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Online ISSN: 2229-4686

Print ISSN:2231-4172

Volume III Issue 1 January 2012


EDITORIAL BOARD Dr. V. S. More, India Dr. S. M. Ahire, India Dr. Manoj Kumar, India Dr. Abha Gupta, U.S.A. Dr. Ravindra Rena Namibia Dr. Rifki Ismal, UK. Dr. Haitham Nobanee, UAE. Dr. Pinaki Mazumder, USA. Dr. Amit Kumar Dwivedi, India Michael Sunday Agba, Nigeria Dr. Y. T. Pawar, India. Dr. Shakeel Ahmed, India Dr. (Mrs.) Swalehak Pathan, India. Dr. El-Nabulsi Ahmad Rami,S. Korea. Dr Balakrishnan P, Malaysia Dr. Hj. K. Jusoff, Malaysia Dr. Mohd Zainal Abidin, Malaysia Dr. Vicky Mody, USA. Dr. Rusli Bin Hj Abdullah,Malaysia Dr. Lynn C. Dailey,USA Dr. Bhanu Shrestha, Korea Dr. Ahmed Umar Khan,India Hamou Reda Mohamed, Algeria Dr. Ghous M Khan, USA Edib Smolo, Malaysia Prof. Ekta Arora, India. Dr. (Sr.) Jaya Shanthi, India. Prof. Nawab Ali Khan, India Prof. Shiv K. Tripathi, Tanzania Pravin P. Ingole, Germany Dr. Ananda. S., Sultanate of Oman Dr.Mohammad Waqar Ashraf, Saudi Arabia Dr. Amitabh Deo Kodwani, India Dr. Anand Agrawal, Malaysia. Emil R. Kaburuan, Ph.D. ,Taiwan Dr.Tanu Kashyap,,India Dr. G.Ananthapadmanabhan, India Dr.Setyabudi Indartono, Indonesia. Dr.Mohammed Belal Uddin, Bangladesh Dr. S. D. Sindhkhedkar, India

Editor-in-Chief : Dr. V. S. More (India) Associate Editors: Wichian Sittiprapaporn (Thailand), Chee-Keong C.(Malaysia) Managing Editor: Dr. Arif Anjum (India)

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-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172

INDEX
EDUCATION An Empirical Investigation Of Lecturers Organizational Commitment In Technical And Vocational Colleges In Iran Khosrow Nazari, Zaidatol Akmaliah Bte Lope Pihie, Ramli Bin Basri & Khairuddin Bin Idris (Malaysia) M ENGLISH LANGUAUGE English Language Teaching And Learning Issues In Malaysia: Learners Perceptions Via Facebook Dialogue Journal Wendy Hiew (Malaysia) M BANKING Problems And Prospects Of Mobile Banking In Bangladesh S.M. Sohel Ahmed, Shah Johir Rayhan, Md. Ariful Islam & Samina Mahjabin (Bangladesh) B FINANCE A Comparative Study of Self Help Groups (Shgs) Quality Assessment Tools Sanjay Kanti Das,(India) I

01-10

11-19

20-31

32-40

ECONOMICS Making Of The Asean Community: Economic Integration And Its Impact On 41-47 Workers In Southeast Asia Fumitaka Furuoka, Beatrice Lim, Roslinah Mahmud & Khairul Hanim Pazim (Malaysia) M MARKETING Management of Micro-Enterprises 48-60 (A study on Indira Kranthi Patham in Srikakulam District Andhra Pradesh) I Dr.S.Tarakeswara Rao, Dr. G.Tulasi Rao (India) TOTAL QUALITY MANAGEMENT The Impact Of Total Quality Management Components On Small And Medium 61-65 Enterprises Financial Performance In Jordan Dr. Yaser Mansour Almansour (Jordan) GEOGRAPHY Tourism Potentials In Baglan Tashil 66-71 I Dr. Subhash Nikam, Dr. Deepak Thakre (India) MARKETING Global Stock Market Integration - A Study Of Select World Major Stock 72-80 Markets P. Srikanth, Dr. K. Aparna (India) I

International Refereed Research Journal www.researchersworld.com Vol. III, Issue 1, Jan 2012

-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172

AN EMPIRICAL INVESTIGATION OF LECTURERS ORGANIZATIONAL COMMITMENT IN TECHNICAL AND VOCATIONAL COLLEGES IN IRAN
Khosrow Nazari, Foundation of Education, Faculty of educational Studies, University Putra Malaysia, Malaysia Ramli Bin Basri, Science and Technical Education, Faculty of educational Studies University Putra Malaysia, Malaysia. Zaidatol Akmaliah Bte Lope Pihie, Foundation of Education, Faculty of educational Studies, University Putra Malaysia, Malaysia. Khairuddin Bin Idris, Department of Professional Developments and Continuing Education, University Putra Malaysia, Malaysia.

ABSTRACT With the purpose of determining the levels of lecturers organizational commitment (affective, normative and continuance) based on gender, employment type, marital status, and academic rank, the current research has been performed in Technical and Vocational Colleges in four provinces of Fars, Khuzestan, Boushehr, and Kohgilouyeh and Boyerahmad in Iran. A survey-based descriptive research with the analysis of mean, standard deviation, frequency and percent and four t-tests were utilized to measure organizational commitment of 295 lecturers. The relevant literature shows little studies pertaining lecturers commitment of higher learning institutions in Iran. Considering the importance of lecturers organizational commitment; educational leaders, policy makers and academic administrators should take necessary measures to make their core workforce highly committed. This study has contributions to fill the gap of theoretical and empirical knowledge and improve understanding of organizational commitment issue. Keywords: Affective, Continuance, Normative, Overall Organizational Commitment, Technical and Vocational Colleges, Iran

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-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172

INTRODUCTION: Organizational commitment has been the focus of attention both in management literature and research for the past four decades. According to Allen and Meyer (1996, 1997), Armstrong (2001), Cohen (2007), employee commitment is not limited to national boundaries or particular organizations, but is a universal issue and needs further research. It plays a key role in attaching the employees to the organization in such a way that the more organizational commitment is deeper, the longer employees continue to stay with the organization (Allen & Meyer, 1996; Cohen, 2007; Martn, 2007; Meyer, Becker, & Vandenberghe, 2004). Knowing that management strategies dependent on control are not suitable to manage educational institutions; administrators try to perform strategies based on commitment to manage such organizations (Martn, 2007; Winter & Jackson, 2006). In addition, one of the most important factors of success in higher education institutions is lecturers commitment (Aminbidokhti & Salehpoor, 2007; Bhatnagar, 2007; Davoodipoor, Ahancheyan, & Rezvani, 2008; Hossaini, Amirtash, & Mozafari, 2005). Lecturing is one of the professions that need high commitment; the workload is heavy, the role is broad and the lecturers are committed and responsible in educating the students. Teachers strong in organizational commitment find it easy to be interested in whatever they are doing and can involve themselves unconditionally. Without commitment, some may even leave the profession and in a case of no longer feel committed to their job, they would probably shirk in their daily duties which absolutely cause other horrible effects, especially to the students (Hossaini, et al., 2005; Khatibi, Asadi, & Hamidi, 2009; Yaghobi, Yarmohammadyan, & Javadi, 2007). However, the literature shows little research on organizational commitment in higher education institutions (Chughtai & Zafar, 2006; Hamidi & Keshtidar, 2004; Hossaini, et al., 2005). TECHNICAL AND VOCATIONAL COLLEGES: Technical and Vocational Colleges (TVCs) as the context of this study have experienced remarkable changes over the past ten years in Iran. The key role of TVCs in training and providing technicians has made their position to be upgraded. Based on the last decision in relation to these colleges, they were transformed to be supervised by the Ministry of Higher education. These organizational changes have had positive effects on lecturers who teach, research and guide students in these colleges (Sadri & Zahedi, 2009; Zainabadi, Salehi, & Parand, 2007). To be successful in managing educational institutions, administrators need to become aware of lecturers needs and commitment and strengthen their relationship with lecturers toward the direction of goal achievement. Thus, satisfying these duties needs lecturers who are committed to institutions for which they work. Highly committed lecturers are expected to obtain expertise in new subjects that contribute to their work, enhance their ability to deal with students special needs, and to improve their classroom performance (Dixon, 1994; Park, 2005; Thomas, 2008). Consequently, lecturers as the pivot role of educational systems, have critical and significant roles in building the future of students. Pertaining this, educational leaders as well as administrators should be aware of the factors that have contributions in making lecturers committed to the educational institutions. To achieve this purpose, the current study intends to fill the gap of scarcity of theoretical and empirical knowledge on the perceptions of lecturers relevant to the organizational commitment in TVCs in Iran. ORGANIZATIONAL COMMITMENT: Various definitions of organizational commitment can be found in the management of literature. According to Mowday, Porter & Steers (1992), commitment is the relative strength of a individuals identification with involvement in a particular organization. They state three characteristics of commitment: Employee belief in and acceptance of the organization goals and values; Willingness to exert dedicated efforts on behalf of organization; Strong desire to maintain organization membership. Introducing a three component model to show different employee linkages to the organization; Allen and Meyer (1990, 1996) defined organizational commitment as psychological relationship between employees and organization. Each component has different behavioral outcomes. Affective commitment refers to an employees psychological attachment to, identification with, and involvement in an organization by acceptance of organization goals and values in order to remain with the organization. Employees who have a strong affective commitment stay in the institution because they want to(Mosadeghrad, Ferlie, & Rosenberg, 2008). Continuance commitment shows the tendency to continue working for the organization. The ones who have a strong continuance commitment stay because they need to (Shaikh, et al., 2005; Shirbagi, 2007). Normative commitment refers to the employees obligation feeling to stay in the organization. Employees think that organization has supported them in needy times, thus they are obliged to stay with the organization by virtue of
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-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172

their belief that it is morally not right to leave the organization. The ones who have a strong normative commitment stay because they feel they ought to(Salami, 2008; Talebpour & Emami, 2006). Thus, organizational commitment is an inner psychological feeling and force which obliged employees to continue in an organization. Researchers have studied organizational commitment as a dependent variable for antecedents such as age, tenure, education, and as a predictive indicator in organizational behavior and organizational outcome such as job satisfaction, work motivation, turnover, intention to leave, absenteeism, and performance (Allen & Meyer, 1996; Meyer, Allen, & Smith, 1993). Mowday et al., (1992) stated four categories of factors affecting organizational commitment: Personal Characteristics, Work experience, Job characteristics and Structural characteristics. Giffords (2009) stated that to promote, systematize, and facilitate organizations functioning in achieving their goals, mission, and objectives, factors such as demographics should be noticed by the managers of the organizations. Tseng (2010) also stated that demographic characteristics could affect organizational commitment. The demographic variables may have effects on organizational commitment and therefore should be controlled for (Chughtai & Zafar, 2006; Ng, Butts, Vandenberg, DeJoy, & Wilson, 2006). Dennis and Alan (2004) reported that gender in educational settings was the most important predictor of organizational commitment. Lim (2003) reported significant differences on affective and continuance variables between men and women. Males showed a higher score on the affective and continuance variables than women. Khatibi et al., (2009) reported that there was no significant difference between male and female employees in organizational commitment. They also found that there was no significant difference between single and married employees based on organizational commitment. Conversely, Salami, (2008) asserted that there were significant differences between male and female employees by organizational commitment. Sabagheyan, Tondnevis, Mozafari, and Zareei, (2006) reported that there were significant differences between affective, continuance, normative and organizational commitment of full and part time lecturers in Iran. Therefore, the theoretical and empirical inconsistent results pertaining to organizational commitment reveals that personal variables such as age, gender, marital status, education level, employment type and academic rank are among frequently variables investigated to show their association with organizational commitment. In this study, the differences in affective, continuance, normative and overall organizational commitment based on gender, marital status, employment type and academic rank were explored using t-test. RESEARCH QUESTIONS: This study was designed to address the following research questions. RQ1: What is the perception level of lecturers affective, continuance, normative and overall organizational commitment? RQ2: Are there differences in lecturers perception towards affective, continuance, normative and overall organizational commitment based on gender? RQ3: Are there differences in lecturers perception towards affective, continuance, normative and overall organizational commitment based on type of employment? RQ4: Are there differences in lecturers perception towards affective, continuance, normative and overall organizational commitment based on marital status? RQ5: Are there differences in lecturers perception towards affective, continuance, normative and overall organizational commitment based on academic ranks? METHODOLOGY: This is a quantitative survey method and the data were collected using questionnaire. The research design consisted of a self-report questionnaire to evaluate lecturers affective, continuance, normative and overall organizational commitment in TVCs in Iran. The unit of analysis is the lecturers who responded to the questionnaire. SAMPLE: The population for the study consisted of faculty lecturers of TVCs in four provinces including: Fars, Khuzestan, Boushehr, and Kohgilouyeh and Boyerahmad in Iran. 310 questionnaires were distributed and a total of 295 were completed and returned, yielding a response rate of 95.16%. Data were collected using proportional
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-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172

stratified sampling method and simple random sampling method. G-power statistical method was used to determine the sample size. INSTRUMENT: Organizational Commitment Questionnaire (OCQ) developed by (Meyer and Allen, 1997) with 18 measurement items was employed. The OCQ is composed of three sections corresponding to different types of organizational commitment: affective, continuance and normative. The three components were measured by using 5-point Likert scale ranging from 1 (Strongly disagree) to 5 (Strongly Agree). The original questionnaire in English was translated into Persian using the forward- then-back translation approach (Chen, Holton, & Bates, 2005). Validity of OCQ was approved by five experienced and knowledgeable lecturers in Iran. They judged face, content and construct of OCQ appropriate for performing in TVCs. The reliability analysis was measured before doing analysis. The results of coefficient were more than .80 in three components, showing appropriateness of OCQ. Table 1 shows the results in details. Demographic items including gender, marital status, type of employment, and academic rank were added to measure basic demographics. TABLE 1: CRONBACHS ALPHA OF THE STUDY VARIABLES Variables Affective Commitment Continuance Commitment Normative Commitment Overall Organizational Commitment PROFILE OF RESPONDENTS: Demographic characteristics of respondents comprised data on gender, marital status, academic rank and type of employment. Table 2 indicates frequency distribution and percentage of respondents participated in the study. TABLE 2: DEMOGRAPHIC CHARACTERISTICS OF PARTICIPANTS Demographic Gender Marital Status Academic rank Employment Type Category Male Female Single Married Lecturer Teacher Full time Part time
Frequency (n=295) 208 87 61 234 155

Number of Items 6 6 6 18

Sample Alpha .82 .83 .80 .82

Percent 70.5 29.5 20.7 79.3 52.5 47.5 41.7 58.3

140 123 172

From two hundred ninety five lecturers in TVCs in Iran participated in this study, 208 (70.5 %) were male and 87 (29.5%) were female, showing that TVCs were male oriented. 234 (79.3%) of the lecturers were married and 61 (20.7%) were single, suggesting that the overwhelming majority of lecturers in TVCs were married. Regarding teaching staff in TVCs, there were two types of teaching staff: lecturers and non-lecturers (teacher). Lecturers were full time staff, whereas teachers were mostly part time. Out of 295 respondents, 155 (52.5%) were lecturers and 140 (47.5%) were teachers. In this study both of these two teaching staff is called lecturers. Data collected showed almost equal distribution for academic rank. Data indicated some 172(58.3%) were full time and 123 (41, 7%) were part time. RESULTS: Descriptive analysis using mean, standard deviation, frequency and levels were employed to measure perception level of respondents regarding variable under study. To show differences in affective, continuance, normative and overall organizational commitment by gender, employment type, marital status and academic rank, t-tests were employed pertaining research questions two to five.

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-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172

TABLE 3: DESCRIPTIVE STATISTICS AND ORGANIZATIONAL COMMITMENT Descriptive Statistics Affective Commitment Continuance Commitment Normative Commitment Overall Organizational Commitment Mean 3.86 3.48 3.49 3.61 Std. Deviation .29 .45 .56 .46 Levels High Moderate Moderate Moderate Frequency (%) High Moderate Low 168 127 -(56.9%) (43.1%) 95 194 6 (32.2%) (65.8%) (2%) 79 216 -(26.8%) (73.2%) 123 172 -(43.75%) (58.3%)

Note: Low (1-2.33), Moderate (2.34- 3.66), High (3.67-5)

Research question 1: level of affective, continuance, normative and overall organizational commitment? Findings presented in Table 3 illustrate that affective commitment was higher than continuance, normative and overall organizational commitment with a mean rating of M=3.86 and standard deviation of .29. More than half (56.9%) of lecturers rated they possess a high level of affective commitment, 43.1% rated moderate and none rated low. The moderate level of commitment was reported for continuance and normative commitment with (M = 3.48, SD = .45) and (M = 3.49, SD = .56) respectively. About two thirds (65.8%) of lecturers rated they possess moderate level of commitment, 32.2% rated high and 2% reported low level of commitment in continuance commitment. Some 79 (26.8%), and 216 (73.2%) reported high and moderate in normative commitment, whereas none rated low. For overall organizational commitment, data indicated mean rating of M=3.61 with a standard deviation of .46. More than half (58.3%) of lecturers reported they possess moderate level of commitment in overall organizational commitment, 43.75% rated high level and none rated low in overall organizational commitment. Research question 2: Are there differences in lecturers perception towards affective, continuance, normative and overall organizational commitment based on gender? To determine whether there were differences in affective, continuance, normative and overall organizational commitment of lecturers based on gender, t-test was utilized in TVCs in Iran. TABLE 4: T-TEST FOR LEVELS OF AFFECTIVE, CONTINUANCE, NORMATIVE AND OVERALL ORGANIZATIONAL COMMITMENT BASED ON GENDER Gender N Mean SD t-value P Male 208 3.87 0.45 -.074 0.941 Affective Commitment Female 87 3.86 0.45 Male 208 3.48 0.55 -.383 0.699 Continuance Commitment Female 87 3.50 0.56 Male 208 3.53 0.49 2.975 0.003* Normative Commitment Female 87 3.37 0.38 Male 208 3.62 0.30 1.107 0.269 Overall Organizational Commitment Female 87 3.58 0.28 P<.05 df=293 SD = Standard Deviation The results of t-test showed that there were not significant differences between male and female lecturers in affective commitment, t = -.074, p>0.05. Likewise, the analysis of t-test showed that there were not significant differences between male and female respondents in continuance commitment, t = -.383, P>0.05, whereas the results showed significant differences between male and female lecturers in normative commitment, t = 2.975, P<0.05. For overall organizational commitment, t-test indicated no significant differences between male and female respondents, t= 1.107, P>0.05. Thus, it can be concluded that normative commitment among male lecturers is higher than female lecturers in TVCs in Iran. Variables Research question 3: Are there differences in lecturers perception towards affective, continuance, normative and overall organizational commitment based on type of employment? The results of t-test in Table 5 showed that there were significant differences between full time and part time lecturers in affective commitment, t = 5.212, P<0.05. Likewise, the t-test showed that there was significant
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-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172

difference between full time and part time lecturers in continuance commitment, t = 2.678, P<0.05. Regarding the normative commitment, the t-test also showed significant differences between two groups of full and part time lecturers in TVCs in Iran, t = 4.735, P<0.05. For the overall organizational commitment, the t-test indicated that full time and part time lecturers were significantly different, t = 7.102, P<0.05. TABLE 5: T-TEST FOR LEVEL OF AFFECTIVE, CONTINUANCE, NORMATIVE AND OVERALL ORGANIZATIONAL COMMITMENT BASED ON EMPLOYMENT TYPE Employmen Mean P N SD t- value t Type Full Time 123 4.02 0.45 5.212 0.000* Affective Commitment Part Time 172 3.57 0.42 Full Time 123 3.59 0.58 2.678 0.008* Continuance Commitment Part Time 172 3.41 0.52 Full Time 123 3.64 0.51 4.735 0.000* Normative Commitment Part Time 172 3.38 0.39 Overall Organizational Full Time 123 3.75 0.30 7.102 0.000* Commitment Part Time 172 3.51 0.24 P<0.05 df=293 SD = Standard Deviation Data indicated that full time lecturers had higher mean scores in affective, continuance, normative and overall organizational commitment in TVCs in Iran. Full time lecturers showed higher mean scores in TVCs in Iran. It can be concluded that full time lecturers were more committed than part time lecturers in TVCs in Iran. Variables Research question 4: Are there differences in lecturers perception towards affective, continuance, normative and overall organizational commitment based on marital status? TABLE 6: T-TEST FOR AFFECTIVE, CONTINUANCE, NORMATIVE AND ORGANIZATIONAL COMMITMENT BY MARITAL STATUS (N=295) Variables Affective Commitment Marital Status N Mean SD t-value P

Single 61 3.82 .46 -.846 .398 Married 234 3.87 .45 Single 61 3.46 .60 -.284 .776 Continuance Commitment Married 234 3.49 .55 Single 61 3.52 .45 .580 .562 Normative Commitment Married 234 3.48 .47 Single 61 3.60 .26 -.309 .757 Overall Organizational Commitment Married 234 3.61 .30 P<.05 df=293 SD = Standard Deviation The results of t-tests indicated that there were no significant differences between married and single respondents in affective, continuance, normative and overall organizational commitment, t = -.846, -.284, .580, and -.309, P>0.05 respectively. Therefore, marital status was not a significant variable that might make lecturers committed in any components of the organizational commitment. Research question 5: Are there differences in lecturers perception towards affective, continuance, normative and overall organizational commitment based on academic ranks? TABLE 7: T-TEST FOR AFFECTIVE, CONTINUANCE, NORMATIVE AND OVERALL ORGANIZATIONAL COMMITMENT BY ACADEMIC RANK (N=295) Variables Academic Rank N Mean SD t-value P Lecturer 155 4.04 .42 7.753 .000* Affective Commitment Teacher 140 3.66 .41 Lecturer 155 3.63 .57 5.094 .000* Continuance Commitment Teacher 140 3.32 .49 Lecturer 155 3.62 .49 3.334 .000* Normative Commitment Teacher 140 3.34 .37
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-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172


Overall Organizational Commitment

P<.05

df=293

Lecturer Teacher SD = Standard Deviation

155 140

3.76 3.44

.27 .21

11.245

.000*

The results of t-test analysis showed that there were significant differences between lecturers and teachers (nonlecturers) in affective commitment, t = 7.753, P<0.05. Similarly, the t-test analysis showed that there was significant difference between lecturers and teachers (non-lecturers) in continuance commitment, t = 5.094, P<0.05. Regarding the normative commitment, the t-test also showed significant difference between lecturers and teachers in TVCs in Iran, t = 5.334, P<0.05. For the overall organizational commitment, the t-test indicated that lecturers and teachers were significantly different, t = 11.245, P<0.05. Data indicated that in affective, continuance, normative and overall organizational commitment, respondents in the lecturer position showed higher mean scores in TVCs in Iran. Data analysis indicates lecturers and teachers were significantly different in affective, continuance, normative and overall organizational commitment. Lecturers were more committed than teachers in TVCs in Iran. DISCUSSION: The study of academic staff commitment is becoming more and more popular because of its link to attitudes and behaviors that contribute to organizational outcomes and as a result may play a key role in how academic staffs work to achieve their organizational or program mission, goals and objectives. While research exists that explores the theoretical and empirical inter relationships among different features of commitment (Fink, 1995; Mathieu & Zajac, 1990) it has not focused on lecturers and the relationship between their work environment, and personal demographics (Cristina, Salome, & Cristina, 2009). After evaluating the findings of the Organizational Commitment Questionnaire (OCQ) for the study of organizational commitment among lecturers in TVCs in Iran, the results have arisen as follows. Organizational commitment in this study was obtained from self rating and as findings indicated lecturers rated moderate in explaining their perception on overall organizational commitment (M=3.61 SD=.29). The results showed that the mean rating in descending order of high to low for affective commitment was (M=3.86 SD=.45), normative commitment (M=3.49 SD=.46) and continuous commitment was (M=3.48 SD=.56). The results regarding lecturers perception with the statements related to affective, continuance, normative and overall organizational commitment for their level of perception in relation to their colleges were analyzed. It has been revealed that lecturers mostly agree with the statements about affective commitment and this is followed by statements about normative and continuance commitment, respectively. In the pertinent literature the mostly desired situation about organizational commitment subscales is that the members of an organization should have high affective commitment first and then normative commitment and lastly continuance commitment (Demiray & Curabay, 2008). In the present study, affective (desired oriented) commitment comes first, normative (obligation oriented) commitment comes second and continuance (necessity oriented) commitment comes last. This result also is in line with the literature. These results are in line with Hossaini, Amirtash, and Mozafaris (2005) study in physical education colleges in Iran. They reported that the mean rating of affective, continuance and normative organizational commitment were 3.67, 3.07 and 3.51 among board of lecturers respectively. They also reported that the level of overall organizational commitment was 3.42 which falls into moderate level and is consistent with the result of the current study. The moderate mean average of lecturers on overall organizational commitment is due to the fact that lecturing is one of the professions that require high commitment (Awang, Ahmad, & Zin, 2010), and lecturers are committed to transform a person from someone who knows nothing to someone educated. Among affective, continuance, and normative commitment, affective commitment had the highest mean score (3.86). This indicates that lecturers in TVCs are happy to continue with colleges, consider institutions problems as their own, have a strong sense of belonging to these institutions, emotionally attached to colleges, and the institutions have a great deal of personal meaning for them. In addition, the high mean score of lecturers organizational commitment can be related to new reforms which have taken place in TVCs due to their significant role in providing human resources for different parts of the country. Based on a new decision all TVCs in Iran which already were supervised, managed and supported by Ministry of Education, have been transferred to be supervised under the Ministry of Higher Education. This decision has probably encouraged and motivated lecturers to continue their work in TVCs because of official, economical, societal and money benefits. Supported by the studies of Hammidi and Keshtidar (2004), Hezouri (2002), in Iran, and Karrasch (2003), Salami (2008), and according to the t-test mode relating to organizational commitment and gender factors; there were no significant differences in affective, continuance and overall organizational commitment between male and female lecturers. However, the findings of this study were inconsistent with the findings of Therrese and Bakalis (2006) and Mathieu and Zajac (1990) who found significant differences between male and female in
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-Journal of Arts, Science & Commerce E-ISSN 2229-4686 ISSN 2231-4172

affective, continuance and overall organizational commitment. In terms of the outcomes of t-test in regard to employees marital status, the findings indicated that differences between single and married lecturers were not significant in affective, continuance, normative and overall organizational commitment. This result is consistent with Salamis study (2008) who found that differences between single and married lecturers were not significant in organizational commitment in Nigeria among public and private respondents, however, the findings of the current study was in line with Khatibi, Asadi and Hamidis study (2009) and Mosadeghrad (2008) who found that marital status was related to commitment in Iran. For academic rank, the outcomes of t-test revealed that there were significant differences between lecturers and non-lecturers (teachers) in affective, continuance, normative and overall organizational commitment in TVCs. This is maybe because of this reason that teachers (non-lecturers) are not permanent employees of TVCs, thus they feel less committed to these institutions. The high mean scores in affective, continuance, normative and overall organizational commitment of lecturers may be related to the fact that they have to show high commitment to the colleges to be able to continue and be accepted as board of lecturers in these institutions. Based on a new decision all TVCs have been transferred to continue under the supervision of Ministry of Higher Education. Because of this, all lecturers have motivated and tended to continue their work in these institutions, though they already were not interested to continue in these institutions. These results are consistent with the work of Nancy (2001) and Hossaini, et al., (2005) in Iran. For employment type, data indicated that full time lecturers were more committed in affective, continuance, normative, and overall organizational commitment than part time lecturers. This is perhaps because part time lecturers are not stable employees, thus they are less committed to the TVCs in comparison with full time lecturers. This finding is consistent with the work of Hossaini, et al (2005) who found that there was significant relationship between type of employment and normative commitment, but not affective and continuance, and overall organizational commitment among board of lecturers. In addition, Sabagheyan, Tondnevis, Mozafari, and Zareei, (2006) reported that there was significant relationship between full time and part time lecturers in continuance and normative commitment, but not affective commitment among lecturers in physical education colleges. In conclusion, the attachment level of the employee towards their institution is an important indicator regarding organizational development and their willingness to do their job. In this regard, research studies focusing on this topic should scrutinize on the current situation, and implications of these studies should be used to improve the attachment level of employee in organizations. Such implementations are good opportunities to expand optimistic attitudes of the employee towards their organization. In addition, organization managers should value their employees, develop working conditions, value employee opinions, consider employee complaints and reward their successes to increase the employee attachment level. When the employee members see that they are considered, their emotional, normative and stability attachment will increase consecutively. Employees with higher level of organizational attachment will be more willing to work for the organization and to stay as a member of the organization, which brings about higher levels of output in the organization (Gurses & Demiray, 2009). IMPLICATIONS FOR PRACTICE AND FUTURE RESEARCH: Results from the present study should be interpreted with recognition of the following limitation. Choosing the sample of the present study from one geographical region is the main limitation of the study which limits the variety of the sample and generalizability of the findings. Therefore, more studies with geographically diverse samples are needed to support the findings of the present study and more develop an understanding of organizational commitment. Regardless of this limitation, findings from the present study should be viewed as an early effort to determine factors related with lecturers organizational commitment in TVCs in Iran. Educational leaders should consider lecturers commitment as an essential part of the decision-making process. Administrators should stay aware of the level of their employees commitment and alter their management practices whenever applicable in an attempt to increase lecturers commitment. The body of literature examining the relationships between lecturers organizational commitment and personal demographics has yet to be conclusively determined. Thus, this gap in the literature cause to be doubts about the effects that demographics may have on employee commitment. For this reason, there is a strong need for reproduction studies that scrutinize the demographic variables associated with lecturers organizational commitment. REFERENCES: [1] Allen, N. J., & Meyer, J. P. (1996). Affective, Continuance, and Normative Commitment to the Organization: An Examination of Construct Validity. Journal of Vocational Behavior, 49(3), 252-276. [2] Aminbidokhti, A., & Salehpoor, M. (2007). The relationship between Job Satisfaction and Organizational Commitment among Academic Staffs in Tecnical and Vocational Colleges Daneshvar Shahed University
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Scientific and Reseaarch Biquarterly., 14(26), 31-38. [3] Armstrong, M. (2001). A Handbook of Human Resource Management Practice. London: Kogan Page. [4] Awang, Z., Ahmad, J. H., & Zin, N. M. (2010). Modelling Job Satisfaction And Work Commitment Among Lecturers: A Case Of UiTM Kelantan. Journal of Statistical Modeling and Analytics, 1(2), 45-59. [5] Bakalis, S., & Jonier, T. A. (2006). The Antecedents of Organizational Commitment among Sessional Academic staff Educational Administration Quarterly, 5(3). [6] Bhatnagar, J. (2007). Predictors of organizational commitment in India: strategic HR roles, organizational learning capability and psychological empowerment Human Resource Management, 18(10), 1782-1811. [7] Chen, H. C., Holton, E. F., & Bates, R. (2005). Development and Validation of the Learning Transfer System Inventory in Taiwan. Human Resource Development Quarterly, 16(1), 55-84. [8] Chughtai, A. A., & Zafar, S. (2006). Antecedents and Consequences of Organizational Commitment Among Pakistani University Teachers. Applied Human Research Management, 11(1), 39-64. [9] Cohen, A. (2007). Commitment before and after: An evaluation and reconceptualization of organizational commitment. Human Resource Management Review, 17(3), 336-354. [10] Cristina, B. S., Salome, G. L., & Cristina, M. G. (2009). How to raise commitment in public university lecturers. International Review of Administrative Sciences, 75(2), 333-347. [11] Davoodipoor, A., Ahancheyan, M., & Rezvani, M. S. (2008). The implementation of management schoolbased plan according to mission, cooperation and organizational commitment among administrators and teachers of guidance schools in Mashad city in Iran. The new Thoughts in Educational Sciences 4, 37-53. [12] Demiray, E., & Curabay, S. (2008). Organizational Commitment of Anadolu University Open Education Faculty Students. International Journal of Social Sciences, 3(2), 138-147. [13] Dennis, M. M., & Alan, B. H. (2004). Organizational Commitment of a Health Profession Faculty: Dimensions, Correlates, and Conditions. Medical Teacher 26(4), 353-358. [14] Dixon, N. (1994). The organizational learning cycle: How we can learn collectively (2nd ed.): Brookfield, VT: Gowe. [15] Fink, A. (1995). The survey handbook. Thousand Oaks, CA: Sage Publications. [16] Giffords, E. (2009). An Examination of Organizational Commitment and Professional Commitment and the Relationship to Work Environment Demographic and Organizational Factors. Journal of Social Work, 9(4), 386-404. [17] Gurses, N., & Demiray, E. (2009). Organizational commitment of employees of T.V production center ( educational television) The Turkish Online Journal of Educational Technology 8(1). [18] Hamidi, M., & Keshtidar, M. (2004). The study of organizational structure and organizational commitment in physical education colleges Harakat Quarterly, 15(10), 43-54. [19] Hezouri, M. (2002). Relationship between organizational commitment and Payame Noor University Board of Lecturer's characteristics Payke Noor, 2(3). [20] Hossaini, M. S., Amirtash, A. M., & Mozafari, A. A. (2005). Relationship, comparison and explanation of different leadership styles with organizational commitment among scientific boards of lecturers in Iran universities. Sport Sciences and Moving, 1(6), 83-94. [21] Karrasch, A. I. (2003). Antecedents and Consequences of Organizational Commitment. [Article]. Military Psychology 15, 225-236. [22] Khatibi, A., Asadi, H., & Hamidi, M. (2009). The Relationship Between Job Stress and Organizational Commitment in National Olympic and Paralympic Academy. World Journal of Sport Sciences, 2(4). [23] Lim, T. (2003). The relationship among organizational commitment, learning organization culture, and job satisfaction in one Korea private organization.Unpublished Dissertation. [24] Martn, S. S. (2007). Relational and economic antecedents of organisational commitment. Personnel Review, 37(6), 589-608. [25] Mathieu, J. E., & Zajac, D. M. (1990). A review and meta-analysis of the antecedents, correlates, and consequences of organizational commitment. Psychological Bulletin, 108(2), 171-194. [26] Meyer, J. P., Allen, N. J., & Smith, C. A. (1993). Commitment to organizations and occupations: Extension and test of a three-component conceptualization. Journal of Applied Psychology, 78(4), 538-551. [27] Meyer, J. P., Becker, T. E., & Vandenberghe, C. (2004). Employee Commitment and Motivation: A Conceptual Analysis and Integrative Model. [Article]. Journal of Applied Psychology, 89(6), 991-1007. [28] Mosadeghrad, A. M., Ferlie, E., & Rosenberg, D. (2008). A study of the relationship between job satisfaction, organizational commitment and turnover intention among hospital employees. Health Services Management Research, 21(4), 211-227. [29] Mowday, R. T., Porter, L. W., & Steers, R. M. (1992). Employee--Organizational Linkages: The Psychology of Commitment, absenteesm, and turnover: New York: Academic Press.
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[30] Nancy, F. (2001). Factors Predicting Faculty Commitment to the University. Paper presented at the The Annual Forum of the Association for Institutional Research (33th) Chicago, IL. [31] Ng, T. W. H., Butts, M. M., Vandenberg, R. J., DeJoy, D. M., & Wilson, M. G. (2006). Effects of management communication, opportunity for learning, and work schedule flexibility on organizational commitment. Journal of Vocational Behavior, 68(3), 474-489. [32] Park, I. (2005). Teacher Commitment and its Effects on Student Achievement in American High Schools. Educational Research and Evaluation, 11(5), 461-485. [33] Sabagheyan, L., Tondnevis, F., Mozafari, A., & Zareei, A. (2006). The relationship between organizational commitment, job satisfaction, and retention of physical education lecturers in Islamic Azad university. Sport Science, 10, 89-103. [34] Sadri, A., & Zahedi, A. (2009). The continuous study of Technition Training of Technical and Vocational Colleges in Iran. Research and Planning in Higher Education, 54, 99-112. [35] Salami, S. O. (2008). Demographic and Psychological Factors Predicting Organizational Commitment among Industrial Workers. Anthropologist, 10(1), 31-38. [36] Shaikh, M., Bagherzadeh, F. A., Zevyar, F., Gholamalizadeh, R., Esmaeili, H., & Fazel, J. (2005). The study of the extent of organizational commitment among education staffs Harakat Quarterly, 26(12), 6-22. [37] Shirbagi, N. (2007). Exploring Organizational Commitment and Leadership Frames within Indian and Iranian Higher Education Institutions. Bulletin of Education & Research, 29(1), 17-32. [38] Talebpour, M., & Emami, F. (2006). Relationship between organizational commitment and job interest and comparing it between male physical education teachers of 7 regions of Mashhad. Sport Sciences, 32(15-2 Persian). [39] Thomas, J. C. (2008). Administrative, Faculty, and Staff Perceptions of Organizational Climate and Commitment in Christian Higher Education. [Article]. Christian Higher Education, 7, 226-252. [40] Tseng, C. C. (2010). The Effects of Learning Organization Practices on Organizational Commitment and Effectiveness for Small and Medium-Sized Enterprises in Taiwan. Unpublished Doctral Disserteation The University of Minesota. [41] Winter, R., & Jackson, B. (2006). State of the psychological contract: manager and employee perspectives within an Australian credit union. Employee Relations, 28(5), 421-434. [42] Yaghobi, M., Yarmohammadyan, M., & Javadi, M. (2007). Relationship between organizational commitment and job stress among educational hospitals managers in Isfahan, Iran. The quarterly of management health, 11(33), 63-68. [43] Zainabadi, H., Salehi, K., & Parand, K. (2007). Girls Technical and Vocational Training:Evaluation of Quality of personal, Social, Economical Output of Tecnical Schools of Tehran City. Women Research, 5(2), 129-164.

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ENGLISH LANGUAGE TEACHING AND LEARNING ISSUES IN MALAYSIA: LEARNERS PERCEPTIONS VIA FACEBOOK DIALOGUE JOURNAL
Wendy Hiew, Centre for the Promotion of Knowledge and Language Learning, Universiti Malaysia Sabah, Malasiya

ABSTRACT The purpose of this research was to gather English as a second language (ESL) learners perceptions pertaining to their experience in learning English language in secondary schools, colleges and local universities. The research methodology incorporated dialogue journal using Facebook. Dialogue journal is a written communication between a teacher and students or other writing partners, which provides a natural context for language development and a new channel of communication outside the classroom. The research incorporated Facebook as it is currently one of the most prominent online social networking sites among Malaysians. 46 respondents from public and private colleges and universities discussed various learning issues including impediments that they encountered during English lessons in secondary school, college and university; learners views and comments on the issues pertaining to local English language teaching and learning; and suggestions to improve the teaching and learning of English. The discussion revealed varying viewpoints such as difficulties and reasons that students faced in learning the four language skills i.e. speaking, listening, reading and writing; and the lack of confidence which hampered their language improvement. This research hopes to enlighten educators of arduous challenges that students faced in learning the English language so that they may strive to improve and consolidate their teaching skills, thus, making language teaching and learning more effective and meaningful for both teachers and students. Keywords: dialogue response journal, language proficiency, language skills.

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INTRODUCTION: The British colonial education system introduced the teaching of English in Malaysia in the1960s and it is still entrenched in the current Malaysian educational system (Asmah Haji Omar, 1992). English is taught as a second language in all Malaysian schools which is also a compulsory subject in both primary and secondary schools. In the university level, local undergraduates are required to register a stipulated credit hour of English courses based on the result of their Malaysian University English Test (MUET), which is an English proficiency assessment course and a compulsory requirement for students who plan to pursue tertiary education at Malaysian universities (Malaysian Examination Council, 2006). Studies by Griggs and Dunn (1984), Smith and Renzulli (1984) and Wallace and Oxford (1992) have shown that a match between teachers teaching style and learners preferred learning style will increase learners motivation and learning. However, serious mismatches between both styles will result in students becoming bored, discouraged, becoming inattentive and performing rather poorly in tests and assessments (Felder & Henriques, 1995; Godleski, 1984; Oxford, Ehrman & Lavine, 1991). There are various definitions of the term learning style. According to Zou (2006) different researchers have their own understanding of what constitutes learning styles. Oxford, Hollaway and Horton-Murillo (1992) define learning styles as the general approaches (as opposed to specific strategies) that students resort to in learning a new subject. Honigsfeld and Dunn (2006) define it as a biological and developmental set of personal characteristics that make the same instruction effective for some learners and ineffective for others. Meanwhile, Peacock (2001) defines it as students preferred mode of learning. PROBLEM STATEMENT: Students spend between 11-13 years (6 years in primary school and between 5 7 years in secondary school) learning English, but a portion of students are still not able to master the language upon completing secondary school. There are various factors that could have contributed to this failure learners learning methods, motivation, perceptions, teachers teaching methods and/or approach, syllabus and lesson plan, among others. Therefore, it is imperative to understand learners views and experiences in learning a second language in order to identify the difficulties and impediments that they encounter in the classrooms. OBJECTIVES OF THE STUDY: The objectives of this research are: 1. To gather learners experience and views pertaining to issues on English language learning problems in secondary school, college or university; 2. To gather learners views on English language teaching and learning in secondary school, college and university; 3. To gather learners suggestions on ways to enhance English language learning and teaching. SIGNIFICANCE OF THE STUDY: Teachers need to know and understand the impediments that learners experience in learning the four skills viz. listening, speaking, reading and writing in order to prepare effective lessons and to guide learners in developing their language proficiency. Therefore, it is pertinent that learners need to be given the opportunity to express their views pertaining to their learning experience to ensure teaching and learning are effectively carried out in the classrooms. RESEARCH QUESTIONS: The research questions in this study are as follow: 1. What are the language learning problems did ESL learners encounter in secondary school, college or university namely speaking, listening, reading and writing? 2. What are ESL learners views on the issues of English language teaching and learning? 3. What are ESL learners suggestions to enhance the teaching and learning of English? METHODOLOGY: RESEARCH APPROACH: A qualitative method was used to conduct the research by utilizing the content analysis of journal entries written by 46 private and public college and university students.
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SAMPLING: A purposive sampling was used to select the 46 respondents who were former students of a public secondary school in Kota Kinabalu, Sabah. The respondents were first to fifth semester students from various courses who scored between Band 2 to Band 5 (Band 1 - limited user and Band 6 - highly proficient user) in their Malaysian University English Test (MUET). RESEARCH INSTRUMENTS: DESCRIPTION OF THE FACEBOOK GROUP AND DIALOGUE JOURNAL: By utilising Facebook, a closed-group was created to gather the 46 samples. Other Facebook users who were not registered in the group were not able to read the respondents comments nor post their views. The Note feature on the Facebook account was used as an alternative form of a journal. It was a mean to ensure that all respondents contributed their opinions and suggestions pertaining to a question posted by the researcher. The respondents must write in proper English i.e. complete and grammatically correct sentences and they were not allowed to use abbreviations such as LOL (Laugh Out loud), BTW (By The Way), IMHO (In My Humble Opinion), among others. In the dialogue journals, the researcher posted three questions on the groups wall message and the respondents wrote their views and suggestions on their personal Note. The researcher responded and prompted questions when there were ambiguous responses. Other respondents were also allowed to contribute their views and suggestions on their group members journal entries. This eventually evolved into a dialogue. DATA ANALYSIS: The journal entries were analysed using content analysis and categorised according to the learners problems in learning the four language skills viz. speaking, listening, reading and writing; learners classroom observations; and learners suggestions to teachers and other learners on the teaching and learning of English. Frequency count was used to score the responses. FINDINGS AND DISCUSSION: This section discusses the findings of the research namely i) the respondents views pertaining to the problems they experienced in learning the four language skills; ii) respondents general views, comments and observations on classroom teaching and learning experience; and iii) respondents suggestions for teachers to enhance their teaching effectiveness and for other learners to improve their language skills based on the respondents personal approaches. LEARNERS LANGUAGE LEARNING IMPEDIMENTS: This section provides the finding on the respondents views pertaining to language learning impediments that they experienced in learning the four skills namely speaking, listening, reading and writing. SPEAKING IMPEDIMENTS ENCOUNTERED BY LEARNERS: TABLE 1: SPEAKING PROBLEMS AND REASONS AMONG ESL LEARNERS Total Respondents 18 respondents Problems Hesitated to speak English with their teachers and friends in and/or outside the classroom. Felt self-conscious about their speaking proficiency. Difficulty in speaking fluently. Mixing other languages with English in their conversation. Reasons Worried about making grammatical mistakes. Felt embarrassed of their low language proficiency. Received negative physical response (smirk). Negative preliminary presumptions about proficient speakers views towards them e.g. not intelligent, incompetent, dull. Unfamiliar with certain English vocabulary.

16 respondents

31 respondents

6 respondents No difficulty in speaking. (Band 5 students) In Table 1, 18 respondents stated that they hesitated to speak English with their teachers and friends in or outside the classroom because they worried about making grammatical mistakes and felt embarrassed of their
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low language proficiency. This is due to the negative physical response, such as a smirk, that they received from other more proficient speakers when learners spoke incorrectly. Meanwhile, 16 respondents stated they felt self-conscious about their speaking proficiency because they have negative preliminary presumptions about proficient speakers views towards them as being slow learners, incompetent and dull, among others. As a result, they were not fully involved in classroom activities even though they were constantly encouraged to speak freely by their teachers without being judgemental. Therefore, these negative experiences and fear of negative judgement from others hindered effective language learning and development among the ESL learners. Learners need to be aware that making mistakes are parts and parcel of language learning and teachers need to constantly reassure and encourage them to continue learning. Krashen, in his interview by Young (1992), stated that one of the causes of speaking anxiety among students is due to teachers who expect them, usually beginners, to perform beyond their acquired competence. This can cause detrimental effects on learners motivation and confidence. The majority of Malaysian students are bilingual who speak Bahasa Malaysia, the national language, and English, the second language. Both languages are compulsory subjects in the Malaysian education syllabus. The uniqueness of the Malaysian multicultural society and mixed-marriages create multilingual individuals who either speak Tamil, Mandarin, various Chinese dialects such as Hakka, Cantonese, Hokkian, or other native languages such as Iban, Kadazan and Murut, among others, depending on their family and social backgrounds. Due to these circumstances, 31 respondents experienced difficulty speaking fluently due to unfamiliarity with some English vocabulary. This caused the respondents to incorporate other local languages and dialects with English to ensure their meanings, intentions or thoughts are unambiguous. Unfortunately, the attempt hindered the respondents speaking fluency. An example given by a respondent is as follow: I think you should try menyakinkan (to convince) your parents to beri kebenaran (give permission) for you to join us on the trip. As a result, the respondents usually experience moderate anxiety and are reluctant to speak in English for fear of being judged negatively. However, moderate feelings of anxiety in second language learning could help students to build the desire to learn, to motivate or to get them to realise that they have to put more effort to acquire the target language (Hadley, 1992). LISTENING IMPEDIMENTS ENCOUNTERED BY LEARNERS: TABLE 2: LISTENING PROBLEMS, REASONS AND EFFECTS AMONG ESL LEARNERS Total Respondents Problems Unable to fully understand their teachers and lecturers. Reasons Teachers and lecturers spoke too fast. Unsure of meaning of words. Effects

15 respondents

11 respondents

Unable to keep up with parts of a conversation or discussion with their classmates and course mates. Unfamiliar with meanings of certain words during conversation.

Misunderstood their teachers and lecturers intended meaning and instructions. Replied or responded inaccurately. Unfamiliar with the Asked speakers for topics of conversation clarification. or discussion. Speakers spoke too fast. Unsure of responding or replying to the speakers. Reluctant to request speakers to repeat or explain the particular word(s).

9 respondents

10 respondents Almost no problem listening. (Band 4 and 5) Table 2 shows that 15 respondents were unable to understand their teachers and lecturers because they spoke too fast during conversations, when giving instructions or explaining a topic. The second reason was due to uncertainty of meanings of words. As a result, the learners misunderstood their teachers intended meaning of the conversation and instruction, thus replying or responding incorrectly.
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Meanwhile, 11 other respondents wrote that they were unable to keep up with certain parts of a conversation or discussion in the classroom because they were either not familiar with the topic or the speakers spoke too fast. It resulted in them asking the speakers for clarification or temporarily putting aside the ambiguous topic and seeking clarification at a later period. In addition, nine respondents related their experience about being unsure of meanings of certain words during a conversation which made them reluctant to respond or reply to the speakers. They feared the speakers would view them negatively as being incompetent in the language. 10 of the respondents who were satisfactory and proficient users (Band 4 and 5) had almost no problem in listening. READING IMPEDIMENTS ENCOUNTERED BY LEARNERS: TABLE 3: READING PROBLEMS, REASONS AND EFFECTS AMONG ESL LEARNERS Total Respondents 25 respondents 21 respondents 6 respondents (Band 5 students) Problems
Unable to fully comprehend passages and articles.

Reasons Encountered many unfamiliar words.

Effects Hampered reading comprehension and fluency.

Required longer duration to read passages and articles. Occasionally encountered unfamiliar words

Encountered many Constantly referred to unfamiliar words. English and bilingual dictionaries. Not mentioned Referred to base forms, prefix or suffix to guess meanings of words.

Based on Table 3, 25 respondents claimed they experienced problem comprehending passages and articles while 21 respondents required longer duration to complete the reading materials. The aforementioned 46 respondents gave the same reason to their impediment whereby they encountered many unfamiliar words which hampered their reading comprehension and fluency. Besides, they had to constantly refer to English and bilingual dictionaries to look up for the meanings of the unfamiliar words. In these situations, learners need to be taught and reminded to skim and scan reading passages especially when a limited time frame is given e.g. during reading exercises or tests. Meanwhile, six respondents who scored Band 5 said that they occasionally encountered unfamiliar words which hampered their reading comprehension but were able to make sense of the passages by referring to the base forms, prefix of suffix to guess the meanings of the words. WRITING IMPEDIMENTS ENCOUNTERED BY LEARNERS: TABLE 4: WRITING PROBLEMS AND REASONS AMONG ESL LEARNERS Reasons Pre-writing stage: Difficulty procuring ideas to write essay outlines. Writing stage: Mentally construct sentences in mothertongue before translating into English Constantly referring to English and bilingual 32 respondents dictionaries, and online translator. Revising stage: To ensure sentences were grammatically correct and comprehensible. To ensure ideas, sentences and paragraphs were arranged coherently and cohesively. Difficulty in writing academic Need to synthesise, paraphrase and cite essays. various sources. 11 respondents Not exposed to academic writing in secondary school. Writing is one of the most difficult skills to master in learning a language. The findings in Table 4 showed that
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Total Respondents

Problems Required longer period to write an essay. Not familiar with the topics.

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32 respondents stated they required longer period to write an essay as they experienced difficulty procuring ideas to plan their essay outlines in the pre-writing stage. Another reason the respondents, specially low and average proficiency students, required longer time to write in the writing stage was because they had to mentally construct sentences in their first language or mother-tongue before translating into English. At the same time, the learners also spent a large amount of time looking up unfamiliar English words using bilingual dictionaries or online translator. Finally in the revising stage, the respondents had to make sure that their sentences were grammatically correct and comprehensible in addition to ensuring that their ideas, sentences and paragraphs were arranged coherently and cohesively. Meanwhile, 11 respondents who have taken academic reading and writing courses in college and university commented about the difficulty of writing academic essays compared to creative essays. The latter essay requires learners to synthesise, paraphrase and cite various sources, which the respondents were not familiar with because they were not exposed to academic writing in secondary school. Thus, it was difficult for them to master the writing style within a short semester.
LEARNERS GENERAL VIEWS AND COMMENTS ON ENGLISH LANGUAGE TEACHING AND LEARNING:

This section provides the findings on the respondents views and comments pertaining to two issues on English language teaching and learning namely their teachers and lecturers teaching approach in school, college and university; and students negative perceptions towards learning English. TEACHERS TEACHING APPROACH: TABLE 5: ESL LEARNERS VIEWS ON TEACHERS TEACHING APPROACH Total Respondents 28 respondents 21 respondents Views Disagreed with teachers who were adamant about speaking only English in the classroom. Teachers and lecturers lessons were non-interactive.

Based on Table 5, 28 respondents said they disagreed with teachers who were adamant about speaking only English in the classroom and also imposing similar practice upon the students. They opined that is was necessary for teachers to explain certain procedures and meanings in the students mother-tongues so that they can fully comprehend the teachers explanation. The respondents commended the teachers intentions to ensure their students mastered the English language but they also needed to practice more flexibility and leniency in accommodating to the students language limitations. By doing so, both teachers and students will be able to provide and obtain effective and meaningful language learning experience, respectively. Meanwhile, 21 respondents thought some of their teachers and lecturers lessons were non-interactive i.e. the lessons were textbook-based, lacked pair or group discussions and presentations. REASONS FOR STUDENTS NEGATIVE PERCEPTIONS TOWARDS LEARNING ENGLISH:
TABLE 6: ESL LEARNERS REASONS FOR STUDENTS NEGATIVE PERCEPTIONS TOWARDS LEARNING ENGLISH

Total Respondents 25 respondents 21 respondents

Views Passive learners viewed English as just another subject to pass, has no necessity and practicality in their future. Passive learners have no intention to further their studies upon completing secondary school. Passive learners intend to seek employment.

According to the respondents who were proactive in learning the English language as shown on Table 6, 25 respondents mentioned that their former secondary schoolmates who were passive learners viewed English as just a subject to pass and did not see the necessity and practicality of it in their future careers. This was supported by 21 respondents who said that low academic achievers did not intend to further their studies and planned to seek employment, usually as odd job workers, upon completing secondary school. Some of the reasons given were reasonable such as the students were not academically-inclined, they came from low-income families whose parents could not afford to provide financial support for them to further their studies, and some students had many siblings which required them to work and provide financial assistance to support their parents and families, among the reasons.
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LEARNERS SUGGESTIONS TO IMPROVE THE TEACHING AND LEARNING OF ENGLISH: This section provides the findings of the respondents suggestions for teachers and lecturers to improve their teaching approach in the classroom; and for students to improve their language skills based on the respondents experience and personal approaches. TEACHERS TEACHING APPROACH : TABLE 7: ESL LEARNERS SUGGESTIONS TO IMPROVE TEACHERS TEACHING APPROACH Total Respondents 5 respondents 28 respondents 39 respondents 22 respondents Suggestions Be more patient in guiding and teaching students. Teachers and lecturers should be more creative in their lessons and not rely only on textbooks. Teachers and lecturers should use other mother tongues to explain meanings of unfamiliar words. Teachers and lecturers should introduce new vocabulary during lessons.

In Table 7, five respondents suggested that teachers should be more patient in guiding and teaching especially the lower and average proficiency students. This will ensure students are more motivated and responsive towards the teachers and lessons. Meanwhile, 28 respondents preferred if teachers and lecturers incorporated more creative teaching approaches in their lessons such as using interactive online programmes and videos instead of the conventional chalk-and-talk, PowerPoint and textbook-based lessons. 39 respondents opined that educators should use their students mother-tongues, depending on the educators command of the language, to explain meanings of unfamiliar words. This is supported by Krashens Input Hypothesis that teachers language instruction should be full of rich input (both in spoken and written language) that is roughly tuned at the appropriate level for the learners in the class to provide meaningful language learning experience (Krashen, 1981). Finally, 22 respondents suggested that teachers should introduce new words during lessons as a mean to guide students to comprehend and use the vocabulary correctly in proper contexts. In the Malaysian Curriculum Specifications for primary and secondary schools, it contains a word list which consists of high frequency words commonly used in the English language which learners will need even when reading simple texts and to understand them in the context of what they read. These are also the words that learners will use when going about their writing task. Teachers are encouraged to add to the word list according to the proficiency of their learners as well as when teaching a particular topic (Malaysian Curriculum Specification, 2003). CLASSROOM ASSIGNMENTS AND ACTIVITIES :
TABLE 8: ESL LEARNERS SUGGESTIONS TO IMPROVE CLASSROOM ASSIGNMENTS AND ACTIVITIES

Total Respondents 6 respondents (Band 5 students) 18 respondents

Suggestions More extensive, interactive and comprehensive individual or group assignments and presentations. Teachers and lecturers should incorporate games in a fun and interactive way.

Six respondents in Table 8 suggested that lecturers should plan more extensive, interactive and comprehensive individual or group assignments and presentations which will be worthwhile and practical for them to be utilised in other courses. In addition to that, lecturers should ensure that the presentations are conducted in a serious and formal environment, similar to a conference, in order to expose students to a simulated conference. Besides, it is also to ensure students invest more effort in completing their assignments and delivering an excellent presentation. Secondly, 18 respondents viewed that games are effective methods to assist students in language learning as students are able to learn the language in context through a fun and interactive way. The respondents who described their favourite English lessons in secondary school, college and university have similarly noted the use of games which made the lessons lively and memorable. On top of that, games gave opportunities to every student to shine especially shy learners who eventually became more outspoken and confident. STUDENTS LEARNING APPROACH:
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In the dialogue response journal, the respondents offered their advice and suggestions on ways to improve language development and proficiency based on their personal experience which were effective in helping them become better learners. SPEAKING AND LISTENING SKILLS: TABLE 9: ESL LEARNERS SUGGESTIONS TO IMPROVE SPEAKING AND LISTENING SKILLS Total Respondents 26 respondents Suggestions Converse with friends who have good command of English or with English native speakers via Skype, Yahoo Messenger. Watch English movies and documentaries. Practice speaking in front of a small audience before a presentation. Consistently practise speaking English with teachers, lecturers and friends.

Based on Table 9, one of the 26 respondents stated that watching English movies and documentaries such as The National Geographic and Discovery helped him in his pronunciation, sentence structure construction, usage of words in contexts and vocabulary range development. Another respondent suggested watching English movies without foreign subtitles as this will force learners to focus on the spoken words. To improve ones speaking skill, three respondents suggested that learners should converse with friends, who have good command of English, and English native speakers via Skype, Yahoo Messenger or other forms of Internet voice services. The continuing rapid advancement of information technology and multimedia has turned the world into a borderless continent especially with notable ubiquitous social networking sites such as Facebook, MySpace and Tweeter. Six respondents suggested that local English teachers should contact overseas native English teachers to form an educational network which allows students from both countries and/or continents to socialise and help local learners to improve their communication skills. It is a norm to feel nervous before a presentation for both proficient and less proficient speakers. Ten respondents said these worries can be reduced by practicing before a presentation in front of a small audience whom the speaker is comfortable with. Preliminary feedbacks and comments from peers will help speakers improve their presentation skills and boost their confidence. One respondent of this research expressed his satisfaction participating in oratory presentations and competitions which helped to build his confidence and develop his speaking skill. My experience participating in oratory presentation and competitions such as public speaking and debates have helped elevate my confidence and honed my speaking skills. Even though I never won, the experiences have been priceless. (sic) WRITING SKILL: TABLE 10: ESL LEARNERS SUGGESTIONS TO IMPROVE WRITING SKILL Total Respondents Suggestions Practice writing daily. Be more patient in guiding and teaching students. Benefits Train students to put thoughts in to words. Train students to use effective forms of expressions and suitable choices of words. Learn new vocabulary and synonyms through dictionary and Thesaurus.

18 respondents

In Table 10, 18 respondents agreed that practice writing daily helped to improve their writing skills as it trained them to put their thoughts into words in addition to using effective forms of expressions and suitable choices of words. Writing practice also helped the ESL learners learn new vocabulary and synonyms via English and bilingual dictionaries, Thesaurus and reading newspapers, magazines and books.

READING SKILL:
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TABLE 11: ESL LEARNERS SUGGESTIONS TO IMPROVE READING SKILL Benefits Newspaper covers general and specific topics and issues. 13 respondents Provide materials for speaking activities and writing assignments. 13 respondents suggested, and acceded by others, that reading newspaper reports and articles help to improve their reading skill in addition to improving their speaking and writing skills, grammar proficiency, and expanding their vocabulary range as shown on Table 11. Newspapers are one of the cheapest reading sources available that cover general and specific topics and issues such as education, environment, health, social issues, science and technology which are suitable for students with average and below language proficiencies. The materials are also imperative guides for students to improve their grammar skills by identifying tenses forms, sentence structures and learning new words to expand their vocabulary and applying them in speaking and writing. The respondents stated that they used these materials in their individual and/or speaking activities and writing assignments. CONCLUSION: Learners perceptions towards the teaching and learning of English should be taken and reviewed seriously as it is a two-way process involving teachers and learners. Meanwhile, teachers should take the initiative to ensure their teaching plans are effective while students learning becomes meaningful through a myriad and mixture of teaching methods to cater to a majority of the students learning styles and preferences. An empathic teacher can motivate reluctant students to explore their maximum potential through consistent encouragement and selfassurance. Besides, average and low proficiency students need to be proactive and consistently strive to improve their English language proficiency until they are able to achieve their maximum ability. In the end, the results will be an equal achievement and success for both educators and learners. REFERENCES:
[1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] Asmah Haji Omar. (1992), The Linguistic Scenery in Malaysia, Dewan Bahasa dan Pustaka. Kuala Lumpur. Felder, R. M, & Henriques, E. R. (1995), Learning and Teaching Styles in Foreign and Second Language education. Foreign Language Annals, Vol. 28, No. 1, pp. 21-31. Godleski, E. S. (1984), Learning Style Compatibility of Engineering Students and Faculty, Proceedings, Frontiers in Education Conference, pp. 362-364. Griggs, S. A., & Dunn, R. S. (1984), Selected Case Studies of the Learning Style Preferences of Gifted Students, Gifted Child Quarterly, Vol. 28, Issue 3, pp. 115-119. Hadley, O. A. (1992), Teaching Language in Context, Heinle & Heinle. Boston. Honigsfeld, A., & Dunn, R. (2006), Learning-Style Characteristics of Adult Learners, The Delta Kappa Gamma Bulletin, Vol. 72, Issue 2, pp. 1431. Krashen, S. D. (1981), Second Language Acquisition and Second Language Learning, Pergamon. Oxford. Malaysian Examination Council. (2006), Malaysian University English Test (MUET), Kuala Lumpur. Malaysian Curriuclum Specification. (2003), Form 4 English Language Curriculum Specifications, Malaysian Ministry of Education. Kuala Lumpur. Oxford, R., Ehrman, M., & Lavine, R. (1991), Style Wars: Teacher-student Style Conflicts in the Language Classroom. In S. Magnan (Ed.), Challenges in the 1990s for College Foreign Language Programs, Heinle & Heinle. Boston. Oxford, R. L., Hollaway, M. E., & Horton-Murillo, D. (1992), Language Learning Styles: Research and Practical Considerations for Teaching in the Multicultural Tertiary ESL/EFL Classroom, System, Vol. 20, Issue 4, pp. 439-456. Peacock, M. (2001), Match or Mismatch? Learning Styles and Teaching Styles in EFL, International Journal of Applied Linguistics, Vol. 1, Issue 2, pp. 1-20. Smith, L. H., & Renzulli, J. S. (1984), Learning Style Preferences: A Practical Approach for Classroom Teachers, Theory into Practice, Vol. 23, pp. 44-50. Wallace, B., & Oxford, R. L. (1992), Disparity in Learning Styles and Teaching Styles in the ESL Classroom: Does This Mean War?, TESOL Journal, Vol. 1, pp. 45-68. Young, D. J. (1992), Language Anxiety from the Foreign Language Specialists Perceptions: Interviews with Krashen, Omaggio, Hadley, Terrell, and Rardin, Foreign Language Annals, Vol. 25, pp. 157-172. Zou, L. (2006), Teaching in the Light of Learning Styles, Sino-US English Teaching, Vol. 3, Issue 7, pp. 52-57.

Total Respondents

Suggestions Read English news reports and articles, story books and magazines.

[19]

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PROBLEMS AND PROSPECTS OF MOBILE BANKING IN BANGLADESH


S.M. Sohel Ahmed, Lecturer, Department of Marketing, Lalmatia Mohila College, Lalmatia, Bangladesh. Md. Ariful Islam, Regional Statistical Officer, Dinajpur, Bangladesh. Shah Johir Rayhan, Department of Management & Finance, Sher-e-Bangla Agricultural University, Bangladesh. Samina Mahjabin, Department of Management & Finance, Sher-e-Bangla Agricultural University, Bangladesh.

ABSTRACT

The main objective of the study is to find out the problem and prospect of mobile banking in Bangladesh. For this research primary data were used. This study adopts with descriptive in nature. Total respondents were 120 within that 61 % respondents think it saves time than traditional banking, the highest number of respondents use mobile banking for Air-time top-up service, that is 21%, out of 120 respondents 56% replied it is less costlier than traditional banking, 100% respondents did agree that it is speedy, and 38% respondents are upper class. Although this concept is new in Bangladesh but its potentiality is high. From this research, other researchers and policy makers will get an insight about the problems and prospects of mobile banking in Bangladesh.
Keywords: Problem, prospect, Mobile banking.

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INTRODUCTION: E-business has been continuously growing as a new industry during the last decade (Van Hoeck, 2001). The banking industry has been leading this trend in recent years, and now all banking transactions completing through internet applications is sometimes called e-banking (Boss et al., 2000; Smith, 2006; Hwang et al., 2007; Shin, 2008). E-banking has revolutionized the way business is transacted by globalizing the business enterprise. E-banking technologies have proliferated in recent years, and the availability of a wide range of products has led to increasing adoption among consumers. These technologies include direct deposit, computer banking, stored value cards, and debit cards (Servon and Kaestner, 2008). Consumers are attracted to these technologies because of convenience, increasing ease of use, and in some instances cost savings (Anguelov et al., 2004). E-banking has been viewed as an upgrading from previous electronic delivery systems to open new business opportunities for the banking industry (Ebling, 2001). www.wikipedia.com defines cellular phone as: The Cellular telephone (commonly "mobile phone" or "cell phone" or "hand phone") is a long-range, portable electronic device used for mobile communication. (www.enterpriseinnovation.net) For the past two decades, the banking sector has chosen a new service channel based on the progress of information technology internet to respond to the changes in customer preferences and needs, increasing competition from non-banks, changes in demographic and social trends, and government deregulations of the financial service sector (Byers and Lederer, 2001). In the search for sustainable competitive advantages in the technological financial service industry, banks have acknowledged the value to differentiate themselves from other financial institutions through new service distribution channels (Daniel, 1999). In addition, customers transaction and communication abilities have been improved by the developments of information technology. Information technology enabled electronic channels to perform many banking functions that would traditionally be carried out over the counter (Giannakoudi, 1999). The rise of electronic payments media such as debit and credit cards has caused the value of paid in the USA to fall to from about $49 billion in 1995 to about $42 billion in 2002 (Gerdes and Walton, 2002). The use of paper cheques has been supplemented step-by-step with e-cheques (i.e., electronic images) allowing banks to have more storage capacity, reduce costs, and improve Furthermore customer services (Rose and Hudgins, 2005). A more recent e-banking development is wireless internet applications of banking sometimes called m-banking (mobile banking) (Choi et al., 2006; Scornavacca and Hoehle, 2007). With the combination of two most recent technological advancements internet and mobile phone, a new service (mobile data service) is thus enabled and the first such wireless internet commercial transaction is performed by the banking industry (Barnes and Corbitt, 2003). It is believed that m-banking will provide another new channel for banking services, especially for certain remote areas where online internet is still unavailable. Strategic implications and customer perception of m-banking services are explored (Laukkanen and Lauronen, 2005) with a focus on the consumer value creation and a better understanding about the customer-perceived value of m-banking services. For instance, mobile internet service has been quite popular in Japan (over 60 millions users in 2003) especially for those young and single (i.e., unmarried) consumers (Scornavacca and Barnes, 2004). Due to the widespread use of computer technologies in almost all aspects of life, organizations that are connected to the Internet started extending their services to their customers to include new applications and services that satisfy their customers desires to make better businesses. One of these emerging applications is mobile banking. The term mobile banking (or m-banking) describes the banking services that the user can perform via a mobile device ubiquitously at anytime and from anywhere. In order for users to access their accounts, they need a mobile device and network connectivity. Therefore, sitting in front of a computer is not a requirement anymore; accessing accounts can occur while users are waiting their turn at the dentist clinic or relaxing at the beach! (Al-Akhras and Qwasmi, 2011). Sylvie and Xiaoyan investigate the market status for online/mobile banking in China. With the recent and forecasted high growth of Chinese electronic banking, it has the potential to develop into a world-scale internet economy and requires examination. The results showed Chinese online and mobile bank users were predominantly males, not necessarily young and highly educated, in contrast with the electronic bank users in the West. The issue of security was found to be the most important factor that motivated Chinese consumer adoption of online banking. Main barriers to online banking were the perception of risks, computer and technological skills and Chinese traditional cash-carry banking culture. The barriers to mobile banking adoption were lack of awareness and understanding of the benefits provided by mobile banking (Laforet, 2005). Telecommunications companies world-wide are developing 3G mobile phones and applications. In the UK, mobile banking is considered to be one of the most value-added and important mobile services available.
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However, the adoption rate of using 3G mobile phones for financial services is yet to be determined. The current research examined both innovative attributes and customers perceived risk in order to understand customers behavior and motivation toward this innovation. It has advanced the theoretical frameworks of innovation and customers risk perception as new attributes and risk dimensions were identified. The findings provide banking executives with a better understanding of what are the perceived advantages and disadvantages of 3G mobile banking services, helping them to plan marketing strategies and promotion approaches for 3G mobile banking services in the future ( Morna 2003). According to Jim Bruene (2006), online banking is the best thing to happen to personal finance management since the invention of the paper statement. In many countries, half or more of online users routinely visit their bank to check account activities, verify deposits, and just see if everything is in order. According to a report by Mintel International Group Ltd (June 1, 2006), the forces driving the growth of the Internet-increased broadband access, new innovations that provide a secure environment, and the coming-of-age of more techsavvy people-will combine to propel online banking as well. Mintel expects that online banking will continue to grow and become more profitable for financial institutions, particularly as the Internet matures and subsequent generations become more technologically literate. Factors impacting online banking include the trend within the industry and the socioeconomic forces behind changing demographics (www.marketresearch.com). Mobile Banking is a financial transaction conducted by logging on to a bank's website using a cell phone, such as viewing account balances, making transfers between accounts, or paying bills. This can be conducted through the internet browser on the phone, through a program downloaded from your bank, or by text-message (SMS). (Malik Abdul,Saif Kamran and Usman Tahir: EMERGING TRENDS IN IT) Mobile banking is an application of mobile computing which provides customers with the support needed to be able to bank anywhere, anytime using a mobile handheld device and a mobile service such as text messaging (SMS). Mobile banking removes space and time limitations from banking activities such as checking account balances, or transferring money from one account to another. In recent research and studies it was found that while mobile banking and more specifically SMS-based mobile banking applications have become popular in some countries and regions, they were still not widely used.(Yu Shi: Factors influencing the use of Mobile Banking: The case of SMS based Mobile Banking) His study identifies and investigates the factors which influence customers decision to use a specific form of mobile banking, and specifically focuses on the evaluation of SMS-based mobile banking in the context of New Zealand. His research model includes the basic concepts of the Technology Acceptance Model (TAM), as well as some constructs derived through a focus group discussion. The model is tested to determine its predictive power with respect to individuals behavior when considering the use of SMS-based mobile banking. The results of the data analysis contributes to the body of knowledge in the area by demonstrating that context specific factors such as service quality and service awareness are influencing user perceptions about the usefulness of SMS mobile banking which in turn affect intention to use and adoption. Secondly, his study demonstrates, on the example of SMS-based mobile banking; how a hybrid approach involving qualitative data collection and a subsequent quantitative survey can help investigate how user perceptions about usefulness and ease of use are formed. Although the study has its limitations, the implications of the results allow providing practical recommendations to the banking industry, and directions for further work. The telecommunications industry worldwide has scrambled to bring what is available to networked computers to mobile devices (Schofield & Kubin 2002). Presently, the use of electronic banking is considerably high and as more and more users sign up for electronic-banking, the maturity as regards remote banking ( i.e. banking outside the banking hall) is on the increase. With electronic banking, users can now conveniently carry out banking transactions, but this convenience cannot be achieved if the user does not have access to the internet, hence, in other words, the user cannot carry out a banking transaction while waiting for a bus, or perhaps while having lunch in a restaurant. With mbanking, convenience can be achieved 24hrs a day. This is because a user has access to his mobile phone all day, at all times. So, to effectively achieve a truly convenient banking mode, a truly mobile mode of banking has to be explored, hence the need for m-banking (Andrew, 2009) The convergence of the Internet and mobile networks creates new opportunities and applications. Treating mobile business as simply an extension to the traditional web could result in missing out unique differentiated qualities for new value-added possibilities. Mobile Banking is considered to be one of the most value-added and important mobile service available. Arcrafs current research examined technological changes in mobile networks and innovative attributes of Mobile Internet. It has advanced the theoretical framework of innovation in service to develop a customer centric analysis of m banking value proposition. His article goes on to discuss critical factors in the diffusion of m Banking and explores reasons of failure and further prospects of success. (Ayadi, 2005).
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According to Rasheda Sultana, across the developing countries, millions of people rely on informal economic activity and local level networks to earn their living. Most of these populations are from bottom of pyramid and they dont have access to basic financial services/banks as access to them is costly and very limited. However, the outstanding growth of mobile sector worldwide has created a unique opportunity to provide social and financial services over the mobile network. With over 4 billion mobile cellular subscriptions worldwide, mobile network has the ability to immediately offer mobile banking to 61% of the world population.(Sultana, 2009) With the improvement of mobile technologies and devices, banking users are able to conduct banking services at anyplace and at anytime. Recently, many banks in the world have provided mobile access to financial information. The reason to understand what factors contribute to users intention to use mobile banking is important issue of research. The researchers purpose is to examine and validate determinants of users intention to mobile banking. He used a structural equation modeling (SEM) to test the causalities in the proposed model. The results indicated strong support for the validity of proposed model with 72.2% of the variance in behavioral intention to mobile banking. His study found that self-efficiency was the strongest antecedent of perceived easeof-use, which directly and indirectly affected behavioral intention through perceived usefulness in mobile banking. Structural assurances are the strongest antecedent of trust, which could increase behavioral intention of mobile banking. This research verified the effect of perceived usefulness, trust and perceived ease-of-use on behavioral intention in mobile banking. The results have several implications for mobile banking managers. (Gu Ja, 2009). According to some researchers, the mobile payment services markets are currently under transition with a history of numerous tried and failed solutions, and a future of promising but yet uncertain possibilities with potential new technology innovations. At this point of the development, the researchers take a look at the current state of the mobile payment services market from a literature review perspective. They review prior literature on mobile payments, analyze the various factors that impact mobile payment services markets, and suggest directions for future research in this still emerging field. Consumer perspective of mobile payments as well as technical security and trust are best covered by contemporary research. The impacts of social and cultural factors on mobile payments, as well as comparisons between mobile and traditional payment services are entirely uninvestigated issues.( Dahlberg Tomi,Mallat Niina ,Ondrus Jan and Zmijewska Agnieszka: Past, present and future of mobile payments research: A literature review, Volume 7, Issue 2, Summer 2008, Pages 165-181). Although millions of dollars have been spent on building mobile banking systems, reports on mobile banking show that potential users may not be using the systems, despite their availability. Thus, research is needed to identify the factors determining users' acceptance of mobile banking. While there has been considerable research on the technology acceptance model (TAM) that predicts whether individuals will accept and voluntarily use information systems, limitations of the TAM include the omission of an important trust-based construct in the context of electronic/mobile commerce, and the assumption that there are no barriers preventing an individual from using an IS if he or she chooses to do so. Based on literature relating to the theory of planned behavior (TPB) and the TAM, this study extends the applicability of the TAM in a mobile banking context, by adding one trust-based construct (perceived credibility) and two resource-based constructs (perceived selfefficacy and perceived financial cost) to the model, while paying careful attention to the placing of these constructs in the TAM's existing nomological structure (Luarn, 2005). Mobile banking is growing at a remarkable speed around the world. In the process it is creating considerable uncertainty about the appropriate regulatory response to this newly emerging service. Researcher sets out a framework for considering the design of regulation of mobile banking. Since it lies at the interface between financial services and telecoms, mobile banking also raises competition policy and interoperability issues that are discussed in his paper. Finally, by unbundling payments services into its component parts, mobile banking provides important lessons for the design of financial regulation more generally in developed as well as developing economies.( Klein Michael,Mayer Colin: Mobile banking and financial inclusion : the regulatory lessons, 01 May 2011). The use of mobile phones in order to effectuate banking transactions is bound to increase in a significant way in the near future. This growth in mobile financial services not only depends on technological advances, but also on consumer confidence in the provided services. Mobile financial services can be divided into mobile banking and mobile payment; therefore, legal certainty must be established as to what supervisory regime applies to the various activities involving banks and non-banks. Mobile banking activities fall within the scope of the banking business, and oversight is provided by the competent financial market authority for prudential supervision, if the definition of banking activities encompasses all relevant mobile banking activities. Furthermore, legal aspects also play a role in the evolution of mobile banking as far as the need to enhance customer trust in the offered services is concerned. Major issues arise in relation to data security and consumer protection. Moreover, the
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outsourcing of certain key activities to mobile operators deserves further attention, as mobile operators can, under specific circumstances, become deeply involved in mobile banking. (Weber, 2010). New electronic channels are replacing the more traditional ones. Mobile devices represent the recent development in electronic service distribution. An exploratory study was conducted on experienced electronic banking customers by using a qualitative in-depth interviewing method. The findings increase the understanding of customer-perceived value and value creation on the basis of attributes of mobile services and customer-perceived disadvantages of mobile phones in electronic banking context. The findings allow practitioners to improve their services and marketing strategies and pass on information to the academics about interesting future research areas (Laukkanen, 2005). In Bangladesh, the expansion of e-banking is beset with several infrastructural, institutional, and regulatory constraints such as inadequate availability of reliable and secure telecommunication infrastructure, absence of a backbone network connecting the whole country, poor ICT penetration in the banking sector, lack of skilled manpower and training facilities, absence of supportive policies, guidelines, rules and regulations relating to etransactions and the like. Despite the constraints, efforts by the Bangladesh Bank in modernizing the country's payment system and commitment by the government in building Digital Bangladesh have brought competition among the scheduled banks to improve banking services and rapidly adopt e-banking on a wider scale. This note provides a critical overview on development of e-banking in Bangladesh and future prospects for better understanding the issue that includes concept of e-banking, present status of scheduled banks in adopting ebanking services, and prospects of e-banking in Bangladesh on the basis of current trend in developing the ICT infrastructure in the country as well as ICT penetration in the banking sector that follows some policy suggestions for BB, Govt. of Bangladesh and scheduled banks so that optimum benefit through e-banking may be obtained. OBJECTIVES OF THE STUDY: To identify prospect of mobile banking in Bangladesh; To detect problems of mobile banking in Bangladesh; To make suggestions on the basis of findings

METHODOLOGY: Methodology is a system of broad principle or rule from which specific methods or procedures may be derived to interpret or solve different problems within the scope of a particular discipline .Methodology is not a formula but set of practices. The study was conducted to identify the problems and prospects of mobile banking in Bangladesh. Necessary data were collected from different ages of people and analyzed in terms of the objectives set for the study. This study was based on field level data. There are several methods of collecting this basic information. The data for this study were collected by the survey method. Survey is a research technique in which information is gathered from a sample of people by use of a questionnaire or interview. The word survey refers to a method of study in which an overall picture of a given universe is obtained by systematic collection of all available data on the subject. It is a method of data collection based on communication with a representative sample of individuals. The main reasons why the survey method is preferred to cost: Survey through sacrificing a certain details, enables quick investigation of a large number case. Survey entails much less cost Surveys provide quick, less expensive, efficient LOCATION/GEOGRAPHIC COVERAGE: The study has been conducted in different area of Dhaka city such as Sher-e-Bangla Nagar, Mirpur, Tejgaon, Dhanmondi, Tejkunipara, Mogbagar, Monipuripara, University, collage, and many houses. TYPES OF RESPONDENTS: This research includes all types of people mostly selected different age, sex, and occupation people. RESEARCH DESIGN: Mobile banking is a new technology for all people in Bangladesh. In this country, most of the people use traditional banking system. People are afraid of using mobile banking because they cannot feel it trust worthy. In our country, most of the customers are influenced by advertisement. In recent period, customers become
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more conscious about their savings. Marketers use these strategies for selling their products. Different banks advertise about mobile banking to give information about it to all the people in the country. This study has researched the consumer perception on mobile banking based on the above dimensions. The study involved a field survey conducted across different places in Dhaka, Bangladesh. The respondents were approached at home, university, collage etc. It was felt that the survey will give the correct result. The respondents were administered a structured questionnaire. The responses were recorded using a set of 15 statements. These statements were derived from the literature survey. They were finalized based on the discussion with some respondents. Responses were also sought regarding customers preference behavior. The research is exploratory in nature. Other relevant issues regarding the research are briefly presented below: SOURCES OF DATA: Both primary and secondary sources were used for the research purpose. Secondary data were used for providing the theoretical background to the research problem. The secondary data sources were-journal, books, internet etc. Primary data was collected through household survey by using appropriate research instrument. In the primary data collection procedure every individual respondent has been considered as potential respondent in the research. QUESTIONNAIRE TYPE AND RESPONSES: The questionnaire was starting with some introductory questions such as name, age, occupation, education, income and address. These questions provide the basic information about respondents. These types of questions make respondents comfortable to respond the study. There are 15 questions in this questionnaire. The respondents were asked the questions to know their knowledge and perception about mobile banking like Have you ever heard about mobile banking?, Do you think you should use it?, Do you think mobile banking is trust worthy? etc. SAMPLING METHOD: The basic sampling procedure for the study was convenience with cluster sampling. I have made the decision to carry out 120 respondents in different areas in Dhaka city. RESEARCH INSTRUMENTS: Information was collected through interviewer administered questionnaire method and through different secondary media. The questionnaire contains several questions for different respondents. PERIOD OF DATA COLLECTION: Data were collected by the researcher himself through personal interviews with the respondents. DATA COLLECTION AND ACCURACY OF DATA: Generally most of the people are not interested to give time to answer a questionnaire. So it was very difficult to collect actual data because the information of the respondents was collected by approaching them to answer the question. To overcome this problem, all possible efforts were made by the researcher himself to ensure the collection of reasonably accurate information from the respondents. So, it has not been possible to apply any other method of investigation. Survey method has the advantage that it facilitates quick investigation and involves higher cost. In order to collect relevant information before taking interview, the whole academic purpose of the study was clearly explained and made clear to the respondents. The researcher himself collected the relevant data from the respondents through face to face interview. Data collected were checked and verified in the field for accuracy and consistency. RESULT AND FINDINGS: Basically the research was of descriptive in nature. Qualitative data are analyzed critically using judgment. Several statistical and analytical methods and tools were used for analyzing the gathered data from the survey. Column chart has been used as graphical tools to show the analysis of data. The package used in the study was: Microsoft Word, Microsoft Excel

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HEARD ABOUT MOBILE BANKING: Mobile banking is a new technology in Bangladesh which started from 31st March 2011. Dutch Bangla Bank Limited pioneered in mobile banking services in Bangladesh. Most people heard about it but not have a clear idea. According to my survey almost 94% people heard about mobile banking and 6% havent heard about mobile banking. INTEREST TO USE: Many people heard about mobile banking. But they yet have not felt that they should use it as they are happy to use traditional banking system. Some people feel interest to use it. About 55% people feel they should use it and 45% people havent feel to use mobile banking according to the survey. TAKES TIME BY MOBILE BANKING THAN TRADITIONAL BANKING: Mobile banking is real time on-line banking. As it is on-line banking it takes less time than traditional banking. It will make access to banking and advanced payment, transactions at affordable cost People have not to wait by standing in a long line which is happen in traditional banking system. But some people think it takes higher time and some people think it takes same time as traditional banking. According to the research only 5% people think it takes higher time, 34% people think it takes the same time and 61% people think it takes lower time than traditional banking system. TIME SAVING: Mobile banking is available anytime, anywhere throughout the country. So it can save ones time. But all people not think the same. About 70% respondents think that mobile banking can save their time, where as 30% think it cannot save time. COST: It is convenient, affordable and it is much more effective in developing savings habits, it will make access to banking and advanced payment transactions at affordable cost. All people know that its cost is not higher than traditional banking. Around 56% respondents say its cost is lower, 20% say same and 24% say it is affordable than traditional banking. . A positive aspect of mobile phones is that mobile networks can reach remote areas at low cost. TRUST WORTHY: It is much safer and safeguard against fraudulent transactions. One can trust mobile banking as traditional banking system. It has secured pin code which is known by the user, and also has a check digit without it no one can deposit money. But in Bangladesh traditional branch-based banking remains the most widely adopted method of conducting banking transaction. The poor often have greater familiarity and trust with mobile phone companies than formal banking institutions. Furthermore a mobile handset can easily be adapted to handle banking transactions. But it is not commonly known by all. From the survey itis found that 63% respondents think mobile banking is trust worthy and 37% respondents feel it is not trust worthy. USE: It is much more effective in developing savings habits. Its using system is also easy. Anyone can use it. Poor people are often not considered viable customers by the formal financial sector as their transaction sizes are small, and many live in remote areas beyond the reach of banks branch networks. Informal banking services such as microfinance and village savings and loan associations remain limited in their reach. So, mobile banking system develops to bring poor people into banking system. 83% respondents face or heard no problem to use mobile banking. But 17% respondents heard or face problems to use it like-sometimes transaction do not reach at time, cannot operate it easily as traditional banking, not trust worthy. PROSPECT OF MOBILE BANKING IN BANGLADESH: Mobile Banking is a Banking process without bank branch which provides financial services to unbaked communities efficiently and at affordable cost. The aim of the service is to bring more people under the umbrella of banking service. Bangladesh Bank governor Dr Atiur Rahman inaugurated the service through
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deposit and withdrawal of money from two banking outlets in the city. Government thinks it has a great prospect as it is a new technology in digital Bangladesh. But in Bangladesh many people think traditionally, because they cannot think it has any facility to use mobile banking. 69% people feel mobile banking has prospect in Bangladesh whereas 31% think it has no prospect in Bangladesh as many people will not feel interest or have belief on mobile banking. SUGGESTION TO OTHER TO USE THE SYSTEM: 55% feel interest to use mobile banking but most people do not want to give suggestion to other to use it. As it is a new method of banking people havent 100% faith on it. So, people dont want to take any risk by giving suggestion to use it. 68% respondents say they do not want to give suggestion and 32% respondents say they want to give suggestion to use mobile banking. MAKE LIFE EASIER: Mobile banking is real time on-line banking, available anytime, anywhere throughout the country, it is convenient, affordable and secure, it is much more effective in developing savings habits, it will make access to banking and advanced payment transactions at affordable cost, it is much safer, speedy and safeguard against fraudulent transactions. All of the characteristics of mobile banking make life easier. But 43% respondents feel it will not make life easier as it may not be trust worthy, but 57% respondents feel the facility which mobile banking give will make life easier. SECURITY: In mobile banking a confidential pin code is used by the user. PIN ensures security of money and protects fraudulent transactions. So mobile banking is fully secured. It also believed by 70% respondents, but about 30% respondents say it is not secured as they cannot fully trust on online banking than traditional banking system. SPEEDY PROCESS: One benefit of mobile banking is a very speedy process. Transaction can be done anytime anywhere quickly in less time. So 100% people believe that it is a speedy process. CLASS OF PEOPLE: Mobile banking started with the idea to bring the poor under the umbrella of banking sector especially rural poor as there are not much bank facilities, also there savings is low so they feel shy to go to bank. But according to my survey 38% respondents feel upper class, 21% respondents feel middle class people can use mobile banking. But 41% respondents say mobile banking can be used by all class of people. PROBLEMS ENCOUNTERED IN COLLECTING DATA: The researcher had to face the following problems in collecting data from the respondents: i. Generally most of the respondents have not enough idea about mobile banking. So it was very difficult to collect actual data. Because the information of the respondents was supplied from their idea. ii. Most of the respondents were not fully use mobile banking which caused another problem to data collection to the researcher. iii. Sometimes respondent could not answer to questions accurately and to the point. iv. The respondents were usually remaining busy with their work. So, the researcher had to visit some of them even at the work place and researcher sometimes had to pay more time to meet the respondents. v. Most of the respondents did not feel comfortable to answer questions. So researcher had to pay more time to gain their confidence. CONCLUSION: Some policy Implications, Mohammad Mizanur Raman,(www.ampublisher.com) Mobile Phone Banking offers the potential to extend low cost virtual bank accounts to a large number of currently un-banked individuals worldwide. Change is being driven by falling costs of mobile phones including airtime, by competition and by the ability of electronic banking solutions to offer customers an enhanced range of services at a very low cost. Text-a-payment (TAP) builds upon the familiarity and comfort that people around the world have with sending text messages via their mobile phone. Instead of traveling to the bank to make their loan payment, clients can
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now text their loan payment directly to the bank; saving them both travel time and money. This is also beneficial for the bank, since they can increase their outreach to rural areas while reducing their costs. (Catching the Technology Wave: Mobile Phone Banking and Text-a-Payment in the Philippines,John Owens, Anna Bantug Herrera,www.bwtp.org) M-Banking technology has become one of the most familiar banking features throughout the world. Nowadays millions of inhabitants of Bangladesh are within a network through mobile network coverage. But in the commercial sectors like banking, m-Commerce technology has not been adopted broadly yet. In context of Bangladesh where almost 95% of geographical areas including Chittagong Hill tract region is under cellular coverage and having sufficiency in Internet infrastructure in remote regions, m-Banking via mobile phones can be the right choice for the promising banking sector. Considering m-Commerce and mBanking perspective in Bangladesh, a Push Pull services offering SMS (Short Messaging Service) based mBanking system has been proposed which is able to provide several essential banking services only by sending SMS to bank server from any remote location. This proposed system is divided into five major phases: Interfacing Module, SMS Technology Adoption Module, SMS Banking Registration Module, Push Pull mBanking Services Generation Module, and Modified Data Failover Module. This push-pull services specified system facilitates bank customers by carrying out real time m-Banking utilities by categorizing services into five major on the basis of their homogeneity. They are Broadcast, Scheduling, Event, and Enquiry and mCommerce services. Fifteen push pull services underlying these categories are implemented in this proposed system which are most desired to customers. The proposed system not only brings banking transaction in hands grip but also makes it easier, robust and flexible with highest security. Moreover, modified data failover algorithm handles unexpected SMS server failure with any congestion or service request loss. At last, after evaluating each module of our proposed system a satisfactory accuracy rate 94.95% has been obtained. APPENDIX: 1 TABLE NO. 1 Characteristic Respondents 1. What do you think how much time mobile banking takes than traditional system? a. Higher 6 b. Lower 73 c. Same 41 Total 120
Source: field Study.
70% 60% 50% 40% Series1 30% 20% 34% 10% 5% 0% 1 2 3 61%

Percentage

5% 61% 34% 100%

TABLE NO. 2 Characteristics 1. Do you use any mobile banking service? a. Customer registration b. Cash in c. Cash out d. Merchant payment Respondents 21 0 0 0 Percentage 12% 0% 0% 0%

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e. Utility payment f. Salary disbursement g. Foreign remittance h. Air-time top-up i. Fund transfer j. None Total
Source: field study.
35% 30% 25% 20%

37 0 13 38 12 60 181

20% 0% 7% 21% 7% 33%

33% 15% 10% 5% 0% 1 12% 7% 0% 0% 0% 2 3 4 0% 6 7% 20% 21%

Series1

10

TABLE NO. 3 Characteristics Respondents Percentage What do you think about the cost of mobile banking than traditional banking? 0 0% a. Higher b. Lower 67 56% c. Same 24 20% d. Affordable 29 24% Total 120
Source: field study.
60%

50%

40%

30%

Series1

20%

10%

0% 1 2 3 4

TABLE NO. 4 Characteristics 1. What do you think? It isa. Speedy process b. Slow process Total
Source: field study.

Respondents Percentage 120 0 120 100% 0%

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120%

100%

80%

60%

Series1

40%

20%

0% 1 2

TABLE NO. 5 Characteristics 1. Which class of people can use mobile banking? a. Upper b. Middle c. Poor d. All Total
Source: field study.
45% 40% 35% 30% 25% Series1 20% 15% 10% 5% 0% 1 2 3 4 21% 38% 41%

Respondents

Percentage

46 25 0 49 120

38% 21% 0% 41%

REFERENCES:
[1] Al-Akhras T Mousa,Al-Saiyeed Rizik,Alian Marwah and Qwasmi Doaa:Innovative Secure Mobile Banking Services,2011, p195 [2] Al-Ashban, A.A. & Burney, M.A. (2001), Customer adoption of tale-banking technology: the case of Saudi Arabia, International Journal of Bank Marketing, 19 (5), pp191-200. [3] Ali, Sadia Samar & Bharadwaj, R.K. (2010), Factor analysis approach of decision making in Indian E-banking: A value adding consumer's perspective, http://inderscience.metapress.com/app/home/contribution.asp?referrer=parent&backto=issue,2,6;journal,3,18;linki ngpublicationresults,1:120361 [accessed 7 Jun 2010] [4] Andrew Wambari, (2009), Mobile Banking in Developing Countries: a case study on Kenya, pp132-139 [5] Ayadi Achraf: Value creation in mobile banking,24 Aug, 2005 [6] Banzal S. (2010), Mobile Banking & MCommerce and Related Issues, www.public.webfoundation.org/.../25.Mobile_banking_M-commerce_15.03.pdf [accessed 10 Jul 2010] [7] Barnes, S.J., Corbitt, B. (2003), Mobile banking: concept and potential, International Journal of Mobile Communications, 1 (3), pp 273-288. [8] Black, N. J., Lockett, A., Ennew, C., Winklhofer, H. & McKechnie, S. (2002), Modelling consumer choice of distribution channels: an illustration from financial services, International Journal of Bank Marketing, 20 (4), pp161-173 [9] Cheong, J.H., & Park, M.C. (2005), Mobile internet acceptance in Korea, Internet Research, 15(2), pp125-140 [10] Cheney, J. S. (2008), An Examination of Mobile Banking and Mobile Payments: Building Adoption as Experience Goods, www.philadelphiafed.org/pcc/papers/2008 [accessed 10 May 2010]

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[11] Comninos, A., Esselaar, S., Ndiwalana, A. & Stork, C. (2008), Towards evidence-based ICT policy and regulation mobile banking the unbanked, http://externo.casafrica.es/aeo/pdf/english/overview_part_2_09_aeo_09.pdf [accessed 30 March 2010] [12] Dahlberg Tomi,Mallat Niina ,Ondrus Jan and Zmijewska Agnieszka: Past, present and future of mobile payments research: A literature review, Volume 7, Issue 2, Summer 2008, pp 165-181 [13] Gu Ja-Chul,Lee Sang-Chul and Suh Yung-Ho: Determinants of behavioral intention to mobile banking,19 March, 2009. [14] Guriting, P. & Ndubisi, N.O. (2006), Borneo online banking: Evaluating [15] Hayat Muhammad Aslam (2009), Mobile payments: Will Colombo keep its leadership in South Asia? http://sundaytimes.lk/090712/FinancialTimes/ft323.html [accessed 30 April 2010] [16] Howcroft, B., Hamilton, R. & Hewer, P. (2002), Consumer attitude and the usage and adoption of home-based banking in the United Kingdom, International Journal of Bank Marketing, 20 (3), pp 111-121. [17] Karjaluoto, H., Mattila, M. & Pento, T. (2002), Factors underlying attitude formation towards online banking in Finland, International Journal of Bank Marketing, 20 (6), 261-272. [18] Klein Michael,Mayer Colin: Mobile banking and financial inclusion : the regulatory lessons, 01 May 2011 [19] Luarn Pin and Lin Hsin-Hui: Toward an understanding of the behavioral intention to use mobile banking,Volume 21, Issue 6, November 2005, pp 873-891 [20] Laforet Sylvie,Li Xiaoyan: Consumers attitudes towards online and mobile banking in China, Volume 23 issue 5. [21] Lyman, T.R., Pickens M. & Porteous D. (2008), Regulating Transformational Branchless Banking: Mobile Phones and Other Technology to Increase Access to Finance, In: Focus Note 43. Consultative Group to Assist the Poor (CGAP), Washington, DC [22] Mas, I. (2008), Realizing the Potential of Branchless Banking: Challenges Ahead, In: Focus Note 50. Consultancy Group to Assist the Poor (CGAP), Washington, D.C [23] Mattila, M. (2003), Factors affecting the adoption of mobile banking services, Journal of Internet Banking and Commerce, 8 (1), pp101-119 [24] Mattila, M., Karjaluoto, H. & Pento, T. (2003), Internet banking majority of laggards?, Journal of Services Marketing, 17(5), pp514-528 [25] Mobile banking: Overview of Regulatory framework in emerging markets,2009 [26] Morna S.Y. Lee, Peter J. Mc Goldrick, Kathleen A. Keeling, Joanne Doherty, (2003) "Using ZMET to explore barriers to the adoption of 3G mobile banking services", International Journal of Retail & Distribution Management, Vol. 31 Iss: 6, pp.340 348) [27] Morawczynski, O. & Miscione, G. (2008), Exploring Trust in Mobile Banking Transactions: The Case Of M-Pesa In Kenya, Social Dimensions of Information and Communication Technology Policy, pp 287-298 [28] Owens, John & Anna, B. (2006), Catching the Technology Wave: Mobile Phone Banking and Text-A-Payment in the Philippines, http://www.chemonics.com/projects/content/GCash.pdf [accessed 13 Jun 2010] [29] Polatoglu, V.N. & Ekin, S. (2001), An empirical investigation of the Turkish consumers acceptance of Internet banking services, International Journal of Bank Marketing, 19 (4), pp156-165 [30] Pousttchi, Key & Schurig, Martin (2007), Assessment of Todays Mobile Banking Applications from the View of Customer Requirements, http://mpra.ub.uni-muenchen.de/2913/ [accessed 10 Oct 2010] [31] Rao, G. R. & Prathima, K. (2003), Online banking in India, Mondaq Business Briefing, 11 April 2003 [32] Sharma, Prerna & Singh, Preeti (2009), Users perception about mobile banking- with special reference to Indore & around, Review of Business & Technology Research, Vol. 2, 1, pp. 1-5 [33] Suoranta, M. (2003), Adoption of mobile banking in Finland, Jyvskyl Studies in Business and Economics, p28. [34] Sultana Rasheda, (2009), Mobile banking: Overview of Regulatory framework in emerging markets, pp124-131 [35] Tiwari, Rajnish & Stephan, Buse (2007), The Mobile Commerce Prospects: A Strategic Analysis of Opportunities in the Banking Sector, http://www.global-innovation.net/publications/PDF/HamburgUP_Tiwari_Commerce.pdf [accessed 15 Aug 2010] [36] Unnithan, C.R. & Swatman, P. (2001), Online banking Adaptation and Dot.Com Viability: A Comparison of Australian and Indian Experiences in the Banking Sector, School of Management Information Systems, Deakin University, No. 14. [37] Weber Rolf H and Darbellay Aline:Legal issues in mobile banking, Journal of Banking Regulation (2010) 11, 129145. doi:10.1057/jbr.2009. p16 [38] www.enterpriseinnovation.net [39] www.wikipedi [40] www.marketresearch.com [41] www.bwtp.org [42] www.ampublisher.com

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A COMPARATIVE STUDY OF SELF HELP GROUPS (SHGs) QUALITY ASSESSMENT TOOLS

SANJAY KANTI DAS, Assistant Professor & HoD, Commerce.Lumding College, Lumding, Nagaon, Assam-782447

ABSTRACT Micro finance through Self Help Group (SHG) has been recognized internationally as the modern tool to combat poverty and for rural development. The SHG movement has come of age after nearly two decades of experimentation. Its initial success has attracted considerable attention of development practitioners, policy makers, fund providers, academicians, researchers and even corporate bodies. The SHGs today have become a vehicle to pursue diverse developmental agendas and even for the profit motive. To avert such a situation, growth with quality has became the paramount agenda of today among different stakeholders, as there is an over reaching concern about sustainability of the SHG movement in India. In other words, the proliferation of SHG has posed a serious challenge to sustain this movement by maintaining quality of SHGs and hence, the quality assessment of SHGs is now being considered as a key concern. But the assessment tools are devised by different agencies for different purposes and different sets of users. An effort is made in this paper to make a comparative analysis of the two selected quality assessment tools of SHGs. It is evidenced in this paper that the two separate assessment tools i.e. NABARD & MYRADA shows the different languages about the quality or grades of selected SHGs. However, it is concluded that some of the possible reasons for and possible implications of such grades differences. However, the study suggested the need for developing common understanding on SHG quality assessment. Keywords: Micro Finance, Quality Parameter, Quality Assessment Tools, SHG-Bank Linkage Programme, Self Help Groups.

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INTRODUCTION: Micro Finance is emerging as a powerful tool for poverty alleviation in the economy. In India, Micro finance scene is dominated by SHG-Bank linkage programme as a cost effective mechanism for providing financial services to the unreached poor. The Programme has been successful not only in meeting financial needs of the rural poor women but also strengthen the collective self help capacities of the poor, leading to their empowerment. The SHG movement has come of age after nearly two decades of experimentation. Its initial success has attracted considerable attention of development practitioners, policy makers, fund providers, academicians, researchers and even corporate bodies. The SHGs today have become a vehicle to pursue diverse developmental agendas and even for the profit motive. To avert such a situation, growth with quality has became the paramount agenda of today among different stakeholders, as there is an overreaching concern about sustainability of the SHG movement in India. In other words, the proliferation of SHG has posed a serious challenge to sustain this movement by maintaining quality of SHGs and hence, the quality assessment of SHGs is now being considered as a key concern. Though SHG movement is growing at a phenomenal pace and resulting in far reaching benefits to its members and also rural bank branches, it is facing a number of serious challenges. All these challenges could be summarized into two major challengesi. These are1. Uneven growth of SHGs in different parts and states of the country. 2. Uneven quality of SHGs across the country and issues related to their sustainability. Rating of SHGs assumes importance as it not only a pre-appraisal tool but as well a self evaluation which is a continuous process. Quality assessment of SHGs has come to be accepted as an important tool to ensure standards in SHGs. In the enthusiasm to ensure monitoring of SHGs every stakeholder had their own innovation in designing a new tool for grading of SHGs. This has resulted in flooding of market with rating tools with slight variation here and there.ii Only a few quality assessment studies were made in the country in general and Assam in particular. But the assessment tools are devised by different agencies for different purposes and different sets of users. Several rating systems for micro-finance interventions and Self-Help Groups (SHGs) have been developed in the past. But most of these were restricted to understanding the creditworthiness of SHGs and employed indicators on performance on basic group functions and credit absorption capabilities. Social, empowerment and behavioural aspects of SHG functioning rarely found a place in the rating system. Further, these rating tools speak different languages in assessing the quality of SHGs. Here, an effort is made in this paper to make a comparative study of two selected SHG quality assessment tools. REVIEW OF LITERATURE: In this section, an effort is made to review a number of studies that has gone into the various quality, sustainability and socio-economic issues related to SHGs in India - self-confidence, communication skills, positive behavioral changes, savings, incomes and assets. The study on SHGs conducted by EDA Rural System and APMAS (2006) iii on the SHG-Bank-linkage programme in India, addressed a wide range of issues including cases of dropouts from SHGs and internal politics, and issues of social harmony and social justice, community actions, book-keepings, equity, defaults and recoveries and sustainability of SHGs. A study by Meissner (2006)iv of the NABARD-GTZ Rural Finance Program examined the viability of SHG lending in a regional rural bank branch, the Alwar Bharatpur Anchalik Gramin Bank (ABAGB), in Alwar district of Rajasthan. Overall, the study found that the SHG lending operations of the branch were viable and sustainable. Another study conducted by Peoples Education and Development Organisation (PEDO 2006) v about their SHGs programme and makes an attempt to evaluate social and economic impact on households of SHGs members. They observed that members involved in SHGs programme have increased involvement in decision making, awareness about various programmes and organisations. Moreover, the members get information about the different sources of credit and also reported that there are the evidences of household income, food security and increased standard of living. A recent study by NCAER for GTZ and NABARD, pointed out that SHG - banking has resulted in a significant decline in poverty among SHG members. It also resulted in a significant decline in SHG members dependency on money lenders and other informal credit sources (NCAER, 2008vi). Even studies of Nirantar, which are considered as most critical studies, pointed out that SHG - banking resulted in smoothening of basic consumption of the poor and helped members to tie over economic emergencies without jeopardizing their
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future (Nirantar, 2007avii and 2007b viii). Another NCAERix study in collaboration with the World Bank suggests that SHG - banking resulted in increase in the proportion rural household, who got institutional credit. A study on SHGs named Lights and Shades conducted by EDA Rural Systems and APMAS (2006x) Self Help Groups in India: A Study of the Lights and Shades observed that 30 per cent of SHGs in the sample were involved in community actions. It was pointed out in the study that such community actions inculcated a new boldness and confidence amongst women, often putting pressure on the authorities to do their jobs, whether through petitions or by staging rallies and blockades. The study also brought out that a significant proportion of sampled groups (40 per cent) had a weak record of account keeping. It was pointed out that financial statements were not being regularly prepared by the SHGs. Only 28 per cent of the SHGs (22 per cent in the South and 35 per cent in the North) prepared an income and expenditure statement and an equal number of SHGs prepared a balance sheet and portfolio information. A study carried out by the Indian Institute of Bank Management (IIBMxi), Guwahati, Assam, and commissioned by Sa-Dhan, shows that the SHG movement has not caught on in some north-eastern states for reasons that are peculiar to the region. The main reason, it appears from the study, is that the micro-finance movement relies mainly on Self Help Groups (SHGs) linked to banks. Banks are thinly spread in the region and are to be found mainly in urban clusters in the valleys. Banks are not only few, they are understaffed. Most banks have two or three employees and they are not equipped to handle many SHGs that could be spread over several kilometers. The cost of promoting SHGs in the virtually high in hill regions, as Study Team points out. In another study conducted by Haryana Community Forestry Project, 2007xii assessed the quality of SHGs in a self style way which comprises nine broad indicators which includes organisational capacity, saving and credit, financial management, micro-enterprises, skill development, awareness & attitudes, empowerment & influence, networks & linkages and plans & visions. Another recent study on Quality and Sustainability of SHGs in Assam, sponsored by NABARD, and Andhra Pradesh Mahila Abhivruddhi Society (APMAS), September 2009 xiii which is the first step in the NABARDAPMAS collaboration for SHG quality improvement in three lagged states, viz. Assam, Bihar and Madhya Pradesh. It is reported that the SHG program has resulted in social and economic benefits to a significant percentage of the sample groups. Despite of all round support from the Government of Assam, NABARD, NGOs, RRBs and active participation of primary members, the condition of SHGs in the state is far from satisfaction. In another study conducted by Centre of Micro Finance, Jaipur, titled Feasibility Study of a Special Purpose Vehicle (SPV) for SHG financing through SHG Institutions developed sixteen variables to access the SHGs quality viz. Feeling of homogeneity/ Solidarity, Velocity of internal lending, Governance issues, attendance in meeting, member awareness about financial, transactions involvement in village issues etc. Working towards a common acceptance and wide use of quality as well as organizational capacity assessment processes for SMFIs, APMAS has developed a Quality Assessment (QA) systemxiv GRADES in collaboration with Micro Credit Ratings International Limited (M-CRIL), New Delhi. GRADES represent the key assessment areas of the Federation Assessment Governance & Strategy, Resources, Asset Quality, Development & Impact, Efficiency & Profitability, Systems & Operating Processes in addition to the SHG Performance. The weightage and the broad parameters to be assessed in GRADES includes Governance & Strategy (15%), Resources (8%), Asset Quality (8%), Development & Impact (7%), Efficiency & Profitability (9%), Systems & Operating Processes (13%), and SHG Performance (40%). The present study differs from earlier studies as it covers a comparative study of the quality assessment tools of SHGs developed by NABARD and MYRADA and a modest effort is also taken to study the weakness of the two models and to put forward some suggestions in the context of quality assessment. OBJECTIVES: The objectives of this paper are1. To make a comparative study of quality of selected SHGs under NABARD & MYRADA assessment tools. 2. To study the issues relating to SHG quality assessment. 3. To outline conclusions based on the findings of the study to put forward some suggestions in the context of quality assessment. RESEARCH DESIGN AND METHODOLOGY: The research design and methodology devised in this paper is being presented which has been designed keeping in mind the focused objectives and with the aim of acquiring accurate and authentic data. The study was restricted to only three Development Blocks out of eighteen Development Blocks of the Nagaon district of Assam under both judgment and convenience sampling methods viz. Lumding Development Block, Udali
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Development Block and Dhalpukuri Development Blocks. Some specific revenue villages were selected for the purpose of the study wherein the concentration of SHG is very high. These revenue villages are featured with high proliferation of SHGs. Data has been collected from both primary and secondary sources. Only SHGs under SGSY which are enlisted with Directorate of SHGs under SGSY, Nagaon District for the year 2008-09 & completed one years of existence are covered in the study and primary data are collected during the first half of 2011. Initially 75 SHGs from each block covering both male and women SHGs are randomly selected from selected revenue villages out of which researchers could collect 50 useful filled questionnaires from each Development Block, due to time, apathy of group members, defunct SHGs and distance constraints. The two questionnaires are being prepared for assessing the quality of the SHGs of the study area. These questionnaires are framed suitably according to the specified grading criteria viz. NABARD CRI Rating Tools and MYRADA Rating Tools. A numerical score calculated on the basis of factors indicated by members. One questionnaire (No-1) contained fifteen (15) statements for studying quality/grading of selected SHG under NABARD CRI and the other questionnaire (No-2) contained twenty one (21) statements for studying quality/grading of selected SHGs under MYRADA Assessment Tools in the selected Development Block under Nagaon districts of Assam. For assessing the quality of selected SHGs in the selected Development Block under NABARD Assessment Tools fifteen variables are taken into consideration as par NABARDs CRI. The NABARDs CRI is basically consists of two sets of variables viz. governance & systems related variables & financial variables. Governance related parameters are frequency and regularity of meetings, attendance in the meetings, decision making methods, lending norms etc. Financial parameters includes frequency & regularity of savings, use of savings, regularity of loan repayments etc.CRI is the aggregate of the points scored on above described parameters. According to the aggregate score, each group is assigned grades A, B and C. Grade A groups could be given loans; grade B groups need capacity building & grade C imply intensive capacity building is required. However, for suitability of the comparative study under NABARDs CRI, the following scale is used keeping conformity with the above cited grades. TABLE 1.NABARD CRI RATING GRADE SCALE Numerical Score 120 & above 75-120 50-75 Below 75
Source: Author.

Grade A B C D

Analysis Grade Good Average Poor Very Poor

Similarly, for assessing the quality of selected SHGs in the selected Development Block under MYRADA assessment tools, twenty one variables are taken into consideration as per MYRADA Assessment Tools. However, a numerical score calculated on the basis of variables indicated by the members. The degree of each statement was determined using a four point rating scale. TABLE 2. MYRADA RATING SCORE Rating Scale Good Average Poor Very Poor
Source: Author.

Numerical Score 3 2 1 0

Further, for suitability of the comparative study under MYRADA Rating Tool, the following scale is used keeping conformity with the above cited rating scale. TABLE 3. MYRADA RATING GRADE SCALE Numerical Score 50 & above 30-50 20-30 Below 20
Source: Author.

Grade A B C D

Analysis Grade Good Average Poor Very Poor

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COMPARATIVE STUDY OF SELECTED SHGs UNDER MYRADA AND NABARD ASSESSMENT TOOLS: It is observed from the study of NABARD CRI and MYRADA Quality assessment tools, it is observed that both the Quality Assessment Tools uses separate rating norms. However, after comparative analysis of the selected assessment tools, the following common variables of Quality Assessment Parameters are found out. TABLE 4. SOME COMMON QUALITY ASSESSMENT PARAMETERS IN MYRADA & NABARD S.No. 1 Common variables in Quality Assessment Parameters Group Constitutions Size of SHGs Group composition Organizational discipline Frequency & regularity of meetings Attendance at meetings Participation of members Regularity & amount of savings Organizational Systems Level of awareness of rules Level of maintenance of records Transparency in operations Financial Management & Performance Management of group funds Loan repayment by members Capabilities & Achievements Literacy of SHG members

Source: Author.

Under NABARD CRI assessment tools, the selected SHGs of Selected Development Blocks are assessed by using the rating scale fixed by NABARD found that there is no sample SHG in Lumding Development Block and Udali Development Block which are found Good except five SHGs in Dhalpukuri Development Block, only 28% of the selected SHGs of Lumding Development Block, 32% in Udali Development block and 26% in Dhalpukuri Development Block are found Average and 52% of the selected SHGs of Lumding Development Block, 44% in Udali Development Block and 48% in Dhalpukuri Development Block are found Poor. Further, 20% of the selected SHGs of Lumding Development Block, 24% in Udali Development Blocks and 16% Dhalpukuri Development Block are earmarked as very poor. This above categorization is made by using rating marks fixed by NABARD and numerical score is fixed as was stated in the research methodology. Further, by using MYRADA assessment tools, the selected SHGs of Selected Development Blocks are assessed by using the rating scale fixed by MYRADA assessment tools found that there is no sample SHG in Lumding Development Block and Udali Development Block which are found Good except three SHGs in Dhalpukuri Development Block, only 22% of the selected SHGs of Lumding Development Block, 26% in Udali Development block and 22% in Dhalpukuri Development Block are found Average and 18% of the selected SHGs of Lumding Development Block, 28% in Udali Development Block and 34% in Dhalpukuri Development Block are found Poor. Further, 60% of the selected SHGs of Lumding Development Block, 46% in Udali Development Blocks and 18% Dhalpukuri Development Block are earmarked as very poor. This above categorization is made by using rating marks fixed by NABARD and numerical score is fixed as was stated in the research methodology. TABLE 5. QUALITY OF SHGS IN LUMDING DEVELOPMENT BLOCK Lumding Udali Development Block Development Block NABARD MYRADA NABARD MYRADA Nil 14 (28%) Nil 11 (22%) Nil 16 (32%) Nil 13 (26%) Dhalpukuri Development Block NABARD MYRADA 05 03 (10%) (06%) 13 11 (26%) (22%)

GRADE Good- A Average-B

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Poor C Very PoorD Total


Source: Field Study

26 (52%) 10 (20%) 50

9 (18%) 30 (60%) 50

22 (44%) 12 (24%) 50

14 (28%) 23 (46%) 50

24 (48%) 08 (16%) 50

17 (34%) 09 (18%) 50

FURTHER OBSERVATIONS: 1. It is observed from the comparative study that all of the SHGs under SGSY in selected Development Block are found homogeneous in respect to gender. Again, most of them are composed of same economic status but having varied social status. However, the size of the SHGs in Lumding Development Block are too some extent similar in nature (10 to 12 members). 2. It is also observed from the study that most of the SHGs in selected Development Block are organized with pre-determined objectives and visions either in written or in verbal form. 3. It is observed from the study that a good number of SHGs in selected Development Block are defunct in nature and they are just in records only. This feature is found more in Lumding and Udali Development Blocks in good number. 4. It is further observed from the study that though most of the SHGs in selected Development Block have some guidelines regarding holding of fortnightly meeting of members but it is found that most of them can not hold such fortnightly meetings of members. However, at an average one meeting in a month is held but there is no regularity in holding such meetings. However, the SHGs in Dhalpukuri Development Block wherein most of the SHGs holds regular meeting among their members. 5. Regarding attendance of members in the meetings, it is observed that in most of the SHGs in selected Development Block where approximately 75% of the members attended the meetings regularly. This feature is very common in SHGs in Dhalpukuri Development Block wherein cent percent attendance is recorded in majority of the SHGs. 6. Regarding participation of members in decision making process, it is observed that in most of the SHGs in selected Development Block where a few members of the SHGs are actively engaged in decision making process. These a few active members who influences decisions but majority of them aware about the issues for organizing and managing the SHGs. 7. Though in most of the SHGs in selected Development Block are guided by well established rules and regulations for organizing and managing the same, but these are in many cases not known to majority of members. 8. One time saving in a month is the maxim in most of the SHGs in selected Development Blocks but majority of the SHGs members does not follow the principle. In fact, most of the members are aware that they have to save but no minimum amount for monthly savings is fixed. Regarding savings and its frequency, minimum amount and mode of collection are often discussed in the members meetings. It is further observed that most of savings collections are done on door to door system. 9. It is further observed from the study that in most of the SHGs in selected Development Block where selection of borrowers is made in group meetings. It is further observed that utilization of SHG Funds and recovery of members loans are reviewed in group meetings. But most of the members are indifferent to loan purposes of borrowers. Finally, it is further observed that the recovery rate is not upto the mark i.e. below 60%. The recovery rate in Dhalpukuri Development Block is found much higher (95%) in comparison to other two development blocks. 10. Regarding maintenance of records and accounts, it is observed that in most of the SHGs in selected Development Block are not properly maintained. After due observation of books and accounts, it is found that in most of the SHGs in selected Development Blocks where accounts books like Cash Book, loan register, minute books etc are maintained but these books are not found updated. SHGs in Dhalpukuri Development Block wherein it is found that most of the SHGs are adopting regular recording of accounts and found serious in maintaining books of accounts in a proper manner. 11. It is also observed that most of the SHGs in the selected Development Blocks promoted to economic units. However, it is aptly observed that the rate of conversion to Grade I is very high while the said conversion of grade I to Grade II is very low in all the selected Development Blocks. Further, it is observed that only a few SHGs in Lumding Development Blocks and Udali Development Blocks converted there units into economic units, but a large percentage of SHGs in Dhalpukuri Development Blocks converted into viable economic units. Dairy farming, Piggery, weaving, goatary & poultry are the major economic units that are promoted by SHGs in Dhalpukuri Development Blocks.
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However,dairy farming appears to be the most lucrative project of the SHGs. Two milk production associations namely Bhimmarali-Kapili Dogdha Utpadan Sanstha & Milik Basti Laxmi Dogdha Utpadan Sanstha in the Dhalpukuri Development Block are the major dairy project in the block formed by SHGs members. NORMAL PRACTICES OF SHGS IN SELECTED DEVELOPMENT BLOCKS: The variations in practices at SHG level have been spurring innovations in terms of products, systems and methodologies and encouraging new standards in SHG promotion and practices; nevertheless it has brought lot of incongruity in the established practices. However, from the present study in selected Development Blocks in Nagaon districts, it is observed that each and every SHGs are performing some common practices which are depicted in as below: TABLE- 6. ANALYSIS OF SOME EXISTING PRACTICES. S. Details of Quality No. Assessment Parameters 1 Group Meetings Subsidy dependence 2 New financial services Normal Practices SHGs take it as a rigor to meet frequently. SHGs deriving more subsidy and more and more moving on towards subsidy regime. SHGs are comfortable only with credit and savings and consider other services as not falling within the mandate for which they etc., and need not directly deal with such are established. SHGs remain, as stand-alone piece without any affiliation to SHG-upstream like clusters/ federations and more often feel their role will be limited in a federal set up. SHGs do not lend to other groups as a matter of policy though more of idle funds are locked an up within SHG, as the scope of lending within the group is limited beyond certain extent. Rotation of leadership is seriously taken, with the result clients with poor leadership qualities come to manage the SHGs very often on turn basis. Sometimes, promoters find it easy to include members from the same family for easy management of groups. Common economic activity is preferred in some cases like SGSY groups due to project compulsions. SHGs believe that visitors may borrow their own concepts and keep certain things within as tricks of trade and do not encourage visitors.

Affiliation to federation

Inter group lending

Rotation of leadership Multiple membership within the family Common economic activity Encouraging visitors

7 8 9

Source: Self compiled.

ISSUES IMPACTING PERFORMANCE OF SHGS: The detailed study findings on the performance of SHGs were presented in below wherein the areas of relatively low performance by SHGs were identified. The issues have been categorised under these heads and presented in detail in the subsequent paragraphs. However, it needs to be borne in mind that most of these issues are not stand-alone in nature but have a cascading impact on other issues. A macro-issue in project design could have a bearing on certain organisational support issues, which in turn could result in some internal issues to the SHG. Quantity rather than quality: With more stress on the number of SHGs to be formed, the quality of the SHGs formed certainly took a back seat. The NGOs, the MFIs and even the Govt machinery were more involved in meeting the annual targets set. In many cases, many SHGs also came forward on their own to be recognised as voluntary SHGs which are existed only in paper. While SHGs were formed, coverage of the specific target population desired was an issue.
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Lack of standardisation / uniformity in practices: In the context of providing flexibility, there is lack of standard guidelines on internal system and processes project aspects like auditing, elections and rotation of office-bearers etc which hinders the performances of SHGs. Lack of proper and preodic orientation on essential practices, lack of effective performance monitoring etc hinders sustainability of the SHGs performances. Lack of planning for evolution of SHGs as income generating units: SHGs were motivated to take up income-generating economic activities. However, the project had not conceptualised the capacity building and other support systems like networking and marketing support that the SHGs would need. Lack of performance monitoring and evaluation: As against the envisaged role, the biggest gap was in monitoring and evaluation. MFIs or NGOs solely relied on the monthly formats provided by themselves. Even in this, many critical areas of SHG performance like conduct of elections, auditing, income generating activities etc., were not captured They did not have the time / human resources to directly assess the performance of SHGs, especially given their large numbers. Further, there was no mechanism to identify the weaker SHGs. Hence, monitoring with a view to bringing about course correction / strengthening weak SHGs could not be followed. In some instances, even when awareness of the poor performance of NGOs existed, it was not acted upon. Gaps in establishing linkages: Performance on credit linkage was not uniform across Development Blocks. There were few Development Blocks where a substantial number of SHGs were not able to take advantage of bank credit. The absence of regular monitoring of the NGO by the PIU and in turn the SHGs by the NGO took away any sort of accountability for performance. The lack of accountability brought in inefficiencies. Sustaining Group Cohesion: The formation, functioning and sustenance of the group depended to a large extent on group cohesion and dynamics. Since functioning and decision-making were based on consensus, unity of the group with a common ideology was important. Over a period of time, maintaining this cohesion was an issue. Quite a few groups experienced conflict before / at the time of / after venturing into income generating activities. Lack of agreement on the activity to be undertaken was the start of the problem. Conflicts arose in business decisions and management leading to lack of trust within the group. Lack of any sort of training on group dynamics, management also contributed to this. Capability of members: Marginalised/ backward community members including tribals are the target groups. Considering that very few women in these communities are literate, building the capacity of such groups in itself is an issue. Since the training programmes are usually standard and not customised as per the target audience, the improvement here has been marginal. As a result, power remains centred around the marginally better off members in these groups. Inadequate capacity building: Given the low capacity of members, capacity building of members was vital. This was also an important objective of the project and thereby a focus area. The training modules envisaged included Group Training, Animator & Representative Training, EDP Training, Vocational Training, Skill Training etc. However, there are few broad issues pertaining to this viz. Lack of coverage of certain important aspects in the training, inadequate coverage of all stakeholders and Backlog in the training envisaged. Various critical areas like managerial skills, communication skills, inter-personal skills, financial management skills, project monitoring skills, lack of refresher training, absence of training for new member etc., were important but were left uncovered.

CONCLUSIONS: The quest for promoting SHGs cannot become merely a number driven agenda and the one and half decades of experimentation on SHGs shall gradually evolve into setting new benchmarks on the quality and standards of SHGs. Analysis of SHGs performance over years by many stakeholders have revealed dip in qualitative attributes like repayments, group dynamics and robustness, business focus, interest of clients in participation in decision making, attendance of group members in group meetings, zeal in taking leadership responsibilities and increase in delinquency in savings, client drop outs, etc. However, SHGs need to over come the Quality blues, the control of which rests with the stakeholders themselves, given the right orientation and attitude. The quality of groups is quite low in the selected Development Blocks compare to other blocks or states. Strict random selection of sample could be one of the reasons. Overall environment in the block/district and popular perceptions about the status of SHG movement in the state appears to be aptly reflected by the grades of the groups. In most other studies, the quality of groups does not follow any definite pattern. This is also evidenced in this paper that the two separate assessment tools i.e. NABARD & MYRADA shows the different languages about the quality of grades of selected SHGs. However, it is concluded that some of the possible reasons for and
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possible implications of such grades are1. Most of the SHGs which are formed in the block are organized mainly to get financial benefits and subsidies. 2. The attraction to avail short term gains is another major hurdle in the progress of the SHG movement in the study area. 3. It is also reported that some groups break down immediately after getting either revolving funds or start new group with new set of leaders to get another dose of fund and /or subsidy, which lacks constant effort for quality enhancement of SHGs. 4. As it is observed that 20% to 30% sample SHGs are leveled as grade Average, hence constant support from SHPI is necessary to make them improved. Moreover, some technical factors are also responsible for poor gradation of SHGs in the study area i.e. interest collection first then principal, lack of economic homogeneity among members and loan accommodation mechanism etc. 5. Sincere effort on savings collection and poor repayment of borrowers often resulted low quality performance of selected SHGs. Mandatory savings and high rate of recovery is quite necessary for quality improvement of SHGs. 6. Finally, there is a need for conciseness about the well established and well recognized quality assessment tools without biasness. REFERENCES: APMAS & NABARD on Quality and sustainability of SHGs in Assam, Hyderabad ,Sept 2009, www.shgateway.in [accessed on 12-05-2010] ii Devaprakash, R (2005), Balancing Quality & Quantity in SHGs in India,IBA Bulletin, August 2005,pp-25-39. iii EDA Rural Systems and APMAS( 2006)Self Help Groups in India: A Study of the Lights and Shades, www.apmas.org [accessed on 02-09-2010] iv NABARD GTZ Rural Finance Programme, towards a refined and improved Management Information System for linkage banking, Results of the study on MIS at SHG level. www.shgateway.in [accessed on 2905-2010] v Jai Pal Singh, 2006. PEDOs SHG Programme Impact Assessment, A Draft Report, Centre for Microfinance, Jaipur. available at http://www.solutionexchange-un.net.in/mf. [accessed on 29-05-2010] vi NCAER, 2008: Impact and sustainability of SHG - banking program: Submitted to NABARD and GTZ, National Council of Applied Economic Research, New Delhi vii Nirantar, 2007a: Examining self help groups: Empowerment, poverty alleviation and education - A Qualitative study, Nirantar, A centre for gender and education, New Delhi. viii Nirantar, 2007b: Examining power and literacy within self help groups - A quantitative study, Nirantar, A centre for gender and education, New Delhi ix Basu,Priya and Pradeep Srivastava 2005.Micro finance and Rural Credit Access for the poor in India. Economic and Political Weekly. 40(17) pp1747 1756. x EDA Rural Systems and APMAS( 2006)Self Help Groups in India: A Study of the Lights and Shades www.microfinancegateway.org, [accessed on 12-05-2010] xi Sharma, A, 2007: Expanding outreach to underserved regions: Kick-starting microfinance in north-eastern region, IIBM, Guwahati, www.shgateway.in [accessed on 29-05-2010] xii Haryana Community Forestry Project, 2007, Forest Department, Govt. of Haryana, Self-Help Group Capability Assessment 2007, http://www.microfinancegateway.org [accessed on 29-05-2010] xiii APMAS ,Quality and Sustainability of SHGs in Assam, Sponsored by NABARD and APMAS, Hyderabad, September 2009, www.apmas.org [accessed on 29-05-2010] xiv Status of SHG Federations in Andhra Pradesh APMAS Assessment Findings, http://www.microfinancegateway.org/gm/document-1.9.24187/07.pdf
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MAKING OF THE ASEAN COMMUNITY: ECONOMIC INTEGRATION AND ITS IMPACT ON WORKERS IN SOUTHEAST ASIA
Fumitaka Furuoka, Human Resource Economics Program School of Business and Economics, Universiti Malaysia Sabah Sabah, Malaysia Roslinah Mahmud, Human Resource Economics Program School of Business and Economics, Universiti Malaysia Sabah Sabah, Malaysia Beatrice Lim, Human Resource Economics Program School of Business and Economics, Universiti Malaysia Sabah Sabah, Malaysia Khairul Hanim Pazim, Human Resource Economics Program School of Business and Economics, Universiti Malaysia Sabah Sabah, Malaysia

ABSTRACT This paper examined the ASEAN integration and its impacts on the workers in the region. It used the theories of economic integration to explain how the economic integration would effect the employment situations and working conditions of the workers in the ASEAN countries. It is interesting to note that it took more than 40 years to create the Free Trade Area (FTA) in the region after the establishment of ASEAN in 1967. Moreover, it is very well-known fact that the AFTA still have not adopted the Common External Tariff (CET). The free movement of goods and services under the FTA tends to have least direct effects on the workers in the FTA member countries. Furthermore, in 2003, ASEAN leaders agree to establish the ASEAN Community by 2020. However, ASEAN leader carefully excluded the free movement of labour under this incomplete Common Market named ASEAN Community. In short, these facts seem to indicate that ASEAN integration would have some indirect impacts on the employment situations and working conditions through foreign direct investment or international trade. However, ASEAN integration, so far, would have minimum direct impact on workers in ASEAN countries because the free movement of workers was carefully excluded from discussion and negotiation of making ASEAN Community. Keywords: Economic integration, workers, ASEAN Community

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INTRODUCTION: It is well-known fact that the ASEAN (Association of Southeast Asian Nations) is one of the most successful and most ambitious economic integration in the world. The association was established on August 8, 1967 at the capital of Thailand with signing of the ASEAN Declaration, or so-called the Bangkok Declaration (ASEAN, 2011a).1 The ASEAN consists of the following ten member countries, 1)Brunei, 2)Cambodia, 3)Indonesia, 4)Laos, 5)Malaysia, 6)Myanmar, 7)the Philippines, 8)Singapore, 9)Thailand and 10)Vietnam. The original member countries of the ASEAN are Indonesia, Malaysia, the Philippines, Singapore and Thailand. Brunei became member state in 1984 while Vietnam joined ASEAN in 1995. Two more countries, Laos and Myanmar became the ASEAN member countries in 1997. Finally, Cambodia joined the ASEAN in 1999 (ASEAN, 2011a).2 According to the Bangkok Declaration, there are seven main aims and purpose of the ASEAN. First of all, ASEAN aims to promote economic, social and cultural development in the region. Secondly, ASEAN aims to promote regional peace and stability. Thirdly, ASEAN aims to promote active regional collaboration. Fourthly, ASEAN aims to provide assistance to each other. Fifthly, ASEAN aims to collaborate more effectively for the utilization of resource and expansion of international trade, Sixthly, ASEAN aim to promote the Southeast Asian Studies. Finally, ASEAN aims to maintain closer relationship with other international organizations (ASEAN, 2011a). On February 24, 1976, the leaders of original five ASEAN countries, namely, 1)Lee Kuan Yew, 2)Ferdinand Marcos, 3)Hussein Onn, 4)Kukrit Pramoj, 5)Suharto signed an important document called the Treaty of Amity and Cooperation in Southeast Asia (TAC) at Denpasar, Bali. This treaty became a underlying foundation of unique characteristics of ASEAN, or so-called the ASEAN Way (ASEAN, 2011b). According to the treaty, there are six fundamental principle of ASEAN. The first principle is the mutual respect. The second principle is the freedom from external interference. The third principle is the noninterference in international affairs of other member countries. The fourth principle is the peaceful settlement of dispute. The fifth principle is the renunciation of use of arms. Finally, the sixth principle is the effective collaboration (ASEAN, 2011b). It is very interesting to note that there is huge discrepancy among ASEAN member countries in terms of their population, total area and income. First of all, in term of population, the largest country in ASEAN is Indonesia with population of 231 million. The second largest country is the Philippine with population of 92 million, followed by Vietnam with population of 87 million. By contrast, the smallest country in ASEAN, in term of population, is Brunei with population of only 0.4 million. The second smallest country in ASEAN, in term of population, is Singapore with population of 4.9 million, followed by the Laos with population of 5.9 million. Secondly, in term of total area, the largest country in ASEAN is Indonesia with total area of 1.860 million square kilometres. The second largest country is Myanmar with total area of 0.676 million square kilometres, followed by Thailand with total area of 0.513 million square kilometres. On the other hand, the smallest country in ASEAN, in term of total area, is Singapore with total area of only 0.7 thousand square kilometres. The second smallest country in ASEAN, in term of total area, is Brunei with total area of 4 thousand square kilometres. Thirdly, in term of total national income, Indonesia has the largest Gross Domestic Product (GDP) in ASEAN and it amounted to US$ 546 billion in 2009. Thailand has second largest GDP and it amounted to US$ 264 billion, followed by Malaysia and its GDP amounted to US$193 in the same year. By contrast, Laos has the smallest GDP in ASEAN and it amounted to only US$ 5.5 billion in 2009. Cambodia has the second smallest GDP and it amounted to US$ 10.3 billion, followed by Brunei and its GDP amounted to US$ 10.7 in the same year. Finally, in term of income per person, Singapore is the wealthiest country in ASEAN and its per capita GDP amounted to US$36,631 in 2009. The second wealthiest country is Brunei and its per capita income amounted to US$26,486, followed by Malaysia and its per capita income amounted to US$6,822 in same year. On the other hand, Myanmar is the least wealthy country in ASEAN and its per capita GDP amounted to only Other successful economic integrations in the world are the European Union (EU) and the North American Free Trade Agreement (NAFTA). The origin of the EU was a international organization called the European Coal and Steel Community (ECSC) which was established on July 23, 1952 with signing the Treaty of Paris. On the other hand, the NAFTA came into force on January 1, 1994. 2 Currently, EU consists of 27 member states while the NAFTA consists of 3 countries only. The original member states of EU are: France, (West) Germany, Belgium, Luxembourg, the Netherlands and Italy. The member countries of NAFTA are: Canada, Mexico and United States and it does not expand its membership to other countries.
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US$419 in 2009. The second least wealthy country is Cambodia and its per capita income amounted to US$692, followed by Laos and its per capita income amounted to US$910 in same year. TABLE 1: BASIC FACT OF ASEAN (2009) Country Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam Total Population (million) 0.4 14 231 5.9 28 59 92 4.9 66 87 591 Area (thousand km2) 5 181 1860 236 330 676 300 0.7 513 331 4,435 GDP (US$ billion) 10.7 10.3 546 5.5 193 24 161 182 264 96 1,496 GDP per Capita (US$) 26,486 692 2,363 910 6,822 419 1,749 36,631 3,950 1,119 2,532

Source: Selected basic ASEAN indicators from ASEAN (2011c)

There is also huge difference in the labour market condition in ASEAN countries. In term of labour force, Indonesia has the largest labour force in ASEAN. Indonesias total number of labour force amounted to 116 million and 108 million workers are employed in 2010. Vietnam has the second largest labour force in the region. The total number of labour force in the country amounted to 50 million and 49 million workers are employed. The Philippines has the third largest labour force in the region. Total number of labour force in the country amounted to 38.8 million and 36 million workers are employed. By contrast, Brunei has the smallest labour force among ASEAN countries. Bruneis total number of labour force amounted to only 198 thousand and 193 thousand workers are employed in 2010. Laos has the second smallest labour force. The total labour force in the country amounted to 2,776 thousand and 2,738 thousand workers are employed. Singapore has the third smallest labour force. Singapores total number of labour force amounted to 3,135 thousand and 3,045 thousand workers are employed. In term of unemployment rate, the Philippines unemployment rate is highest in ASEAN and its unemployment rate is 7.4 percent in 2010. Indonesia has second highest unemployment rate and its unemployment rate was 7.1 percent, followed by Myanmar and its unemployment rate was 4.0 percent in 2007. On the other hand, Thailands unemployment rate is lowest in ASEAN and its unemployment rate is 1.0 percent in 2011. Laos has second lowest unemployment rate and its unemployment rate was 1.3 percent in 2005, followed by Cambodia and its unemployment rate was 1.8 percent in 2001. Next, in term of male labour force participation (MLFP) rate, Indonesia has the highest MLFP in the ASEAN and its MLFP rate is 83.76 percent in 2010. Myanmar has the second highest MLFP and its MLFP rate is 82.04 percent in 2007, followed by Vietnam and its MLFP rate is 82.0 percent. By contrast, Cambodia has the lowest MLFP in the ASEAN and its MLFP rate is 72.1 percent in 2001. Brunei has the second lowest MLFP and its MLFP is 76.4 percent in 2007, followed by Singapore and its MLFP rate is 76.5 percent. Finally, in term of female labour force participation (FLFP) rate, Vietnam has the highest FLFP in the ASEAN and its FLFP rate is 73.0 percent in 2010. Cambodia has the second highest FLFP and its FLFP rate is 64.4 percent in 2001, followed by Thailand and its FLFP rate is 64.2 percent. By contrast, Malaysia has the lowest FLFP in the ASEAN and its FLFP rate is 46.1 percent in 2010. The Philippines has the second lowest FLFP and its FLFP rate is 49.7 percent in 2007, followed by Myanmar and its FLFP rate is 49.8 percent in 2007. TABLE 2: LABOUR MARKET CONDITION IN ASEAN (2010)
Country Brunei Cambodia (2001) Indonesia Laos (2005) Labour Force (thousand) 198 6,309 116,527 2,776 Employed workers (thousand) 193 6,243 108,207 2,738 Unemployment Rate (percentage) 2.6 1.8 7.1 1.3 Male Labour Force Participation (percentage) 76.4 72.1 83.7 n/a Female Labour Force Participation (percentage) 58.0 64.4 51.7 n/a

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Malaysia 11,517 11,129 3.4 Myanmar n/a n/a 4.0 (2007) Philippines 38,894 36,025 7.4 Singapore 3,135 3,045 2.8 Thailand 38,643 38,037 1.0 Vietnam 50,392 49,048 2.6 Source: Statistical Database System, from Asian Development Bank (2011) Note: n/a is an abbreviation of the not available 78.7 82.0 78.5 76.5 80.7 82.0 46.1 49.8 49.7 56.5 64.2 73.0

This paper consists of five sections. Following this introductory section, the second section examines the creation of ASEAN community. The third uses the theory of economic integration to examine the future of ASEAN. The fourth section is conclusion. ASEAN INTEGRATION: MAKING OF ASEAN COMMUNITY: The ASEAN integration started as an informal production network led by Japan after the World War II. This production network was known as the Flying Geese pattern of economic integration, which, in effect, could be regarded as the first attempt at ASEAN integration (Furuoka, 2005). According to Furuoka (2005), it took decades for Japan to restore its economy after the war. The huge US market has been vital for Japans export-related industries. In order to bolster its increasing economic power, Japan embarked on creating a production network in East Asia. Zhang (2011) pointed out that Japan played a leading role to create the Flying Geese production network in East Asia. This production-based economic integration could explain the rapid expansion of inter-regional and inter-industrial trade in the region. More importantly, the Flying Geese pattern of economic integration in ASEAN is a result of market force. There is no formal mechanism for the economic integration in ASEAN. However, the Flying Geese pattern of economic integration was destroyed by the Asian Financial Crisis of 1998-1999. Simon Tay (2002) commented that the Asian economic crisis has scattered the flock of geese that followed the Japanese model of development. On the other hand, formal process of ASEAN integration took place by creating the free trade area in the ASEAN or so-called the ASEAN Free Trade Area (AFTA). According to the Ministry of International Trade and Industry (MITI), Malaysia, the creation of the AFTA started in 1992. The six countries of ASEAN member countries or so-called ASEAN-6, namely Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, signed the AFTA agreement at the ASEAN Summit in Singapore on January 28, 1992 (MITI, 2011). There are three main objective of creating of the AFTA. The first objective of the AFTA is to establish a single market in the South East Asia. The second objective of the AFTA is to attract multinational corporations (MNCs) to invest in the region. Third objective of the AFTA is to increase international trade and investment among ASEAN countries (MITI, 2011). According to Malaysias MITI, the creation of the AFTA is the ASEAN countries response to the emerging other economic integration in other regions, such as the North American Free Trade Agreement (NAFTA) or the expansion of the European Union (EU) (MITI, 2011). Under the Common Effective Preferential Tariffs (CEPTs) scheme, the ASEAN-6 countries successfully lowered intra-region tariffs. The tariff rates of more than 99 percent of all products in the CEPT inclusive list have been brought down to 0-5 percent range by January 1, 2010 (ASEAN, 2011d). At the Ninth ASEAN Summit at Bali, Indonesia on October 3, 2003, ASEAN leaders agree to establish the ASEAN Community by signing a declaration known as the Bali Concord II. There are three pillows of the ASEAN Community, namely 1) political and security cooperation, 2) economic cooperation and 3) sociocultural cooperation (ASEAN, 2011e). Furthermore, at the Twelfth ASEAN Summit at Cebu, the Philippines on January 13, 2007, the ASEAN leaders agreed to accelerate the creation of the ASEAN Community by 2015 by the signing of another declaration known as the Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community (ASEAN, 2011f). The ASEAN leaders signed the constitution of the ASEAN community, the ASEAN Charter at the Thirteenth ASEAN Summit at Singapore on November 20, 2007, (ASEAN 2011g). The ASEAN Charter can be considered as a firm foundation of the ASEAN community by providing its legal and institutional framework (ASEAN, 2011g). In other words, the adaptation of the ASEAN Charter would transform the ASEAN integration from the market force-based regional organization into the regulation-based one. However, Pushpanathan commented that the ASEAN Charter is a form rather than substance. The substantial outcome would be achieved only after the regulation and institution would become more mature (Pushpanathan, 2009).
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More importantly, the ASEAN Charter would ensure that the ASEAN member countries would speak out other member countries political situation. The ASEAN Secretary-General Surin Pitsuwan commented that the ASEAN member countries could not discuss about the internal matters of each member in the past. However, after the adaptation of the ASEAN Charter, the ASEAN member countries are able to express their concerns, to give warnings, to ask for explanations (Hotland, 2008). ASEAN INTEGRATION AND ITS IMPACTS ON WORKERS: There are four stage of economic integration. The first stage of economic integration is known as the Free Trade Area (FTA). The main characteristic of the FTA is that all member countries will remove the tariffs on other member countries products. However, each member country would retain its independence in imposing individual tariffs on non-member countries products (Appleyard, et al, 2006; Holden, 2003). The second stage of economic integration is known as the Custom Union (CU). The main characteristic of the CU is that all member countries will remove the tariffs on member countries products. At same time, all member countries would impose same tariffs on non-member countries product. This tariff is called the Common External Tariff (CET) (Appleyard, et al, 2006; Holden, 2003). The main purpose of the CET is to prevent the trans-shipment strategy. When each country imposed on own external tariffs, non-member countries would export a product to the country which has the lowest external tariff. This strategy is called the trans-shipment strategy(Appleyard, et al, 2006). The third stage of economic integration is known as the Common Market (CM). The main characteristic of CM is that all member countries will remove the tariffs on member countries and adopt the CET. At same time, member countries remove all barriers to the factor movement among member countries. It means that labour and capital will move freely without barriers in the CM (Appleyard, et al, 2006; Holden, 2003). The final stage of economic integration is known as the Economic Union (EU). The main characteristic of the EU is that all member countries will remove all barriers to the free movements of goods, services, labour and capital and will adopt the CET. At same time, all member country would unify the economic institutions and adopt common economic policies (Appleyard, et al, 2006; Holden, 2003). The four stages of economic integration can be summarised in Table 3. TABLE 3: FOUR STAGE OF ECONOMIC INTEGRATION Stages of Economic Integration Free Trade Area (FTA) Custom Union (CU) Common Market (CM) Economic Union (EU) Main Characteristics No tariffs among member countries FTA + common external tariff (CET) CU + free movement of labour and capital CM + common economic policy and institution

Source: Appleyard et al. (2006) and Holden (2003)

First of all, a famous example of the Free Trade Area (FTA) is the North American Free Trade Agreement (NAFTA). The origin of the NAFTA is the Canada-US Free Trade Agreement which was signed on October 4, 1988. It expanded its membership to Mexico and become the tripartite FTA in 1994 (Cockerham, 2010). Secondly, the well-known example of the Custom Union (CU) is the Southern African Customs Union (SACU). The SACU is the oldest custom union which was established in 1910 and consists of following five countries, 1)Botswana, 2)Lesotho, 3)Namibia, 4)South Africa and 5)Swaziland. The SACU will collect the import duties on products from non-member countries and tariff revenues would be allocated to member countries following a revenue-sharing formula (SACU, 2011). Thirdly, a famous example of the Common Market (CM) is the European Economic Area (EEA) which came into force on January 1, 1994. The CM consists of twenty-seven member countries of the European Union (EU) and three member countries of the European Free Trade Association (EFTA) or so-called EEA-EFTA countries, namely, Iceland, Liechtenstein and Norway (EFTA, 2011). Fourthly, the well-known example of the Economic Union (EU) is the European Union (EU). The origin of the European Union is the European Coal and Steel Community (ECSC) was established by signing the Treaty of Paris on April 18, 1951. There were only six countries in 1951 and currently are twenty-seven member countries in the European Union (EU, 2011). It is very well-known fact that the AFTA have not adopted the Common External Tariff (CET). In other words, the stage of ASEAN integration remains as the first stage of the Free Trade Area (FTA). The free movement of goods and services under the FTA tends to have least direct effects on the workers in the FTA member countries. Furthermore, in 2003, ASEAN leaders agree to establish the ASEAN Community by 2020. However, the
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ASEAN Community would not a complete Common Market in the all member countries would remove all barriers for the goods, service, labour and capital. In other words, the ASEAN Community would be a single market in which all member countries would remove barriers for goods, services and capital (Cockerham, 2010). It should be noted that ASEAN leader carefully excluded the free movement of labour under this incomplete Common Market named ASEAN Community. These facts seem to indicate that ASEAN integration would have some indirect impacts on the employment situations and working conditions through foreign direct investment or international trade. However, ASEAN integration, so far, would have minimum direct impact on workers in ASEAN countries because the free movement of workers was carefully excluded from discussion and negotiation of making ASEAN Community. CONCLUSION: ASEAN is one of the most successful and most ambitious economic integration in the world. This paper examined the ASEAN integration and its impacts on the workers in the region. It used the theories of economic integration to explain how the economic integration would effect the employment situations and working conditions of the workers in the ASEAN countries. It is interesting to note that it took more than 40 years to create the Free Trade Area (FTA) in the region after the establishment of ASEAN in 1967. Moreover, it is very well-known fact that the AFTA still have not adopted the Common External Tariff (CET). The free movement of goods and services under the FTA tends to have least direct effects on the workers in the FTA member countries. Furthermore, in 2003, ASEAN leaders agree to establish the ASEAN Community by 2020. However, ASEAN leader carefully excluded the free movement of labour under this incomplete Common Market named ASEAN Community. In short, these facts seem to indicate that ASEAN integration would have some indirect impacts on the employment situations and working conditions through foreign direct investment or international trade. However, ASEAN integration, so far, would have minimum direct impact on workers in ASEAN countries because the free movement of workers was carefully excluded from discussion and negotiation of making ASEAN Community. REFERENCES: [1] Appleyard, D., Field, A. and Cobb, S. (2006). International Economics, (Singapore: McGraw-Hill). [2] Asian Development Bank (2011). Statistical Database System,https://sdbs.adb.org/sdbs/index.jsp [accessed on September 30, 2011] [3] ASEAN (2011a). Overview, http://www.asean.org/64.htm [accessed on September 30, 2011] [4] ASEAN (2011b). Treaty of Amity and Cooperation in Southeast Asia, http://www.asean.org/1217.htm [accessed on September 30, 2011] [5] ASEAN (2011c). Selected basic ASEAN indicators, http://www.asean.org/stat/Table1.pdf [6] [accessed on September 30, 2011] [7] ASEAN (2011d). ASEAN Free Trade Area http://www.asean.org/19585.htm [accessed on October 2, 2011] [8] ASEAN (2011e). Declaration of ASEAN Concord II, http://www.asean.org/15160.htm [accessed on October 3, 2011] [9] ASEAN (2011f). Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015, http://www.asean.org/19260.htm [accessed on September 30, 2011]. [10] ASEAN (2011g). http://www.asean.org/21861.htm, http://www.asean.org/21861.htm [accessed on October 4, 2011] [11] Balassa, . (1967). Trade Creation and Trade Diversion in the European Common Market. Economic Journal, Vol. 77, pp. 121 [12] Cockerham, G. (2010). Regional integration in ASEAN: institutional design and the ASEAN way, East Asia, Vol.27, pp.165-185. [13] European Free Trade Association (2011). European Economic Area, http://www.efta.int/eea/eeaagreement.aspx [accessed on October 5, 2011] [14] Furuoka, F. (2005).Japan and the Flying Geese Pattern of East Asian Integration, eastasia.at, Vol. 4, No.1, (October), pp.1-7. [15] Hotland, T (2008). ASEAN Charter ushers in historic new era for region, The Jakarta Post dated on December 16, 2008. http://www.thejakartapost.com/news/2008/12/16/asean-charter-ushers-historicnew-era-region.html [accessed on October 2, 2011] [16] Holden, M. (2003). Stages of economic integration: From autarky to economic union, [17] http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/EB-e/prb0249-e.pdf [accessed on October 3, 2011]
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[18] Ministry of International Trade and Industry, Malaysia (2011). AFTA, http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_8de83760-7f00001072f772f7 f5047602 [accessed on September 30, 2011] [19] Pushpanathan, S (2009). ASEAN Charter: One year and going strong, The Jakarta Post, December 12, 2009. [20] http://www.thejakartapost.com/news/2009/12/22/asean-charter-one-year-and-going-strong.html [accessed on October 2, 2011] [21] Southern African Custom Union (SACU)(2011). What is the SACU? http://www.sacu.int/main.php?include=about/what_is.html&menu=menus/leftmenu.html [accessed on October 5, 2011] [22] Tay, S. (2001). Looking Beyond the Yasukuni Shrine Issue. http://www.asahi.com/english/asianet/column/eng_010921.html [accessed on September 30, 2011] [23] Zhang, Z. (2011). Economic integration in East Asia: The Path of Law, ASLI Working Paper Series No. 24, pp.1-24. ----

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MANAGEMENT OF MICRO-ENTERPRISES (A STUDY ON INDIRA KRANTHI PATHAM IN SRIKAKULAM DISTRICT ANDHRA PRADESH)
Dr.S.Tarakeswara Rao, Faculty Member, Dept. of Commerce & Management Studies, Dr.B.R.Ambedkar UniversitySrikakulam, Pin 532 410 Andhra Pradesh-India. Dr. G.Tulasi Rao, Professor & Head, Dept. of Commerce & Mgt. Studies Dr.B.R.Ambedkar UniversitySrikakulam, Pin 532 410 Andhra Pradesh-India.

ABSTRACT

The Government of India had ushered in the new millennium by declaring the year 2001 as 'Women's Empowerment Year' to focus on a vision 'where women are equal partners like men'. The most common explanation of 'women's empowerment' is the ability to exercise full control over one's actions. The last decades have witnessed some basic changes in the status and role of women in our society. There has been shift in policy approaches from the concept of 'welfare' in the seventies to 'development' in the eighties and now to 'empowerment' in the nineties. This process has been further accelerated with some sections of women becoming increasingly selfconscious of their discrimination in several areas of family and public life. They are also in a position to mobilize themselves on issues that can affect their overall position. Keywords: Indira Kranthi Patham, Micro-enterprise, Micro-finance, Women empowerment, entrepreneurship, Self Help Group.

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INTRODUCTION: Micro-finance (MF) is directly influences the quality of life and is therefore considered to be a powerful tool for bringing about socio-economic transformations in the society especially in the rural areas, the MF movement can be traced to Bangladesh and later years in Brazil. Muhammad Yunus a college professor with Chittacong University in Bangladesh began the concept of micro-credit (MC) for a small group of 42 people lending them US$ 27 only in the year 1976. Later the concept of Grameen bank spread all over the world. Today Grameen bank serves 43,000 villages across Bangladesh and gives loans to 2.8 million borrowers, 96 per cent of whom are women. They have disbursed more than US$ 4 billion to borrowers in a cumulative way of which US$ 3.6 bullion has been paid back. The Bank lends US$ 34 million every month as new loans. The recovery rate on such loans is 98 per cent. This was the second annual event of what is now becoming a large annual gathering to celebrate successes, discuss perspectives and research, and build networks around the MF sector in India. Reconnecting after a few years, I was pleased to see the entire buzz about MF and the number and diversity of stakeholders who collaborated on the conference. The number and diversity of delegates, the level of participation from senior policy makers and bankers and the quality of debates and media attention confirms that MF is no longer at the periphery of the financial sector in India. This short note is a personal reflection on what has changed, what may take a long time to change and what India and the rest of the world may learn from each other. MICRO-ENTERPRISES - THE CONCEPT: A ME is a very small business unit run by an owner of modest means, usually with few or no other employees. Common activities include dairy, poultry, sheep rearing, tailoring, fish fending, and sale of forest products, bullock trading, pig rearing, child care, catering, cosmetology, or cleaning services. The ME excludes one person small businesses owned by professionals such as doctors, lawyers, or computer programmers, and it also excludes hobbyists-such as those selling hand-made arts and crafts at weekend shows-who are not really trying to make money. Some valuable lessons can be drawn from the experience of successful MF operation. First of all, the poor repay their loans and are willing to pay for higher interest rates than commercial banks provided that access to credit is provided. The solidarity group pressure and sequential lending provide strong repayment motivation and produce extremely low default rates. Secondly, the poor save and hence MF should provide both savings and loan facilities. These two findings imply that banking on the poor can be a profitable business. However, attaining financial viability and sustainability is the major institutional challenge. Deposit mobilization is the major means for MF institutions to expand outreach by leveraging equity. In order to be sustainable, MF lending should be grounded on market principles because large scale lending cannot be accomplished through subsidies. AN EVALUATION OF INDIRA KRANTHI PATHAM: The Indira Kranthi Patham (IKP) (A women development programme named late prime minster of India Smt.Indira Gandhi) came in to force during the year 2005 as a new concept with much broader scope and objectives to meet the overall financial and needs of the rural poor. The activities of DWCRA (Development of Women and Children in Rural Area) and Velugu were integrated under programme called IKP. The IKP is an integrated concept for socio-economic development of rural women. The IKP is not a contingency plan of action but a long range strategy aimed for sustainable development based on financial self religance and self supporting basis. The vision of the IKP in short is to provide the required micro financial services for the poor people could be met through their self-managed and financially sustainable Micro Finance Institutions (MFIs) to make them to live a better way of life. For this cause, IKP-DRDA (District Rural Development Agency) project will act as a catalyst by providing innovative and quality services and serving as a guiding model. The required financial services viz., savings, credit and insurance will be met through their self-managed and financially sustainable MFIs. SHGs FOR EMPLOYMENT OF THE POOR: SHGs consist of members who are poor, having low savings capacity and generally depending on money lenders or private sources for meeting their consumption and emergent needs. A typical SHG will comprise likeminded individuals who volunteer to save small amounts of money in a common pool, out of which, need based loans are given to members for meeting their emergent credit requirements based on the priorities decided by the group. The group members take collective decisions on all matters including those relating to terms of credit viz., purpose, size, interest rate and repayment period. They exercise close supervision on utilization of loans
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and exert peer and moral pressure on members to continue savings and repay loans promptly on time. In other words, SHG can be referred to as a group of poor persons who own, manage and control a micro bank of their own. PROFILE OF THE SRIKAKULAM DISTRICT: Srikakulam District, which is located in the north-eastern part of Andhra Pradesh, is one of the back ward districts of the state, despite its natural resources and other potential which are yet to be exploited. It is bound on the North by Orissa State, on the West and South by Vizianagaram District and on the East by Bay of Bengal. The total area of the district is 5837sp.kms. Administratively, the district is divided into three Revenue Divisions viz., Srikakulam, Palakonda and Tekkali with 38 constituent mandals comprising of 1870 villages of which 1767 are inhabited. There are 11 semi-urban units in the District, of which 4 are Municipalities and 7 are notified major panchayats (elected governing village councils) and 1053 are minor gram panchayats. SCOPE OF THE STUDY: There are a few studies made particularly in Andhra Pradesh by the government agencies that have evaluated the impact of these women development programmes. However, these studies fall to bring out the chronic inadequacies in the implementation of the programmes. Therefore, it is necessary to evaluate thoroughly the women development programmes such as IKP in the state of Andhra Pradesh, which has voter Self Half Groups. This article attempts to study the importance of SHGs in Srikakulam in the state on selective basis with a view to thoroughly evaluating the role of IKP in socio-cultural & economic development of women at the grass-root level. RESEARCH GAP: Only a few studies have been undertaken during the past years on SHGs and women development and their standard of living. Each study has its own limitations. One common lacuna was that many studies were case studies covering women problems in general. Secondly the authors of various studies did not provide uniform data. Some relied on State government figures and some on Central Government figures. They were not based on primary data. Present study is devoid of such limitations and examined the following: 1. The living conditions, life-style and socio-economic characteristics of rural women. 2. The problems and causes for poverty and indebtedness among rural women and scope for alleviating them. 3. The role of Indira Kranthi Patham and District Administration in relation to women development by way forming SHGs. 4. The problems of rural women. OBJECTIVES OF THE STUDY: As pointed out earlier the SHG was designed to raise the living standard of poor people with more focus on poor women. This study tries to find out to what extend this programme has succeeded in realizing the following objectives. More specifically the study has the following objectives: 1. To evaluate the role of IKP scheme in the development of SHGs. 2. To study the impact of SHG on generation of additional income, additional employment, on mobilization of savings and investment on the creation of assets and their repayment performance in the member household. 3. To study the socio-economic profile of the rural women entrepreneurs. 4. To study the profile and nature of MEs. 5. To evaluate the performance evaluation of business enterprises carried by rural woman entrepreneurs. 6. To study the operational problems and remedial measures for successful conduct of MEs. 7. To suggest measures for development of MEs for the socio economic development of women under IKP programme.

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METHODOLOGY: Srikakulam District was selected for the purpose of the present study. The operational methodology adopted for this study was as follows. The study covers the district of Srikakulam in Andhra Pradesh state. However micro aspects of SHG members economic condition and standard of living have been included in the study. For this purpose this study was conducted at three levels applying survey research methods. The first was mandal level where mainly historical research method was adopted. At the second level is panchayat level. Each panchayat was selected for in depth study. At the third level SHGs were selected for the study. The impact of government development programmes on SHGs and rural women development were also examined. For selection of SHG in Mandals, three criteria have been adopted. They are as follows. 1. Proximity of the SHG with all facilities including literacy. 2. SHG members having the formal education and low infrastructural facilities. 3. SHG members who are ignorant to avail Government facilities. A list of SHGs in all 38 mandals of the District was collected from the official records of District Rural Development Agency (DRDA), Srikakulam. While selecting the DWCRA groups the followed criteria have been followed: 1. The group must be in existence for more than three years. 2. The group must have undertaken income-generating activities. 3. The group must have bank linkage. 4. SAMPLE SELECTION: Lack of time tampered studying all the SHGs in the selected Mandals. Therefore it was decided to study 75 SHGs per Mandal of the district. Totally 750 SHGs (10X 75) were selected in random from the total SHGs of 31,423 in this district. Multi-stage stratified sampling method is used for date collection. DATA COLLECTION: The study is based on survey research method. The analysis of overall status of the SHGs and its development status in the district is based on the secondary sources of the information like the published reports and documents of DRDA-Srikakulam Collectrate of Srikakulam and office of the Chief Planning officer-Srikakulam, Directorate of Economics and Statistical, Hyderabad, V.S.Krishna memorial library Andhra University, Visakhapatnam and other concerned governmental and non-governmental agencies. Since the focus of the research is on to study the impact of MF and MEs on socio-economic upliftment of rural women, the researcher was faced with a hard choice from among the following three methods for obtaining data. 1. Total dependence of Mandal records and other sources of data. 2. Interviews with all officials concerned and to aggregating their responses on a particular variable. 3. Interviews with selected respondents of a village. The interview method opted for in-depth study. The first two methods are used to enhance the quality of the data, the SHG of the selected Mandals were interviewed through a specially designed schedule to obtain primary data about their socio-economic profile and their experience with MF and micro-enterprises. To avoid stereotype, unreliable responses and to get valid information, the researcher held as many informal and extended interviews at possible with elderly members and resourceful respondents. Discussions were also held with the level of members, the officials of cooperatives, Commercial Banks and DRDA of Srikakulam District to generate data. Their opinions regarding developmental activities in the SHGs are also considered. The experience revealed the friendly talk, outdoor trips, some of these best means of collection of original information. All information thus collected was counter checked with reliable persons and other available records. MANAGEMENT OF MICRO- ENTREPRENEURS: An attempt has been made to present in this study the results of the analysis made on the empirical data collected from the sample SHG micro entrepreneurs who availed MF covered under IKP programme. The caste wise representation of the sample reveals the fact that 97 per cent of the respondents belong to socially weaker section and only three per cent respondents come under forward communities. This phenomena is
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mainly due to the fact that weaker sections of the society in order to improve their economic status desire to start micro-enterprises by availing the MF simultaneously with their regular occupation. The emergence of women on the economic scene as entrepreneurs is a significant development in the emancipation of women and securing them a place in the society, which they have all along deserved. The hidden entrepreneurial potentials of women have gradually been changing with the growing sensitivity to the role and economic status in the society. Women are increasingly becoming conscious of their existence, their rights and their work situations. The data relating to social status in terms of caste of the respondents is presented in table 1. It is observed from the table that out of 750 respondents, 554 respondents belongs to backward class while 74 per cent of the total, while 173 respondents are Scheduled Castes and Schedule Tribe (23%). The remaining 23 respondents belong to forward castes. The demographic features of the respondents relating age distribution is also presented in the table 1. The age of the respondents varied between 18years and 42 years. The average age of the sample respondents is worked out to be around 36 years. As many as 58.40 per cent of the respondents are found in the age group of 31-40 years, followed by 31.60 per cent who are in the age group of 20-30 years. The table also shows that there are a little over nine per cent of the respondents whose age is above 40 years. Thus it can be concluded that majority of the woman entrepreneurs under study are middle-aged ladies. However, going by the total picture, age does not seem to be a bar as far as ones entry into entrepreneurial career is concerned. While studying socio-economic profile of woman entrepreneurs, it was considered necessary to evaluate the extent of formal education because the formal education has always been considered as an important factor for an individual in building her operational career. TABLE.1: AGE-WISE DISTRIBUTIONS OF SAMPLE RESPONDENTS Age Group 20-30 31-40 41-50 50 Above Total LITERACY LEVELS: While education is a boon to an individual in a contemporary society, lack of education is a bane to a person. An educated person commands respect while an illiterate person cannot. For a woman entrepreneur education facilitates to keep abreast of the latest happenings in and around the country. An educated person need not depend on others, while an illiterate person has to depend on others either in approaching government officers or in approaching banks. The formal education is always looked upon, as a means to improve ones socioeconomic position in the society. Against this background, an attempt is made in the study to find out the extent of education of the sample respondents. As can be seen from table 2, out of the sample 750 woman respondents as many as 47.73 per cent have no formal education and they are illiterates, but they know only how to sign. Nearly one-fourth of the respondents have formal education between first standard and fifth standard, while a little over one-fourth of the respondents have formal education between sixth standard and 10th standard. On the whole it can be concluded that majority of the woman respondents in the sample are illiterates, and those who have formal education are studied primary and secondary education only. However their low-level of education did not act as a barrier to their entrepreneurial career. Because of poverty coupled with gender discrimination, which is widely prevalent in the olden days especially in rural areas, girl students were not allowed to pursue high school and college education. Now the situation has changed drastically; and even the parents in rural areas are sending their girl children to high school and colleges even though they are located far away from their residential places. It is a fact that entrepreneurship is not a special preserve for the educated, but in the case of women already burdened with many social pressures, education is a powerful tool in breaking down the barriers to successful entrepreneurship. As more women are educated, pressures for change convert or open are exerted on accepted social norms militating against women. Our data also indicates that a good educational background and success in an enterprise are positively related. Good academic background enables the women to deal with the problems in business particularly the initial teething problems in an effective manner. Besides in a country where opportunities are few and the society is male dominated, education plays a vital role in shaping aspirations, ambitions and a sense of achievement among women. Number of Respondents 237 438 69 6 750 Percentage of Total sample 31.60 58.40 9.20 0.80 100.00

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TABLE.2: LEVEL OF EDUCATION OF SAMPLE MEMBERS Level of Education No formal Education (only sign) Below to Fifth Sixth to Tenth Intermediate Total Number of Respondents 358 184 202 6 750 Percentage of Total sample 47.73 24.53 26.94 0.80 100.00

LEVEL OF INCOME: The data on household income level of sample respondents are given in table.2. It is evident from the table that 59.01 per cent of sample respondent households belong to the lowest income group 5,000-10,000 and rest found in the next group 10,001-20,000. TABLE.2: HOUSEHOLD INCOME LEVEL OF SAMPLE RESPONDENTS Income Group 5,000-10,000 10,001-20,000 Total Number of Respondents 443 307 750 Percentage of Total sample 59.01 40.90 100.00

Table.3 revels that the level of savings in different age SHG with three groups was falling in 1-3 years, another two groups falling in 3-5 years and remaining groups falling in 5 years above. It could be observed form the table that as the age of the group increases, the amount of savings also increases, and per members savings also increases from Rs. 1158.30 in the junior group (1-3 years) to Rs. 3571.43 in the senior group (5 years above). This increasing trend in savings as reveled in the table indicates the strong thrift habit or willingness of the sample beneficiary for saving after joining the SHG. Whenever comparison is made between levels of savings in different age SHGs by using the population mean savings formula. Total savings / No.of groups Population means savings = -----------------------------------Group size Hypothesis is more the age of the SHG having more the savings. TABLE.3: SAVING IN DIFFERENT AGE SHG Age of SHG (Years) 13 35 5 years above Total No. of respondents 200 275 275 750 Total Savings (Rs) 2,31,660 7,20,993 9,82,143 19,34,736 Per member savings (Rs) 1,158.30 2,621.79 3,571.43 --

Source: Compiled from Mandal Development Office Records, Collectorate, Srikakulam.

Table.4 shows that the availing of loan from the group savings in all the SHGs. This indicates that the group savings are utilized for lending to their members of the group themselves. The quantum of loan is also smaller than the bank loan is meant for consumption purpose only. It is also evident in the table that not all the members of all the age groups have availed groups loans, however majority of them (53.33 per cent) availed the loan facilities from the savings of the group. Table.5 shows that the bank loan availed by the members of sample SHG representing all age groups with three groups coming under 1-3 years, another two group under 3-5 years and the rest in 5 years above. It could be observed that when the age of the group increases the total amount of bank loan availed also increases. Per member bank loan also increases form Rs. 4665 in the youngest group (1-3 years) to Rs. 6914 in the oldest group (5 years above). This increasing trend indicates the senior members had borrowed more than once after repaying the past loans.

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TABLE.4: GROUP LOAN IN SAMPLE SHGS Group according to age (years) 13 35 5 years above No.of Respondents 200 275 275 No.of Members availed 100 150 150 Amount of group loan (Rs) 6,60,000 6,75,000 7,68,000 Per member group loan (Rs) 6,600 4,500 5,120

Source: Compiled from records, Collectorate, Srikakulam.

TABLE.5: BANK LOAN IN SAMPLE SHGS. Group according to age (years) 13 35 5 years above No.of members 200 275 275 No.of Members availed 200 275 275 Amount of group loan (Rs) 93,30,000 1,02,38,250 1,90,13,500 Per member group loan (Rs) 46,650 37,230 69,140

Source: Compiled from records, Collectorate, Srikakulam.

The data on functioning of SHGs both in the Mandal and sample 70 SHGs taken up for study reveals a positive impact of SHG approach on women development as follows: 1. There is a growth in the level of savings of the poor women. 2. A thrift habit has been very much uncalculated in the minds of poor women and 3. Joining in the SHG, poor women are enabled to access for loan for consumption purposes immediately as well as bank loan for income generation activity. In the second part of the study the profile of the sample respondents reveals that majority of them belong to backward castes and are falling in the age group 20-30. Nearly half of them are illiterate and majority of them comes under 5000-10000 income group. THE IMPACT OF BANK LOAN FOR DAIRY ANIMAL DISTRIBUTED THROUGH SHGs: To assess the impact of dairy loan on the standard of living of sample group mandal a comparative analysis has been made with reference to the level of income, consumption, employment assets, savings and repayment position of the sample population before and after analysis. IMPACT ON INCOME: Generally personal income is the sum of all income actually received by all individuals of the household during a particular year. For the purpose of analyzing the impact on income, the dairy income alone taken into account. Table. 6 reveals that the income generated by the dairy assistance. Table.10 shows that the income generated by the dairy assistance. The sale of milk constitutes main source of income (65.75%). The milk yield is arrived at by multiplying the average milk yield per buffalos per day, with the current prices and again multiplied by the total number of days in which the animal is milking. The other sources of income surveyed the sale of manure and sale of calves comes second with (20.54% and 5.5% respectively) and value of own consumption (8.21%) respectively. Even in the income from the sale of milk, there is considerable variation between different groups. For instance, income from sale of milk for FC and BC is lesser than the SC & ST. TABLE.6: INCOME GENERATED BY THE DAIRY ASSISTANCE Castes FC BC SC &ST Average Income from sale of milk per month 2250 (65.22%) 2400 (65.75%) 2450 (66.66%) Income from sale of calves 700 (20.29%) 750 (20.54%) 775 (21.23%) Value of milk (own use) per month 300 (8.70%) 300 (8.21%) 250 (6.8%) Value of manure per month 200 (5.79%) 200 (5.5%) 200 (5.44%) Total (Rs) 3450 (100%) 3650 (100%) 3675 (100%)

Source: Survey Data.

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GROSS EXPENDITURE FOR THE DAIRY ACTIVITY: Expenditure on feeds and fodder has been calculated by obtaining the beneficiaries daily expenses on these items and multiplied by the total number of days in the year without considering whether the animal is milking or not. It may be noted from the table.7, the average annual expenditure maintained the dairy animal by forward castes is Rs. 1650, and for the backward castes Rs.1590 and for the Scheduled Castes and Schedule Tribe it is Rs.1475. the difference in socio-economic conditions of the respondents is the main course for the difference in their expenditure. Among the items of expenditure, feeds and fodder takes a lions share constituting 67.89 per cent of total expenditure towards the maintenance of dairy. The next item namely the labour and milking charges constitutes 15.16 per cent. It is followed by veterinary cost 4.41 per cent. The item Insurance constitutes 8.07 per cent of total expenditure. Lastly others cost 4.47 per cent of the total expenditure is worked for each group (average). The difference between the gross dairy incomes minus gross dairy cost as the surplus on net income, which worked in table.7. TABLE.7: GROSS EXPENDITURE FOR DAIRY ACTIVITY (PER ANIMAL) Sources of Expenditure Feeds & Fodder Labour & Milking charges Veterinary Charges Insurance Others Total Forward Castes Expen % of total diture expenditure(1) 1100 300 60 127 63 1650 66.67 18.18 3.64 7.70 3.81 100.00 Back ward castes Expend % of total iture expenditure (2) 1100 220 60 127 83 1590 69.2 13.8 3.8 7.9 5.3 100.00 Scheduled Castes Expen % total diture expenditure(3) 1000 200 85 127 63 1475 67.8 13.5 5.8 8.6 4.3 100.00 Average percentage (1+2+3)/3 67.89 15.16 4.41 8.07 4.47 100.00

Source: Survey Data.

The total income or surplus generated from the dairy activity is given in the last column in the table.8 (Income Flow). The surplus is Rs.1090 for forward castes and Rs.1230 for backward castes and the rest Rs. 1450 in Scheduled castes. Comparatively, in the case of OC, the survey may be very low due to high cost of maintaining the animals. The cost of maintaining the animals is Rs.1650, for forward castes, Rs.1590 for backward castes and the rest Rs1475 for schedule castes and schedule tribe. The cost benefit from dairy loan is Rs. 2740 for other castes and Rs.2820 for BC and Rs.2925 for Scheduled castes and Schedule Tribe. The average benefit is Rs.2821.5 and the average cost is Rs.1571.50 for all the respondents. Therefore the average surplus is Rs.1256.5 for all categories. TABLE.8: INCOME FLOW (PER MILK ANIMAL) Category FC BC SC & ST Total Average
Source: Survey Data.

(IN RUPEES) Surplus 1090 1230 1450 3770 1256.5

Benefit 2740 2820 2925 8465 2821.5

Cost 1650 1590 1475 4715 1571.5

COST-BENEFIT RATIO: A Cost-Benefit analysis can help us to calculate and estimate the rate of return every rupee spent. When the return is more than the cost, we infer that there is a surplus flow of returns. Net Income --------------Total Cost

Cost Benefit Ratio

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The cost-benefit ratio for the groups is presented in Table.13. The cost benefit ratio is shown in the last column in table.9. It implies that for every rupee spent on dairy activity, there is a net income of Rs.0.69 for other castes, Rs.0.77 for the backward castes and scheduled castes and schedule tribe for Rs. 0.98 respectively. From the table, it is understand that the cost benefit ratio is very favorable to scheduled castes compared than other castes. However, under SHG programme the women prefer dairy loans under IKP and they will be much benefited, as there is substantial benefit in this scheme as empirically shown above. This would also help the women to enhance their standard of living. TABLE.9: THE COST-BENEFIT RATIO Castes FC BC SC & ST Net Income (month) 1090 1230 1450 Total Cost (in rupees) 1650 1590 1475 Cost-Benefit Ratio 0.66 0.77 0.98

Source: Survey Data.

INVESTMENT GROSS INCOME RATIO: Table.10 presents the incremental gross income and investment gross income ratio for different castes namely other castes and scheduled castes. We have computed the incremental gross income and investment gross income ratio over an investment of Rs. 2500 on a single milk animal of an average quality and the capital output ratio. The capital output ratio is favorable to both the groups due to low cost of maintenance of milk animal. TABLE.10: INVESTMENT GROSS INCOME RATIO Castes FC BC SC & ST
Source: Survey data.

Average initial income level 2750 2500 2250

Investment one milk animal 2500 2500 2500

Incremental gross income 1090 1230 1450

Incremental gross income ratio 2.29 2.03 1.62

AVERAGE AND MARGINAL PROPENSITY TO CONSUME OF THE RESPONDENTS UNDER THE DAIRY ASSISTANCE: Average propensity to consume refers to the total amount of consumption expenditure out of the given total income at a particular period. Marginal propensity to consume is the incremental change in consumption as a result of a given incremental income. It refers to the additional consumption out of a given additional income. In short, the average propensity to consume is the ratio on consumption of income, the marginal propensity consume is the ratio of charge in consumption to change in income. Past Consumption C1 ----------------------- = -------- X 100 Past Income Y1 One Consumption C C2- C1 ----------------------- = ------- = ------Additional Income Y Y2 - Y1

Average propensity to consume =

Marginal propensity to consume =

The normal relationship between income and consumption is that when income rises, consumption also rises but to an extent smaller than rise in income. Past consumption, average present consumption, income (increment in income level), consumption (increment in expenditure level), APC (Average Propensity to Consume), and MPC (Marginal Propensity to Consume) of the sample members of the SHGs. When there is an increment of income of sample borrower due to dairy activity, the expenditure of the sample also increases. The APC for the sample respondents are 94.91 per cent, 97.00 per cent and 93.3 for FC, BC and SC&ST respectively. The Marginal propensities to consume of sample beneficiaries are 0.89, 0.90, and 0.80 respectively.

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TABLE.11: THE APC AND MPC OF THE RESPONDENTS UNDER DAIRY ASSISTANCE Past Income Y1 2750 2500 2250 Past Consumption C1 2610 2430 2100 Present income Y2 3300 2900 2500 Present Consumption C2 3100 2790 2300 Y Income Y2 - Y1 550 400 250 C Income C2- C1 490 360 200 APC C1 ----- X 100 C2 94.91 97.20 93.33 MPC C -----Y 0.89 0.90 0.80

Caste FC BC SC &ST

IMPACT ON EMPLOYMENT: The most meaningful way the bulk of the poor women can be provided greater income to enable them to raise above poverty is greater opportunity of employment. Once large-scale opportunity for greater earning through wage employment is created for the poor women, this will create greater purchasing power for them and large market for the commodities produced in rural areas. The dairy assistance under IKP through SHG creates additional employment to the women beneficiaries, besides creating additional income. The dairy enterprise could be a better means of providing fruitful employment to the rural people who are living below the poverty line. The increased employment of the women beneficiaries is estimated and measures in terms of man-days before the dairy loan and after the dairy assistance. The following table 12 presents information regarding employment generation due to implementation of dairy assistance under IKP through SHGs. From the table.12 it is understood that a total of 200 man-days in a year has been created for Other Castes and 240 man-days for Backward Castes. It was only 230 man-days for Scheduled Castes &Schedule Tribe, before the implementation of dairy assistance. There has been additional increment of 70 man-days for Forward Castes, 60 man-days for Backward Castes and 95 man-days for Scheduled Castes & Schedule Tribe after the dairy assistance in the sample mandals. The average man-days in a year for all castes 223.3 men-days in a year and now it is 298.3 man-days for these women respondents after the implementation of dairy assistance. There have been additional man-days of 75.0 for all in a year. There has been a reduction in dependency in the women beneficiary households as a direct result of dairy assistance availed through SHG. TABLE.12: EMPLOYMENT GENERATION BEFORE AND AFTER DAIRY ASSISTANCE Castes FC BC SC & ST Average Man-days before Dairy loan 200 240 230 223.3 Man-days After loan 270 300 325 298.3 Increment of mandays 70 60 95 75

IMPACT ON REPAYMENT OF LOAN: The success of dairy assistance depends not only on the generation of additional income and additional employment for the benefits of respondents but it depends on the prompt repayment of the loan by the respondents. Prompt repayment of the loan is all the more important because the extension of the benefit of the programme to other respondents depends on this vital aspect. So an attempt is made during the survey to fund out the extent of repayment of loan by the respondents. All the 750 respondents under dairy loan are the members of the cooperative milk societies and therefore there is no difficult in marketing the milk and paying the loan amount to the banks on behalf of the respondents. The following table.13 gives the Recovery Performance of Sample women respondents. Table.13 shows that the recovery performance for group loans was 100 per cent. The high percentage is because, the members feel that their money is lent among themselves and so it should be repaid promptly. Another reason for good recovery is also due to the fact that the prompt repayments of group loan make them eligible to avail bank loan for any income generating activity preferred by them.

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TABLE.13: REPAYMENT PERFORMANCE OF SAMPLE WOMEN RESPONDENTS (AMOUNT IN RUPEES) Caste FC BC SC & ST Amount 5300 5300 5600 Group Loans Repay-ment 5300 5300 5600 Percent of recovery 100 100 100 Amount 50000 52000 50000 Bank Loans through SHG Repay-ment 45000 40000 44200 Percent of recovery 90.00% 76.92% 88.40%

OPINION / ATTRIBUTES: Following are the opinions elucidated from the sample respondents: 1. The sample respondents expressed that joining into SHG has a substantial impact on their socioeconomic profile. 2. They felt that availability of loans at any point of time and their effective utilization helped them to increase their income and savings. 3. The sample women respondents belonging SC & ST opined that their husbands give respect to them as their enjoy the social status. 4. Respondents belonging to socially suppressed communities (Schedule Caste, Schedule Tribe & Backward classes) are of the opinion that economic empowerment helped them in social upliftment. 5. Participation in periodic group meetings helped them to increase their awareness on various social programmes besides solving the credit related programmes. 6. Although majority of the women respondents agreed that the officials from DRDA and Banks helping them significantly, a few of them expressed the need for greater coordination and cooperation among all the stakeholders. 7. Almost all the respondents expressed the need for increasing the subsidy in percentage terms in IKP funding. 8. Nearly three fourths of the respondents expressed that there should be greater thrust on practical training in the areas of poultry, dairy and other income generating activities before sanctioning the loans. 9. Majority of the respondents is of the opinion that every literate group member should be trained in maintaining the various records and registers which help them to know detailed information about various financial activities such as loans repayment, outstanding balance etc. 10. About 20 per cent of respondents suggested that the government officials from DRDA, IKP should attend the SHG meetings at least once in three months to explain various features of development programmes offered by them. 11. Many respondents opinioned that the collection of milk should be done by Government functionaries for ensuring for continued marketing with assured income and fair price. CONCLUSION: Before the formation of SHGs the situation was that the whole family was dependent upon the male member. But after the advent of the SHGs the women are able to manage their family better even without their spouse. Women of the SHG can be said to have been empowered since they have become owners of a ME from the status of agriculture labourers. Their income has increased after taking up economic activities in MEs. Improvement in their attitude and behaviour through the socialization process and participation in decision making affairs of the family as the other members of the family consults or hears to the views of the female. The study proved that women have tremendous energies to start and conduct their own ME given the right opportunities. They have developed a sense of unity, abundant self confidence and self esteem through SHG movement. Not only economic poverty but also social and gender issues can be tackled effectively. The success of the SHGs in terms of high repayment is mostly related to the exploitation of prevailing social ties and social cohesion found among women members. The status of women both within the household and outside has improved. Setting up of a small manufacturing unit with state administration may prove to be easy but sustaining the unit and turning the initiative into a profitable venture is very difficult. Big MNCs are flooding the local market with their products. There is no level playing field. Any economic activity by the SHGs has to be supported by the Government and it cannot be a temporary relationship. This will only lead to a bigger blow
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to the SHGs later. The IKP scheme has all the usual ingredients like target, subsidy, bureaucratic and political involvement in the credit, insistence on entrepreneurial income generating activity and most importantly, lack of understanding of the nuances of rural financial requirements. What is ignored is that these areas lack profitable investment opportunities. These opportunities need to be created first before thrusting upon anyone investment credit. SUGGESTIONS: Every activity has some hurdles for implementation, even in the development of MEs, there is some hurdles and following few suggestions are made which felt to contribute to the development of the MEs and the spreading of MF activities more rapidly and effectively. The working conditions of all the ME started by SHG members are either poor or inadequate. Since some of the members are illiterate, the officials from DRDA, IKP and Commercial Banks periodically visit the location of MEs and train them on book keeping and maintenance of accounts and conducting awareness programmes on latest schemes and developments. Private MFIs are charging very high rate of interest i.e 24 per cent which affects the financial sustainability of the micro units (MUs). Hence necessary steps are to be taken to assure the MUs to avail the sufficient finance at a marginal rate for a certain period (gestation period). The implementer should monitor not only the disbursal of money, but also the end-use of money for productive income generating activities/ MEs. Policy makers need to recognize the potential of micro financial services to support investment and growth in key economic sectors and hence to contribute significantly to national economic growth. Considering the consumption expenses of the respondents which are quite large in relation to their income, provision may be made for giving consumption loans under IKP scheme. Due to variation in the price of different quality animal, the loan amount should be as per members actual requirement. The recommendations of the group members should also taken in to account which fixing the cost of the dairy unit. In addition to the institutional sustainability, the group should also become financially viable. Financial sustainability of the group is achieved when the group is able to meet its operational costs from its income. In order to encourage more women towards setting up of MEs the subsidy amount should be increased and at the same time the subsidy should be linked to the promptness of the repayment. The State government should give necessary instructions to the developmental agencies to co-operate with the financial institutions in conducting recovery drives. Banks and IKP functionaries at the field level need to synergize their efforts that will strengthen the programme and the branch officials should make effective use of tools like of community based recovery mechanism for sustaining the recovery performance. A portion of the income generated out of the IKP financed activity should be used for the further development of the business/economic activity. There are number of groups with more than six years of experience. The government departments and banks should encourage them and sensitize to increase their quantum of thrift / savings. The IKP scheme may concentrate more on women self-employment income generation activity to empower the women. Present repayment structure is not suitable for promotion of MEs. Though the loan recovery period is fixed for 36 installments but in reality the loan is recovered in 18 to 24 monthly installments. It is necessary to reduce the influence of the private money lenders by taking measures such as further branch expansion, motivating the staff to be more receptive and responsible and by giving promotional and financial incentives linked with their loan recovery performance. There is a need to tighten the supervision and monitoring mechanisms and provide greater autonomy in the operation of credit institutions to improve their lending policies and procedures. Establishment of marketing information centre at district level for enhancing the opportunity of marketing outside of locality. Up gradation of quality of low cost products with enhanced capacity of artisans to face global threat.
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Government should provide infrastructure for training of SHG members in ME as also marketing infrastructure for marketing of the products. Multiple Enterprises development programmes are to be organized so that awareness for setting up of MEs could be attained. BIBLIOGRAPHY: [1] Anitha Prasad,T(2005), Emerging Trends in Microfinance A Case study of Swayam Krishi Sangham, Osmania, Journal of Management November 2005, Vol.4 No.4 Published by Department of Business Management, pp171-180. [2] Dasgupta, Rajaram (2005), Micro Finance in India: Empirical Evidence, Alternative Models and Policy Imperatives, Economic and Political Weekly, 40(12), March 19-25:1229-1237. [3] Falendra K.Sudan, Empowering Rural Women through Micro Enterprise Development, Social Change and Development, Vol.3 July, 2005.pp54-73. [4] Femida Handya and Meenaz Kassamb. (2004) Womens empowerment in rural India paper presented as the ISTR conference, Toronto Canada July, 2004. [5] Financing Micro-finance the ICICI partnership model- Small enterprise development Vol.16, No.1 March, 2005. [6] Fisher.T.and Sriram.M.S. (2002), Beyond micro-credit, putting development back into micro finance, Vistaar Publications, New Delhi. [7] Ghule & V.Mahajan, Microfinance A Tool for Alleviation in the Globalised Scenario Focus on Woman SHGs, Indian Commerce Bulletin, December 2004, pp36-44. [8] Growth and challenges faced by Micro-Finance Journal of IMS group. [9] Hannover, W.(2005), Impact of microfinance linkage banking in India on the Millenium Development goals. NABARD. [10] Jagdish kapoor, Development Issues in Micro-Credit, Bank Credit Emerging Trends, ICFAI Publication 2002, pp 21-26. [11] Jarinabi,U and Kanniammal.K. (2008), Micro finance and empowerment of Muslim women: A study of SHGs in Coimbatore city of Tamil Nadu, The Indian Journal of Commerce, p.p 16-26,Coimbatore. [12] Jayaraman,B. (2001), Micro finance: Retrospect and Prospects, Occasional paper-20.NABARD. [13] Jha,T.N: Micro credit finance models in Bangladesh: Lessons for Indian Yojana Feb -2002. [14] Journal Published by the SERP-Hyderabad. [15] Karmakar, K.G. (1999), Rural credit and Self-Help Groups, micro finance needs and concepts in India. Sage publications, New Delhi. [16] Kole Swapna & Arya Kumar. (2005), Facilitating Entrepreneurship among Rural Women: Issues and Challenges, Asian Economic Review December 2005, Vol.47.No.3, pp.445-455. [17] Malcolm Harper and Dr.Manoj Nath. (2004), Inequity in the Self-Help Group Movement a view form Indias Centre, Shelter, Vol. No.1 pp.14-24. [18] Meher, Shibalal (2007), Impact of Micro Finance on Poverty: A Study of Self Help Groups in Orissa, Journal of Rural Development, 26(3), July-September:315-333. [19] Mohanthy B.B, Sukhdeve M.L and Manikumar S. (2005), Mega Socio-Economic Transformation through Microfinance the NABARD experience, Focus, October 2005, pp 9-22. [20] Mostofa Kamal.Md, Mohammad. Shamsuddoha & Tasnuba Nasir: NGOs and Women: An Evaluative study on ASA and BRAC in Bangladesh [21] Muhammad Yunus, Grameen Bank, Micro credit and Millennium Development Goals Economic and Political Weekly, September4, 2004, pp 4077-4080. [22] Mustafa A. Rahman, Md. Shirahul Islam, M.A Matin, Grameen Bank in Employment Creation and Poverty Alleviation, the Bangladesh Public Administration Journal, Vol IV, No.2, July 1990, pp 52-74. [23] NABARD, Micro Credit Innovations Department (MCID) (2007), Progress of SHG-Bank Linkage in India 2006-07, and earlier years form 2002-03. [24] http://www.indirakranthipatham.com [25] http://www.microenterprises.com [26] http://www.microfinance.com [27] http://www.nabard.org/pdf/introduction05-06.pdf [28] http://www.rd.ap.gov.in.com. ----

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THE IMPACT OF TOTAL QUALITY MANAGEMENT COMPONENTS ON SMALL AND MEDIUM ENTERPRISES FINANCIAL PERFORMANCE IN JORDAN
Dr. Yaser Mansour Almansour, Al Balqa Applied University, Amman Jordan.

ABSTRACT

Total Quality Management (TQM) is increasingly lambasted by management gurus and the business media for a lackluster impact on the bottom line. The question of whether the adoption of TQM improves financial performance has been discussed for several years.However, most research has examined large organizations, and it has been recognized that TQM studies on small and medium enterprises (SMEs) is limited (Parkin and Parkin 1996; Walley 2000). This paper presents a study of the impact of TQM components on small and medium enterprises financial performancein Jordan while also providing a review of global TQM research. Keywords: TQM, SMEs, Global TQM, Jordan

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INTRODUCTION: Since the 1980s, when the Total Quality Management (TQM) concept was first defined, (Deming, 1986, Crosby, 1979, Juran, 1986), practitioners and researchers tried to give more definitions to defend this business philosophy, the first organic ground based system that emphasizes a systems approach to quality. TQM is a set of techniques, principles, processes, and best practices that over time have been proven effective (Rao et al., 1996). TQM utilizes techniques that improve as well as get better product quality and processes and thereby help a firm improve competitive performance (Grant et al., 1994). Proponents of TQM argue that the philosophy can be applied to any organization (Powell 1995). The effectiveness of TQM as a system for organizational improvement has been widely reviewed in the literature. TQM is an important management tool, which can offer business with stability, growth, and prosperity (Issac et al., 2004). In order to achieve the requirement of quality, firms have to put the effort on the implementation of TQM. Therefore, firms will introduce quality management practice to integrate internal information communications with TQM philosophy effectively. In addition, the application of TQM mechanisms is also important to develop the relationship between organizations and their suppliers. Moreover, the application of TQM can also increase the satisfaction of the customer by providing preeminent products or services. Evidence concerning the impact of TQM on business performance is based on a wide range of indicators that differ across studies and are in some cases are contradictory, especially regarding financial performance, which is measured in terms of ROA (return on assets), or ROI (return on investment). There are many studies have investigated the link between TQM and organization performance, however, that studies have concentrate on large organizations, and that could give a light on recognizing that TQM studies on small and medium enterprises (SMEs) is limited (Parkin and Parkin 1996; Walley 2000). Therefore, this study focuses on the impact of TQM components on SMEs financial performance in Jordan. LITERATURE REVIEW: Christos B. Fotopoulus&EvangelosL. Psomas(2009) and Kumar, Dixit Garg and T.K Grag (2009) studied the impact of TQM practices on quality management consequences and explained the relationship between TQM components including leadership, strategic quality planning, employee management and involvement, supplier management, customer focus, process management, and other continuous improvements, and their effect on quality management in the form profits, sales, and position. Some research has found a positive effect of TQM (Easton and Jarrell, 1998; Hendricks and Singhal, 2001a,b); whereas other research reports a negative incidence of TQM on all of the measures (Chapman et al. 1997). Other research has found a neutral result (Adam, 1994; Powell, 1995; York and Miree, 2004). Hence, that indicates the inconsistent results of those studies, However, that could lead to a methodological problem and conceptual approaches used by researchers which may have led to conflicting results but, in response. Moreno Luzon (1993) examined the effectiveness of TQM in a survey of 44 small manufacturing companies in Valencia, Spain. Effectiveness was measured on the basis of managers satisfaction with the achievement of specific objectives and their estimation of the change in several performance variables over a one year period believed to be a consequence of the quality program. Overall, the managers indicated a high level of achievement of their TQM objectives, and some managers perceived that their TQM programs had resulted in highly positive effects. In particular, the most frequently cited effects were the development of a quality culture (with 77% of firms experiencing this effect) and improved training (72.7%). Increased profits and increased sales were less frequently cited, with 63.6% and 50% of firms experiencing these effects, respectively. Walley (2000) provided insights to the effect of TQM in SMEs in the UK farming sector. Respondents were asked to rate the impact of TQM on a range of criteria. Based on the responses of 25 farmers who had implemented TQM (15.2% of the sample), Walley (2000) concluded that although some farmers had indicated that TQM had resulted in slight decreases in criteria such as cost efficiency and profitability, on average TQM appeared to have a small positive effect on overall performance. Criteria where TQM had a major impact were quality awareness and employee morale. Rahman (2001) studied the relationship between TQM practices and three business outcomes in SMEs in Western Australia. He developed a questionnaire which asked respondents to rate themselves on the degree to which they practiced 36 TQM mechanisms. The questions pertained to the similar six quality criteria that have been examined in Anderson and Sohals (1999) study. Business outcomes were defined in terms of revenue, profit, and the number of customers. A self rating scale was used to measure business outcomes. The questionnaire was sent to 250 SMEs, and 49 usable responses were received. Rahman (2001) documented that leadership, processes, products and services, people, and customer focus were significantly correlated with revenue, profit, and the number of customers.
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EsinSadikoglw ,CemalZehir (2010) and Alessandro Brun (2010) investigated the relationship between TQM practices with innovation and employee performance. The theoretical model developed for the study explains how different TQM practices i.e. leadership, training, employee management, information and analysis, supplier management, process management, customer focus, and continuous improvements effects on employee performance which leads to innovation performance and this in later stages effects the firm overall performance. Some researchers have found a positive effect of TQM (Easton and Jarrell, 1998; Hendricks and Singhal, 2001a,b); whereas other researchers found a negative incidence of TQM on all of the measures (Chapman et al. 1997). Other researchers also have found a neutral result (Adam, 1994; Powell, 1995; York and Miree, 2004). Hence, that indicates the inconsistent results of those studies, However, that could lead to a methodological problem and conceptual approaches used by researchers which may have led to conflicting results but, in response. INDEPENDENT VARIABLES: TQM measurement: The TQM program components used in the study include the following: 1. Commitment to Quality: It is important in implementing a TQM program to getthe commitment to the program of top management and the companys keystakeholders. 2. Employee Involvement: The qualitymanagement efforts of the organizationshould be fully supported by the members of the organization, especially the rank and file employees and middle management. Top management should be involved in planning, designing, implementing and monitoring the program. 3. Customer Focus: The ultimate objective of TQM is to satisfy and delight the customers. It is important, therefore, to implement strategies to determine customer needs and requirements, to monitor their level of customer satisfaction, and to respond to their concerns. 4. Fact-based Management: Employees need to be educated on the use of quantitative and statistical techniques to monitor and improve the quality of products and processes. 5. Process Monitoring and Control: The effectiveness of the firms process strategies and quality management program should be regularly monitored to ensure that targeted quality performance outcomes are met. 6. Incentive and Recognition System: Since quality management programs will promote teamwork and process-based approaches, appropriate incentives and recognition systems need to be designed to continuously motivate employees to support the program. 7. Continuous Improvement: The quest for quality should be continuing. Employees need to be encouraged to adopt productivity improvement programs.
TABLE 1 SHOWS THE ITEMS OF TQM STRATEGIES ASSOCIATED WITH THESE SEVEN TQM FACTORS:

TABLE 1 VALIDATED TQM PROGRAM COMPONENTS: FACTOR ITEMS 1. Primary consideration of quality in product design 2. Getting feedback from technical experts 3. Inclusion of customer feedback 4. Multi-functional review of product / service design 5. Ensuring benchmarking activities result to improvement 1. Organization of regular meetings 2. Encouragement of employees 3. Clarity and formality in goals 4. Top management involvement in planning & implementing quality management programs 5. Presence of multi-functional teams 6. Presence of quality circles 1. Program to implement customer service 2. Top management involvement in planning quality 3. Integration of training lessons to work processes 4. Inclusion of customer feedback 5. Techniques to determine customer satisfaction 6. Provision of financial support by top management

Commitment to Quality

Employee Involvement

Customer Focus

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Fact-based Management

Process Monitoring and Control

Incentive and Recognition System

Continuous Improvement Orientation

1. Utilization of quantitative techniques in process 2. Utilization of quantitative techniques in production design 3. Training on problem-solving techniques 4. Training on quality control 1. Adoption of repair and preventive maintenance 2. Employee compliance to regulations 3. Periodic quality audits 4. Review of departmental targets 5. Quality as primary consideration in supplier Selection 1. Application for ISO 9000 certification 2. Company application for recognition 3. Incentives to employees 4. Involvement in quality management association 1. System on item segregation 2. Signboards and labels 3. Records management system 4. Cleanliness 5. Programs on waste elimination

Source: Talavera, G. V. (2004), TQM Constructs Development and Validation: The Philippine Experience, GadjaMada International Journal of Business, 6(3), pp. 355 - 381.

DEPENDANT VARIABLE: Financial performance measurement: FACTOR ITEMS Return on investment Earnings growth Sales growth Market share Return on assets Cash flow

Financial performance

The review of the literature on the status of TQM components and organizations performance return has been analyzed in order to see the TQM components and its effect on organizations performance. The analyses are carried out by applying several factors which provide a sufficient understanding of the context within which the issue studied and analyzed. The discussion provides an important framework for this study in term of the variables that are going to be used in term of measuring TQM. Therefore, the variables that will be used to measure market sentiment are undertaken by Talavera, G. V. (2004). Figure 1 illustrates the conceptual framework of this study. FIGURE 1: CONCEPTUAL FRAMEWORK

Commitment to Quality Employee Involvement Customer Focus Fact-based Management Process Monitoring and Control Incentive and Recognition System Continuous Improvement Orientation Financial performance

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CONCLUSION: Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company. TQM utilizes techniques that improve as well as get better product quality and processes and thereby help a firm improve competitive performance. The quality management systems force company departments to work as a team. Different areas of the company become reliant upon one another to produce a quality product that meets and exceeds the customers' expectations. A quality system incorporates measures that affect sales, finance, operations, customer service and marketing. This study focuses on the impact of TQM components on SMEs financial performance in Jordan. An extension of this study for future research can be developed in term of finding other factors of measuring TQM. Interested parties can develop model of TQMs impact on publicly traded firms. Rather than focusing on small and medium enterprises REFERENCES: [1] Adam Jr., E.E. (1994). Alternative quality improvement practices and organizational performance. Journal of Operations Management, Vol. 12 No.1, pp. 27-44. [2] Alessandro Brun (2010). Critical success factors of six sigma implementation in Italian companies.International Journal of Production Economics, pp 1-7. [3] Chapman, R.L, Murray, P.C and Mellor, R (1997). Strategic quality management and financial performance indicators, International Journal of Quality & Reliability Management, Vol. 14 No. 4, pp. 432-448. [4] Christos B Fotopoulus and EvangelosL.Posmas (2009). The impact of soft & hard TQM elements onquality management results.International Journal of Quality and Reliability Management, Vol 26, no 2,pp 150-163. [5] Crosby, P.B. (1979). Quality is free: The Art Of Making Quality Certain. New American Library, New York. [6] Deming, W.E. (1986). Out of the Crisis. MIT Center for Advanced Engineering.Cambridge University Press. [7] Easton, G. S. and S. Jarrell (1998). The Effects of Total Quality Management on Corpora Performance: An Empirical Investigation, The Journal of Business, 71(2), pp. 253-307. [8] EsinSadikoglu ,CemalZehir (2010). Investigating the effect of innovation and employee performance on relationship between TQM practices and firm performance: An empirical study of Turkish firms, International Journal of Production Economics, pp 1-14. [9] Grant, R. M., R. Shani, and R. Krishnan (1994). TQMs Challenge to Management Theory and [10] Practice, Sloan Management Review, pp. 25-35. [11] Hendricks, K.B. and Singhal, V.R. (2001a). Firm characteristics, total quality management, and financial performance, Journal of Operations Management , Vol. 19 No. 3, pp. 269285. [12] Hendricks, K.B. and Singhal, V.R. (2001b). The long-run stock price performance of firms with effective TQM programs, Management Science, Vol. 47 No. 3, pp. 359368. [13] Issac, G. &Rajendran, C., Anantharaman, R.N (2004). A conceptual framework for total quality management in software organizations, Total Quality Management, 15(3), 307-344. [14] Juran, J. (1986). The quality trilogy, Quality Progress, No. 9, pp. 19-24. [15] Kumar, Dixit Garg and T.K Grag. (2009). Total quality management in Indian industries: relevance,analysis and directions. The TQM Journal, Vol 21, no 6, pp 607-622. [16] Powell, T. C. (1995). Total Quality Management as Competitive Advantage: A Review andEmpirical Study, Strategic Management Journal, 16(1), pp. 15-37. [17] Parkin, M. A. and R. Parkin (1996). The Impact of TQM in UK SMEs, Industrial Management & DataSystems, 96(4), pp.6-10. [18] Rahman, S.-U. (2001). Total Quality Management Practices and Business Outcome: Evidence FromSmall and Medium Enterprises in Western Australia, Total Quality Management, 12(2), pp.201-210. [19] Rao, A., L. Carr, I. Dambolena, R. Kopp, J. Martin, F. Rafii, and P. Schlesinger (1996). Total [20] Quality Management: A Cross-Functional Perspective, John Wiley & Sons, Inc. [21] Talavera, G. V. (2004). TQM Constructs Development and Validation: The Philippine Experience, GadjaMada International Journal of Business, 6(3), pp. 355 - 381. [22] Walley, K. (2000). TQM in Non-Manufacturing SMEs: Evidence From the UK Farming Sector,International Small Business Journal, 18(4), pp.46-61. [23] York, K.M. and Miree, C.E. (2004). Causation or covariation: an empirical re-examination of the linkbetween TQM and financial performance, Journal of Operations Management, Vol. 22, pp. 291311. ---International Refereed Research Journal www.researchersworld. com Vol. III, Issue 1,Jan. 2012 [65]

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TOURISM POTENTIALS IN BAGLAN TASHIL


Dr. Subhash Nikam, Research Guide & Principal S.P.H.College, Malegaon, Nasik-india Dr. Deepak Thakre, Asst. Prof. in Geography, L.V.H.College, Panchavati, Nasik-India

ABSTRACT Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes". Tourism has become a popular global leisure activity. The climatic conditions are very healthy and pleasant in the study area. Temperature remains much lower than the remaining part of Baglan tahsil. Temperature increases from about the latter half of February up to May Temperature starts decreasing from the month of June still August. Rainfall mainly receives in the month June to Sept. from the monsoon. The study area has tremendous potential for the ecotourism and Religious tourism development but the rural tribal community is not aware about the ecotourism. Villagers are in there traditional functioning. Cattle and Goat grazing is considered as an economical activity which does not have any scope due to protected forest. So the economical condition of peoples is not changing. If the government agencies as ITDC and MTDC, forest department will promote and propagate such area for selling as tourists destination, which will attract people all around the world and number of tourist will definitely increase. To promote this side for tourism well planed infrastructure should be created. Construction of good hotels and restaurants is necessary so as homely cottages with local impact in food and building material should be consider. Boost in number of tourist will provide the job opportunities which will be beneficial to increase the economic condition of local tribal community. Keyword: Ecotourism, ectourists, ecotourism development, flora and fauna, tribal community, Culture, environmental conservation.

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INTRODUCTION: Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes". Tourism has become a popular global leisure activity. In 2010, there were over 940 million international tourist arrivals, with a growth of 6.6% as compared to 2009. Ecotourism can be defined as travel to natural attractions that contributes to their conservation, respects integrity of local communities and enhances the tourists understanding of natural attraction, its conservation and the local community. It contributes to the welfare of local and indigenous population. The concept of modern tourism is relatively new. The main characteristics of modern tourism were obvious in the changes in mental attitudes towards pleasure seeking, to find relief from daily routine and the city dwellers yearning for physical adventure and pleasure. Scenic attractions are a very important factor in tourism, scenery of the landscape consisting of mountains, rivers, water falls, lakes, man made water reservoirs, glaciers, wide life, forests, deserts are the strong forces attracting people to visit them. Hence, it gives birth to a new concept a new concept of tourism called as ecotourism. Ecotourism has been relatively new around since the nineteenth century, it has grown considerably in popularity and commercial importance in just the past ten years in response to interest in the environment and adventure, increase in leisure time and personal incomes and most important is accessibility to many natural attractions. Ecotourism is primarily an activity to enjoy natural beauty and authentic culture. REVIEW OF LITERATURE: In the national as well as in the international level many case studies related to the eco-tourism and community based eco-tourism are published. One research titled Developing a Sustainable Eco-Tourism Framework for the Cordillera Region of the Philippines by Arthur Joseph Paul D. Alipio clearly mentioned the impact of Natural resources, pollution and physical impacts on Ecotourism. In his project he described the socio-cultural impacts of tourism activities also economic impacts of tourism. One of the research paper was published by Centre for East-West Cultural and Economic Studies, Bond University (2005) on the Development of ecotourism in tribal regions of Orissa: Potential and recommendations which was written by NilakanthaPanigrahi, NKC Centre for Development Studies, Orissa, India. In the particular research paper it is explained very clearly the treasure of tourism and the tourist potential in the State of Orissa. One of the case studies was published in the, The Hindu, (2006) magazine on the Periyar tiger reserve and community participation, which was written by prominent ecologist Ashish Kothari and NeenaPathak. In the particular article it is explained very well how once the local people of the forested area were involved in stealing of wood and poaching activities and how the local people after being involved in the ecotourism activities as a part of Global Environmental Facility (GEF) funded Eco-development Project helped to control over the cases of poaching and how they were later benefited from the project. Another article was published by the same author Mr. Asish Kothari in, The Hindu, magazine (2007) on the topic- Tourism, wildlife and communities, explains how the successful ecotourism ventures are facing threat due to unclear policies. Two successful ecotourism destinations from Uttarakhand and one from the Rajasthan were discussed here. Another case study published in, The Hindu, magazine (2007), titled, Andaman and Nicobar Islands dangerous tourism explains how the unplanned tourism can cause great threat to the biodiversity hotspots and other natural environments. One case study published in Current Science, Volume 95 No. 11 (Dt. 10th Dec, 2008), titled, Ecotourism in wetlands causes loss of biodiversity by S. Sandilyan, K. Thiyagesan and R. Nagarajan explains that wetlands might be adversely affected by ecotourism. ECOTOURISTS: It is very difficult to determine who exactly the Ecotourists are the successful ecotourism will depend on good tourist behaviour. Ecotourism has emerged from western environmentalism, therefore mostly related to the demand of western travellers who are generally educated and interested in culture and environment. Ecotourists can appreciate the surrounding nature while at the same time learn about unique culture of the local people. OBJECTIVES: The study is aimed at investigating the following objectives in the study area: To assess the natural and cultural resource potential for development of ecotourism. To examine the village wise land use pattern of study area. To find out the recent trend of tourism development in the study area.
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METHODOLOGY: Physical survey of 23 villages, having very rich flora and fauna was conducted for ecotourism development. The secondary data is used for a closer look into the culture and tradition in the study area. Discussions and interviews were also organized with the forest officers, tourists and local tribal people with an aim to create awareness about ecotourism development collected from the forest department, Irrigation department and Trust of Mangi-Tungi Jain Temple of Bhiwad, Attempts have been made to analyse the resource pot entities for ecotourism development which is useful for the economic development of rural tribal developing community. STUDY AREA: The study area lies between 20042 to 20053 North latitude and 73045 to 74.07 East longitude having an area of 26714.63 hectares with the population of 32,808 including 80.7% tribal population (1991) of 23 villages selected for the study, which are situated in the north-western part of Baglan tehsil in Nashik district of Maharashtra. The study area has tremendous potential for ecotourism development which is very useful for economic development of local tribal community. CRITERIA FOR THE ASSESSMENT OF RESOURCE POTENTIALS FOR ECOTOURISM: Ecotourism is based on natural bio-physical attributes, while conservation of natural resources is fundamental to ecotourism. Tourists visit places of natural beauty and culture for leisure, adventure and study. While assessing potential of ecotourism sites, the following factors are considered: Attractiveness of natural features Richness in wild life Flora diversity Water resources Cultural and historical uniqueness Accessibility Local infrastructure ATTRACTIVENESS OF PHYSICAL FEATURES: Mountains and hills carry great aesthetic appeal than the lower relief. The study area is situated in the Eastern side of Sahaydri mountain range. Few highest points like Mangi(1326Mt) Tungi(1323Mt) are the main attractions of this area. Salbari pass provides road connection from the historical time. River Mousam originating from Western Ghats adds charm in to this scenic location Few historical forts like Salher(1613mt), Hargad(1122mt),Auranggad (1129mt) Mulher, through apportinuty to historical lovers. Salher ( 1613Mt) is the second highest peak in the Western Ghat. CLIMATE: The climatic conditions are very healthy and pleasant in the study area. Temperature remains much lower than the remaining part of Baglan tahsil. Temperature increases from about the latter half of February up to May. May is the hottest month with mean daily max. Temperature 37.4o c. Temperature starts decreasing from the month of June still August. December is the coldest month with the mean daily min. temperature at 11.2oC. Annual Max temp is 32o C and min is 17.8oC. Rainfall mainly receives in the month June to Sept. from the monsoon. FORESTS AND WILD LIFE: The study area has occupied the area of 13462 hectares of forest. The region has natural cover of vegetation. The floral wealth of study area is great in terms of variety. The forests in this area are of dry deciduous type, In this forest teak is the main species, other closely associated species are Sadada or Ain, Hed, Kalam, Sisum, Khair, Tiwas, Bibla & Dhavda in varying proportions. Bamboos are also common in western part. The vegetation is generally found along terraces and sheltered belt. The major portion of the study area of forest has been occupied by Reserved forest. The study area has an abundance of wild life, A number of species are found including insects, mollusks, mammals, birds, reptiles, amphibian and fishes. The tiger Wagh (Felis Tigris) is common in the study area.
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The panther bibtya (Felis parades), Wolf (Canis pallipes), Fox, Monkeys, Mongoose and Jackals are commonly found in the study area. The Baglan panthers are especially large in size, many of them over seven feet in length. Apart form these, the Stag Samber (Rusa aristotelis) the spotted deer, chital (Axis maculates), Nilgay (Portax pictus) wild boar dukkar (Sus indicus) the barking deer (Cervulus aurcus) are found in small number. WATER RESOURCES: Water bodies constitute major resources for ecotourism promotion. Lakes, tanks, dams etc can play a vital role in the aesthetic and recreational activities of the people. Water sports like swimming, boating, river rafting and other related activities can be developed in study area. The headwaters of the Mousam river rise from the Sahyadris south of the Hanuman hill of Salher fort. The river runs eastwards past Mulher. It is joined by large number of affluent from the northern side as well as southern slopes of the Galana hills. The important among them are Tungadi nala, Kanjari nala, Dagadchand nala, etc. The Mousam has cut a wide valley. There are number of water falls in the north-west and south-west part of study area. Lakes are a natural choice for ecotourism activities. There is major water project constructed on the Mousam River in 1982 at Ambapur known as Haranbari CULTURAL AND HISTORICAL UNIQUENESS: People themselves are major source of tourist attraction. The total tribal population is 80.7% This study area as a cultural landscape of the region carries an unmistakable imprint of its history since the time of the cession of the region to the Muslim rule of Khans right through the Maratha occupation till the advent of the British. Being unique in their culture and tradition the people of this region still retain some of their basic cultural values. The transition between the territory of Delhi rulers and the kingdoms of the south, was a scene of encampment of armies, a theatre of conflict between the rival Maratha dynasties in the 18th and early 19th century and offered easy access or escape routes to the Arabian sea ports through the Selbari Pass. The Salher fort and the Mulher fort are the evidence of the uniqueness and historical importance of this area. The people speak languages like Bhili, Kokani and Ahirani, The former is enumerated as the mother-tongue of tribal people of the area and the latter is classed as a dialect of Marathi, though there is a controversy about the origin and status of Ahirani as some consider it an admixture of Gujrati, Prakrit, Hindi and Marathi, once the language of Abhir dynasty. The people of the region are straight forward, simple, hard working and love their motherland. The culture and art of this tribal community have significant potential for tourism development. They have a distinctive way of building their houses on the foothills of mountains. In addition their traditional dances, music, weeding ceremonies, their fairs and festivals are unique examples of culture. Three day celebration once in a year takes place on the day of Anant Chaturdashi by performing Ramlila known as Bhawada local language. This tradition is going on from last 300years at Mulher. These people prepare wine from Moha Flowers for domestic use only. They workship various Hindu Gods as Lord Shiva, Ganesha, goddess Ambika etc. RECENT TREND IN TOURISM DEVELOPMENT: There has been a considerable increase in tourist arrivals (only domestic)in this region. Religious motivation plays an important role in pilgrimage tourism in study area. Mangi-Tungi is an important holy place of the Jains. There are seven caves on the hill top in which there are sculptures of Jain deities. More than two lakh peoples visit this holly place each year. There is another important holly place, known as Dawal Malik Darga, located near Antapur. It is a symbol of national integration both Hindu and Muslims worship these god, more than 300 peoples from entire part of Maharashtra visit this place every week. Apart from these holy places, many trekkers, excursionists, nature lovers, students are visit this area. As per the information collected from local people, nearly 20 to 50 tourists are visiting this place in a day. Varies places like Salher fort, Haranbari Project, Mangi-Tungi Temples, Antapur etc are there places of interest. This areas are not properly advertised so number of tourist is less as compare to the areas having less potentials than Mulhar. If the government agencies like ITDC and MTDC, forest department will promote and propagate this area for as a tourists destination, which will help to increase the number of tourist arrival. Which will help to increase the economic condition of local tribal community? LAND USE: In the study area, 50.39% area is under forest only 34.72% land is used for cultivation out of which only 2.22% land comes under irrigation through wells and cannels. Subsistence farming is practice here. Animal grazing is
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also practice in small scale but this is not permitted in the protected forest area. So the people are not economically developed. If ecotourism is properly propagated and advertise which increase the number of tourist which will provide job and business opportunities to local people. INFRASTRUCTURE: This area is well connected with Nasik and neighboring Gujarat state by tar road In the study area every village is connected by tar road. State highway No. 16 is an important road along with Mousam river passes east to west which provides accessibility to the tribal people. M.S.R.T.C buses run frequently in the study area, private jeeps also provide transportation. The accommodation facilities are not fully developed there is lack of good hotels and restaurants. Accommodation is provided by Trust of Mangi-Tungi Temple trust nearly 100 rooms are there at Bhilwad. Primary health centers are located at Mulher, Antapur, Salher which provide medical facilities for rural population. CONCLUSION: The study area has tremendous potential for the ecotourism and Religious tourism development but the rural tribal community is not aware about the ecotourism. Villagers are in there traditional functioning. Cattle and Goat grazing is considered as an economical activity which does not have any scope due to protected forest. So the economical condition of peoples is not changing. If the government agencies as ITDC and MTDC, forest department will promote and propagate such area for selling as tourists destination, which will attract people all around the world and number of tourist will definitely increase. To promote this side for tourism well planed infrastructure should be created. Construction of good hotels and restaurants is necessary so as homely cottages with local impact in food and building material should be consider. Boost in number of tourist will provide the job opportunities which will be beneficial to increase the economic condition of local tribal community. REFERENCES: [1] Lisa M. Campbell, 1999, Ecotourism in rural developing communities, Annals of Tourism Research, Vol.26, No.3. P534-53. [2] Gearing, Charles, E, Swart, William and Var, Turgut (1974) Establishing a measure of touristic attractions, Journal of Travel Research, Vol. 12, No.4 [3] Ferrario, F.F. (1979), The evolution of tourist resources an applied methodology, Journal of Travel Research, Vo. XVII No.3. [4] Dixit, K.R. (1986) Maharashtra in Maps, Maharashtra State Bored for literature and culture Mantralaya, Bombay P-183 [5] Sinha P.C (1998) Ecotourism and Mass Tourism, Anmol publication Pvt. Ltd. New Delhi. P. 29-30 [6] Parbati Nandi and P. Chakraborty (1999), Tourism and Environmental Degradation Facts and Remedies, Geographical Review of India. Vol-61, No. 1 P. 22-27. [7] Glen T. Hvengard and Philp Dearden (1998), Linking ecotourism and Biodirvsity conservation: A case study of Doi Inthanon National Park, Thailand. Singapur Journal of Tropical Geography. Vol-19 No.2 [8] Pleumaram, A. (1997), Open questions concerning the concept, policies and practicals of ecotourism. RECOFTC Report No. 15, Bangkok, Thailand P.25. [9] Govt. of India (1994): Gazetteer of Bombay Presidency, Nashik, Vol.XVI [10] District Census Handbook (1995), Census of India 1991. Series -14. P.178-179. [11] Rai, H.C. (1998), Hill tourism, Planning and Development, Kaniska Publishers, New Delhi. P.12-23. [12] Punia B.K. (1994), Tourism Management: Problems and Prospects, Ashish publishing House, New Delhi. P.33-37 POPULATION & LAND-USE PATTERN IN THE STUDY AREA: Area not available for cultivation (%) Cultural waste land (%) Non irriga-ted land(%) Area under forests (%) Population Tot area in hectares Irrigat-ed Land (%)

Village

Golwad Mohalangi Borhate

2396 1052 499

3407.00 502.00 652.00

68.71 61.35 66.10

2.35 1.20 0.77

24.80 32.27 16.87

1.61 1.59 1.53

2.52 3.59 14.72

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Jaitpur Maliwade
Devthan-dongar

Shevare Vade-digar Hatnoor Kharad Jad Babhulane Aliyabad Ajande Jamoti Mulher Bordaiwat Bhimkhet Waghambe Mannur Salher Bhilwad Antapur Total

721 1314 406 842 707 288 470 1539 1172 1671 327 1582 3356 1502 1001 982 2243 2228 1548 4962 32808

248.00 773.00 343.00 1387.00 132.00 216.00 138.00 1827.00 1358.00 1886.00 290.00 1001.00 935.00 1177.00 959.00 877.00 2950.00 2400.00 1817.63 1439.00 26714.63

48.79 44.11 0.00 29.27 0.00 0.00 0.00 78.49 82.33 3.82 31.38 57.94 64.49 71.88 56.20 26.68 51.86 33.17 73.48 23.35 50.39

4.84 0.65 30.61 1.44 15.15 1.39 3.62 1.92 2.95 1.64 0.56 2.50 1.71 0.00 1.43 0.09 0.68 0.83 0.31 8.55 2.22

18.55 47.99 40.52 53.86 66.67 26.85 47.10 7.61 11.86 22.96 61.72 31.17 23.64 24.47 36.08 55.64 28.81 58.33 21.66 58.44 32.50

23.79 1.68 8.16 2.81 9.85 58.80 36.96 9.63 1.69 19.72 2.07 1.80 4.92 0.85 0.00 0.91 16.95 2.04 0.34 1.11 6.11

4.03 5.56 20.70 12.62 8.33 12.96 12.32 2.35 1.18 51.86 4.27 6.59 5.24 2.80 6.28 16.67 1.69 5.63 4.22 8.55 8.77

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GLOBAL STOCK MARKET INTEGRATION - A STUDY OF SELECT WORLD MAJOR STOCK MARKETS

P. Srikanth, M.Com., M.Phil., ICWA., PGDT.,PGDIBO.,NCMP., (Ph.D.) Assistant Professor, Commerce Post Graduate College, Constituent College of Osmania University, Secunderabad. A.P.

Dr. K. Aparna, M.Com, MBA., Ph.D., UGC-NET, Assistant Professor, Business Management, Telangana University Dichpally, Nizamabad, A.P.

ABSTRACT The present study is being contemplated with the objective of studying the degree of stock market integration. In this study, month-wise average prices of BSE-Sensex, NYSE, NASDAQ, S&P500, HangSeng, Nikkei225, SSE Composite index and FTSE100 have been selected. Multiple Correlations has been computed for the select stock market indices. Statistical Significance of the correlation has been tested by applying correlation t-test. The results of these studies support the view that there is a substantial integration between domestic and international financial markets. BSE-Sensex has witnessed greater fluctuations which has been indicated by very high Ce-efficient of variation compared to other select indices. Sensex, the Indian bench market index, has shown strong association with NYSE and Hang Seng. Chinese stock index i.e., SSE Composite index has exhibited strong correlation with BSE- Sensex and with Hang Seng. Japanese stock index i.e., Nikkei225 has strong correlation with all the select indices except Sensex, HangSeng and SSE Composite index. The European index i.e., FTSE100 has exhibited strong correlation with all the US stock market indices and with Nekkei225, the Japanese stock market index. Keywords: Stock market integration, Global stock markets.

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1. INTRODUCTION: The globalization of the world stock markets is the most significant development that has occurred during the last decade. Various factors contributed to this including: the advancement of technology and remote access which have been utilized in security trading, the emergence of new international financial institutions offering financial services regardless of geographical jurisdictions, trends of liberalization and the removal of restrictions used to be imposed on foreign ownership, and the movement towards regional integration of that stock exchanges, clearing and settlements organizations, and other financial institutions. Along with various measures, opening up of the home market for the foreign investors is one of the important steps taken by the Indian Government that may lead the Indian stock market to be strongly integrated with the stock market of the rest of the world. The globalization phenomenon may be blessing, since many experts believe that globalization may improve market efficiency, lower its risk due to the possibility of diversification, and use arbitrage in a relevant way. On the other hand, it may increase pricing volatility and trading instability, due to the high correlation between leading - major- stock markets and other markets as well as to the fact that the irrational trading in one market may move to other markets as witnessed in the last two decades.. 2. LITERATURE REVIEW: William L. Huth et al have opined that economic interdependence between nations has been the focus of considerable research. In their view point, a particular avenue of international interrelationship that has received a great deal of recent attention is the integration of international stock markets. Increased trade between nations implies that domestic corporate profitability will be influenced by economic conditions in other countries. If international influence is widespread between particular markets then it is likely that measures of overall market performance will be related1. Hazem A. Marashdeh et al examine the extent of stock market integration among the Gulf Cooperation Council (GCC) countries. The results of the empirical tests suggest that the GCC stock markets are not fully integrated and there still exist arbitrage opportunities between some of the markets in the region. On the other hand, the results show no evidence of cointegration between the GCC stock markets and developed markets, which implies that international investors can diversify their portfolio and obtain long-run gains by investing in the GCC markets2. Luca Cuadro Sez et al analyse whether, and to what extent, emerging market economies (EMEs) have systemic importance for global financial markets, above and beyond their influence during crises episodes. Using a novel database of exogenous economic and political shocks for 14 systematically relevant EMEs, they find that EME shocks not only have a statistically but also economically significant impact on global equity markets. The economic significance of EME shocks is in particular underlined by their remarkably persistent effects over time3. Ravazzolo et al examine real and financial links simultaneously at the regional and global level for a group of Pacific-Basin countries by analysing the covariance of excess returns on national stock markets over the period 1980-1998. They find overwhelming evidence at the regional and global level and for all sub-periods that financial integration is accompanied by economic integration. This seems to suggest that economic integration provides a channel for financial integration, which explains, at least partly, the high degree of financial integration found in this study and in other studies for this region even in the presence of foreign exchange controls4. 3. IMPORTANCE OF THE STUDY: In the context of increasing globalizing and increasing opportunities to the investors to invest abroad, it is essential for the international portfolio investors from India to understand the level of interdependence among the major stock markets in the world and its impact on Indian stock market. Study of level of correlation between Indian stock market and other major stock markets, helps the investors in planning for international price arbitrage and international portfolio diversification. It is also essential to analyse the level of correlation among the major stock markets themselves. In order to reduce the portfolio risk, an investor will prefer to invest in the stock markets which are less correlated with other stock markets. The present study helps in better international portfolio diversification and making effective planning for international price arbitrage. 4. OBJECTIVES OF THE STUDY: The objective of the present study is to analysis the level of integration of Indian stock market with major stock markets in the world. 5. METHODOLOGY OF THE STUDY: 6. 5.1. Period of study: The study covers a period of 10 years from January 2000 to December 2009.
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5.2. Sources of Data: The present study is based on secondary data. Month-wise average prices of select indices have been collected from concerned stock exchange websites. Apart from this, various journals, magazines, text books and articles have been referred to get the relevant information. S.No. 1 2 3 4 5 Index selected for the study Sensex Dow Jones Industrial Average NYSE NASDAQ S&P500 Country India United States of America United States of America United States of America United States of America Sl.No. 6 7 8 9 Index selected for the study HangSeng SSE Composite index Nikkei225 FTSE100 Country Hong Kong Peoples Republic of China Japan United Kingdom

6.3. FRAMEWORK OF ANALYSIS: For the present study, month-wise average index prices have been chosen. Multiple Correlation has been computed for the select stock market indices. Statistical Significance of the correlation has been tested by applying correlation t-test. Correlation has been divided into three levels. Correlation below 0.40 is treated as Weak; correlation between 0.40 to 0.70 as moderate; and correlation between 0.70 to 1 as strong. Descriptive statistics i.e., Minimum, Maximum, Mean, Standard Deviation, Coefficient of Variation, Skewness and Kurtosis have been computed for the select indices. 7. DESCRIPTIVE STATISTICS FOR THE SELECT INDICES FOR THE PERIOD FROM 1-1- 2000 TO 31-12-2009: TABLE 1 : DESCRIPTIVE STATISTICS Indices N Minimum Maximum Mean Std. Deviation 5,049.42 1,453.80 1,410.60 654.76 197.41 4,782.11 1032.67 Coefficient Skewness Kurtosis of Variation 60.29% 0.659 -0.918 13.89% 0.242 0.002 20.02% 0.483 -0.550 29.95% 1.678 3.659 16.64% -0.142 -0.812 30.66% 0.909 0.501 48.85% 1.77 2.860

SENSEX DOW NYSE NASDAQ SP500 HANGSENG SSE Composite index Nikkei225 FTSE100

120 120 120 120 120 120 120

2811.60 7062.93 4617.03 1172.06 735.09 8634.45 1060.74

20286.99 8,374.54 13930.01 10,466.61 10311.61 7,046.26 4696.69 2,185.92 1549.38 1,186.39 31352.58 15,597.13 5954.77 2113.82

120 120

7568.42 3567.40

20337.32 12,682.00 6721.60 5,248.81

3,162.20 866.53

24.93% 16.51%

0.421 -.096

-.884 -1.222

As shown in table 1, BSE-Sensex has witnessed greater fluctuations which have been indicated by very high coefficient of variation followed by SSE composite index. In the case of US indices, NASDAQ has shown highest fluctuations and DOW has shown very low fluctuations. Skewness of the distribution of all the indices prices is positive except S&P500 and FTSE100. European index FTSE100 has lesser fluctuations when compared US indices. Kurtosis in the case of NASDAQ is positively very high followed by SSE Composite index indicating abnormal peaks in the distribution of the indices prices. 8. STUDY OF RELATIONSHIP OF BSE-SENSEX WITH OTHER SELECT INDICES FROM 1-12000 TO 31-12-2009: To study the relationship between BSE-Sensex and other indices selected for the study, the following hypothesis
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has been designed. Null Hypothesis: There is no significant relationship between Sensex and other select indices. Alternate Hypothesis: There is a significant relationship between Sensex and other select indices. TABLE 2: CORRELATION BETWEEN BSE-SENSEX AND OTHER SELECT INDICES Indices Sensex & Dow Sensex & NYSE Sensex & NASDAQ Sensex & S&P500 Sensex & HangSeng Sensex & Nikkei225 Sensex & FTSE100 Sensex & SSE Composite index Correlation Correlation Coefficient 0.592 0.741 0.164 0.386 0.912 0.336 0.410 0.764 Level of Correlation Moderate Strong Weak Weak Strong Weak Moderate Strong t-value -4.361 2.775 13.314 15.582 -11.377 -7.920 6.683 -13.307 T-test results p value Hypothesis accepted 0.001 H1: Accepted 0.006 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted

The study of relationship between BSE-Sensex and other select indices (table 2) indicates that, null hypothesis is rejected and alternate hypothesis is accepted in all the cases. Hence, there is a significant relationship between Sensex and other world major indices. In all the cases, correlation is significant at 1% level of significance, indicating strong integration of Indian stock market with major world stock markets. Though, the correlation of Indian stock market is weak with NASDAQ and S&P500 of US market and also with Nikkei225 of Japanese stock market, the relationship was statistically significant as it is revealed in t-test. As shown in table 2, highest correlation was recorded between Sensex and Hang Seng and the lowest correlation was recorded between Sensex and NASDAQ. From among the US stock market indices, NYSE exhibited strong positive correlation with Sensex; Dow has showed moderate correlation. NASDAQ and S&P500 exhibited weak correlation with Sensex. In the case of Asian regional stock markets, Hong Kong market (i.e., Hangseng) and Chinese stock market (SSE Composite Index) showed strong integration with Indian stock market and Japanese stock market (i.e., Nikkei225) exhibited weak correlation with Indian stock market. Moderate correlation between Sensex and FTSE100 indicates that European Stock market is not very strongly integrated with Indian stock market. 9. STUDY OF RELATIONSHIP OF DOW JONES INDUSTRIAL AVERAGE (DJI) WITH OTHER SELECT INDICES FROM 1-1-2000 TO 31-12-2009: To study the relationship between Dow Jones Industrial average (DJI) and other indices selected for the study, the following hypothesis has been designed. Null Hypothesis: There is no significant relationship between Dow Jones Industrial average (DJI) and other select indices. Alternate Hypothesis: There is a significant relationship between Dow Jones Industrial average (DJI) and other select indices. TABLE 3: CORRELATION BETWEEN DOW JONES INDUSTRIAL AVERAGE (DJI) AND OTHER SELECT INDICES Indices Dow & Sensex Dow & NYSE Dow & NASDAQ Dow & S&P500 Dow & HangSeng Dow & Nikkei225 Dow & FTSE100 Dow & SSE Composite index Correlation Coefficient 0.592 0.960 0.539 0.914 0.768 0.785 0.833 0.614 Level of Correlation Moderate Strong Moderate Strong Strong Strong Strong Moderate T-test results t-value 4.361 18.497 56.892 69.291 -11.244 -6.973 33.772 -51.311 p value 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 Hypothesis accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted

In the case of all the above indices, alternate hypothesis is accepted, indicating statistically significant
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relationship between Dow Jones industrial average (DJI) and other world major indices as observed from Table3. Dow, one of benchmark indices of US stock market, is exhibiting strong correlation with all other leading indices in the world except Sensex, NASDAQ and SSE Composite index. Dow Jones industrial average (DJI), the US stock index, is strongly correlated with other US indices (i.e., NYSE and S&P500) except NASDAQ. DJI has moderate correlation with NASDAQ. There is a strong correlation between Dow and FTSE100 which indicates close integration of US and Europe stock markets. Dow has strong correlation with Hong Kong stock market index (i.e., Hang Seng) and Japanese stock market index (i.e., Nikkei225) which indicates strong integration with stock markets of Asia pacific region. However, Dow is showing moderate correlation with BSE-Sensex and SSE Composite Index indicating moderate integration of Indian and Chinese stock markets with US stock market. 10. STUDY OF RELATIONSHIP OF NYSE COMPOSITE INDEX (NYA) WITH OTHER SELECT

INDICES FROM 1-1-2000 TO 31-12-2009: The following hypothesis has been designed to study the relationship between NYSE Composite index (NYA) and other select indices. Null Hypothesis: There is no significant relationship between NYSE and other select indices. Alternate Hypothesis: There is a significant relationship between NYSE and other select indices. TABLE 4: CORRELATION BETWEEN NYSE COMPOSITE INDEX (NYA) AND OTHER SELECT INDICES Correlation Level of Coefficient Correlation 0.741 0.960 0.452 0.847 0.839 0.749 0.789 0.634 Strong Strong Moderate Strong Strong Strong Strong Moderate T-test result Hypothesis p value accepted 0.006 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted

Indices NYSE & Sensex NYSE & DOW NYSE & NASDAQ NYSE & S&P500 NYSE & HangSeng NYSE & Nikkei225 NYSE & FTSE100 NYSE & SSE Composite index

t-value -2.775 -18.497 34.236 45.068 -18.787 -17.830 11.894 -30.907

The p value is less than 0.05 in all the above cases. Hence, Null hypothesis is rejected and alternate hypothesis is accepted. It can be inferred from the above analysis that, the relationship of NYSE with other world major indices is statistically significant. NYSE, one of the bench mark indices of US, is exhibiting strong integration with other major indices in the world except NASDAQ and SSE Composite index. As indicated in table 4, NYSE, major US stock market index, is showing strong correlation with other US major indices i.e., DOW and S&P500, except NASDAQ. Correlation between NYSE and BSE-Sensex is strong, indicating closer integration between US and Indian stock markets. Relationship of NYSE with Hang Seng and Nikkei225 is also very strong. It clearly indicates the strong integration of stock market of US and Asia-pacific region. However, correlation between SSE Composite index and NYSE is moderate. NYSE is strongly correlated with FTSE100 indicating strong correlation of US and European stock markets. 11. STUDY OF RELATIONSHIP OF NASDAQ COMPOSITE INDEX WITH OTHER SELECT INDICES FROM 1-1-2000 TO 31-12-2009: To study the relationship between NASDAQ Composite index and other indices selected for the study, the following hypothesis has been designed. Null Hypothesis: There is no significant relationship between NASDAQ and other select indices. Alternate Hypothesis: There is a significant relationship between NASDAQ and other select indices. TABLE 5: CORRELATION BETWEEN NASDAQ COMPOSITE INDEX AND OTHER SELECT INDICES Indices NASDAQ & Sensex Correlation Coefficient 0.164 Level of Correlation Weak T-test result Hypothesis p value accepted 0.006 H1: Accepted

t-value -2.775

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NASDAQ & DOW NASDAQ & NYSE NASDAQ & S&P500 NASDAQ & HangSeng NASDAQ & Nikkei225 NASDAQ & FTSE100 NADAQ & SSE Composite index

0.539 0.452 0.792 0.466 0.802 0.771 0.245

Moderate Moderate Strong Moderate Strong Strong Weak

-18.497 34.236 45.068 -18.787 -17.830 11.894 -0.646

0.001 0.001 0.001 0.001 0.001 0.001 0.519

H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H0: Accepted

Statistically significant relationship between NASDAQ and other world major indices is observed by accepting alternate hypothesis at 95 percent level of confidence, except with SSE Composite Index . As revealed from table 5, impact of NASDAQ is not similar on all the indices selected for the study. In America region, NASDAQ has exhibited strong correlation with S&P 500 and it has moderate correlation with other major US indices i.e., DOW and NYSE. Influence of NASDAQ on select Asia-pacific indices is not on same level. It has showed strong correlation with Japanese stock market (i.e., Nikkei225) and moderate correlation with Hong Kong stock market (i.e., Hang Seng) and weak correlation with Indian stock market (i.e., BSE-Sensex) and Chinese stock market (i.e., SSE Composite index). The correlation between NASDAQ and FTSE100 is strong which indicates closer integration of US stock market with European stock markets. 12. STUDY OF RELATIONSHIP OF S&P 500 INDEX WITH OTHER SELECT INDICES FROM 1-12000 TO 31-12-2009: The following hypothesis has been designed to study the relationship between S&P 500 Index and other select indices. Null Hypothesis: There is no significant relationship between S&P500 and other select indices. Alternate Hypothesis: There is a significant relationship between S&P500 and other select indices. TABLE 6: CORRELATION BETWEEN S & P 500 INDEX AND OTHER SELECT INDICES Indices S & P500 & Sensex S & P500 & DOW S & P500 & NYSE S & P500 & NASDAQ S & P500 & HangSeng S & P500 & Nikkei225 S & P500 & FTSE100 S&P500 & SSE Composite index Correlation Coefficient 0.386 0.914 0.847 0.792 0.653 0.913 0.946 0.451 Level of Correlation Weak Strong Strong Strong Moderate Strong Strong Moderate T-test result t-value -15.582 -69.291 -45.068 -16.011 -32.983 -39.746 -50.073 9.663 p value 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 Hypothesis accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted

In all the above cases, p value is lesser than 0.01 which clearly indicates a significant relationship between S & P 500 and other world major indices. Level of correlation is strong between S & P 500 and other major indices in the world except BSE-Sensex, Hang Seng and SSE Composite index. It indicates stronger integration of S & P 500 with other major world indices. Observation of table 6 reveals that, S&P500, one of the US bench market indices, is showing strong correlation with other major indices in US i.e., DOW, NYSE and NASDAQ. S&P500 index has different levels of correlation with the major stock market indices in Asia-pacific region. S &P 500 has exhibited strong correlation with Japanese stock market index (i.e., Nikkei225); it has maintained
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moderate correlation with Hong Kong stock market index (i.e., Hang Seng) and Chinese stock market (i.e., SSE Composite Index). It has showed weak correlation with Indian stock market index (i.e., BSE-Sensex). There is strong correlation between S&P500 and FTSE100 which indicates strong integration of stock markets of US and Europe. 13. STUDY OF RELATIONSHIP OF HANG SENG INDEX WITH OTHER SELECT INDICES FROM 1-1-2000 TO 31-12-2009: To study the relationship between Hang Seng index and other indices selected for the study, the following hypothesis has been designed. Null Hypothesis: There is no significant relationship between Hang Seng and other select indices. Alternate Hypothesis: There is a significant relationship between Hang Seng and other select indices. TABLE 7: CORRELATION BETWEEN HANG SENG INDEX AND OTHER SELECT INDICES Indices Hang Seng & Sensex Hang Seng & DOW Hang Seng & NYSE Hang Seng & NASDAQ Hang Seng & S&P500 Hang Seng & Nikkei225 Hang Seng & FTSE100 Hang Seng & SSE Composite index Correlation Coefficient 0.912 0.768 0.839 0.466 0.653 0.555 0.661 0.844 Level of Correlation Strong Strong Strong Moderate Moderate Moderate Moderate Strong tvalue 11.377 11.244 18.787 30.437 32.983 5.570 23.325 30.191 T-test result p Hypothesis value accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted 0.001 H1: Accepted

Since, p value is less than 0.01 in all the above cases, null hypothesis is rejected and alternate hypothesis is accepted stating that there is a significant relationship between Hang Seng and other world major indices. Hang Seng has strong correlation with Indian stock market index (i.e., BSE-Sensex), Dow and NYSE and it has moderate correlation with NASDAQ, S&P500, Nikkei225 and FTSE100. Level of correlation of HangSeng is not the same with major stock market indices in US. It has maintained strong correlation with Dow and NYSE and moderate correlation is exhibited with NASDAQ and S&P500. In Asia-pacific region, Hang Seng has maintained strong correlation with BSE-Sensex and SSE Composite Index and moderate correlation with Nikkei225. 13. STUDY OF RELATIONSHIP OF NIKKEI225 INDEX WITH OTHER SELECT INDICES FROM 1-1-2000 TO 31-12-2009: Hypothesis designed to study the relationship between Nikkei225 index and other select indices is: Null Hypothesis: There is no significant relationship between Nikkei225 and other select indices. Alternate Hypothesis: There is a significant relationship between Nikkei225 and other select indices. TABLE 8: CORRELATION BETWEEN NIKKEI225 INDEX AND OTHER SELECT INDICES Indices Nikkei 225 & Sensex Nikkei 225 & DOW Nikkei 225 & NYSE Nikkei 225 & NASDAQ Nikkei 225 & S&P500 Nikkei 225 & HangSeng Nikkei 225 & FTSE100 Nikkei225 & SSE Composite index Correlation Coefficient 0.336 0.785 0.749 0.802 0.913 0.555 0.901 0.332 Level of Correlation Weak Strong Strong Strong Strong Moderate Strong Weak T-test result t-value 7.920 6.973 17.830 35.605 39.746 -5.570 24.834 -34.801 p value 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 Hypothesis accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted

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By accepting alternate hypothesis, it can be inferred that there is a significant relationship between Nikkei225 and other world major indices. This indicates close integration of Japanese stock market with other major stock markets in the world. As shown in the Table-8, Nikkei has strong correlation with all the major indices in the world except, BSE-Sensex, Hang Seng and SSE Composite index. Nikkei225, major stock market index in Japan, has not maintained the same level of integration within Asia pacific region. It has exhibited weak correlation with Indian stock market (i.e., BSE-Sensex), and Chinese stock market (i.e., SSE Composite index). It has exhibited moderate correlation with Hong Kong stock market (i.e., Hang Seng). Nekkei225 has showed strong correlation with all major indices in US stock market and European stock market. 14. STUDY OF RELATIONSHIP OF FTSE 100 WITH OTHER SELECT INDICES FROM 1-1-2000 TO 31-12-2009: The relationship between FTSE 100 and other indices is tested with the following hypothesis: Null Hypothesis: There is no significant relationship between FTSE 100 and other select indices. Alternate Hypothesis: There is a significant relationship between FTSE 100 and other select indices. TABLE 9: CORRELATION BETWEEN FTSE 100 AND OTHER SELECT INDICES Indices FTSE 100 & Sensex FTSE 100 & DOW FTSE 100 & NYSE FTSE 100 & NASDAQ FTSE 100 & S&P500 FTSE 100 & HangSeng FTSE 100 & Nikkei225 FST 100 & SSE Composite index Correlation Coefficient 0.410 0.833 0.789 0.771 0.946 0.661 0.901 0.480 Level of Correlation Moderate Strong Strong Strong Strong Moderate Strong Moderate T-test result t-value -6.683 -33.772 -11.894 30.893 50.073 -23.325 -24.834 -25.475 p value 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 Hypothesis accepted H1 : Accepted H1 : Accepted H1 : Accepted H1 : Accepted H1 : Accepted H1 : Accepted H1 : Accepted H1 : Accepted

Significant relationship between FTSE100 and other world major indices is proved by accepting alternative hypothesis at 0.01 level of significance. This clearly indicates the stronger correlation of European stock markets with major stock markets in the world. FTSE100 has exhibited strong correlation with all the major indices in the world except with BSE-Sensex, Hang Seng and SSE Composite index. As observed from table 9, FTSE100, major stock market index in UK, has exhibited strong correlation with all major stock market indices in US i.e., DOW, NYSE, NASDAQ and S & P 500. It indicated stronger integration of European stock market with US stock market. Level of correlation provided by FTSE100 with major stock market indices in Asiapacific region is not the same for all the indices in this region. FTSE100 has exhibited strong correlation with Japanese stock market index (i.e., Nikkei225); it has showed moderate correlation with Indian stock market Index (i.e., BSE-Sensex), Hong Kong stock market index (i.e., Hang Seng) and Chinese stock market index( i.e., SSE Composite Index). 15. STUDY OF RELATIONSHIP OF SSE COMPOSITE INDEX WITH OTHER SELECT INDICES FROM 1-1-2000 TO 31-12-2009: The relationship between SSE Composite index and other indices is tested with the following hypothesis: Null Hypothesis: There is no significant relationship between SSE Composite index and other select indices. Alternate Hypothesis: There is a significant relationship between SSE Composite index and other select indices. TABLE 10: CORRELATION BETWEEN SSE COMPOSITE INDEX AND OTHER SELECT INDICES Indices SSE & Sensex SSE & DOW SSE & NYSE Correlation Coefficient 0.764 0.614 0.634 Level of Correlation Strong Moderate Moderate T-test result t-value -13.307 -51.311 -30.907 p value 0.001 0.001 0.001 Hypothesis accepted H1: Accepted H1: Accepted H1: Accepted

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SSE & NASDAQ SSE & S&P500 SSE & HangSeng SSE & Nikkei225 SSE & FST 100

0.245 0.451 0.844 0.332 0.480

Weak Moderate Strong Weak Moderate

-0.646 9.663 -30.191 -34.801 -25.475

0.519 0.001 0.001 0.001 0.001

H0: Accepted H1: Accepted H1: Accepted H1: Accepted H1: Accepted

As indicated in table 10, SSE Composite index has exhibited strong correlation with BSE- Sensex and Hang Seng and moderate correlation with all the US stock market indices except with NASDAQ. It indicates that Chinese stock market is not closely associated with US stock market. Correlation between SSE Composite Index and FTSE100 is moderate which indicates that there is no strong relationship between Chinese stock market and European stock market. Weak correlation between SSE Composite Index and Nekkie225 indicates poor integration of Chinese stock market with Japanese stock market. CONCLUSIONS: The results of this study strongly support the view that, there is a substantial integration between Indian and International financial markets. BSE-Sensex has witnessed a greater fluctuation which has been indicated by a very high Co-efficient of variation compared to other select indices. Sensex, the Indian bench mark index, has shown strong association with NYSE, Hang Seng and SSE Composite Index. The study reveals that, there is a poor integration of BSE- Sensex with NASDAQ, Nikkei225 and S&P500. Indian stock market exhibited strong positive correlation and perfect price correlation with global stock markets. In Asia pacific region, when compared to Hang kong and Japan, correlation of the Indian market with global markets is not so attractive. Chinese stock index i.e., SSE Composite index has exhibited strong correlation with BSE- Sensex and with Hang Seng. Japanese stock index i.e., Nikkei225 has strong integration with world major stock markets. It has strong correlation with all the select indices except Sensex, HangSeng and SSE Composite index. The European index i.e., FTSE100 has exhibited strong correlation with all the US stock market indices and with Nekkei225, the Japanese stock market index. REFERENCES: 1. William L. Huth, (1994) "International Equity Market Integration", Managerial Finance, Vol. 20 Iss: 4, pp.3 7 2. Hazem A. Marashdeh(2010) International Research Journal of Finance and Economics Issue 37 (2010) EuroJournals Publishing, Inc. 2010 3. Luca Cuadro Sez, Marcel Fratzscher and Christian Thimann The transmission of emerging market shocks to global equity markets, European Central Bank- working paper series No. 724/ February,2007. 4. Ravazzolo, Fabiola and Phylaktis, Kate, Measuring Financial and Economic Integration with Equity Prices in Emerging Markets (2002). EFMA 2002 London Meetings; Cass Business School Research Paper. Available at SSRN: http://ssrn.com/abstract=314833 or doi:10.2139/ssrn.314833 ----

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