India to become as a super economic power.
Structural changes in manufacturing sector of india brought about by liberalization and globalization. Structural changes in terms of employment of labour and capital, possibly indicated by replacement of the former by the latter. New Industrial in 1991 in India chose to open her economy to global economic forces and formulated the new economic policy (NEP) under the structural adjustment and reform programmes, the NEP aimed at promoting growth by eliminating supply bottlenecks that hinder competitiveness, efficiency and dynamism in economic system.
Changing Work Force
India has seen a dramatic shift in the public policy and expectations of the individuals. After independence, it was mainly a socialist country and the educated (and non-educated as well) wanted to have secure career, a job that they can continue to do for their whole life. Salary was not a deciding factor in choosing a job but the guarantee of life time employment was important factor (Private companies like TATA, Aditya and MP Birla Group, Godraj, Bajaj had to provide the same kind of commitment to recruit people). People wanted to work fix numbers of hours every day and spent quality time with the family. It was working fine till 20 years back and the new generation asking for different terms of employment and entrepreneurship and zest to become huge arose.
Mainly because of the high salaries in the IT sector in India, aspirations of the India youths have gone many-fold up then the previous generation. Today’s generation does not mind to work for 12 hours every day without any proper weekend if the salary is good and there are chances of getting further salary hike next quarter or semi-annually. These youth don’t even mind changing job if they see higher salary at another company. These youth don’t even care about stability in the career. They want to earn more and at a fast rate. If they are going on a motor bike this year, they want to buy a brand new Honda City (a brand of Honda car) next year. If by changing companies expectations are not met they can change the country too. They don’t have commitment to anyone, for them Money is all about honey.
Other change in the nature of the work place is the number of female employees is increasing at an astonishing rate. Among new recruits in some of the companies, number of females is same as the number of male. These young girls of emerging India are very vocal, open and career oriented. They are ready to work with or compete with anyone. Some of the companies are not ready to deal with such a high percentage of female work forces on their payroll. Some of the companies might not have some necessary facilities for the female employees. Some of the companies are providing childcare and working from home for the females with small babies.
Some of the biggest companies in India, Infosys, IBM, TCS and Mind Tree are trying to tame the rising aspirations of these youths by providing them global working standards, facilities and support for higher studies and certifications in the domain of the employees. For example, TCS and Infosys have proper internal programs to teach employees about PMP (Project Management Professional) certifications. They are also trying to let them go for MBA and give study leave. Companies also promote some of the high performing employees into the management rank much faster to keep them with them.The changing structure of the workforce in India based on census data collected from 1961 to 2007. The shares of agricultural labourers in India are found to be higher the 1990s has witnessed a substantial shift in favour of non-agricultural workers. The growth rate of agricultural workers have decreased continuously among males, females and all persons from 1971-81 to 1991-2007 while those of non-agricultural workers have increased.
The participation of woman in work tremendously increased in Indian economy. The women employees also participated in higher authority of jobs this has been increased due to the three forces (LPG). In industrial wide the training & development has played a major role to improve the skills and abilities of employees in Indian industries .There has been change in from labour intensive to capital intensive.
In India the majority of people is in between 25 to 40 which is a major strength which revokes the in Indian economy to move it into a super power.
Strategic partnership
Strategic partnership is a formal alliance between two commercial enterprises, usually formalised by one or more business contracts but falls shot of forming a legal partnership or agency, or corporate affiliate relationship.
Typically two companies form a strategic partnership when each possesses one or more business assets that will help the other but that it does n’t wish to develop internally one common strategic partnership involves one company providing engineering manufacturing or product development services, partnering with a smaller enterprenual firm or inventor to create a specialised new product. Typically the larger firm supplies capital, and the necessary product development, marketing, manufacturing, and distribution capabilities while the smaller firm supplies specialized technical or creative expertise.
Another common strategic partner ships involves a supplier/manufacturer partnering with a distributor or wholesale consumer rather than approach the transaction between the companies as simple link in product or service supply chain, the companies form a closer relationship where they mutually participate in advertising marketing branding product development, and other business functions as examples an automotive an manufacturer may form strategic partnership with its parts supplier, or a music distributor with record labels.
Strategic partner ship raise the questions concerning co-inventership and other intellectual property ownership, technology transfer, exclusivity, competition, hiring away of employes,right to business opportunities created in the course of partnership, splitting of profits and expenses, duration and termination of relationship, and many business issues. The relation ship are often complex as a result, and subject to extensive negotiation.
The Indo- US relation ship recently begun several initiatives that could lead to strong strategic partner ship. India visualises a major role for it self in the current world order, and US acknowledges this possibility. India seeks lasting partnership to help achieve its strategic ambitions.
Foreign Investment
FDI India was initiated in 1992. Streamlining of the procedures and substantial liberalization has been done since 1995. As of now, Indian corporate/Registered partnership firms are allowed to invest abroad upto 100% of their net worth and are permitted to make overseas investments in business activity. Here we have covered India's FDI performance over the world.
Inflows of Foreign Direct Investment during the financial year 2005-06 have followed a faster rate of growth. Both Manufacturing sector as well as the services sectors have attracted an impressive foreign direct investments to the country.The flow of Foreign Direct Investment to India in the month of March increased at a faster pace. The FDI Inflows to the country in the month of March 2006 was at US $1,244 Millions. FDI equity inflow during the financial year 2006-07 at nearly US $ 16 billion (US $ 15.7 billion) has been 2.8 times more than the inflow (US$5.5 billion) received during the previous year. This is the highest FDI equity inflow into the country during any financial year since the commencement of economic reforms. FDI equity inflow in the month of March 2007 was US$3.8 billion which is the highest inflow received so far in a single month.
MAJOR SECTORS RECEIVING INFLOWS AND TOP INFLOWS :The five sectors which have attracted highest FDI into India during 2006-07 are Services, Electrical Equipments (including computer software & electronics), Construction Activities, Telecommunications and Real Estate. The Construction and Rear Estate Sectors have together received US$ 1.45 billion during the year 2006-07 which is about 12% compared to 3.4% of the total FDI inflows received during the year 2005-06. The Services sector has received 38% during the year 2006-07 compared to 10.5% in the previous year. The share of the Electrical Equipment sector has been 22% in the year 2006-07 compared to 26.1% in 2005-06 and the Telecommunication sector has received 4% in 2006-07 compared to 12.2% in 2005-06.Though the services sector in India constitutes the largest share in the Gross Domestic Product, still it has failed to some extent in attracting more funds in the forms of investments. Important sectors of the Indian Economy attracting more investments into the country are as follows:
Electrical Equipments (Including Computer Software & Electronic)
Telecommunications (radio paging, cellular mobile, basic telephone service)
Transportation Industry
Services Sector (financial & non-financial)
Fuels (Power + Oil Refinery)
Chemical (other than fertilizers)
Food Processing Industries
Drugs & Pharmaceuticals
Cement and Gypsum Products
Metallurgical Industries.
By seeing the above statics the Indian industries are attracting the foreign investments very well which is a good sign for india to become a super economic super power.
OPPORTUNITIES
First, it is into the right things, the modern, skill-intensive service sectors like IT and outsourcing. Second, it has an entrepreneurial culture. Most Indians never fully subscribed to the non-acquisitiveness of the Congress consensus. Now that acquisitiveness has been given free rein, it's producing a big advantage. Third is the fact that they have a much younger population, which means that their saving rate is going to increase in the future. A young population with a lot of people who are in the high savings phase of their life cycle is going to save more than an older population as it moves into the retirement phase and may stop active saving. Finally, in many ways India has better institutions. It has a tradition of setting up thoughtful committees before it makes a reform. It has a democratic system, which is a really major advantage. As countries modernize, one of the things people want is a greater say in running their own life. India already has that democracy India is as yet a minor player in world trade, contributing less than one percent of world exports.
CHALLANGES:
As far as India is concerned, there is no evidence to date that the government is able to tackle the problems of the caste system, something the BBC has been reporting on in recent weeks. Energy is going to be a concern there is no evidence at the moment. Until India is able to resolve its problems with Pakistan it will always be a hampered situation. The vast majority of India's rural population remains illiterate and impoverished.

CONCLUSION
India is as yet a minor player in world trade, contributing less than one percent of world exports. The hordes of Indian software engineers, call-center operators, and back-room programmers supposedly hollowing out white-collar jobs in rich countries? The total number of workers in all possible forms of IT-related jobs in India comes to less than a million workers – one-quarter of one percent of the Indian labor force. India is the largest single-country contributor to the pool of illiterate people in the world. Lifting them out of poverty and dead-end menial jobs will remain a Herculean task for decades to come.
But in the long run we need to service our own industry, expand our domestic economy, increase standards of living within our own economy. We need to be able to withstand economic fall outs that will become more and more common in the globalized world economy. There are very few Management schools. Fewer still technology schools. Educational institutions that encourage youth to explore their own creative instincts are practically non existent in India. Primary education is supreme. On the optimistic side. Imagine 20% of the world's youth (not just teenagers) , all with basic education, Broadband connected, all exploring and connected globally. All coming from one country and one culture ! They will be the 'tipping factor' and change the cultural and therefore the economic and political dimensions of our planet. In their own favour.
While adjusting its economies to the new reality and utilizing the new opportunities, the West should not overlook the enormity of the economic gap that exists between countries (particularly India). There are many severe pitfalls and roadblocks which they have to overcome in the near future, before they can become significant players in the international economic scene on a sustained basiswe will truly be the Super Power that everyone talks about. That is our Gross Domestic Potential.

2008-10-26T02:09:00.000-07:00

TAGLINES

MRF - Tyres with Muscle
CEAT - Born Tough
EBAY - The World's Online Market Place
AMAZON.COM - Earth's Biggest BookStore
TIMESJOBS.COM - If you have a reason, we have the job -
BLOGGER.COM - Push Button Publishing
Microsoft - Where Do You Want to Go Today ; Your Potential Our Passion
Windows XP - Do More with Less
HP-Invent - Everything is Possible
Accenture - High Performance. Delivered
IBM - ON DEMAND
LENOVO - We are building a new technology company.
Apple Macintosh - Think Different.
TCS - Beyond the Obvious
Infosys - Powered by Intellect, Driven by Values; Improve your odds with Infosys Predictability
WIPRO - Applying Thought
Adobe - Simplicity at work. Better by adobe.
Macromedia - What the web can be.
FORD – Built for the Road Ahead
GM – Only GM.
BMW – The Ultimate Driving Machine
TOYOTA - Touch The Perfection
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SKODA – Obsessed with Quality since 1897.
VOLKSWAGEN - Drivers wanted
FIAT - Driven by Passion. FIAT
TATA MOTORS – Even More Car per Car
IBM - I think, therefore IBM.
Dell - Easy as DELL.
Intel - Intel inside.
LEE - The jeans that built America
Master card - There are some things money can't buy. For everything else there's MASTERCARD.
Kotak - Think Investments. Think Kotak.
Sun Microsystems - The Network is the Computer
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Barclays - Fluent in Finance; Its our business to know your business
Standard Chartered Bank - Your Right Partner
CNBC - Profit from it
AT&T - The World's Networking Company
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Jet Airways - The Joy of Flying
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British airways - The Way to Fly.
Air Canada - A breath of Fresh Air
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Malaysian Airlines - Going Beyond Expectations
Kingfisher Airlines - Fly the good times
Exxon Mobil - Taking on the World's Toughest Energy Challenges
Chevron Corporation - Human Energy
Reliance industries Limited - Growth is Life
British Petroleum - Beyond Petroleum
ONGC - Making Tomorrow Brighter
IOCL - Bringing Energy to Life
BPCL - Pure for Sure
IBP - Pure bhi. Poora bhi
GAIL - Gas and Beyond
Essar corp - A positive a++itude
Speed - High Performance Petrol
Servo - 100 % Performance. Everytime.
NDTV Profit - News you can Use.
Toyota Innova -All you Desire.
Star Sports - We know your game
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The difference lies in our DNA - BIOCON
Caring for life - CIPLA
The Edge is Efficiency - (Bombay Stock Exchange )
The world puts its stock in us - NYSE (New York Stock Exchange)
Stock market for the digital world (NASDAQ)
Tomorrow Market's Today. (Singapore Stock Exchange, SGX)
Have You Met Life Today - Metropolitan Life Insurance Company or Metlife.
The Power on your side - Allianz Group
Growing and Protecting your wealth - Prudential Insurance Company
We know Money - AIG or American International Group Insurance Company
Your Partner for life - Max NewYork Life Insurance
Positively Different. - Standard Insurance Company Limited.
India's International Bank -- Bank of Baroda
Good People to Bank with -- Union Bank of India
Higher Standards -- Bank of America
You and Us -- UBS
The Citi Never Sleeps -- CITIGROUP or CITIBANK
Where Vision Gets Built -- Lehman Brothers
The World's Local Bank -- HSBC
A Passion to Perform -- Deutsche Bank
Making More Possible -- ABN AMRO Bank
The Magazine of the Corporate World - BUSINESS INDIA
For Managing Tomorrow - BUSINESS TODAY
Intelligent Computing - CHIP
Your Technology Navigator - DIGIT
Play the Game - BUSINESS WORLD
Journalism of Courage - The Indian EXPRESS
The Power of Knowledge - THE ECONOMIC TIMES
The Name India trusts for News - HINDUSTAN TIMES
Read a Bestseller everyday - THE DAILY TELEGRAPH
Like. No. Other. - SONY
Everyone's Invited or Its hard to Imagine - SAMSUNG
Life's Good - LG
The Indian Multinational - VIDEOCON
Born in Japan Entertaining The World - SANSUI
Inspired Living - HAIER
Sense and Simplicity - PHILLIPS
The Perfect Experience - JVC
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Always low prices. Always. - WALMART
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The spirit of Commerce - METRO
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Is se sasta aur Achcha kahee nahee milenga - BIG BAZAAR
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Shop. Eat. Celebrate - CENTRAL
Shaping the future of steel - MITTAL STEEL
Steel solutions for a better world - ARCELOR
We make things which make India proud - LARSEN and TOUBRO
Forever new Frontiers - BOEING
The Miracles of Science - DUPONT
Everyday Solutions - COMPTRON and GREAVES
Pride of Steel - VIZAG STEEL
Powering a Greener Tomorrow. - SUZLON ENERGY

2008-10-22T06:36:00.000-07:00

2008-10-22T06:25:00.000-07:00

malavaka3

2008-10-18T22:28:00.000-07:00

malavika

2008-10-18T22:24:00.000-07:00

malavaka

2008-10-18T22:21:00.000-07:00

aish

2008-06-07T04:22:00.000-07:00

katti

2008-06-07T04:20:00.000-07:00

anushka

2008-06-07T04:18:00.000-07:00

namitha

2008-03-21T02:08:00.001-07:00

my friend

2008-03-05T17:49:00.000-08:00