IJIR Oct 10 PDF

A REVIEW OF ECONOMIC & SOCIAL DEVELOPMENT

Vol. 46 No. 2 October 2010

Lead Article on

RS CSHRI RAM CENTRE

FOR IR & HR

György Széll

Trade Union & the

Financial Crisis

Previous Special Issues

Affirmative Action (Oct.2008)Guest Editor: Lord Meghnad Desai

Corporate Social Responsibility (Jan.2009)Guest Editor: Mritunjay Athreya

The Global Indian Firm (July 09)Guest Editor: Tarun Khanna

International Industrial Relations (April 10)Guest Editor: Tayo Fashoyin

Editorial Committee

Abad Ahmed

Andre Bateille

Baldev R. Sharma

Ishwar Dayal

J.S. Sodhi

Meghnad Desai

N.R. Seth

Rama J. Joshi

Tayo Fashoyin

V.R. Panchmukhi

Vinay Bharat Ram

Editor

N.K. Nair

The Indian Journal of Industrial RelationsA Review of Economic & Social Development

The Indian Journal of Industrial Relations: A Review of Economic & Social Development (IJIR) is devoted to dissemination of knowledge for effective management of human resources and harmonious industrial relations. A quarterly in English, the journal enjoys high academic reputation in India and elsewhere and is widely subscribed by government institutions, universities and private sector organizations. A refereed journal its readership consists of academia, policy makers, practicing managers and student community.

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Contents

Articles

Trade Union Movement & Labour Policies in the György Széll 183EU after the Global Financial Crisis

Leverage & Trade Unionism in Indian Industry : Saibal Ghosh 194An Empirical Note

Reforming Labour Legislation on Working Conditions Tapomoy Deb 201for Competitive Advantage: An Empirical Study

Trade Unions in Indian IT Industry? An Employees� Perspective Nidhi Bist 220

Employee Attitudes Towards Employer- Yvan Barel, Sandrine Fremeaux 229Sponsored Child Care: Evidence from France & Grant Michelson

Role of Neo Five Factor Model of Personality in Archana Tyagi & Veena Bansal 248Management Education: An Empirical Study

Suitability of Instruction Methodology in Ashutosh Muduli 259Informative Management Course: An Empirical Study Vinita Kaura

Predictors & Outcomes of Employee Engagement: Jyotsna Bhatnagar 273Implications for the Resource-based View Perspective Soumendu Biswas

Role, Work Perception & Stress in a Omer Bin Sayeed 287High Reliability Work Environment Satish Chandra Kumar

Predictors of Occupational Stress: An Exploratory Study Alok Chandra 300Baldev R. Sharma

The Indian Journal of Industrial Relations

VOLUME 46 NUMBER 2 OCTOBER 2010

A Review of Economic & Social Development

VOLUME 46 NUMBER 2 OCTOBER 2010

SHRI RAM CENTREFOR INDUSTRIAL RELATIONS AND HUMAN RESOURCES,ECONOMIC & SOCIAL DEVELOPMENT4, Safdar Hashmi Marg, New Delhi-110 001Phone: 011-43213100 Fax: 011-23352410E-mail: [email protected], [email protected]: www.srcirhr.com

IJIR online www.irhrjournal.com

Emotional Intelligence & Managerial Effectiveness : Nivedita Srivastava 313Role of Rational Emotive Behaviour Shreekumar K. Nair

Management Styles, Productivity & Ravindra Jain 328Adaptability of Human Resources: An Empirical Study R. Premkumar

Timely, Continuous & Credible Communication & Reeta Raina 345Perceived Organizational Effectiveness

Book Review

Winning In Emerging Markets �A Road Map For K. Ramachandran 360Strategy And ExecutionTarun Khanna & Krishna G. Palepu

Changes In Labour Institutions In China: Right Steps Nand Dhameja 362Towards Achievement Of Decent WorkK R Shyam Sundar

IJIR is pleased to announce the release of its back volumes (1965 onwards)

in JSTOR Archive as part of the Arts & Science IX Collection.

To view the journal online please visit:

http://www.jstor.org/action/showPublication?journalCode=indijindurela

Trade Union Movement & Labour Policies in the EU afterthe Global Financial Crisis

György Széll

Gyorgy Szell is Professor Emeritus, Department ofSocial Sciences, University of Osnabrueck, Germany.E-mail:[email protected]. This paper was presented atthe International Symposium on Labour Relations&Labour Rights under the Global Recession, Nov.6-9, 2009, Guangzhou, People�s Republic of China.

There are fundamental questions toask before we are able to come togrips in regard to the future of theEuropean Social Model and the roleof Europe in a globalising world.Today we are facing a number ofchallenges. In September 2009 thebiggest financial and economiccrash since the Black Friday 1929has shuttered the economic model ofderegulation at any price and the at-tempt to destroy the welfare state. Ap-parently we are at a new beginning,although those who are mainly re-sponsible for this disaster try toblame the state. Since many yearsthere were already a number ofwarnings that this neo-liberal eco-nomic system, which declared war onthe trade unions and workers� par-ticipation, is not sustainable � nei-ther economically or financially norsocially or environmentally, arguesthe paper.

The Indian Journal of Industrial Relations, Vol. 46, No. 2, October 2010 183

Pre-remarks

There are a number of fundamen-tal questions we have to ask ourselves,before we are able to come to grips inregard to the future of the EuropeanSocial Model. Apparently we also haveto inquire about the role of Europe in aglobalising world. Today we are facinga number of challenges, which grewover the last couple of decades, buthave materialized only over the lastcouple of months. Just a week beforethe opening of the Third Congress ofthe European network �Regional andLocal Development of Work andLabour� the biggest financial and eco-nomic crash since the Black Friday1929 has shuttered the economic modelof deregulation at any price and the at-tempt to destroy the welfare state.Apparently we are at a new beginning,hopefully for better, although those whoare mainly responsible for this disaster,which destroys dozens of millions ofjobs and the economies of a whole gen-eration, try to blame the state. Actu-ally, since many years, there were al-ready a number of warnings that thisneo-liberal economic system, which

György Széll

184 The Indian Journal of Industrial Relations, Vol. 46, No. 2, October 2010

declared war on the trade unions andworkers� participation, is not sustainable� neither economically or financially norsocially or environmentally. In 1986 themovie �Wall Street� characterised thefinancial system with its elements of cor-ruption and megalomania quite precisely.It may be also reminded of another quitepertinent Canadian movie in the sameyear: �The Decline of the AmericanEmpire�. These are all in the highlight ofthe Reagan administration and itsReaganomics. The most successful finan-cial speculator, George Soros, published in1998 a book with the significant title �TheCrisis of Global Capitalism. The Open So-ciety Endangered�, where he warned of therisks of an uncontrolled financial system. Ipublished in 1987 an article with a scenariofor 2000, where I forecasted the crisis ofautumn 2008 (English translation: Széll1990). Apparently I was partly wrong, asI put the crisis eight years early. How-ever, most probably � besides the fasci-nation of a round number � the break-down of the Soviet system in 1989/1990gave ultra-liberal market capitalism an-other few extra years.

The management of the financialcrisis today, however, is more con-cerned with saving the big compa-nies instead of taking the occasionfor a fundamental turn-around.

The management of the financial cri-sis today, however, is more concernedwith saving the big companies instead oftaking the occasion for a fundamentalturn-around. The old recipe is repeated:privatisation of profits and socialisation

of losses. The former chief-economist ofthe World Bank, Nicholas Stern, whobecame well known, as he published lastyear the first account of the costs of ne-glecting environmental protection, pub-lished in December 2008 an article, wherehe argued that the crisis is a uniquechance to save the planet.

History

Trying to set the stage for a furtherEuropean Social Model, we have first tolook back. As Warren Buffet, the richestman in the world, said: We can only learnlessons from the past. So what haschanged in regard to our topic since 1945,1968, 1989 and 2000? Apparently the datesare not neutral, and we may take otheroptions. In 1858, after some failed revolu-tions in Europe, perhaps the most impor-tant element was that Prussia entered theinternational scene, first unifying and es-tablishing the Second German Reich, andthen building up huge industry and military.The second important element is the unifi-cation and ending of the inner frontiers ofthe United States of America about thesame period. The German model to catchup with the leading economies and imperi-alist powers � the British and French em-pires � was a modernisation from the top,played on two different fronts, expansionoutwards and pacification inwards: the in-troduction of the Bismarckian welfare stateand the interdiction of the Social-Demo-cratic Party (SPD). The outcome was ter-rible, as we all now, two World Wars andthe Holocaust (Wehler).

Fascism and Stalinism were bothbased on the passive participation of the

Trade Union Movement & Labour Policies in the EU after the Global Financial Crisis


masses (Gramsci). Another importantinnovation was the system of Fordism,developed in the USA, combining massproduction and mass consumption, i.e.participation was reduced to it.

After the Second World War Fordismspread over to the other industrialisednations, including Japan. In Germany the�social market economy� was designedas a third way between socialism andcapitalism. The biggest political and eco-nomic experiment in the 20th century wasthe creation of the European Union in1958 with its predecessor the EuropeanCommunity of Coal and Steel in 1951. Ithas been largely successful, although therealisation of a European Social Union isstill lagging far behind.

In the Third World, some countriesexperimented with other forms ofindustrialisation and welfare state (China,India, Cuba, North Korea, Algeria, Tan-zania � just to name a few), however,mostly failed. China changed in 1978 tothe so-called �socialist market-economy�with the destruction of most of its wel-fare system (Széll, Kamppeter & Moon2009).

1968 was not only for my generationa fundamental watershed, but for futuregenerations as well. It was the startingpoint for a large democratisation process.Until then democracy stopped at the fac-tory gates. The famous slogan �To daremore democracy� of the then GermanChancellor and Peace Nobel Prize win-ner, Willy Brandt, was a marking stone.

The implosion of the Soviet system

in 1989/1990 gave way for the integra-tion of some of its European satellitestates into the EU, for the others a fallback into more or less authoritarianstructures. The end of history, as de-clared by Francis Fukuyama in 1992, didfortunately not take place, although a newera of deregulation and military conflictsstarted, and did not end so far.

At the beginning of the new century,or the new millennium the fifteen Mil-lennium Goals by the United Nations, theLisbon Agenda for the EU, and the De-cent Work campaign by the InternationalLabour Organisation were launched.There was a slogan of the beginning ofthe Pacific Century with the rise of Chinain accordance with its past grandeur.

The Questions

Some fundamental questions first,before we proceed further:

1. Is there one European Social Model?For sure there are � as already stud-ies in the 1970s demonstrated � quitea number of variations (IDE 1981),due to the differences relating to his-tory, culture, power etc. However,some clusters are discernible: Nordic,Anglo-Saxon, Central European andMediterranean � before 1990 thereexisted also the Yugoslav one. Al-though these differences are still quitemarked, we can conclude in compari-son to the U.S.-American or also theJapanese model there are some dis-tinctive features, which make it thatwe may speak on the global level of aEuropean Social Model.

György Széll


2. What kind of participation are welooking for? Again there are quitesubstantial differences. We may dif-ferentiate between financial partici-pation, participation in decision-mak-ing and on different levels, direct orrepresentative participation, ad hocor permanent participation (Kester &Pinaud 1996).

3. Double participation: Participationwithin the company and as a citizenand/or consumer. These roles may becontradictory at some times. The taskis to overcome this kind of schizop-hrenia.

4. What is the role of experts? Partici-pation in decision-making has be-come through globalisation and thedifferentiation of the workforce socomplex that workers and their rep-resentatives need special trainingand/or advice from experts to cometo grips with decisions about futureinvestments, off-shoring, environme-ntal issues, human rights etc. Al-though it may be still true, what theformer general secretary of theFrench CFDT once said: �Theworker is the real expert concerninghis work.�

The Challenges

During a conference �Which Euro-pean Social Model?�, which was co-sponsored by the European Foundationfor the Improvement of Living and Work-ing Conditions, in Aix-en-Provence inSeptember 2001, I presented a paper on�Fifteen Challenges for a European So-cial Model� (Széll 2002a), which is in my

eyes still up-to-date. Let me just pick upsome of the issues:

1. The environment � is still the big-gest challenge. And since the movieby the former US-American Vice-president and Peace Nobel Prize win-ner, Al Gore, �An InconvenientTruth� and the report by his co-PeaceNobel Prize laureate, the Interna-tional Panel on Climate Change(IPCC), there is no doubt that envi-ronmental protection is the biggestchallenge for humanity. We only havean opening of another ten years tofix the challenge (Hennicke 2009).All empirical studies prove that it isonly with the participation of all con-cerned that this challenge may beovercome (Széll 2004a). However,even after the progress, which hasbeen made by the European Unionin this regard over the last two years,and the election of Barrack H.Obama as President of the U.S.A.the prospects look rather grim for aKyoto II-convention in 2009 inCopenhagen, not to speak of the on-going pollution and depletion of theseas and rivers, the lack of drinkingwater, the waste disposal etc.

There is no doubt that environ-mental protection is the biggestchallenge for humanity.

2. Gender equality is the next big chal-lenge, not only � as the late Chair-man Mao Dze Dong put it: �Womenare half of heaven� � but becausewithout the active participation of



women in all realms of life, not atleast in environmental protection,there will be no social justice, no de-cent work, no future.

3. All organisations (political, social,trade unions) are in a deep crisis inregard to recruiting new members,especially from the younger genera-tion. The problem concerns as wellthe low qualified and the most highlyqualified strata of society. It seemsthat the dominant economic systemwith its focus on �sex and shopping�has resulted in to a large degree ofdepolitisation and individualisation,which has been analysed by Alexisde Tocqueville already more then170 years ago.

Quite often they seem to be moreconcerned with competing amongthemselves than to struggle to-gether for their common targets.

4. In regard to trade unions they havecertainly partly to blame themselves,as they still remain largely blue col-lar, male unions, which are not onlyin the EU quite diverse, due to theirhistorical legacies. Besides, quite of-ten they seem to be more concernedwith competing among themselvesthan to struggle together for theircommon targets, if they are politicallyor sectorally differently oriented,which leads to a number of unnec-essary conflicts and by that to theweakening of the whole labourmovement. To that adds the lack oftraining, competence and quality ofmany union officials. And the em-

ployers contribute to these difficul-ties their part as well. For instance,Peugeot and Siemens, two of the big-gest companies in the world, financeduntil recently �yellow unions�. Defi-nitely the trade unions have to re-structure themselves. But big � as themergers of the past years show � isnot always beautiful and successful.The mergers in Germany, resulting into the biggest single unions in theworld (IG Metall, ver.di) had as a col-lateral damage, the formation orstrengthening of smaller unions of aguild type (pilots, train conductors,health sector). On the other hand theEuropean Trade Union Confederation(ETUC) has made substantialprogress since the enlargement of theEU. And another very positive de-velopment is the creation of the uni-fied International Trade Union Con-federation (ITUC) in 2006, seven-teen years after the break-down ofthe Soviet Empire. This gives hopefor a new élan. Since then the pres-ence of the trade union movement onthe international scene has much pro-gressed.

The weakness of the labour move-ment is mirrored by the weaknessof the employers� associations.

5. The weakness of the labour move-ment is mirrored by the weakness ofthe employers� associations. Quite anumber of companies in the neweconomy do not associate them-selves with employers� associations,thinking they can save the fees, and

György Széll


they are better off without bindingcollective agreements (Széll, Bösling& Hartkemeyer 2005).

6. This phenomenon is particularly pro-nounced within the new EU-Mem-ber States, where employers� asso-ciations in the period of really exist-ing socialism did not exist. The strat-egy in these countries is still to makethe pie bigger to share some of thebenefits, instead of going forsustainability.

7. After the implosion of the Soviet sys-tem there was much fear of a largeEast-West migration. This happenedonly partially, as the freedom ofmovement was restricted for the firstyears after the entry of the newMember States. Nevertheless migra-tion is quite an issue as the illegal fluxfrom non-EU States is still verystrong, and as all EU Member Statesface a decrease in population, nota-bly the active population (Széll2002b).

8. In regard to participation and theEuropean Social Model there aremany obstacles to overcome, evenwithin the EU, as the European So-cial Union is far from being realised,i.e. that not only social rights can beeasily transferred. And the full rec-ognition of diploma, which startedwith the Bologna-process ten yearsago, is not yet established every-where.

9. Social security is still largely a na-tional affair. One of the reasons ofthe negative referenda in France andThe Netherlands in regard to the EU

Constitution Treaty was just the de-fence of the national social securitysystems against liberalisation strate-gies on the EU-level. This fear seemsto have reasons as for two decadesthe neo-liberal strategies focussed onthe destruction of the welfare state.However, on this concrete point therefusal of the EU Constitution Treatywas wrong: It would have broughtmore social rights than the Nice-Treaty. And the famous Plan B byJacques Delors � with better socialprotection � was a myth. Even nowthe problem is who controls the so-cial security system? The drive forprivatisation was very strong. Espe-cially the pension funds, which arealready now the biggest institutionalinvestors, are playing the game on theinternational markets � with all therisks we know now. And the pen-sion funds of the big US-Americancar makers are one of the reasonsof their bankruptcy. The only real al-ternative to state bureaucratic con-trol of the social security system isthe social economy, the fastest grow-ing sector in the world � without therisks of the dominant sector.

The pension funds of the big US-American car makers are one ofthe reasons of their bankruptcy.

10. That brings us to the concern ofglobalisation. Here the main actorsare the WTO, IMF, World Bank, G8and OECD. The driving force in thisprocess, the financial sector, is notregulated at all, as we just noticed in



the banking crisis in autumn 2008 andas George Soros monitored previously.

11. One answer to the unregulatedglobalisation is continental regionali-sation, of which the EU with all itsflaws is still the most successfulmodel, with its own currency, theEuro. Mercosur, ASEAN and SARCare modelled after the EU, and evenin North-East Asia China, Japan andSouth Korea try to establish their ownunion with its own currency.

12. Although the shareholder dictatorshiphas been questioned during the lastcouple of months, those who profitedmost of it, blame the state for the fail-ure and not their own business. So,the European alternative, the stake-holder democracy, has to struggle hardto overcome this ideology.

13. One of the means of shareholder dic-tatorship to increase profits to amaximum is outsourcing, off-shoring,and delocalisation. Although this strat-egy may bring benefit to new EU-Member States, for the emergingeconomies and Third World countries,the price is rather high, becauseoutsourcing, off-shoring, anddelocalisation does not only meanlower salaries, but less social protec-tion, non-respect of human rights andthe environment. So far participationin decision making is a pre-conditionfor decent work and sustainabilityinstead of social and environmentaldumping.

14. The results of uncontrolled and un-regulated globalisation are precari-sation and dualisation of the work-

force. No standard, life-long labourcontracts are practiced any more foran increasing part of the employees,mainly the young ones. The �Genera-tion Praktikum� (generation intern-ship) in Germany and elsewhere is asymbol of this trend. Apparently theprecarisation does not only affect thequality of life and working-life butalso the possibilities of life-long learn-ing and participation, and with it thequality of products and services.

The results of uncontrolled andunregulated globalisation areprecarisation and dualisation of theworkforce.

15. That this process could so easily beimplemented without much resis-tance by the concerned is certainlydue to the cultural hegemony of themedia industry. That a tycoon likeSilvio Berlusconi came twice topower, based on his ownership oflarge parts of the TV-industry, in acivilised country like Italy is a scan-dal. Here the analysis by the US-American media-sociologist Neil Post-man with his book �Amusing Our-selves to Death� from 1984 is moreup-to-date than ever. His thesis thateverything in our societies, even poli-tics, becomes entertainment is con-vincing. That does not mean that ev-erything of new global informationand communication technologies, e.g.Internet, contributes to this trend. Ourscientific conferences and publica-tions, the World Social Forum and itsregional and national off-springs

György Széll


would not have been possible with-out the new media and technologies.

16. Education (general, vocational, uni-versity training) is in a crisis as well.Europe � except Scandinavia � is farfrom its target to invest 3 % of itsGDP into science and research. Ininternational comparisons it is laggingbehind even of emerging nations likeSouth Korea or China. Expenditureon education and science is in gen-eral still regarded as costs and notas an investment into the future.However, in the OECD countries 40+% of the generation are today uni-versity graduates. So not only thefuture managers and elites aretrained there, but also a large part ofthe workforce. So university traininghas to give them the qualification forparticipative management and partici-pation in decision making. But eco-nomics and business are not taughtin secondary schools � not to speakof primary schools �, although every-body will be part of it. An essentialprecondition to have a future for aparticipative European Social Modelis that teachers and university facultyhave these competencies and areunionised themselves. There is still inmost countries a long way to go, as �when they are unionised � it is mostlyin kind of professional, guild-like as-sociations with rather conservativeideologies.

Conclusions

The world has not only changed inregard to the topics mentioned in the para

above on the challenges, but also con-cerning the structure of the economy.The Lisbon agenda speaks of a knowl-edge-based society. The biggest eco-nomic sectors in the world today are ag-riculture, IT, health care, entertainment,tourism � which are at the same time theweakest in regard to unionisation.

Performance is certainly the issue oftoday, but also quality. And quality of lifeand working life are actually the mostimportant targets, as the economy is notan end in itself. (Széll & Széll 2009). Toreach a sustainable company, economyand society, which are the targets of theRio and Lisbon agendas, environmentalKaizen is an important tool (Széll 2004a).To realize them we need a kind of socio-cultural revolution. Part of it is Corpo-rate Social Responsibility, which includesthe environment as well (Széll 2006).

The State, which has been re-garded as ineffective and hencedismantled during this period, hasbecome again the only institution,into which citizens and consumershave trust.

A fundamental element of this socio-cultural revolution is trust. Trust is thebasis of all human society and relations,although it has been largely lost duringthe last couple of decades of casino capi-talism, as also the crash of the lastcouple of months proves. The State,which has been regarded as ineffectiveand hence dismantled during this period,has become again the only institution,into which citizens and consumers have



trust. The civil society, which has beendestroyed as well, being replaced bycrude individualism, is the other institu-tion, on which the reconstruction of theeconomy and society at large has to bebased on.

In the last years benchmarking andbest practice have become tools to mod-ernize the economy and business. Butas we know against Taylorism there isno one best way. The optimal solutiondepends on the socio-historical contextof each institution. The Open methodof co-ordination within the EU is a flex-ible answer to this. The target of ad-aptation to or overcoming the chal-lenges has to be a win-win situation,where there are collateral benefits in-stead of damages.

�Think globally, act locally!� was theslogan in the 1970s and 1980s. That istruer than ever today. And our inter-national network, Regional and LocalDevelopment of Work and Labour inits tenth year of existence, is a modestanswer.

Keynesianism was already an an-swer to this widespread marketfailure.

The old dream � from hetero- via co-to self-management � is on the agendaagain. There is empirical evidence toprove since long that participative com-panies and those with social responsibili-ties perform much better than the oth-ers. (Garibaldo & Telljohann 2004). Sothe question stands: why are these prin-

ciples not applied everywhere, if thepower of market and the homooeconomicus prevail? Again recent eco-nomic research � honoured by diverseNobel prizes � as well as the recent de-velopments in the world economy dem-onstrate that the economy is far from be-ing as logical as the main stream neo-clas-sical textbooks pretend. Keynesianismwas already an answer to this widespreadmarket failure.

The economy is far from being aslogical as the main stream neo-clas-sical textbooks pretend.

The obstacles are ideological, andare ignorance, i.e. cognitive dissonance.It is power relations within business andthe economy, which prevail and aretermed by the German author GünterOrtmann (1995) as micro-politics. Therethe role of academia comes in for train-ing and research. Human resourcesmanagement, change management, qual-ity management, and environmental man-agement are already partial answers inthis process of enlightenment. Fortu-nately there are a number of companiesand institutions, which are run by an en-lightened management and driven by en-lightened economic, political, social andcultural actors. It is a dialectical pro-cess. As Karl Marx described it 160years ago: �In the womb of the old so-ciety the new one is born�. History mayproceed as the procession in the townof Echternach in Luxemburg: two stepsforward, one step back. Hopefully weare now at the moment of two stepsforward, and the European Social Modelis part of it.

György Széll


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Saibal Ghosh


Leverage & Trade Unionism in Indian Industry :An Empirical Note

Saibal Ghosh

Saibal Ghosh is presently on lien from the ReserveBank of India. E-mail: sai_ghosh@ hotmail.com.The views expressed are personal

Market power in the hands of asupplier such as a labor union affectsan industry�s capital structure. Usingpanel data techniques for 1992-2004,this note shows that industries indeedappear to employ financial leveragestrategically to influence collectivebargaining decisions. The estimatesimply that strategic incentives frominput markets have a substantialimpact on financing decisions.

Introduction

The product market and input marketeffects of capital structure link thefinancial and real activities of a firm. Asignificant body of theoretical literaturerelates financial structure to marketconduct and postulates strategic use ofleverage by firms (Dasgupta & Sengupta1993, Campello 2003, Cavanaugh &Garen 2004). Notwithstanding theadvancements in the theoretical literature,empirical evidence on this aspect is farless convincing. The present noteaddresses this gap in the literature bydemonstrating that strategic incentivesfrom input markets have an impact onfinancing decisions.

Existing evidence on the link betweencollective bargaining and capital structuredetermination relies on cross-sectionalcomparisons that may be affected by omittedvariable bias. Bronars and Deere (1991), forinstance, show that unionization rates arecorrelated with financial leverage at theindustry level. This sort of analysis, however,fails to take cognizance of the strategicincreases in debt from the more�mechanical� balance sheet effects.

Leverage & Trade Unionism in Indian Industry : An Empirical Note


We identify the strategic effectempirically using profitability acrossindustries which reflects differences in thespecific product markets in which industriescompete. When labour and managementbargain, a union can claim a portion of thefirm�s excess liquidity � its operating cashflow- net of any required debt payments.Collective bargaining, therefore, imposes agreater threat to a firm when a firmmaintains higher levels of excess liquidity.With limited liability and positive debtbalance, greater underlying profit is onefactor that increases expected excessliquidity and a firm�s susceptibility to unionrent seeking. Greater profitability ofpotential projects implies that the firm must,on average, maintain greater excessliquidity in order to fund the same marginalproject. Profitable firms are thus morevulnerable to union rent seeking andtherefore, have greater incentive to use debtto shield liquidity from workers inbargaining. Consequently, evidence of thestrategic effect can be found by analyzingthe interaction between union bargainingpower and firm profitability.

The remainder of the paperproceeds as follows. The empirical modelis presented in the subsequent section,along with the data base employed for thepurpose. This is followed by a discussionof the results. The final section concludes.

Collective bargaining, therefore,imposes a greater threat to a firmwhen a firm maintains higher levelsof excess liquidity.

Empirical Strategy

The degree of union bargaining powerin negotiations with a given industry is likelyto increase with the proportion ofemployees covered by the bargainingprocess. In industries with greatercoverage, union-organized job actions arelikely to be more costly, and as a result,industry-wide policies are more likely to beaffected by bargaining. We use industry-level data on bargaining as a proxy for unionbargaining power and estimate its effecton the firm�s choice of capital structure.

In industries with greater coverage,union-organized job actions arelikely to be more costly, and as aresult, industry-wide policies aremore likely to be affected bybargaining.

The empirical equation for industry j attime t can be specified as follows :

Debtj,t=I j+a2*Coverage+a3 *Profit+a4

( C o v e r a g e * P ro f i t ) + C * { C o n t ro lvariables)+zj,t (1)

where (ignoring subscripts) Debt isthe debt profile of the industry which ismodeled as a function of the proportion ofemployees covered by bargaining(Coverage), industry profits (Profit) andthe interaction of Coverage and Profit, aset of control variables [Controls] and two-digit NIC industry fixed effects, I. Finally,z denotes the error term.

As regards the dependent variable,we employ both the level of debt as well

Saibal Ghosh


as its composition. Accordingly, weestimate alternate specifications where thedependent variable is defined in terms ofboth the level of debt (such as total debtand total bank debt) as well as itscomposition (defined in terms of the debtequity ratio and the proportion of bank debtto total debt).1

Among the independent variables,following from the literature (Bhattacharjee& Datta Chaudhuri 1994), Coverage ismeasured as the number of employeesregistered as trade union members dividedby total number of employees. Theprofitability variable, Profit is measured asthe ratio of operating profits to total assets.It is demeaned (with respect to the samplemean) before it is interacted withCoverage to allow for a more meaningfulinterpretation of the interaction term. Thefinancial controls are those typicallyincluded in leverage regressions,specifically, the proportion of tangible assets(proxy for informational asymmetry), logsales (proxy for firm size) and modifiedAltman-Z score (proxy for probability ofbankruptcy). Finally, the industry-specificfixed effects capture the effect of omittedvariables specific to the concerned industry.For identification purpose, the dummyvariable for electricity industry (NIC code40) is omitted, so that the coefficients onthe other industry dummies measure theresponse relative to this omitted category.Table 1 presents the details of the definitionsand source of the concerned variables alongwith their summary statistics.

The analysis covers 16 industries forthe period 1992-2004, the latest period forwhich data on the relevant variables isavailable on a consistent basis. Towardsthis end, we matched the data fromProwess with those obtained from theAnnual Survey of Industries (ASI). As itstands, the ASI data are reported at the 2-digit NIC classification code. The CMIEdata, on the other hand, is firm-level data.The two data sets were made compatibleusing the following method: the ASI data,which are reported in 2-digit NIC codes,were aggregated into 16 industries.2 TheASI format was then used to assign generalclassification to the CMIE-listed firms. Inthis fashion, we arrived at consistent 2-digitlevel classifications by suitably integratingthe CMIE data with the ASI data.

The Results

The results emanating from theanalysis are presented in Table 2. Asevident, the interaction term of Coverageand Profit is positive and statisticallysignificant at the 0.01 level. Thus, theinteraction provides a margin for detectingstrategic response to bargaining. To interpretthe magnitude of this effect, consider twoindustries � one with profitability one percent more than the other. An increase in

1. We employ bank debt since evidence suggeststhat bank debt is the preponderant form ofdebt employed by firms (Ghosh 2007)

2. These include: NIC 20-21 (food products), 22(beverages), 23 (cotton), 24 (wool, silk andman-made fiber), 25 (jute), 26 (textiles,including wearing apparel), 27 (wood), 28(paper), 29 (leather), 30 (basic chemicals), 31(rubber, plastic, petroleum and coal), 32 (non-metallic minerals), 33-34 (basic metals andmetal products), 35-36 (machinery andequipment), 38 (other manufacturing) and 40(electricity).



the industry�s union coverage by 10percentage points is associated with around67 basis point greater increase in overalldebt for the more exposed firm.

Profitable industries are moresusceptible to union capture,especially if they exhibit greaterunion coverage, impelling theseindustries to increase overall debt.

A key feature of industry�s debt policyis that it is generally set unilaterally, withoutconsent of the labour (Baldwin 1983).Management fixes the capital structure(typically at the firm level), subject to capitalmarket constraints. When a union hasmarket power but cannot commit to futurenegotiating positions (Grout 1983),

Table 1: Variable definitions and summary statistics

Variable Definition (Data source) Mean Std. Devn.

Debt Logarithm of total borrowings (Prowess) 3.633 0.756

Bank debt Logarithm of bank borrowings (Prowess) 7.146 1.604

Leverage Bank borrowings / total borrowings (Prowess) 0.335 0.137

Debt equity ratio Total borrowings/(equity plus reserves) (Prowess) 1.344 1.427

Altman Z 3.3 (PBIT/total asset)+1.0 (Sales/total asset)+1.4(retained profit/total asset)+1.2 (working capital/totalasset) (Prowess) 2.980 4.172

log sales logarithm of total sales (Prowess) 3.962 0.730

Tangible land and building plus plant and machinery/totalasset (Prowess) 0.467 0.122

Inventories total value of inventories/sales (Prowess) 1.983 4.057

Raw materials total value of raw materials/sales (Prowess) 0.768 1.701

Fin. Goods total value of finished goods/sales (Prowess) 0.499 1.016

Coverage number of employees registered as union members/totalnumber of employees (Indian Labor Yearbook) 0.227 0.199

management will likely consider labormarket ramifications in choosing its debtpolicy. Judged from this standpoint, thepresent results seems to suggest thatprofitable industries are more susceptibleto union capture, especially if they exhibitgreater union coverage, impelling theseindustries to increase overall debt.

Among the control variables, thecoefficient on Altman-Z is negative, sincehigher probability of bankruptcy leads firmsto lower their debt profile. Bigger firmsassume higher debt, as expected fromtheory. The fit of the model is quite high,as evidenced from the high value of R-square across all models.

In the second model, we employlogari thm of bank debt as theexplanatory variable. In this case, the

Saibal Ghosh


coefficient on the interaction term is notstatistically significant, which suggeststhat profitable industries do not altertheir bank debt in response to higherunion militancy. Combining Models I andII , i t seems that the response ofindustries to higher unionism is to raisetheir debt profile, primarily by alteringtheir non-bank debt.

The response of industries to higherunionism is to raise their debtprofile, primarily by altering theirnon-bank debt.

The third and fourth models explorethe composition of debt as opposed to thelevel of debt. With debt-equity ratio is thedependent variable (Model III), the

Table 2: Leverage and Trade Unionism - Baseline Regressions

Variable Debt Bank debt Debt equity ratio LeverageModel I Model II Model III Model IV

Constant 0.594 -1.523 18.726 -0.286(0.189)*** (0.578)*** (2.406)*** (0.126)**

Coverage 0.0002 -0.0002 0.0009 -0.0002(0.0005) (0.001) (0.006) (0.0003)

Coverage*Profit 0.067 0.070 -0.417 -0.031(0.019)*** (0.061) (0.242)* (0.013)

Profit -0.019 -0.012 0.065 0.009(0.003)*** (0.011) (0.049) (0.002)

Controls

Altman Z -0.009 -0.021 -0.032 -0.0006(0.004)** (0.012)* (0.053) (0.003)

Log (sales) 0.916 2.344 -3.371 0.102(0.045)*** (0.137)*** (0.568)*** (0.029)

Tangible -0.129 -0.325 -3.151 -0.094(0.155) (0.473) (1.968)* (0.103)

Industry dummies included included included included

Number of industries 16 16 16 16

Time period 1992-2004 1992-2004 1992-2004 1992-2004

R-square 0.993 0.986 0.682 0.846

Prob > chi-sqaure 0.000 0.000 0.000 0.000

(p-Value)

Clustered standard errors within parentheses***, ** and * indicate statistical significance at 1, 5 and 10%, respectively.



coefficient on the interaction term isnegative and on the borderline ofsignificance, which suggests that theresponse of profitable industries to lowerunion militancy is to raise their debt equityratio.

The final specification focuses onthe composition of bank debt. In thiscase, the coefficient on the interactionterm Coverage*Profit is not significant,corroborating the results obtained inModel II.

Ultimately, much of workers�bargaining power is derived from crediblethreats to withhold labor services. Tomitigate these threats, firms maystrategically maintain costly �buffer�inventories, which increases the cost of astrike borne by workers relative to thoseborne by the firm. Compared to materialsand goods in earlier stages of the productionprocess, inventories of finished goodsprovide the most effective insurance anddeterrence against employee job actions.Theoretical analysis seems to suggest that,in anticipation of a strike threat, firms oftenover-employ in an earlier period so as tobuild up an inventory that can be employed

in order to offset the revenue loss duringthe strike period (Clark 1991). Subsequentwork by Coles and Smith (1998) shows thataccess to strategic stock by the firm in theprocess of union-firm bargaining depressesthe negotiated wage.

Industries appear to have beenusing inventories of finished goodsstrategically in conjunction withbargaining negotiations.

Analyses of the inventory hypotheses,presented in Table 3, seems to suggest thatindustries appear to have been usinginventories of finished goods strategicallyin conjunction with bargaining negoti-ations.As expected, the effect appears to bedriven most by a build-up of finished goodsinventories (Model III), although rawmaterials seems to exert limited influenceon firm�s inventory policy. Although theseresults are persuasive, corroboratoryevidence from the labor law analysis wouldbe ideal. Unfortunately, disaggregated datadrilling down inventories by stage-of-production is not readily available for theperiod of analysis and evidence based ontotal inventories are only indicative.

Table 3: Unionisation and inventory policy

Variable Inventories Raw materials Finished goodsModel I Model II Model III

Coverage 0.009 (0.006) 0.002 (0.005) 0.001 (0.002)

Coverage*Profit 0.280 (0.141)* 0.145 (0.186) 0.150 (0.083)*

Profit -0.042 (0.049) -0.034 (0.037) -0.028 (0.016)*

Industry dummies Included Included Included

R-square 0.961 0.877 0.931

Clustered standard errors within parentheses***, ** and * indicate statistical significance at 1, 5 and 10%, respectively.

Saibal Ghosh


Concluding Remarks

The bargaining process led indus-tries to adopt a capital structure thatmade them more vulnerable to cashflow shocks.

Anecdotal evidence suggests that thecapital structure of relatively unionizedfirms seems to be significantly differentfrom those which are relatively lessunionized. A natural question to ask is whatrole does unionization plays in this regard.Since unionization data is not available atthe firm-level, we employ industry-levelunionization information to explore thishypothesis. Based on our analysis, theevidence suggests that the bargainingprocess led industries to adopt a capitalstructure that made them more vulnerableto cash flow shocks. As a supplier withmarket power, a union can demand a shareof the industry�s liquidity, which the industrymaintains primarily to insure againstnegative shocks. To reduce the impact ofcollective bargaining on profits, the industryhas the incentive to undertake costlyactions that reduce its expropriableliquidity. Consequently, the bargainingsolutions emanating from the process canyield outcomes that are not Pareto-optimal.

References

Baldwin, C. (1983), �Productivity and LaborUnions: an Application of the Theory of Self-enforcing Contracts�, Journal of Business,58: 155-85

Bhattacharjee, D.& T.D.Chaudhuri (1994),�Unions, Wages and Labour Markets inIndian industry: 1960-86�, Journal ofDevelopment Studies, 30: 443-65

Bronars, S. & D.Deere (1991), �The Threat ofUnionization, the Use of Debt and the Preser-vation of Shareholder Wealth,� QuarterlyJournal of Economics, 106, 231-54

Campello, M. (2003), �Capital Structure andProduct Market Interactions: Evidence fromBusiness Cycles�, Journal of FinancialEconomics, 68: 353-78

Cavanaugh, J. & J. Garen (1997), �Asset Specificity,Unionization and the Firm�s Use of Debt�,Managerial and Decision Economics, 18:255-69

Clark, I. (1991), �Inventory Accumulation,Employment and Wages�, Economic Journal,101: 630-41

Coles, M & E. Smith (1998), �Strategic Bargainingwith Firm Inventories�, Journal of EconomicDynamics and Control, 23: 35-54

K.Sengupta (1993), �Sunk Investment, Bargainingand the Choice of Capital Structure�,International Economic Review, 34: 203-20.

Economic & Political Weekly Research Foundation(2002), Annual Survey of Industries, Mumbai.

Ghosh, S. (2007), �Firm Size and Bank Debt Use:Indian Evidence�, Small Business Economics,29: 15-23.

Government of India, Indian Labour Yearbook(various years), Labour Bureau: Shimla.

Grout, P. (1983), �Investment and Wages in theAbsence of Binding Contracts: a Nash Barga-ining Approach�, Econometrica, 52: 449-60.

Reforming Labour Legislation on Working Conditions forCompetitive Advantage: An Empirical Study

Tapomoy Deb

Tapomoy Deb is Deputy General Manager (HumanResources) in JK Lakshmi Cement Ltd. 4, BahadurShah Zafar Marg, New Delhi110002. E-Mail:[email protected]

Sixty years have passed since In-dia gained its independence, butit is still a large agrarian economywith 3/5th of workforce employedin agriculture and producesabout 1/4 th of gross domesticproduct (GDP). Since the liber-alization of Indian economy, thereform in respect of labour hasbeen the slowest. Labour legisla-tion on working conditions needsto be equitable, more responsiveand more inclusive and which fa-cilitates in making Indian firmsmore competitive. The challengeis of combining greater flexibil-ity with the need to maximize se-curity for all particularly labour,argues the author.


Globaliztion &Competitiveness

Globalization has facilitated the inte-gration of world economy thereby mak-ing geographical boundaries only of po-litical relevance. Globalization is consid-ered to be a major force behind liberal-ization and privatization of hitherto closedor somewhat closed economies primarilyin the developing world. Since it is thefirms and not nations that compete in themarket the onus of gaining and sustain-ing competitiveness lies on the firms. Theincreased competition has forced firmsto reduce their operating costs in orderto reduce price of their products and ser-vices. Thus, it has become imperative forfirms to control their costs especially atpresent time due to global meltdown fu-elled by economic slowdown. Under sucha compelling business scenario, Indianfirms are looking at ways for cuttingdown their costs especially the labourcost. This is because labour cost consti-tutes a major component of operating andconsequently product costs of firms.

Competitiveness is a complex termwhich requires firms, government and

Tapomoy Deb


mechanisms to be readjusted and reori-ented for ensuring long-term success. Atthe micro level, the labour reform seeksto improve working conditions of theworkforce on one hand and frees employ-ers from the shackle of cumbersome andarchaic legal system on the other. Thetrade unions should act as facilitators andplay the role of a resource person to bringabout greater awareness amongstworkforce about the working conditionregulations, motivate and guide workerstowards greater cooperation for improv-ing the productivity and competitivenessof the firm so that all its stakeholders in-cluding the employees, management, sup-pliers, customers and society can be ben-efited. At the macro level, reform of theworking condition regulations seeks tobring the key stakeholders of the firm, thatis, workers, trade unions and managementcloser and move towards the path of suc-cess across the different sectors of theindustry. This will result in creation and/or development of a business-conduciveenvironment in the country with win�winapproach. The creation of a business-con-ducive environment will help in attractingmore and more foreign direct investment(FDI) necessary for spearheading socio-economic development of the country.Commentators may argue that such ascenario is too idealistic and cannot berealized in practice given the past experi-ences. It may be argued that the veryobject of working condition regulations oras a matter of fact any other labour legis-lation is a piece of social welfare mea-sure. If the laws are not serving its in-tended purpose either to business or tolabour, then its existence is questionableor debatable. India has to make its legal

environment such as working conditionregulations growth inducing so that em-ployers, workers, and the society gains.

Since it is the firms and not nationsthat compete in the market theonus of gaining and sustainingcompetitiveness lies on the firms.

Over the past one decade there hasbeen increasing globalization of Indianeconomy, which has necessitated increas-ing the competitiveness of Indian indus-try through human resources in generaland workers in particular. There has beenan increasing demand from the industryfor reform in labour legislation in orderto increase efficiency, effectiveness,competitiveness and productivity of In-dian workers so as to face the onslaughtof global competition, especially fromChina. In general, the Indian labour leg-islations are partly archaic and have out-lived their utility in a globalizing world.However, reforming labour legislation isa very touchy issue and there are con-flicting interest groups involved, whichhas resulted in lack of initiative of thegovernment to make necessary amend-ments. Much has been talked but littleseems to have been done.

The Indian labour legislations arepartly archaic and have outlivedtheir utility in a globalizing world.

Review of Literature

Literature survey indicates that thereis a widespread concern at the present

Reforming Labour Legislation on Working Conditions for Competitive Advantage


level of effectiveness of labour legisla-tion on working conditions in view of glo-bal business competitiveness. Peru-Pirotte (1996) observed that labour leg-islation is quickly evolving in order to takeinto account the impacts of technologieson working conditions and on human re-sources within firms. Traditional law, pro-tecting the worker, is modernized in or-der to be more pre-occupied by today�semployer�s requirements and constraintsconcerning the hiring, redundancy, work-ing hour �s management and wageearner�s status. Pierre and Scarpetta(2006) drawing from harmonized surveysof firms around the world comparedemployer�s responses with actual labourlegislation and found that employer�s con-cerns about labour regulations are closelyrelated to the relative stringency of labourlaws. Medium and large firms, as wellas innovating firms, were those mostnegatively affected by onerous labourregulations. In the Indian context, re-search conducted by Upadhyaya (2003)in Garment & Hosiery industry of Noidapoints out that although The Factories Act,1948 makes very elaborate and unam-biguous provisions regarding the minimumwelfare (also health and safety) stan-dards to be followed, but laying down thestandards alone is not enough. It is alsoto be ensured that these provisions areactually implemented. He found that fa-cilities for first aid, washing, canteen,refreshment/tea, annual holidays, and in-tervals of rest were satisfactory; ambu-lance and lunch room facility were foundto be inadequate in terms of implemen-tation, provisions relating to welfare of-ficer and storing and drying clothing werenot found to be implemented even in a

single unit covered under the study, noneof the selected units had any provisionfor appointment on compassionateground, majority of the respondents wereworking for more than 9 hours a day (av-erage 10 hours of working per day). In-terestingly, no child labour was employed.A research made by Ramesh Babu(2004) in Business Process Outsourcing(BPO) industry found that the continuedstress and strain at work lead to circum-stances where the women workers can-not carry on due to atypical timings ofwork especially that of shift work.Noronha and d�Cruz (2008) found that75% of the call centre employees joiningunion can be attributed to improving payand conditions, followed by information/advice about employee rights (67%) andbelieve in trade unions (38%). 65% ofthe call centre/BPO employees citedworking times as being very important inprompting to join a trade union. Two-thirds of respondents reported that theywere either �very� or �quite pressurized�as a result of their work on a normal day.87% of these respondents cited �havingto meet targets� as the greatest sourceof work pressure. 51% reported of hav-ing not enough breaks while 48% of therespondents found hardly enough time totake care of family/personal matters.Thus, the problems of working conditionspertain to long working hours, forced

The problems of working conditionspertain to long working hours,forced overtime without remune-ration, inadequate breaks, highwork pressures and lack of work-lifebalance.

Tapomoy Deb


overtime without remuneration, inad-equate breaks, high work pressures andlack of work-life balance.

Bhavani and Bhanumurthy (2007) intheir study observed that the economicpolicy reforms of 1991 were expected toinstil competitive forces in the Indian in-dustry. They emphasized that it is essen-tial to revamp complex and comprehen-sive labour legislation to further compe-tition. Papola and Pais (2007) resonatesthe same sentiments when they argue thatreforming labour laws has become nec-essary to make Indian industry effi-cient, cost effective and internationallycompetitive in the face of globalization.Sahu (2008) says that besides rational-ization of labour laws, emphasis must begiven on the improvement of labour ad-ministrative machinery.

However, Gill (1999) took the tradi-tional view and observed that trade union-ism is influenced by growth of capital-ism with its own specificities, the media-tion of the state and initiatives by thetrade union movement. The author fur-ther argues that at the moment tradeunions are not displaying capacity to meetthe challenge of attempt to review labourlegislation, therefore bold and new initia-tives are needed to enable them to playtheir historical role to build just and hu-mane society for working people. How-ever, Lucio Baccaro (2008) concluded inhis study that there has been a consider-able decline in unionization over the pasttwo decades. Union density declined inalmost all the 51 countries considered inthe study. The decline was dramatic inCentral and Eastern European countries,

where levels had initially been very high.

Advocate Kumar (2009) observesthat �it is true that existing labour laws inIndia cannot be changed or removed bya fiat as it could be easily done in Chinabut the fact lies that unless the laws arechanged drastically, it would not be pos-sible to obtain desired results. Continu-ing to �protect� a small aristocracy of in-dustrial labour means hurting the pros-pects of prosperity for the mass of India�slabour. It is time to repeal this imperiallegacy.� Thus, reforming labour legisla-tion on working conditions is imperativefor us in order to meet the demands ofmodern industrializing society. Pradhan(2005) observed that creating an environ-ment that reduces the cost of doing busi-ness can help attract FDI into India. Heargues that creating a legal environmentthat is conducive to entrepreneurship andgrowth is vital.

The Factories Act, 1948 and TheDelhi Shops and EstablishmentAct, 1954 make very elaborate andunambiguous provisions regardingthe minimum standards of safety,health and welfare to be followedby the organizations.

The reasons for concern on workingcondition regulations are as varied as thestakeholders are. Different stakeholderslike workers, both blue collar and whitecollar, trade unions, employer�s associa-tions and officials of labour departmenthave different perceptions on workingcondition regulations and hence have dif-ferent object of reforming the same. The



concept of working conditions is flexibleand elastic and differs widely with times,regions, industry, country, social values andcustoms, the degree of industrialization,general socio�economic development ofpeople and political ideologies prevailingat a particular moment. The Factories Act,1948 and The Delhi Shops and Establish-ment Act, 1954 make very elaborate andunambiguous provisions regarding the mini-mum standards of safety, health and wel-fare to be followed by the organizations.

However, laying down the standardsalone is not enough, as it is to be imple-mented in letter and spirit. Furthermore,with passage of time, drastic changes intechnology, general economic and busi-ness environment has taken place. Thepresent study was conducted to ascer-tain how far the provisions of FactoriesAct, 1948 and The Delhi Shops and Es-tablishment Act, 1954 have beenachieved. It also examines the scope forreforming the legislations in order to meetthe standards of working conditions re-quired in any civilized society from theperspectives of factory workers, call cen-tre agents and trade unions and identify-ing opportunities for giving impetus tocompetitiveness of business organizationby making the legislations less cumber-some, business oriented and less proneto labour politics, from the perspectivesof business associations and government.

Objectives of the Study

The purpose of the present study isto describe, analyze, understand anddraw inferences on the need for reform-ing labour legislation on working condi-

tions for competitive advantage. Morespecifically, the study aims to achieve thefollowing objectives:

� To study and review various legal pro-visions relating to working conditionsin Factories and Shops/Establish-ments.

� To examine the current trends inlabour jurisprudence in India.

� Assessing the impact of LPG (Lib-eralization, Privatization and Global-ization) on legal perspectives of busi-ness organizations in enhancing com-petitive advantage.

� To suggest appropriate reforms inlabour legislations relating to work-ing conditions in contemporary busi-ness environment.

Research Methodology

This study looks into the perceptionsof workers, call centre agents, trade unions,business/employer�s associations, andlabour department of government of NCTof Delhi. The perspectives of workers andcall centre agents revolve around nine es-sential constructs viz. working posture,nature of industry, hours of work, safetymeasures, accident prevention measures,safety culture, safety training and partici-pation, worker�s perception on statutoryinspections, and workers perception on re-forming working condition regulations. Theperspectives of trade unions and businessassociations revolve around the presentstate of working conditions, role of labourlegislation in ensuring appropriate workingconditions for the workers, role of inspec-

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tors in improving the working conditions,frequency and manner of inspections, per-ceived role of statutory inspectors as re-source person for the industry as a wholein terms of building awareness, training,providing guidance and suggestions forimproving working conditions, misuse ofstatutory power by inspectors in collusionwith employers affecting productivity, roleof government in working conditions, hoursof work, flexi-work system, need for sepa-rate labour legislation on working conditionfor small, medium and large sectors, par-ticipative decision making on working con-ditions, perception on working conditionregulations as impediment to attaining com-petitive advantage by firms, and finally theissue of reforming working conditions regu-lations to make it more contemporary needbased, business and growth oriented andcompetition friendly. Finally, the perceptionof the labour department (factory inspec-torate and shops and establishments inspec-torate) on present level of compliance ofworking condition regulations, effective-ness of inspections in ensuring adequateworking conditions, measures to educateworkers / agents on working conditionregulations, emergent areas of emerging ornewer risks at workplace to be addressedthrough legislation, and opinion on reform-ing working condition regulations.

Given above mentioned dimensions, theviews of trade unions, employer�s associa-tions, government and practitioners throughsecondary sources were examined beforefinalizing the research questions. The studyrelied upon primary data and is collectedthrough questionnaire, interview guide, dis-cussions and observations. Purposive ran-dom sampling was employed. For the sur-

vey method, the sample size was 338 re-spondents, consisting of 291 workers of 13different factories in pharmaceutical, tex-tiles, beverages, refrigeration and air-con-ditioning, consumer, confectionary, auto-components and engineering products, 82call centre agents from a leading Call Centrecompany, 5 office bearers of five nationalfederation of trade unions, 25 state-leveltrade unions, 1 national-level call centreemployees union, 11 business associations,4 personnel of Factory Inspectorate and1 personnel of Shop & Establishment In-spectorate of Government of NCT ofDelhi. SPSS software using statistical toolslike mean, standard deviation, t-test, co-efficient of correlation, and chi-square testwere utilized.

Findings

Workers in a new economy industrylike pharmaceutical group have better per-ception than those in non-pharmaceuticalgroup on various dimensions of workingcondition viz. safety measures availability,accident prevention measures, safety cul-ture, safety training and participation, healthmeasures available and perception on work-ing condition regulations and inspections ascompared to traditional industry. However,increased work pressure leads to unsafework practices amongst workers and notcall centre agents. Workers and call cen-tre agents appreciate the vitality of regularinspection but for different reasons. Work-ers of pharmaceutical group holds that in-spection is helpful in identifying workplacehazards (value-additive) while workers ofnon-pharmaceutical group and call centreagents find inspections routine (non value-additive) ( Tables 1- 4).



Table 1: Comparison of Working Conditions between Two Groups of Companies(Pharmaceutical & Non-Pharmaceutical)

S. No. Dimensions Pharmaceutical Non- t-Value(N=129) Pharmaceutical

(N=80)

Mean SD Mean SD

1 Hours of Work 3.59 1.19 2.10 1.46 8.07**2 Safety Measures Available 4.39 0.34 4.30 0.60 1.27**3 Accident Prevention 3.91 0.59 3.79 0.55 1.51**

Measures4 Safety Culture 4.22 0.33 4.10 0.35 2.46**5 Safety Training & 4.40 0.25 4.16 0.50 4.57**

Participation6 Health Measures Available 4.38 0.56 3.68 0.55 8.82**7 Perception on Working 4.32 0.33 3.97 0.54 5.73**

Condition Regulations &Inspections

** Significant at 0.01 level

Table 2: Distribution by Company on Vitality of Regular Inspections

Description Pharmaceutical Non-Pharmaceutical Total N = 129 N = 80 N = 209

Identify hazards in the workplace 92 17 109 {71.3} {21.3} {52.5}

Keep the organization looking good 18 52 70 {14.0} {65.0} {33.5}

Aid communication 19 11 30 {14.7} {13.8} {14.4}

Chi-Square Value = 62.18, significant at 0.01 levelNote: Figures in brackets are in percentages

Both trade unions and business as-sociations perceive that working condi-tion regulations have been partially suc-cessful in protecting the interest of work-ers, trade unions and management. Tradeunions perceive deterioration in workingconditions while business association per-ceive improvement in working conditionssince liberalization, privatization and glo-balization of Indian economy in 1991.Both trade unions and business associa-tions do not favour flexi-work system.

However, half of the respondent employ-ers favour flexi-work system also. Tradeunions want more statutory inspectionsto be carried out and educating workersabout their legal rights is necessary whilebusiness associations want a completechange in the character of working con-dition regulations keeping in view latestdevelopments in technology, flexibilityand dynamic scenario of competitiveness.Trade unions hold that corruption andbureaucracy amongst statutory inspec-

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Table 3: Mean & Standard Deviation of Dimensions by Type of Company with Respect to Perceptionof Workers on Reforming Working Regulations

S. No. Perception Dimension Pharmaceutical Non-Pharmaceutical t-Value(N=129) (N=80)

Mean SD Mean SD

1 The implementation of 4.15 0.88 3.79 0.63 3.20 (NS)legislation is satisfactory

2 Legislation kept pace with 4.34 0.76 3.54 0.78 7.39**changing needs of working class

3 Statutory inspectors facilitate 4.37 0.67 4.25 0.99 1.06 (NS)in effective implementation ofsafety measures

4 Satisfied with quality of 4.20 0.86 4.41 0.79 1.78 (NS)implementation of welfare schemes

5 Statutory inspectors cause dislocation 4.20 0.99 3.24 0.95 6.94**of work as & when they visit us

** Significant at 0.01 levelNS = Not Significant

Table 4 : Relationship (Coefficient of Correlation) Among Various Dimensions of WorkingConditions (N = 82)

Dimension Dimension Dimension Dimension Dimension Dimension Dimension1 2 3 4 5 6 7

Dimension 1 1.0000 0.1757 0.3012 0.2949 0.0070 0.0406 0.1238Dimension 2 0.1757 1.0000 0.6300 0.5959 0.7130 0.6151 0.5923Dimension 3 0.3012 0.6300 1.0000 0.5489 0.5632 0.5507 0.4011Dimension 4 0.2949 0.5959 0.5489 1.0000 0.5689 0.5100 0.6875Dimension 5 0.0070 0.7130 0.5632 0.5691 1.0000 0.6646 0.5779Dimension 6 0.0406 0.6151 0.5507 0.5100 0.6646 1.0000 0.3753Dimension 7 0.1238 0.5923 0.4011 0.6875 0.5779 0.3753 1.0000

Dimension 1 Hours of WorkDimension 2 Safety Measures AvailableDimension 3 Accident Prevention MeasuresDimension 4 Safety CultureDimension 5 Safety Training and ParticipationDimension 6 Health Measures AvailableDimension 7 Perceptions on Working Conditions Regulations & Inspections

tors are impediments to effective imple-mentation of working condition regula-tions whereas business associations per-ceive lack of awareness of legal rights

amongst workers to be the impediment.While surprisingly trade unions are satis-fied with present level of emphasis onworking conditions business association�s



titude has changed from �prosecution� to�education�. The inspectorate stronglyadvocates for deletion of minimum stipu-lation of 10 workers working in any pre-mises or precincts thereof to be a con-sidered as a factory in pursuance of sec-tion 2 (m) of the Factories Act, 1948.Vibration is still not recognized as a healthhazard under the Factories Act, 1948.Therefore, legislation must provide forprovisions governing vibration treating itas a health hazard and integral part ofworking conditions. The number of fac-tory inspectors is much lesser than thenumber of factories (1: 615 for organizedsector). The inspectorate pointed out thatthe trade unions seldom make complaintson working conditions to the inspectorate.This results in indifference to workingcondition regulations. The inspectoratesuggests that The American Model onOSH can be emulated by us. Once a fac-tory is found to comply with the provi-sions of the act at the time of grantingfactory license, then as an incentive tothe employers, immunity from furtherchecking by factory inspectors can begranted. This will seek to motivate em-ployers to maintain and improve workingconditions of their own.

The American Model on OSHcan be emulated by us.

The shops and establishment inspec-torate contends that lack of registrationhas adversely affected the effectiveimplementation of the Delhi Shops andEstablishments Act of 1954. As on date,the inspectorate is not undertaking anysuo-motto inspections. Inspections aregenerally undertaken as a result of com-

Both trade unions and businessassociations do not favour flexi-work system.

finds lack of government emphasis onworking condition. Trade unions perceivethat the reason of lower number of court/adjudication cases on working conditionis due to the fact that all stakeholders aresatisfied with working conditions. On theother hand, business associations find lackof proper understanding of the signifi-cance of working condition amongst allstakeholders to be reason behind lowernumber of court/adjudication cases.

Labour department argues that mostof the employers in organized sectors arecomplying with working conditions pro-visions stipulated in The Factories Act,1948. However, employers in unorga-nized sectors, constituting small firms,have failed to comply with health, safetyand welfare provisions provided in thesaid act.

Employers in unorganized sectors,constituting small firms, havefailed to comply with health, safetyand welfare provisions provided inthe said act.

Labour department states that cus-tomers of the firms play a pivotal role inensuring compliance and improving work-ing conditions. This is because increas-ingly buyers/customers want productionof goods by workers working in adequateworking condition and with a legally com-pliant note. Now-a-days inspector�s at-

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plaints received from employees of shopsand commercial establishments. The in-spectorate is of the view that given ram-pant unemployment especially in currenteconomic recession scenario, effectiveimplementation of the act is difficult giventhat supply of manpower far exceeds itsdemand. Provision for mitigating risks toemployee�s health on account of stressshould be expressly provided for in thesaid act. Further, in order to ensure bet-ter compliance by employers, deterrentpunishment of fine of Rs. 25, 000/- shouldbe provided for against the present mea-gre fine of Rs. 250.

Both trade unions and business as-sociations favour reforming working con-ditions regulations to make it more con-temporary need based, business andgrowth oriented and competition friendly.The Factory Inspectorate strongly be-lieves that The Factories Act, 1948 is notan impediment in attaining or sustainingcompetitive advantage by firms. TheFactories Act exists in developed coun-tries like USA and UK, but nowhere is itan impediment to competitive advantageof the firms. The inspectorate contendsthat Delhi Shops and Establishments Act,1954 is not an impediments to attainingor sustaining competitiveness by thefirms. They argue that the recent eco-nomic downturn of American economyindicates that competitiveness of firmscannot be unregulated or unrestrictedotherwise frauds and malicious failureswill continue to trouble corporate worldand national economy as well.

Many commentators argue that theenforcement of the labour legislation in

India is a bigger problem in the presentjudicial system. Unfortunately, the legaland judicial system has been unable tokeep pace with the needs of a growingpopulation of workers and the increasingcomplexities of the industrial sector. InBharat Forge Ltd. Vs. Uttam ManoharNakate (1985), Supreme Court of India,2005, the Supreme Court�s final judgmentwas based on the interpretation of lawsthat have not changed. The judicial sys-tem could have arrived at this commonsense at any stage of the proceedings(after all, the facts of the case were notreally in dispute, Nakate always acceptedthe fact that he was sleeping). There-fore, one should not be impressed by thefact that the judicial system eventuallygot the judgment right. Furthermore, asper the latest available estimates, pend-ing cases number 28 million, and aregrowing at the rate of 8% a year, implyan additional of more than 2 million pend-ing cases a year.

Many commentators argue that theenforcement of the labour legisla-tion in India is a bigger problem inthe present judicial system.

Recommendations

For Workers and Call CentreAgents: Workers should in so far as pos-sible work in sitting position. Working instanding position creates discomfort andleads to a poor perception of workingconditions and related regulations. Work-ers should not resort to unsafe work prac-tices lest accident and even death couldresult. They should not be overwhelmed



by work pressure and should obey allsafety and health instructions of theirsuperiors and as documented in manualsin their own interest. Management shouldensure that excessive work pressures areavoided and if it is inevitable then adequatetraining and close monitoring should beresorted to. Although both legally andmorally employers are responsible for thesafety of the workers at workplace, work-ers must consider themselves most impor-tant for ensuring their very own safety.Unless they are conscious about self-safety, even the best safety measuressuch as personal protective equipmentscan only help to a limited extent.

Workers understand their crucialrole in improving competitiveness oftheir firms and at the same time empha-size the motivational aspect of workingconditions. Their needs, aspirations andrequirements must be fulfilled by appro-priately reforming working conditionregulations. Unless their needs, aspira-tions and requirements are met, the in-tended purpose of working conditionregulations is hardly being fulfilled.

For Trade Unions: Trade unions shouldwork towards improving working conditionsand compliance of working condition regu-lations in tandem with both employers andinspectorate in a spirit of trust and collabo-ration. This will help to reduce or eliminatethe employer�s tendency to collude withcorrupt inspectors and help in betterment ofthe working conditions for the workers. Thiswill also pave the way for attitudinal changefrom one being focused on employment re-lations arising from workplace to the condi-tions of the workplace itself.

Trade unions should improve thefrequency and closeness of their in-teractions with workers to stay abreastwith the needs, aspirations and reali-ties of worker�s perceptions and prob-lems in respect of working conditions.This is especially important becausewhile workers and employers findpresent status of working conditionsto be satisfactory but trade unionsfeels otherwise. This calls for moreintense partnership between tradeunion leaders and workers for whothey profess to be advocating for ad-equate working conditions. Otherwise,they will be alienated amongst theworking population and soon will findno place for them. Trade unions alsoneed to come out of the shackles ofhistoric mindset which believes thatemployers are the adversaries of theworking class.

Trade unions also need to comeout of the shackles of historicmindset which believes that em-ployers are the adversaries of theworking class.

In this globally competitive era, theyneed to shift from �conflict� to �coopera-tion� framework in letter and spirit. Thenonly they will continue to justify their roleand will be important for both the work-ers and the employers. Trade unions muststrive to understand the business com-plexities, technology and changing pat-terns of organization and should interpretcompetitiveness of the firms in that per-spective. Merely pointing accusing fin-gers at the employers will neither help

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anybody nor further the cause of thefirm. Their role should be to assist man-agement in identifying and overcomingchallenges in global business environmentand render a helping hand to improveworker productivity, which is the step-ping stone of firm level competitiveness.

Rather than looking up to governmentfor help in improving working conditions,they should themselves embark upon vari-ous educational and training programmesfor building awareness of rights, duties andliabilities amongst the workers in relationto working condition regulations. Relyingtoo much upon a third party like govern-ment will only increase their vulnerabilityto political manoeuvring. They should buildpressures on employers through process ofmutual dialogue and a demandingworkforce which is committed to produc-tivity and adequate working conditions.Trade unions must recognize the signifi-cance of working conditions and mustspread it amongst workers and governmentagencies. They must press upon strength-ening of those provisions of working con-dition regulations that help in realizing bet-ter working conditions and elimination ofthose provisions which fails to serve thepurpose of none or still worse impede com-petitiveness of the firms. Developing andnurturing cooperation, collaboration andtrust with employers will help them toachieve both better working conditions aswell as competitiveness of the firm whichis essential for survival of all stakehold-ers.

Relying too much upon a thirdparty like government will only in-crease their vulnerability to politi-cal manoeuvring.

For Business/Business Associa-tions: Business associations should nowcome out of the traditional mould of dis-trust and conflict which has been rulingthe roost of employer-trade union rela-tionship for long. They should now forgepartnership with trade unions and work-ers for improving productivity and com-petitiveness of workforce and eventuallytheir firms. Changes in legislative provi-sions in terms of reforming working con-dition regulations would undoubtedly pro-vide them relief from archaic and restric-tive provisions but without trust, collabo-ration and mutuality the objectives of thefirm cannot be achieved successfully.Today firm�s success depends upon thecommitment and capability of itsworkforce and therefore collaborationand cooperation will go a long way inimproving individual and firm perfor-mance. This would also reduce their de-pendence on third party like governmentand its numerous bureaucratic agenciesthat they often complain against.

Although business associationsaccept that there is wide-spread corruptionamongst statutory inspectorates what theyneed to understand is that unless they stopbribing inspectors for escaping legalprovisions with impunity, this problem willcontinue to haunt especially the honest andupright employers in the future also.Employers should themselves implementthe legally stipulated measures of safety,health and welfare and refuse to bribecorrupt inspectors.

Employers often have the means andmeasures to ensure that their workershave access and full knowledge of vari-



ous rights, duties and obligations underworking condition regulations. This willreduce dependence of workers on thirdparties such government and/or tradeunions. Since business associations ap-preciate that there is a lack of properemphasis on working conditions, theyshould themselves provide for means andmeasures of accommodating workersparticipation and involvement in decisionsrelated to working conditions. This willprobably come when they treat workersas equally important partner and have anon-adverse attitude towards them, es-pecially the trade unions. Such a gestureon the part of the employers will buildtrust and aid strategic imperatives ofthe firm due to enhanced level of com-mitment and ownership amongst theworkers. Additionally, these should beforthcoming as regards initiating andimplementing safety, health and wel-fare measures are concerned quite vol-untarily. Business associations shouldthemselves act as a regulatory body fortheir members so that employers arepersuaded to improve working condi-tions in their respective firms. Theymay also constitute a neutral audit teamto inspect and suggest means and mea-sures of improvement at the workplace.They should ensure that member em-ployers upload status of compliance ofworking condition regulations in thewebsite voluntarily.

Business associations shouldthemselves act as a regulatory bodyfor their members so that employersare persuaded to improve workingconditions in their respective firms.

For Government: Government isone of the most crucial actors of work-ing condition regulations both as the lawmaker and the law enforcer. Both theemployers and trade unions rely upon itssupport to achieve their respective butoften contradictory goals. This makes thejob of government even tougher as bal-ancing the two traditional adversaries isquite difficult. However, we make thefollowing recommendations for the gov-ernment.

� Government must invest in concertedmedia and other publicity mecha-nisms in a planned, systematic andcontinuous manner to ensure thatdue awareness on working conditionsis being built which will help work-ers as well as employers to knowtheir respective rights and obligationsunder The Factories Act, 1948 andThe Delhi Shops and EstablishmentAct, 1954.

� The position of Certifying Surgeonmust be dispensed with immediatelyand a pool of Medical Officers shouldbe engaged on full time basis for ren-dering a host of medical assistanceand services to the workers em-ployed in factories, shops and othercommercial establishment. A tie-upwith Employees State InsuranceCorporation�s dispensaries and hos-pitals can provide the doctor�s poolas enumerated above at a marginalcost to the government.

� The labour enforcement machineryis grossly inadequate to cope with themultitude of labour laws and the vari-ous establishments that require sur-

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veillance. The enforcement strategywill be to reduce the burden on theexisting machinery and to encourageemployers and other stakeholders liketrade unions to proactively participatein the implementation of this strategyon a voluntary compliance basis. Forthis purpose, stipulation of workerstrength should be reduced suitably (say200) to ensure appointment of welfare(or safety officer) in almost all the fac-tories and they should be designatedas �Resident Factory Inspector�.These resident factory inspectorsshould upload compliance status ofworking condition regulations in theirfirm�s website on voluntary basis.

These resident factory inspectorsshould upload compliance status ofworking condition regulations intheir firm�s website on voluntarybasis.

� In this global business era, govern-ment must foresee its role as facili-tators and enablers rather than inter-ventionist. This will help governmentand its various agencies to focus onareas important for improving work-ing conditions rather than beingbogged down with in-fighting be-tween employers and trade unions.This will also help the government togive proper focus on working condi-tion regulations also rather thanmerely concerned with industrial re-lations only.

� Multiplicity of forms/returns to bedone away with and combined re-turns to be introduced. Both trade

unions and business associationsagree that multiplicity forms is at besta drag on time, efforts and resourcesof a firm which can be better utilizedinto productive activities. Often theseforms are not even properly scruti-nized but simply dumped into recordrooms as a matter of record.

� It is recommended that a firm foundcomplying with working conditionregulations at the time of grant of li-cense or subsequently for three yearsshould be granted immunity from fur-ther inspections. Different authori-ties, employers and trade unions cancoordinate to arrive at an inspectionschedule that is mutually convenient.This will help in increasing account-ability of trade unions also in addi-tion to employers in matters of work-ing conditions and prevent illegalgratifications of corrupt statutory in-spectors. All deficiencies and short-comings must be noted on the inspec-tion book clearly in a positive envi-ronment, rather than the practice ofinforming later, with due signaturesof management and trade union rep-resentatives along with the con-cerned inspectors. Trade unions canthen pursue with employer for the re-quired improvement duly assisted bythe inspector, as needed.

� The inspectors must be trained so thatthey act as resource person for theindustry as a whole and make edu-cational efforts for improving knowl-edge about statutory provisionsamongst both workers and employ-ers. The training and guidance to in-spectors is necessary so as to do



away with the punitive or rent seek-ing behaviours.

� Central Factory Rules must be for-mulated by the central governmentin order to bring uniformity and sim-plicity in procedure, process anddocumentation. This is crucial asnow-a-days many multinational aswell as domestic firms are setting-up their factories in more than onestate.

� Government must setup training cen-tres on occupational safety andhealth at every district and such cen-tres should provide a wide spectrumof training, retraining and refreshertraining to workers, trade unions,employers and inspecting staff onvarious issues, aspects, problems andnew developments in respect ofworking conditions. Attending train-ing programmes at the centres shouldbe made compulsory by institutingsuitable provision in The FactoriesAct, 1948 and The Delhi Shops andEstablishment Act, 1954.

Engagement of women in nightshifts should be allowed in all theindustries subject to satisfactorysafeguards.

� Engagement of women in night shiftsshould be allowed in all the industriessubject to satisfactory safeguards.Requirement of all �prior approvals�should be done away with. This willhelp in employment of ever increas-ing women workforce who is bothcareer-oriented and capable.

� In the case of organizations havingISO/TS 16949/GMP etc. certifica-tions, inspections could be done oncein three years, thus placing relianceon self-certification. Since most of thequality certifications considerworking conditions before certifying,therefore reliance upon suchinternational or national certificationscan be made.

� Registration of shops and establish-ments must be revived and madecompulsory at the earliest. The proc-edure for making and obtaining reg-istration must be simple and online.Similarly, the application for and grantof factory license including renew-als thereof should be online.

� Adequate number of qualified andseparate inspecting staff under TheDelhi Shops and Establishment Act,1954 must be created so as to en-sure effective implementation of theworking conditions in shops and com-mercial establishments. Further, theinspectorate must be headed by a fulltime and independent Chief Inspec-tor of Shops and Establishment inorder to bring desired improvementsin enforcement.

� Punishment and fine as a deterrentunder The Delhi Shops and Estab-lishment Act, 1954 must be enhancedto a reasonable level on the patternof The Factories Act, 1948.

For Law Making Bodies: The lawmaking bodies assume paramount impor-tance not because of their law makingability but their role in balancing the

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needs and expectations of various stake-holders of the working condition regula-tions viz. workers, call centre agents,trade unions, business association and theinspectorates of the government. This isdefinitely a challenging task given balanc-ing equity with efficiency.

Our law makers must look beyondthe �income-employment� securityparadigm which seems to havemade employment or terms of em-ployment more important than theconditions of employment.

Our law makers must look beyondthe �income�employment� security para-digm which seems to have made employ-ment or terms of employment more im-portant than the conditions of employ-ment. Working conditions, where em-ployees spend 80% of their waking life,cannot be less important than wages andother benefits. It is in this context, thatreforming working condition regulationsassumes paramount importance.

Some of the crucial recommenda-tions for law making bodies in respect ofworking condition regulations are as fol-lows:

� The Factories Act, 1948 must beamended to remove obsolete anddysfunctional provisions which servepurpose of none of the stakeholders.Also, all ILO conventions on safety,health and welfare must be incorpo-rated in the amended acts. Further,working condition regulations mustbe very simple and easy to under-

stand and implement which meets therequired and desirable aspects ofsafety, health and welfare needs ofa modern India.

� Section 2 (m) of The Factories Act,1948 must be amended to removestipulation of 10 workers as a quali-fying ground for consideration of apremise or precincts therefore as afactory. This will help to extend thebenefits of the law to unorganizedsectors of the industry.

� Appellate mechanism and complaintson corruption against inspecting staffmust be incorporated in The Facto-ries Act, 1948. This will act as a de-terrent to corrupt inspectors.

� Vibration and stress must be recog-nized as health and safety hazard andaccordingly provisions must be in-serted in the working condition regu-lations of the Factories Act, 1948 andthe Delhi Shops and EstablishmentAct, 1954. Also, more elaboratesafety provisions must be inserted inthe Delhi Shops and EstablishmentAct, 1954.

� Training and education on provi-sions pertaining to working condi-tions must be compulsorily providedto the workers by the managementand earmarking of managerial per-sonnel who are directly responsiblefor safety, health and welfare of theworkers and call centre agentsmust be made and given refreshertraining.

� Workers working in hazardous pro-cesses must be rotated periodically



(say every 6 months) to prevent orminimize occurrences of occupationaldiseases.

Audit of working conditions mustbe laid down in the statute bookwhich shall be conducted by a re-puted and independent body hav-ing specialized knowledge of a par-ticular industry and well aware ofsafety, health and welfare aspects.

� Like other professions, certificationsby the government for being quali-fied to look after safety, health andwelfare can also be made in thesame pattern as that of �Energy Au-ditors� (Bureau of Energy Efficiency,under Ministry of Power).

� Provisions on working conditions forbenefit of call centre employeesmust be provided for in the Informa-tion Technology Act of 2000.

� The working condition regulationsmust contain a provision that it needsto be completely reviewed after ev-ery 10 years. This will help in keep-ing the labour legislation on workingconditions both relevant and uptodate. Review should be made on thebasis of survey carried out by a spe-cial commission being headed by�Safety and Health Commissioner�taking field data from different typesand kinds of factories and establish-ment and incorporating reasonablesuggestions of trade unions, businessassociations and inspectorates.

The impact of customer�s require-ments on compliances of working condi-

tion regulation on the actual condition andimprovement initiatives by the employ-ers can also be studied. This may high-light whether business has greater impactthan legal stipulations on maintaining orimproving adequate working conditions infactories, shops and commercial estab-lishments.

Conclusions

All the stakeholders of working con-dition regulations viz. workers, call cen-tre agents, trade unions and business as-sociations are in favour of reforminglabour legislation on working condition butfor varying reasons. Workers and callcentre agents want better safety, healthand welfare measures that can take careof their contemporary needs and aspira-tions. Trade unions want to make theworking condition regulations evenstricter while business association wantto rationalize them for improving com-petitiveness of their firms. This impliesthat it is essentially a struggle betweenequity and efficiency. Trade unions per-ceive deterioration in working conditionsand therefore want that labour legisla-tion on working condition to be strength-ened whereas business associations per-ceive an improvement in working condi-tions and therefore want it�s rationaliza-tion for making it competition friendly.Liberalization, privatization and globaliza-tion of Indian economy since 1991 hasfocused only on industry thereby makingto suddenly face global competition whilestill keeping the workforce under tradi-tional over protective working conditionregulations which has created a disequi-librium in the economic system. From the

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empirical evidence, workers (both fac-tory workers and call centre agents) aresatisfied with working conditions. There-fore, it is a challenging proposition for thegovernment and law making bodies tostrike a balance between equity and ef-ficiency. They need to reform or ratio-nalize the labour legislation on workingconditions in such a way that interest ofworkers and employers as a class on onehand and business enterprise and com-petition on the other hand are balancedto the maximum extent.

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Nidhi S Bisht


Trade Unions in Indian IT Industry? An Employees�Perspective

Nidhi Bist

The importance of trade unions inIndia descended because ofnegativities associated with them;but off late their activities are againgaining momentum not only inmanufacturing industries but alsoin service industries. IT industry isone of the high growth service in-dustries in India, which has con-tributed significantly to the upsurgein the Indian economy and has cre-ated a huge base of white-collaroccupa-tions. The industry knownfor its knowledge workers is dis-tinct in comparison to other indus-tries with no organized union ac-tivities. This paper attempts to un-derstand the perspective of IT pro-fessionals towards unionization byexploring the responses given bythese professionals for organizedtrade unions in the industry. Thepaper also investigates the roletrade unions can play in collectivebargaining for these knowledgeworkers in the contemporary con-text.

IT Industry &Trade Unions

Indian IT industry has carved a nichefor itself in the international arena withits global offshore delivery model andcompetent workforce. Many of thelabour laws applicable to the industryhave been simplified in the name of re-quirement for growth and developmentof the industry and employers are nowplaying with these simplified laws by tak-ing advantage of the existing loop holes.Employees thus have an array of un-settled demands due to which havewarmed up to the idea of trade unions inrecent years. However, there has beena reverberating voice of employers andassociations against the formation oftrade unions in the IT industry.

The industry directly employs morethan 2.3 million employees and as the in-dustry will expand the employees� basewill continue to increase further at a highrate. With such vast employee base thepossibility of organized trade unionsshould be given a serious thought sinceright to association is guaranteed by theConstitution of India. The right to asso-ciation, right to collective bargaining; in-

Nidhi S Bisht is Asst. Professor (HR) in Institute ofMarketing Management, New Delhi. E-mail :[email protected]

Trade Unions in Indian IT Industry? An Employees� Perspective


cluding the right to strike also constitutethe core conventions of the InternationalLabour Organisation (ILO) of which In-dia is a founder member. Welfare of em-ployees can not be overlooked for an in-dustry which has had an unparalleled im-pact in the growth and development. Inthe long run the repugnance to the em-ployee demands and international labourstandards can be serious trouble for In-dian IT industry.

In the long run the repugnance tothe employee demands and inter-national labour standards can beserious trouble for Indian IT in-dustry.

Theoretical Background

Trade unions represent associationof employees for the purpose of secur-ing improvements in pay, benefits, work-ing conditions etc through collective bar-gaining. The Trade Unions Act (1926)defines a trade union �as any combina-tion, whether temporary or permanent,formed primarily for the purpose ofregulating the relations between work-men and employers or between work-men and workmen or for imposing re-strictive conditions on the conduct of anytrade or business and includes any fed-erations of two or more Trade Unions�.The Trade Union Act which is a centrallegislation administered by the state gov-ernments, is applicable to all industriesin India including the IT industry. TradeUnion Amendments Act (2001) althoughrestrains the multiplicity of trade unionsthere are no provisions of barring IT in-

dustry or any other industry from for-mation of trade unions.

But why do we need trade unions inIT industry? The ILO governing body dis-cussed fundamental rights at work withtrade union formation activities as primafacie in their agenda (as quoted in the pressrelease by ILO on 29th March�10). Whethertrade unions are there or not, employeesrespond to the inherent alienation of workby resistance (Joseph 2010). The mainmotive of the trade unions is to put for-ward ideas across the management andget those converted into well-structuredplans through negotiations (Sinha 2007)and it is understandable and will be goodfor the industry to operate on a level play-ing field with other Indian industries(Subramanyam 2005). There can not beany industry which can quash trade unionformation activities and show disrespectto the labour laws. Centre of Indian TradeUnions (CITU) has forwarded variouscomplaints from employees in this sectorto the Labour Ministry for taking suitableaction (Rajan 2006).

There can not be any industrywhich can quash trade union for-mation activities and show disre-spect to the labour laws.

When a union is recognized, a pro-found change is created in the relation-ship between the white collar staff andtheir employer leading to transition froman �individualistic� to a more �collective�relationship (Marsh & Pedler 1993). Itis actually through collective bargainingthat individuals stand to gain much more

Nidhi S Bisht


than they would gain, if left to themselves(Tapomoy Deb 2009). ILO made an ob-servation way back, in the year 2003that the group dynamism in the IT indus-try in India may force establishment of atrade union movement in the near future(Devanathan 2009). Although there areformal associations, there is an absenceof ideology in the present era ofliberalisation, globalization and privatizationand therefore Indian trade unions are los-ing sympathy from various quarters(Jagannathan & Roy 2009). Key policyactors in the external and internal envi-ronment (contextual and individual), havebeen instrumental in the failure of theunionization effort in the beginning(Shantanu Sarkar 2008). However trendsare also showing lesser number of tradeunions functioning in the industry acrossthe world in the form of decline in thenumber of overall unions and the growthof lesser number of �Super Unions� (Startet al. 2010). Today trade unionism isshowing a new trend of associations withinternational interaction showcasing anew mechanism, as cross border tradeunion mergers. Trade unions are defend-ing their members by opting for multi-lat-eral link-ups via Global Trade Union Fed-erations to counter balance the economicstrength of multi-nationals in a globalizedeconomy (Gennard 2008).

The annual survey conducted by TheInternational Trade Union Confederation(ITUC) for the year 2009 shows that theemployees are facing glitches in organiz-ing trade unions and the Indian govern-ment is maintaining strong restrictions onthe right of employees to strike. The re-port has also put forward clauses of The

Essential Services Maintenance Act(ESMA) which enables the governmentto ban strikes in public enterprises anddemand conciliation or arbitration in cer-tain �essential� industries; without speci-fying what these essential industries are.Such policies pose a question mark overthe intentions of Indian government to-wards employee welfare.

Conceptual Framework Relating toTrade Unions in IT Industry

In the past discerning IT profession-als in India have been putting in effortsfor trade union formation in cities likeBangalore and Hyderabad and Kolkata.One of these early initiatives is the Unionfor Information Technology & EnabledServices (UNITES) head quartered inBangalore. UNITES is a part of globalunion UNI, which is a global union for skillsand services having 1.2 million workersworldwide. The union strives to create adistinct and cogent link between employ-ers & employees at all levels. Followingthe foot steps, another unionized body �TheIT Professional�s Forum� is made underthe aegis of UNI with dual objectives ofbetter working conditions and studyingimpact of social change and technology.Similarly West Bengal Information Tech-nology Services Association is set up un-der the patronage of CITU to safeguardwelfare of all employees in the IT & ITESservice sector, West Bengal.

In the existing landscape many of theprofessionals in Indian IT industry feel theneed of organized trade unions and sce-nario hints that there will be a progressiveincrease in such activities in other IT hubs



like Chennai, Delhi and Mumbai. So it�sobviously relevant that there should be ap-propriateness of union policies for the cat-egory of employees whose unions are com-peting for membership on an unprec-edented scale (Bowen et al.1993).

Though there is a burgeoning demandfor unionisation from the employees of thissector in India, the voice is subsided by theemployers and different employer associa-tions. These initiatives relating to regionalunions have been controversially debated inthe fraternity with no unanimous accep-tance. Any of these employees� associationshave not been endorsed by NASSCOMwhich is an apex regulatory body for IT in-dustry. Kiran Karnik, former president ofNASSCOM, pointed out that union forma-tion will not succeed in IT industry as it doesnot make sense in thinking about unionswhen workers are not exploited and haveaccess to management to redress their griev-ances. However the stark reality is notaliened with the remarks made the formerNASSCOM president. To contradict thestatement made by NASSCOM that theemployees of the IT/ITES sector did notwant trade unions, practicing profession-als in the industry were surveyed to seektheir opinion about trade unions.


Both descriptive and analytical typesof research designs have been used forthe study. The descriptive research hasbeen used to describe the state of affairsexisting at present and to discover opin-ion of the employees about trade unions.Analytical research design has been usedto analyze the existing facts from the data

collected for the research work. Employ-ees working in the industry were askedvia mail that if the presence of organizedtrade unions in the industry would pro-vide employees a better bargain aboutwork- related issues. In the close endedquestion, dichotomous scale was used totake responses from the professionals.The Dichotomous Thinking about pref-erence of trade unions in the softwareindustry has been used to assess the cog-nitive thinking style. The close endedquestion was further branched as an openended question, where employees wereasked to substantiate their opinion aboutpreference for trade unions. With a viewto taking insights from male and femaleemployees for existence of organizedtrade unions in the industry hypotheseswere formed which were tested with chisquare test (SPSS14.0 version).

The sample includes employees work-ing in Tier 1 and Tier 2 companies. Thetiered classification of the companies hasbeen adopted on the basis of the annualrevenue of the companies. Tier 1 Softwarecompanies are those having annual rev-enue of more than Rs.10,000 crores andTier 2 Software companies are those hav-ing annual revenue between Rs.10,000crores- 450 crores and 800 professionallyqualified male and female employeesworking in the industry in the age groupof 20-35 years from six prime geographi-cal locations viz. Delhi-NCR, Mumbai,Pune, Hyderabad Bangalore and Chennaiwere the targeted respondents. The sur-vey was conducted in the year 2009-2010where out of the 800 employees, 610 re-verted back, so the actual sample size isof 610 employees.

Nidhi S Bisht


Results & Implications

A whopping 67% of the employeeswho participated in the survey were infavour of organized trade unions. Theywere assertive that organized trade unionsin IT industry would provide employees abetter bargain in work related issues.Table 1 shows the demographic profile ofthe respondents who participated in thesurvey and Table 2 shows one sample sta-tistics for preference of trade unions inthe IT industry.

Table 1: Demographic Profile of the Respondents

Variable Categories % of respondentsGender Male 56

Female 44Age 20-25 years 39.5

25-30 years 52.2930-35 years 8.19

Location NCR 26.39Mumbai 16.06Hyderabad 16.72Bangalore 16.22Chennai 10.16Kolkata 14.42

Table 2: One-Sample Statistics for Prefer-ence of Trade Unions

N Mean Std. Deviation

Preference forOrganized TradeUnions 610 1.33 .471

A sizable proportion of women work-ers contribute to the total employee basein IT industry and to find out whetherthere is a difference in opinion for tradeunions in the case of male and femaleemployees, a null and an alternatehypoth-esis were formed.

H0- There is a significant differencein the opinion of male and female em-ployees regarding existence of tradeunions

H1- There is no significant differencein the opinion of male and female em-ployees regarding existence of tradeunions

Table 3: Preference for Trade Unions: Gender Cross Tabulation

Gender1 2 Total

Prefer Trade 1 Count 239 169 408Unions % within prefer 58.7% 41.3% 100%

Trade Unions% within Gender 69.88% 63.05% 67.0%

2 Count 103 99 202% within prefer 51.1% 48.9% 100%Trade Unions% within Gender 30.12% 36.95% 33.0%

Total Count 342 268 610% within prefer 56.2% 43.8% 100%Trade Unions% within Gender 100% 100% 100%

Table 3shows gendercross tabulationfor preferenceof trade unionsand Table 4shows chisquare statisticsfor categoricalv a r i a b l e samong malesand females inregard to pref-erence fortrade unions.



At 5% level of significance with onedegree of freedom, Pearson Chi-Squarevalue of significance is .244. So we ac-cept the null hypotheses that Male andFemale employees working in softwareindustry do not think differently in regardto trade unions.

Male and Female employees work-ing in software industry do notthink differently in regard to tradeunions.

Also we infer that most of the em-ployees irrespective of gender welcomethe suggestion of trade unions in the in-dustry.

The practicing professionals of ITindustry are veering for unionisation toaddress concerns related to their job andwork environment; along with economicconcerns. Different driving responsesgiven by employees when asked to sub-stantiate their opinion for organized tradeunions have been grouped and summa-rized below:

Long Working Hours: Many of thecompanies are flouting the weekly work-

ing hours norm set by InternationalLabour Organization. Employees work-ing in the industry are forced to work forextra hours as managers pressurize theirsubordinates in the name of shrinkingdeadline of projects.

Many of the companies are flout-ing the weekly working hoursnorm set by International LabourOrganization.

Work Load: Employees are pressur-ized by their superiors for more output sothat the company can maximize profits.

Compensation Related Issues:Parameters for performance based payare not clearly defined in the companies.Some companies are even paying lessercompensation to their employees goingfor overseas assignments in comparisonto what they are entitled for, as per theregulations of the host country for expa-triates (e.g. CSC India Pvt. Limited, Noidafor its employees working in Denmark).

Appraisal &Promotion Issues:Inspite of the methods like 360 degree andMBO for performance appraisal, most of

Table 4: Chi-square Tests for Preference of Trade Unions

Value df Asymp. Sig. Exact Sig. Exact Sig.(2-sided) (2-sided) (1-sided)

Pearson Chi-Square 1.356b 1 .244Continuity Correctiona 1.068 1 .301Likelihood Ratio 1.352 1 .245Fisher�s Exact Test .294 .151Linear-by-Linear Association 1.351 1 .245N of Valid Cases 267

a. Computed only for a 2x2 tableb. 0 cells (.0%) have expected count less than 5. The minimum expected count is 38.56.

Nidhi S Bisht


the companies lack maturity in HRprocesses to adopt such type of robustappraisal approach. It is seen that the entireappraisal of an employee is handled by theimmediate manager which generatesdiscontentment in the employee with noappropriate solution. Also it is observed thatmany deserving employees are overlookedduring the promotion process.

Many deserving employees areoverlooked during the promotionprocess.

Job Insecurity: Employees in theindustry are not secured about their jobsand many a times the companies are atliberty to fire employees on flimsygrounds without giving due notice. Em-ployees fret about being given pink slipbut feel totally helpless in such cases.

High Stress Levels: These jobs arevery stressful leading to mental exhautionand over-worked employees are unable tostrike appropriate work-life balance. How-ever when we see other industries, peopleare able to achieve work-life balance be-cause they are not over worked and em-ployers have a fear from trade unions.

Denial of Annual Leaves: Anothermajor problem in most of the IT compa-nies is that employees are not given an-nual leave although they are available onpaper. Even it can be seen that normallyan employee is not given leave for morethan 1-2 weeks yearly in spite of pendingleaves. This means that an employee can-not take a long break to de-stress himself/herself.

No Recognition for Extra Efforts:Extra efforts by employees in theorganisation are not accounted for andno compensation is given to the employ-ees in lieu of that.

Lack of Transparency & Equity:Organizational culture is spoiled due tolack of transparency and equity as equalopportunities are not provided to all theemployees. Some of the employees areeven harassed at times and haplessemployeees are forced to quit.

Similarly a plethora of issues need tobe addressed for employees� concernsand rights.

Amongst the responses for favoringtrade unions there were employees whowere not upfront about the organized tradeunions in the industry. They argued thattrade unions would not work in the indus-try, as all the companies have differentialpay scale. They feared that unions wouldlead to tussle on one or the other issue andafter sometime it may become a powergame handled by trade union leaders.There can be insurgence of off beam de-mands leading to corruption, donation andpolitics of all sort. Also high quality on-timedelivery of services, one of the main USP�sof Indian IT industry might get affected ifstrikes and related activities are allowed inthe industry; thereby endangering the cher-ished credibility built over decades.

It�s evident that there is a grow-ing need to draw a fine balancebetween the growth of the indus-try and the rights of the workmen.



Some of the employees are still ap-prehensive about trade unions but enlight-ened and responsible trade unions with aclear long-term vision can help to suit therealities of Indian IT industry. The roleof trade unions should morph from tradi-tional agitators to present day facilitatorsand bargainers. Not withstanding the dis-sension within the industry regarding ex-istence of trade unions, it�s evident thatthere is a growing need to draw a finebalance between the growth of the in-dustry and the rights of the workmen tosafeguard the integrity of the employees.It is required to closely monitor policiesof the companies related to work envi-ronment, social security provisions andother work related issues. Turning a blindeye to the reality of employee problemswill not help in the long run. We can haveunion agreements where unions can workcollectively to improve the work cultureof the organizations and the right to strikecan be reserved for extreme circum-stances. Trade unions acting as facilita-tors will create a level playing field forboth employees and employers to cometo a common forum for discussing issuesand find amicable solutions.

Organized trade unions would help inrationalising the work hours, compensa-tion and other issues in a much bettermanner especially for freshers workingin the industry who are the most exploitedones. Unions can provide activatedGrievance redressal machinery for theemployees by opening way to two waydialogues for solving the pending issuesand prove to be an institution for rede-fining the role of collective bargaining andeventually working along with employersnot against employers.

Conclusion

This paper has explored the insightsof practicing professionals regarding theexistence of organized trade unions inthe IT industry. Results of the literaturereview and the survey clearly indicatethat trade unions have found roots in theindustry and most of the employees arein favour of organized trade unions.However till now amongst NASSCOMinitiatives, there is no place for support-ing union activities. Unorganized unions,what ever may be the number, cannotsafeguard the interest of the employ-ees working in the industry. In the highlyinternationalised IT sector, we havetrade unions like UNI, PROSA in U.S,UK, Denmark and many other coun-tries across the globe. Therefore it�snot fair to say that trade unions in In-dia will conjure up chassis of strikesand lockouts. Employers in the indus-try should not feel that the existenceof trade unions will be a retrograde stepfor a flourishing industry and shouldadopt a progressive approach in favourof labour movement.

Organized trade unions will providea legitimate framework to the employ-ees for voicing their grievances and be-come more upfront for their rights towork. It is therefore, imperative that thepresent fear driven work environmentmakes way for a healthy and balancedwork environment in the Indian IT indus-try. Unionisation will lead to a more dig-nified work place atmosphere with free-dom of association and the effective rec-ognition of the right to collectivebargaining(FACB) being guaranteed to

Nidhi S Bisht


the employees. In the zeitgeist of global-ization Indian government and IT indus-try should endeavor to join the league forthe formation of organized trade unionslike in many other countries

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Yvan Barel, Sandrine Fremeaux & Grant Michelson

Yvan Barel is Associate Professor, University of Nantes,France. Email: [email protected]. SandrineFremeaux is Associate Professor of Law, Audencia NantesSchool of Management, France. Email:[email protected]. Grant Michelson is Professor ofHRM and Director of Research, Audencia Nantes School ofManagement, France. Email: [email protected]

The increasing numbers of women in thelabour market and the rise in dual-careercouples have prompted many organiza-tions to introduce programmes to help theiremployees balance their work and per-sonal lives. Positive employee perceptionsof such initiatives have tended to be as-sumed rather than demonstrated. Thisstudy examines how a proposal for a work-life balance programme is actually viewedby employees. Drawing on survey datafrom 300 employees in a shopping centrein France, the study finds evidence of arange of attitudes. These attitudes are in-fluenced not only by existing and poten-tial constraints, but also by the possibil-ity of the employees benefiting from childcare as well as their views concerning therole of the organization. Attitudes towardsthe provision of child care are particularlypositive when they seek to attenuate diffi-culties of work organization and are con-sistent with a flexible approach that takesemployees’ personal constraints into ac-count.


Introduction

The task of balancing workand personal life is arguably be-coming more challenging in manycountries as a result of the chang-ing nature of work precipitated byfactors including workplace reor-ganizations, technological de-velop-ments, and an expansion ofspaces and times pertaining towhere and when paid work canoccur (Lewis et al. 2007). Suchchallenges are increasingly evi-dent when placed in the contextof increasing number of womenin labour markets, the rise of dualcareer couples, higher divorcestatistics, the prevalence ofsingle-parent families, and an age-ing population. These broadersocietal trends oblige many em-ployees to seek new solutions forcombining work with their per-sonal and family lives. In addition,business firms can also developproposals intended to help theiremployees better balance theirwork and personal lives (Davis &Kalleberg 2006), even if someemployers might view them as

Employee Attitudes Towards Employer-Sponsored ChildCare: Evidence from France



disruptive (den Dulk & de Ruijter 2008).These employer-based proposals, whichto date have generally come under theterm of ‘family-friendly’ practices, maybe grouped according to three categories:flexible work policies, paid holidays orvacations, and assistance with child careand family health care.

It is with the last category of prac-tices, specifically the provision of em-ployer-sponsored child care services,that this paper seeks to engage. Theremight be a number of factors which mo-tivate employers to promote such ser-vices including strengthening the imageand communication of corporate values,along with the desire to mitigate absen-teeism, encourage employee involvementand loyalty, and facilitate future recruit-ment. Nonetheless, the real impact ofcompany and human resource initiativesin this area is less than evident. Somestudies have observed a reduction in turn-over and turnover intentions (Milkovich& Gomez 1976, Grover & Crooker 1995)or an increase in satisfaction (Kossek &Nichol 1992, Ezra & Deckman 1996),whereas other researchers did not ob-serve these effects (Miller 1984, Goff etal. 1990). What is even less well knownis how employees regard the provisionof child care arrangements by their or-ganizations. Because of the ostensiblebenefits they provide in helping to reducework-family conflicts, it might be gener-ally assumed that child care is universallydesirable and welcomed from an em-ployee perspective. However, this claimhas not always been evaluated in empiri-cal terms (for an exception, see Haar &Spell 2004). Therefore, the major contri-

bution of the paper is to investigate theviews of employees towards the provi-sion of employer-sponsored child carearrangements.

This study poses the following twomajor questions. First, is there a relation-ship between work–family conflict anda positive view of employer-driven childcare initiatives? A related question is:what role do organizational and personalsituations play in explaining this conflictand do the sources of work–family con-flict affect employees’ attitudes? Second,what other variables, independent of thework–family conflict, help to inform em-ployees’ views of employer-sponsoredchild care?

In order to better understand the re-actions of employees during the devel-opment of a work-life balanceprogramme, a survey was conducted ata large shopping centre (involving manydifferent small businesses) in France thathad introduced a proposal for the jointfinancing of a child care centre. The na-tional setting is one of established statelegitimacy and intervention in work regu-lations, including state infrastructure andsupport for child care and the 35 hourworking week. However, such public in-terventions do not necessarily mean thatwork-life conflicts are eliminated as thetraditional domestic division of labour inFrance remains strong (Windebank 2001,Crompton & Lyonette 2006) and the situ-ation of fewer work hours is not alwaysimproved for those who might work ‘un-social or flexible hours of work in ex-change of a reduction of their workingtime’ (Fagnani & Letablier 2004: 551).

Employee Attitudes Towards Employer-Sponsored Child Care: Evidence from France


Thus, it is precisely in such locations asshopping centres where work-family con-flicts and balance issues are more likelyto be exacerbated because of the natureof operations with their extended daysand hours of business.

The economic and social repercus-sions of work-family conflict andwork-life balance programmes arequite complex

The research findings show positivebut not overwhelming support for thechild care proposal. Indeed, there wereemployees who did not value such ar-rangements even when their personalsituations may have suggested this de-mand. From this, it is argued that theeconomic and social repercussions ofwork-family conflict and work-life bal-ance programmes are quite complex andneed to take into account the diversity oforganizational and personal situations.

Theoretical Framework &Research Hypotheses

To date, many studies (e.g. Duxburyet al. 1994, Saltzstein et al. 2001,McManus et al. 2002) have confirmed arelationship between a high work–fam-ily conflict and a positive reception to-wards child care proposals. This meansthat employees who face considerabledifficulties in balancing their work andpersonal lives would view such a proposalin favourable terms. Evidence from pre-vious research further suggests that em-ployees who feel overwhelmed and un-able to find the time for their different

activities will appreciate any ‘kind’ andsupportive gestures from their supervi-sor (Anderson et al. 2002, McManus etal. 2002). Thus, a positive response bysupervisors or managers towards sup-porting greater work-life balance amongtheir workforces will be welcomed byemployees. The link between a strongwork–family conflict and a positive viewof the employer-sponsored child careproposal will be explored in the follow-ing hypothesis.

Hypothesis 1: The stronger is thework-family conflict, the more positiveis the perception of a work-life balanceproposal.

To elucidate the role of the work–family conflict concept, our study willmeasure the effect of the independentvariables of the work–family conflict onthe attitudes towards an employer-spon-sored child care proposal. Frone et al.(1992) define two categories of indepen-dent variables: those related to individualand family requirements, and those re-lated to work and organizational require-ments. The logic underlying their modelis that family requirements can cause aspill-over of the family domain onto thework domain, and thus dissatisfaction atwork, whereas work requirements canimpinge on family time, and cause dis-satisfaction in the family. Building on thefindings of Frone et al. (1992), the cur-rent study categorizes the independentvariables of the work–family conflict byjuxtaposing individual and family con-straints alongside work and organizationalconstraints. We explore whether eachvariable increases the work–family con-



flict and whether each variable increasesemployees’ positive attitudes towards thechild care programme.

Individual & Family Constraints

Past research has shown that work-family conflict is linked to a number offactors including gender, parental status,number and age of children, and familystatus (Greenhaus & Beutell 1985,McManus et al. 2002). These variablesare examined below.

Because women devote on averagemore time than men to the domestic andeducational tasks in the home (Thomp-son & Walker 1989, Major 1993), it ishardly surprising that they are morelikely to complain of lack of time thanare men (Greenhaus et al. 1987, Kossek1990). If work–family programmesstrongly affect productivity when womenconstitute a higher percentage of thework force (Konrad & Mangel 2000), itis underst-andable that women will ex-press a greater work–family conflict andreport a particula-rly positive view to-wards work-life balance proposals.

Many studies also reveal that havingchildren and the number of children in-creases the work–family conflict (e.g.Kirchmeyer 1995). Moreover, the age anddiversity of ages of the children influencesthe perception of personal constraints(Frone & Yardley 1996). Having childrenwhose ages require different child caremethods will increase the work–familyconflict considerably (Duxbury & Higgins2001). It is therefore probable that work-ers with young children experience the

greatest work–family conflict and areparticularly receptive to any work-lifebalance programme. Similarly, single par-ents reportedly experience a greaterwork–family conflict than those living witha partner in that they have less help andpossibly fewer financial resources(McManus et al. 2002). This might sug-gest that they will be more favourable to-wards the balance proposal. This leads tothe following hypotheses.

Hypothesis 2a: Women employees,employees with young children or em-ployees who are single parents experi-ence the strongest work-family conflict.

Hypothesis 2b: Women employees,employees with young children or em-ployees who are single parents have amore positive perception of the work-lifebalance proposal.

Work & Organizational Constraints

Previous studies have revealed thatwork-family conflict is linked to time al-located to work, consideration of theworkers’ personal constraints by the su-pervisor or manager, and predictability ofwork schedules (Greenhaus & Beutell1985, Goff et al. 1990, Kossek 1990).

Kossek (1990), for example, assertedthat dedicating considerable time to workcan increase the difficulties of balancingone’s work life and personal life. Otherscholars in contrast, notably Evans &Bartolomé (1980), demonstrated thatperceptions of employees regardingwork-family conflict are not connectedwith the actual number of hours worked.



Thus, analyses based on the number ofhours worked alone are insufficient. Itmust be supplemented by assessments ofthe perceived time allocated to work.Workers who feel that they spend toomuch time at work may be experiencingthe greatest work–family conflict. As aresult, they might have a more positiveview of any work-life balance proposal.

The findings of Anderson et al. (2002)and McManus et al. (2002) remind us ofthe importance of support by the directsupervisor or manager. This support en-tails creation of a climate that favours dia-logue, variable work schedules, and toler-ance of some personal phone calls (Tho-mas & Ganster 1995), along with a ca-pacity to listen to employees and offerflexibility to workers in crisis situations(Goff et al. 1990, Warren & Johnson1995). Research has further shown thatsupport by the immediate supervisor in theform of empathy and flexibility or assis-tance attenuates the work–family conflict(Thomas & Ganster 1995, Warren &Johnson 1995). We may then infer thatthe absence of respectful practices in anorganization will increase work–familyconflict and the positive views towardswork-life balance programmes.

Finally, the ease of co-ordination ofwork hours, along with workers’ andtheir families’ use of time, can also re-duce work–family conflict (Greenhaus &Beutell 1985, Anderson et al. 2002). Wemay then ask whether the unpredictabilityof work schedules will increase the dif-ficulties of balancing an employee’s worklife and personal life. By implication, thismight suggest that employees with un-

predictable work schedules are morelikely to hold a positive view towardswork-life balance programmes than thoseemployees with more predictable workschedules. This discussion leads to thefollowing hypotheses.

Hypothesis 3a: The perception ofspending too much time at work, a lackof consideration of personal constraintsby the immediate supervisor or manager,and unpredictable work schedules in-creases the work-family conflict.

Hypothesis 3b: The perception ofspending too much time at work, a lackof consideration of personal constraintsby the immediate supervisor or manager,and unpredictable work schedules in-creases the positive perception of thework-life balance proposal.

Other Determinants

Employees’ positive views towardsa work-life balance proposal do notemerge exclusively from the independentvariables of the work–family conflict.The possibility of participating in such aprogramme and their opinion of the ‘ideal’organizational response may also contrib-ute to positive employee attitudes.

Even if employees were not experi-encing a strong work–family conflict atthe time of the study, they might antici-pate benefiting from a work-life balanceprogramme in the short or medium termfuture. Rather than the direct personaland work-related constraints that employ-ees experienced at the time of the study,it is the possibility of eventually benefit-



ing from the programme that could alsoexplain a positive view towards the em-ployer-sponsored proposal. Just as it isthose employees who would benefit im-mediately from this measure tend to per-ceive the programme most positively (seeGrover 1991), employees who plan tobenefit in the future from the child carecentre would also be expected to reportthe most positive response. From this, wederive the following hypothesis.

Hypothesis 4: Employees’ positiveperception towards a work-life balanceprogramme is positively related to thepossibility that they will ultimately ben-efit from the measure. Employee atti-tudes are not influenced solely by per-sonal interests. They can also be condi-tioned by their understanding of the‘ideal’ organizational response to thework-family conflict. The successivestudies by Kanter (1977), Orthner &Pittman (1986), and Kirchmeyer (1995)propose a classification of organizationalresponses to work-life conflict that rangefrom ‘separation’, to ‘respect’ and ‘inte-gration’. An organization applies the prin-ciple of ‘separation’ when it ignores thepersonal life of its employees. The prin-ciple of ‘respect’ described by Hall &Richter (1998) assumes that a boundaryis maintained between one’s work lifeand private life. The employer does notassume the personal responsibilities of theemployees on their behalf, but rather al-lows them to assume their own respon-sibilities by considering their personalconstraints and by allowing flexible workhours, for example. The ‘integration’ re-sponse is when a firm tries to help itsemployees meet the multiple require-

ments of work life and private life. Theproposed joint financing of a child carecentre reflects an integration perspective.

Employee attitudes are not influ-enced solely by personal interests.They can also be conditioned bytheir understanding of the ‘ideal’organiz-ational response to thework-family conflict.

Researchers have examined the ef-ficacy of each of these organizationalresponses or models (e.g. Hall & Rich-ter 1988, Kirchmeyer 1995). However,we know of no study that has attemptedto evaluate the perceptions of employ-ees concerning the ‘ideal’ organizationalresponse. Using the same typology, ourstudy aims to identify the influence ofemployee endorsement of the models of‘respect’ and ‘integration’ on their viewstowards work-life balance programmes.This leads to our final hypothesis.

Hypothesis 5: Employees’ positiveperception of a work-life balanceprogramme is positively related to em-ployees’ support for the models of respectand integration.

Figure 1 summarizes the variablesthat could explain a favourable responseby employees towards the proposedwork-life balance programme sponsoredby employers.

Method

The study explored the attitudes ofemployees towards an employer-spon-



sored work-life programme. The employ-ees were all based in a large shoppingcentre in Nantes, a city in the west ofFrance with a total population of about800,000 persons (wider metropolitanarea). The shopping centre contained asupermarket and 49 stores, where thecentre management was considering thepossibility of jointly financing a child carefacility with the businesses in the centre.In exchange for partial financing, eachparticipating business could obtain a pri-ority assignment of places in the childcare centre for one or more of their em-ployees’ children. The proposal was ex-pected to be well received in the shop-ping centre for at least three reasons :

1. The context of child care places: Ifthe first organization-provided childcare centres were set up in Francein the early 1980s, only a few French

private firms had taken the initiativeto create or jointly finance a child-care facility. In fact, it is very diffi-cult to obtain a place in a state-funded child-care centre because thenumber of openings is limited but yetsuch centres remain the preferredmeans by parents for taking care oftheir children. Giving the children ofemployees’ priority access can, as aconsequence, be seen as consider-able assistance even if the fee pro-posed was not necessarily advanta-geous.

2. The wide span of hours of the stores:Shop employees’ were expected tobe available for work from earlymorning through to late in the evening,including Saturdays and public holi-days. There is also pressure for Sun-day opening to be authorized (see

Fig. 1: Predictor variables of employee attitudes towards the work-life balance programme

Individual and family contraints

Work-related and organizational contraints

Strong work - family conflict Positive perception of the proposal

Possibility of benefiting from the measure

Endorsement of models of respect and integration

Other variables :

H5

H2a

H4

H3a

H3b

H2b

H1



Baret et al. 1999). This situation in-creases the need for child care ser-vices to be made available beyond thetimes established by state or publicchild care providers.

3. The proportion of female employees:The vast majority of employees at theshopping centre were women and thisgroup generally experiences morenonwork-related constraints than domale employees.

The survey questionnaire was admin-istered to the 650 employees of the shop-ping centre in 2003. During the question-naire distribution phase, we met all man-agers of the 49 stores to make themaware of our study. Of those distributed,311 questionnaires were returned. Of thisfigure, 300 questionnaires were usable(response rate of 46%). Of the respon-dents, 78% were female employees; 72%had a full-time, permanent employmentcontract; 69% were under the age of 36years; and 74% lived with a partner (mar-ried or de facto). In addition, 49% of re-spondents had children and these employ-ees had an average number of 1.21 chil-dren.

Respondents were told that the ques-tionnaire was intended to help research-ers understand employees’ perception ofthe work–family balance. It included foursections that covered their work situa-tion, personal situation, perceptions of thework life–personal life balance, and thework-life balance assistance measures.

Employees without children werealso encouraged to complete the ques-tionnaire. Although precautions were

taken, it is possible that the 311 employ-ees who completed the questionnairewere those who felt particularly con-cerned by the child care proposal. It islikewise possible that the perception ofemployees were more positive at thepoint of the development of the projectthan at the time of its subsequent imple-mentation. It is often at the implementa-tion stage that employees leave the sym-bolic sphere of influence and becomeaware of the concrete difficulties of itsapplication. As the study objective wasnot to identify the proportion of individu-als interested in the proposed child carecentre per se, but rather to understandthe determinants of the positive views ofemployees, possible over-representationof employees who were in favour wouldnot bias the validation of the researchhypotheses.

In order to discover the existence ofstatistical relationships between variables,either the Chi2 test for nominal variablesor the Fischer test when at least one ofthe variables was an ordinal variable(scaled), was employed. The p value isthe probability the real distribution of theresults is random (and thus not due tothe influence of the causal variabletested). The relationship is statisticallysignificant when p is less than 0.05 andvery significant when it is less than 0.01.

Measures

The measure of work–family conflictdoes not result from the lack of time andthe individual states of fatigue and irrita-bility appearing in the traditional measure-ment scales of inter-role conflict



(Greenhaus & Beutell 1985, Frone et al.1992). Rather, it is derived from the levelof satisfaction in the search for a worklife–personal life balance. The formula-tion of the question is similar to that usedin classic studies of the concept of satis-faction in life (Campbell et al. 1976, Rode2004): ‘How satisfied are you with thebalance you have achieved between yourwork life and personal life?’ The employ-ees’ level of satisfaction was measuredon a 4-point scale (‘very dissatisfied’,‘somewhat dissatisfied’, ‘somewhat sat-isfied’, and ‘very satisfied’), similar tothose applied by Ezra and Deckman(1996). The index varied between 1(strong work-family conflict) and 4(weak work-family conflict) with a theo-retical average of 2.5 corresponding to aneutral opinion.

In order to prompt employees to spe-cifically appraise their possible difficul-ties of balancing work and non-work, thequestion related to satisfaction in thequest for the work life-personal life bal-ance was preceded by two questions:‘How satisfied are you with your worklife?’ and ‘How satisfied are you withyour personal life?’

Positive perceptions towards the pro-posed child care facility in the shoppingcentre were measured using two crite-ria: perception of normality and employeepreferences. First, employees had to re-ply either ‘yes’ or ‘no’ to the question ofwhether they found it ‘normal’ thatplaces in a child care centre jointly fi-nanced by different organizations be as-signed to employees. Second, to createa hierarchy of employee preferences,

respondents were asked to specify theservices that would benefit them themost. They selected a maximum of threechoices from the following services: as-signment of a given number of places ina child care centre co-financed by em-ployers; occasional child care assistanceservice (for example, people that couldvisit the home if necessary); legal andfinancial consulting services; messengerservices (delivery); laundry services (drycleaning) and services for seniors. Thetwo criteria used to determine the per-ception of the proposal are complemen-tary. Analysis of normality is based onemployees’ judgments of the theoretical‘normality’ of the proposal, whereas theanalysis of preferences highlights theirindividual and practical interest in thechild care centre.

Satisfaction in the quest for a worklife–personal life balance and the percep-tion of the balance assistance proposalwere measured by the following personaland family variables: gender (male/fe-male), family situation (single or couple/married or de facto), the number of chil-dren (numerically open variable) and ageof children (under three years, betweenfour and six years, over seven years).The following work-related and organi-zational variables were also evaluated:average number of hours per week spentat work (numerically open variable), judg-ment of work time (too much time atwork; not enough time; just the rightamount of time); consideration of personalconstraints by the immediate supervisoror manager (never, sometimes, often, al-ways) and predictability of work sched-ules (never, sometimes, often, always).



To measure the extent that employ-ees believe they could benefit from theprogramme, two criteria were used. Thefirst question inquired if the employeeswho were most positive toward the childcare proposal had particular socio-demo-graphic characteristics. Second, employ-ees had to answer ‘yes’ or ‘no’ to whetherthey thought they would be interested inplacing a dependent in a child care centreover the short or medium term.

Consistent with the terminology usedby Kirchmeyer (1995), we consideredthat employees who endorsed the ‘sepa-ration’ model were those that answeredin favour of the item: ‘In your opinion,under ideal circumstances should themanager take into account work aspectsonly (each worker resolves his or herown personal constraints)?’ Employeeswho adhered to the ‘respect’ model wouldreply positively to the following item: ‘Inyour opinion, under ideal circumstancesshould a manager take into account thedemands of employees’ personal lifewhen planning work schedules (shifts,meetings, paid leave, etc.)?’ Finally, em-ployees who endorsed the ‘integration’model were deemed to support the item:‘In your opinion, in ideal circumstances

should a manager offer services to fa-cilitate balancing the personal life of theemployees (child care, legal services,etc.)?’ Although employees could befavourable to all three organizational re-sponses, attention will be especially di-rected towards those employees whosupported the models of ‘respect’ and‘integration’. This stands in contrast toemployees who indicated an exclusiveinterest in the separation model.

Results & Analysis

Of the 300 respondents, we foundthat 88% considered it ‘normal’ thatplaces in an employer-sponsored childcare proposal be given to employees(rather than the direct public). Moreover,the service preferences expressed byemployees indicate that the main expec-tations concern assistance services fordaily child care or for occasional supportto care for sick children (Table 1). Alongwith legal and financial services, theseconstituted over three-quarters (77%) ofemployee preferences. The lack of in-terest in messenger and laundry servicescan be explained by the fact that the shop-ping centre already offered practical so-lutions in both areas.

Table 1: Preferences in Child Care Assistance Services

Preferences Frequency (%)

Assignment of a number of places in a child care centre financed by employers 30

Occasional child care services (e.g., people that could visit the home if necessary) 28

Legal and financial consulting services 19

Messenger services (delivery) 11

Laundry services (dry cleaning) 8

Services to help seniors 4

TOTAL 100



Written comments on the surveyquestionnaire confirmed these resultsdespite the fact that a few employeesdemonstrated reticence with regard tothe child care proposal. Some employ-ees expressed feelings of injustice, see-ing in the work-family balance proposala source of discrimination. Among thoseemployees over 50 years of age, severalmade critical comments: ‘In our time, allthat didn’t exist. Today, everything is donefor young people’. If the project is seenas a discriminatory measure, it is becauseit is not intended to satisfy the needs ofall the employees. Only a few employ-ees could obtain priority for their childrenin the child care centre. Further, one em-ployee remarked that ‘not everybodyneeds child care on the work premises,

whereas everybody needs [more]money’.

Table 2 shows the findings do notsupport hypothesis 1, which posited thatthe stronger the work–family conflict,the more positively the child care pro-posal is viewed. On the contrary, work-ers who adopted a positive view of thechild care facility were on average moresatisfied in their quest for a work life–personal life balance.

Workers who adopted a positiveview of the child care facility wereon average more satisfied in theirquest for a work life–personal lifebalance.

Table 2: Impact of Work–family Conflict on Perception of the Child Care Proposal

It is normal for places in a child care centre financed Degree of satisfaction in the quest for workby organizations be assigned to employees life – personal life balance

Yes 2.68No 2.44

TOTAL 2.65

(p < 0.05)

Influence of Individual & FamilyConstraints

Consistent with previous studies (e.g.Goff et al. 1990, Konrad & Mangel2000), socio-demographic variables suchas gender, parental status, number andage of children, and family status influ-enced the work–family conflict.

Having children whose ages requiredifferent child care modes is anotherexplanatory variable of the work–family conflict.

(a) Gender: Women were significantlyless satisfied (mean = 2.58) than men(mean = 2.90) with the balance be-tween their work life and personallife (p < 0.05).

(b) Number and age of children: Thenumber of children appears to bevery significant in accounting forwork-family conflict, because ‘verydissatisfied’ or ‘somewhat dissatis-fied’ employees have on average1.51 children, compared with an av-erage of 0.92 children for those that



are ‘somewhat satisfied’ or ‘verysatisfied’ (p < 0.01). Having childrenwhose ages require different childcare modes is another explanatoryvariable of the work–family conflict.Employees who have at least onechild under 3 years of age and at leastone child over 4 years of age have alevel of satisfaction of 2.50, com-pared with 2.61 for employees whohave only one child or several chil-dren but these children are all over 4years of age (p < 0.05).

(c) Family status: Women without chil-dren, whether single or not, do notdiffer significantly in their opinions (p= 0.58). The level of satisfaction is2.57 in the case of single women and2.68 for women who are married orlive with a partner. Single employeeswith at least one child clearly expressa relatively greater difficulty in balanc-ing their work life and personal life(mean = 2.20) than women who livewith a partner (mean = 2.81) (p < 0.01).

Hypothesis 2a, which posited that thework–family conflict is linked to individualand family variables, was therefore sup-ported. The following personal variables– gender, number and age of children andsingle parent status – all influence thework–family conflict. We will now evalu-ate whether these variables also shapethe way employees perceive the pro-posed child care centre.

Hypothesis 2b, whereby a positive per-ception of the work-life balanceprogramme is linked to individual and fam-ily variables, also received support: womenemployees, parents with young children

(under 3 years of age), and employees whowere single parents all had a more positiveperception of the proposal (p < 0.05).

Influence of Work & OrganizationalConstraints

The number of hours worked perweek did not appear to be an importantcriterion among the surveyed employees(p = 0.53). Employees who were ‘some-what satisfied’ or ‘very satisfied’ with thework-life balance worked about the samenumber of hours (36.08 hours) per weekas those who were ‘somewhat dissatis-fied’ or ‘very dissatisfied’ with their work-life balance (36.54 hours per week).

It was therefore not the number ofhours worked that significantly affectedemployee satisfaction as Kossek (1990)has previously noted, but rather the per-sonal judgment of the time spent at work(p < 0.01). Employees who believed theyspent ‘too much time at work’ are leastsatisfied with the balance between theirwork and private lives (mean = 2.13).However, those who considered that theyspent ‘not enough time’ are hardly moresatisfied (mean = 2.25). Satisfaction issignificantly greater among employeeswho reported they spend ‘just the rightamount of time’ at work (mean = 2.82).

The claim that consideration by thedirect supervisor or manager of the em-ployees’ personal constraints reduces thework–family conflict was supported (p< 0.01). The level of employee satisfac-tion was only 2.0 when the manager‘never’ considers personal constraints. Itincreases to 2.73 if the manager ‘some-



times’ considers the employees’ personalconstraints, to 2.76 when it is ‘often’ thecase and 2.78 when personal constraintsare ‘always’ considered.

The assertion that unpredictability ofwork schedules increases the work–familyconflict was also confirmed (p < 0.01).Employees who felt that their schedules were‘never’ or ‘sometimes’ predictable were lesssatisfied with the work life–personal lifebalance (mean = 2.43) than employees whobelieved their schedules are ‘often’ or ‘al-ways’ predictable (mean = 2.76).

Hypothesis 3a, which stated thatwork–family conflict is related to the fol-lowing work and organizational vari-ables—judgment of too much time spentat work, absence of consideration of per-sonal constraints by the immediate su-

pervisor, and unpredictable work sched-ules—was therefore supported. The feel-ing of being overwhelmed by time spentat work had no significant effect on per-ceptions of the child care project: 88%of employees said that they spent ‘toomuch time at work’ and 89% of thosewho believed they spent ‘just the rightamount of time’ found the child care jointfinancing proposal to be ‘normal’.

If the lack of consideration of per-sonal constraints increases the work–family conflict, it does not necessarilycontribute to a positive attitude towardsthe child care facility. In fact, the inversephenomenon was observed. The lessemployees believed that their managersconsidered their personal constraints, theless ‘normal’ they considered the assign-ment of child care places (Table 3).

Table 3: Impact of Consideration of Personal Constraints on Perception of the Child careProposal

It is normal for places in a child care centre financed Degree of satisfaction in the questfor work

by organizations be assigned to employees life – personal life balance

YES 2.58

No 1.89

(p < 0.01)

Although it increases work–familyconflict, work schedule unpredictabilityalso does not significantly contribute to a

Table 4: Impact of Predictability of Work Schedules on Perception of the Child Care Proposal

It is normal for places in a child care centre financed Degree of satisfaction in the quest for work

by organizations be assigned to employees life – personal life balance

Yes 2.86

No 2.67

TOTAL 2.84

(p < 0.21)

positive perception of the proposed childcare centre (Table 4).



Therefore, hypothesis 3b, whichstated that the perception of the work-life balance programme is more positiveamong employees facing organizationalsources of work–family conflict, was notsupported. On the contrary, considerationof employees’ personal constraints bysupervisors and managers increased thepositive attitudes towards the proposedchild care centre.

Consideration of employees’ per-sonal constraints by supervisorsand managers increased the posi-tive attitudes towards the pro-posed child care centre.

Influence of Other Determinants

Two results illustrate the influence ofemployees’ personal plans. First, employ-ees who were reportedly in favour of the

child care proposal have particular char-acteristics: 69% of the employees with-out children versus 63% of employees whowere parents considered the assignmentof a given number of places in a child carecentre funded by businesses in the shop-ping centre as one of the services thatwould help them the most. Under-repre-sentation of employees who were parentsmay be related to the fact that they havealready chosen a child care system (forchildren under 3 years of age) or they nolonger need this service (for children over3 years of age). Employees under 35years of age who did not yet have chil-dren were considerably more likely thanthe other workers to intend to have a child,and were therefore more interested in thechild care centre. Moreover, employeeswho expressed their intention to enrol theirchild in a child care centre over the shortand medium term also viewed the proposalmuch more favourably (Table 5).

Hypothesis 4, whereby the positiveperception of the work-life balanceprogramme is linked to the possibility thatemployees will at some later stage ben-efit, was supported.

Turning to the ‘ideal’ organizationalresponse to the work-family conflict, at first

Table 5: Impact of the Possibility of Benefiting on Attitudes towards the Child care Proposal

The assignment of places in achild care centre financed

by business is normal

Yes No TOTAL

Respondent would be interested in enrolling a Yes 95% 5% 100%child in a child care centre over the short or No 79% 21% 100%

medium term TOTAL 88% 12% 100%

(p < 0.01)

glance the data indicates a significant pref-erence for the ‘respect’ model. In otherwords, the responses were as follows (inascending order): model of separation(22%); model of integration (60%); and themodel of respect (93%). Employeesfavourable to the logic of ‘integration’ werealso strongly in support of the model of ‘re-



spect’: all those who supported the ‘inte-gration’ model attached strong importanceto the principle of respect. On the otherhand, only 65% of employees whofavoured the ‘respect’ model also subscr-ibed to the integration model. It appears,then, that the model of integration was seen

Table 6: Combinations of Organizational Responses

Separation Integration Respect model Number Frequency

yes model model no or NR no or NR 24 8%Single no or NR yes no or NR 0 0%

combination no or NR no or NR yes 68 23%

Double no or NR yes yes 152 51%combination yes no or NR yes 24 8%

yes yes no or NR 0 0%

Triple yes yes yes 16 5%combination no or NR no or NR no or NR 16 5%

TOTAL 300 100%

NR = No Response

at a supplementary level, and somewhatdifficult to obtain, relative to the respectmodel. The various combinations (and re-sponses) are depicted in Table 6. The ‘re-spect’ model alone (or in combination withthe ‘integration’ model) attracted aboutthree-quarters of all responses (74%).

Different visions of the role of theorganization led employees to perceive theemployer-funded child care centre in dif-ferent ways (p = 0.01). Specifically, 93%of proponents of the ‘integration’ modeland 92% of employees that endorsed the‘respect’ model regarded the allocation ofplaces in a child care centre financed bybusiness to be ‘normal’, compared withonly 69% of employees who embraced the‘separation’ model. Thus, hypothesis 5,whereby the positive perception of thework-life balance programme is linked toemployee support for the models of ‘re-spect’ and ‘integration’, was supported.The results of the statistical analyses aresummarized in Figure 2.

Written comments on survey ques-tionnaires were consistent with the sta-tistical results on two major points. First,

employees did not necessarily see howthe proposed child care centre would re-duce the work–family conflicts that theyfaced. Thus, the link between the centreand the practical difficulties of reconcil-ing work and personal life was not al-ways evident. For example, employeeswho had experienced a strong work-fam-ily conflict because of the number anddiversity in the ages of their children, andwho did not plan to have other children,did not necessarily see the utility of sucha measure. Second, some employ-ees didnot see the value of a programme rootedin an integration logic when they experi-enced insufficient practices of respect.These initial steps of respect seem to bea necessary prerequisite for the imple-mentation and success of any measureaimed at supporting the ‘integration’model.

The Indian Journal of Industrial Relations, Vol. 46, No. 2, October 2010




ployees in the organization of their work-ing time. The highly variable and oftenunpredictable structure of work sched-ules remains a problem in this industrysector (Baret et al. 1999).

Conclusion

The study has found that if a rangeof personal constraints can influencework–family conflict, they do not guar-antee a positive attitude among employ-ees towards work-life balanceprogrammes (research question 1). Em-ployees’ vision of a proposed assignmentof child care places in a French shoppingcentre funded by employers depends notonly on individual and family constraintsbut also on their own personal plans, theirperception of the work organization andtheir concept of the role of the employ-ing organization (research question 2).

It would appear that the success ofany employer-driven proposal intended tobalance one’s work and personal lifeshould meet the following conditions.First, the work-life balance programmemust be tailored to the real needs of theemployees and the organization. Aprogramme must be designed to directlyaddress the aspirations of the largestnumber of its employees. Second, thework-life balance programme must beconsistent with the organization of workthat defends the fundamental rights ofemployees and takes into account theirpersonal constraints as much as possible.Businesses would only seem to benefitfrom offering priority places in a childcare centre to their employees as part ofan integration response if they first em-

phasize respect, and take into account theday-to-day personal circumstances oftheir employees.

In other words, the ‘respect’ modelis perceived as a consensual solution,whereas the model of ‘integration’ is con-sidered as somewhat more difficult toachieve. This conclusion is justified be-cause implementing a work-life balanceproposal as part of an integration re-sponse may exacerbate feelings of ineq-uity and discrimination among some em-ployees who will not benefit from themeasure. In future empirical studies, itwould be worthwhile to pursue the in-vestigation using the same methodologyon already established child care centres(provided by the employer) and on lesswell targeted work-family balanceprogrammes such as services for the eld-erly, for example. We also see potentialin doing comparative research both interms of reactions towards employer-funded and government-funded child carecentres, as well as studies that extendacross different national settings(Zeytinoglu et al. 2010).

Since work-life balance programmescan sometimes evoke diverse reactionsfor reasons that are not always easy toidentify, it is important that human re-source and other managers not assumethat measures that purportedly favour animproved work–life balance will have auniquely positive impact—both economi-cally and socially. Only once a ‘respect’approach is applied – especially by anemployee’s immediate supervisor – is itthen opportune to advance further to-wards adopting the ‘integration’ model.



Until this occurs, it would certainly beprudent for employers to limit communi-cation of any new initiatives that are stilltentative as to do otherwise might cre-ate expectations that will prove difficultto satisfy.

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Archana Tyagi & Veena Bansal


Role of Neo Five Factor Model of Personality inManagement Education: An Empirical Study


Archana Tyagi ([email protected]) is basedin Geneva and is associated with UBIS-Geneva as anadjunct faculty in the area of OB/HR. She is also aCoach for �Coach for Peace� (an international non-profit association) in Geneva. Veena Bansal isinvolved in conducting personality developmentprograms and teaching applied psychology in CCSUniversity Meerut, India.

The present study compares thepersonality profiles of male andfemale students of the full timemanagement programme of amanagement institute. It also ex-amines the differences in person-ality profiles of the male studentsof the full time and part time man-agement programmes. Significantdifferences were found betweenthe male and females students ofthe full time management prog-rammes . Female students have asignificantly higher score in fourfactors, namely, negative emo-tionality, openness to experience,agreeableness and conscientious-ness. The full time male studentswere low in negative emotional-ity. The part time male studentswere higher in conscientiousnessas compared to the full time malestudents.

It is often argued that, besides cog-nitive abilities, a blend of personality char-acteristics is necessary for people to besuccessful in education and eventually intheir jobs or careers (Smithikrai 2007).Recent research has demonstrated thatpersonality assessment contributesunique information to the prediction of jobperformance, over and above that of-fered by methods such as cognitive abil-ity testing and managerial assessmentcentres (Goffin, Rothstein & Johnson1996). Progress has been made in recentyears in understanding the structure andthe concepts of personality (Dunn,Barrick & Ones 1995). In principle, per-sonality measurement should sample el-ements or aspects of an individual�sbehaviour that are diagnostic of impor-tance characteristics of people in gen-eral. These diagnostic behaviour samplesshould on the one hand, allow us to com-pare different people against the samestandard and, on the other hand, allowus to interpret what a person has doneand predict what he or she will do in other

Personality assessment contrib-utes unique information to the pre-diction of job performance.

Role of Neo Five Factor Model of Personality in Management Education


important non-test situations. Both pro-cesses �comparisons among people andinterpretations of individual cases �areimportant tasks in industrial and organi-zational psychology (Hogan 1991).

With the introduction and generalacceptance of the five-factor model(FFM), also known as the �Big Five�(Goldberg 1990) in the early 1990s, re-search examining the link between per-sonality and work behaviour has beenintensified. The FFM dimensions havebeen replicated in an impressive seriesof studies across countries and culturesand have remained fairly stable over time(McCrae &Costa 1997, McCrae,Terracciano &78 Members of the Per-sonality Profiles of Cultures Project 2005,Salgado 1997, and Tett, Jackson, andRothstein 1991). These studies show thatthe most relevant personality factorswhich predict job performance are Con-scientiousness and Emotional stability.The five-factor model of personality isobtaining construct validation, recogni-tion, and practical consideration acrossa broad domain of fields, including clini-cal psychology, industrial-organizationalpsychology, and health psychology(Widiger & Trull 1997).

The most relevant personality fac-tors which predict job performanceare Conscientiousness and Emo-tional stability

Although the FFM has been re-searched in many areas of individual-or-ganizational psychology, most notablywith respect to job performance (Barrick,

Mount & Judge 2001), the relationshipof the FFM to management education ismuch less studied, especially in Asiancountries. And, moreover, no study ofsuch nature was done on a sample setcomprising Indians. Management educa-tion encompasses a broad range of phi-losophies, and issues concerned withhelping tomorrow�s manager�s to be moreeffective in their jobs. Indian manage-ment education has undergone a para-digm shift. There have been fundamen-tal and irreversible changes in theeconomy, outlook of business and indus-try, government policies and in themindset of the Indians in general. Thusthe objective of the present study is tocompare the personality profiles of malesand female students of the full time man-agement programme. It also examinesthe differences in personality traits of themale students of full time and part timemanagement programme. This study canbe a guiding tool in the hands of man-agement education institutes where it canbe used to effectively make tomorrow�sleaders understand the virtues of theircore behavioural style.

Personality Overview & RecentDevelopments

A person�s personality (that is a setof psychological traits) is a relativelystable precursor of behaviour; it under-lines an enduring style of thinking, feel-ing and acting (Hogan 1991, Mc Crae &Costa 1997). Recent years have wit-nessed a rebirth in the utility of person-ality testing in work settings. This resur-gence is largely due to the emergence ofa preferred taxonomy in personality clas-



sification. As discussed by Mount andBarrick (1995), �it appears that manypersonality psychologists have reacheda consensus that five personality con-structs, referred to as the big five, arenecessary and sufficient to describe thebasic dimensions of normal personality�.Interest has also increased due to re-search documenting empirical linkagesbetween the �big five personality con-structs and measures of individual per-formance and success in work organiza-tions in both North America (Barrick &Mount 1991, Hough et al 1990, Tett et al1991) and Europe� (Salgado 1997).

At the same time it is extremely rel-evant in today�s scenario to link person-ality and its implications to success inwork. Management education is one ofthe most prominent and accurate placesto understand the vocabulary of individualdifferences. In today�s scenario, it is dif-ficult to think of learning without lookingat the relationship between the person-ality type, user interface and actual per-formance in the work place. It is there-fore of significant interest to profile thetype preference in a management insti-tute with due respect to the differencesin terms of experience and gender (Tyagi& Bansal 2005).

Management education is one ofthe most prominent and accurateplaces to understand the vocabu-lary of individual differences.

For the present research work NEO-FFI instrument has been chosen. Thisinstrument has gained widespread accep-

tance in the academic-psychology com-munity. It also offers human resourcepractitioners a broadly applicable andpractical tool. NEO �FFI has been usedfor: team building ,employee selection, jobanalysis, training design, customer ser-vice, management and leadership devel-opment, coaching and counselling, careerdevelopment and conflict management toname a few. (Howard & Howard 1995).The NEO-FFI instrument has been cho-sen for the present study, which will ulti-mately help the management students innot only knowing and exploring the selfbut will at the same time, also help themin making wise and meaningful careerchoices in life.

NEO-FFI

The NEO-FFI dimensions are nega-tive emotionality, extraversion, opennessto experience, agreeableness, and con-scientiousness. Each of the Big Five di-mensions is like a bucket that holds a setof traits that tend to occur together. Thedefinitions of the five super factors rep-resent an attempt to describe the com-mon element among the traits, or sub fac-tors, within each �bucket�. The mostcommonly accepted buckets of traits arethose developed by Costa and McCrae(1992).Negative emotionality concernsthe degree to which the individual is in-secure, anxious, depressed, and emo-tional versus the degree to which the in-dividual is calm, self confident and cool.Extraversion concerns the extent towhich the individual is gregarious, asser-tive and sociable versus the extent towhich the individual is reserved, timid andquiet. Openness to experience defines



individuals who are creative, curious, andcultured versus those who are practicalwith narrow interests. Agreeablenessconcerns the degree to which individualsare cooperative, warm and agreeableversus the degree to which they are cold,disagreeable and antagonistic. Conscien-tiousness measures the extent to whichindividuals are hard working, organized,dependable, and preserving versus thedegree to which they are lazy, disorga-nized and unreliable

Literature Review

While a good amount of informationrelated to NEO-FFI in the context ofteam building, carrier guidance, conflictresolution and leadership development isavailable, there is considerably less re-search work available, which investigatesthe relationship between the NEO-FFIand post graduate management students.Educators of management institutes arefaced with the sensitive task of prepar-ing students for the rapidly changing de-mands of the 21st century. Understand-ing one�s own personality as well as thepersonality of others better, can make asignificant difference in one�s perfor-mance and advancement. Much of one�ssuccess depends on how well he or sheis able to understand and act on the per-sonality dynamics in one�s workplace(Howard & Howard 2001).

Relations between personality traitsand job performance are also of potentialinterest to personnel psychologists respon-sible for selecting or placing employees.Longitudinal research in history has dem-onstrated that personality characteristics

are important indicators of career perfor-mance. Since different features of per-sonality will be relevant to different typesof jobs; the personnel psychologist mustdetermine the optimal configuration oftraits for each position (Costa & McCrae1992).Two of the NEO PI-R(instrumentwith 240 items) domains �Openness andConscientiousness �promise to be of par-ticular interest in the area of educationalpsychology. Openness is moderately re-lated to measures of intelligence andsomewhat more strongly related to mea-sures of divergent thinking, an ability gen-erally thought to contribute to creativity(Mc Crae 1987). Important questions foreducational research focus on whetherstudents gifted with openness are morelikely to avail themselves of, and profit by,educational enrichment opportunities;whether their unconventionality is a sourceof misunderstanding and frustration in tra-ditional classrooms; and whether Open-ness itself can be increased by education,as the concept of the liberal education hastraditionally assumed (Costa & McCrae1992). Conscientious students on the otherhand, are well organized, purposeful andpersistent, and there is some evidence tosuggest that these traits lead to higher aca-demic achievement (Digman & TakemotoChock 1981).Conscientious people considerthemselves, and are rated by others as be-ing, more intelligent (McCrae & Costa1987), and scores on this domain scale maybe a useful supplement, as predictors ofacademic and later �life success. Barrickand Mount (1991) found that conscientious-ness, viewed as a broad construct waspositively related to performance across alljob criteria and across all occupationalgroups (Moon 2001).



Although recent research has pro-vided grounds for optimism, a close ex-amination of the findings from the quan-titative reviews reveals some discrepan-cies in the results. For example, Barrickand Mount (1991) found that conscien-tiousness was the only FFM trait to dis-play non-zero correlations with job per-formance across different occupationalgroups and criterion types. In contrast,Tett, Rothstein and Jackson (1991) foundthat only emotional stability displayednon-zero correlations with performanceand two other Big Five traits �agreeable-ness and openness- displayed higher cor-relations with performance than consci-entiousness. More recently, Salgado(1997) and Anderson and Viswesvaran(1998) found that two traits from the five-factor model �emotional stability andconscientiousness � displayed non-zerocorrelations with job performance.

In India, management education stu-dents come from various educationalbackgrounds like Engineering, Com-merce, Science and Art. Predicting thesuccess of any particular domain is anuphill task. The present study is done inthe field of Management, in a Manage-ment Institute with full time residentialstudents and part time management stu-dents. Full time management studentsare residential students who tend to com-plete their post graduation study in twoyears whereas part time managementstudents are those who work during daytime, and attend classes in the evening.Hence for part time students the totalduration of completing the course is threeyears. The present study aims to com-pare the Personality profiles of male and

female students of Full time ManagementProgramme. It also examines the differ-ences in personality profiles of male stu-dents of the full time and part time man-agement programme.

Sample

This study was conducted on the postgraduate students of a premier BusinessManagement Institute of Northern India.Out of 229 students there were 138 fulltime male students, 48 part time male stu-dents and 34 full time female students.There were only 9 female studentspresent in the part time PGDBM course.The selection process of the students inthis Management Institute is the sameacross the entire programme, that is theyhave to clear the written test followedby the Group Discussion and PersonalInterview. Educational backgrounds ofstudents were very diverse; ranging fromEngineering to as varied as art and com-merce. The average age of the totalmanagement students was 24 years. Forthe full time male students the averageage was 23 years, for the part time malestudents it was 27 years and for the fulltime female students it was 23 years.

Instrument

The Neo-Five Factor Inventory(NEO-FFI) developed by Costa and McCrae (1985) was used in the presentstudy. This inventory is a short form ofthe Neo-Personality Inventory. A 60item version of Form S of NEO-FFI wasadministered on the 229 students. Eachof the five factors was measured using12 items for a total of 60 items. McCrae



and Costa (1989) have verified the ex-istence of five independent personalityfactors with coefficient alphas of .70 orhigher for the items measuring each ofthe factors. It provides a comprehensiveassessment of the major dimensions ofpersonality and a broad sample of morespecific traits. It is a useful tool in al-most any research on personality cor-relates.

Procedure

NEO-FFI was conducted on the man-agement students as a part of their Or-ganizational Behaviour Course. And theprofile of each student obtained with thehelp of this instrument was shared anddiscussed through personal counselling,which was also one of the main objec-tives of this course. OrganizationalBehaviour subject is taught in the 1st se-mester of the 1st year of the PGDBM(Post Graduate Diploma in Management)Programme, for both the full time and parttime students.

Results

full time management students. Meanscore of NE (Negative emotionality) in-dicate that full time female students havehigher (M=21.79) scores than full timemale students (M=17.78) on this dimen-sion, and this was statistically significant(t = -2.81). This result indicates that fe-male management students feel the ef-fect of even a little workplace stressmore readily than most people and oftenserve as the �conscience� of those aroundthem. In tough times female students mayneed plenty of time to vent their frustra-tions, before they are ready to tackle thenext job challenge. Mean score of O(Openness to Experience) indicates thatfemales have higher scores (M=32.41)than full time male students (M=27.92)on this dimension, and this was statisti-cally significant (t= -4.99). This trait in-

Table 1: Differences in Mean values of Full Time Male & FemaleManagement Students

Total Males F/T Females F/T Value of FFI test

T Mean Mean Mean T Variable

18.92 17.78 21.79 -2.81 NE

28.49 27.92 32.41 -4.99 O

29.32 28.53 31.50 -3.24 A

34.16 32.83 35.15 -2.17 C

NE-Negative Emotionality; O-Openness to Experience; A-Agreeableness;C-ConscientiousnessValues of t (Student�s t) less than -1.96 or greater than 1.96 have beenshown

The first andforemost aim of thisstudy was to identifythe significant differ-ences in the person-ality profiles of maleand female studentsof the Full time Man-agement Prog-ramme. The resultpresented in Table 1shows mean valuesfor male and female

This result indicates that femalemanagement students feel the ef-fect of even a little workplacestress more readily than mostpeople and often serve as the �con-science� of those around them.



dicates that females are more open toexperience, and are willing to entertainnovel ideas and unconventional values,but they need to guard themselves againstgetting bored easily. Females are gener-ally assumed to be helpful, conflict averse

Females are more agreeable innature and they are more coopera-tive rather than competitive.

Table 2: Differences in Mean Values of Full Time & Part Time Man-agement Male Students

Total Male F/T Male P/T Value of

T Mean Mean Mean t Var NEO-FFI

34.16 32.83 37.23 -4.18 Conscientiousness

Values of t (student�s t) less than -1.96 or greater than 1.96 have been shown

pline, ambition, and focus. Mean scoreof C (Conscientiousness) trait indicatesthat female management students(M=35.15) have a higher score than fulltime male students (M=32.83) on this di-mension and this was statistically signifi-cant (t= -2.17).This trait suggests thatfemale students are better focused, scru-pulous, purposeful and punctual by na-ture. They are also strong willed and de-termined by nature.

and a team player.This was proventrue with the meanscore of A (Agree-ableness) trait ofthis study whichindicates that fe-males (M= 31.50)have a higherscore than full time male managementstudents (M= 28.53) on this dimension,and this was statistically significant (t =-3.24) too. This trait indicates that femalesare more agreeable in nature and theyare more cooperative rather than com-petitive. At the same time they should bewary of situations in which they are re-sponsible to someone with whom theydon�t share the same values, becausethey will find it difficult to stand up tothat person when they need to. Consci-entiousness is that trait of personalitywhich is linked with job success in manyresearch studies. It is that trait of per-sonality which is associated with disci-

Female students are better fo-cused, scrupulous, purposeful andpunctual by nature.

From the above table it is apparentthat Conscientiousness trait was distinc-tively higher in part time managementstudents than in full time managementstudents. Part time management studentsare those who work in the day time andstudy in the evening. Hence they need tobe really focused in their approach, tocarry on with their responsibility in theworkplace and also at the same to suc-cessfully pursue their studies. Table 2shows mean values for males and fe-males full time management students.Mean score of Conscientiousness indi-cates that part time management studentshave a higher score (M=37.13) than fulltime male students (M=32.83) on this di-mension, and this was statistically sig-nificant (t = -4.81). This result indicatesthat part time management students aremore focused and organized in their ap-proach.



Discussion

The primary focus of this study wasto better understand the relative impor-tance of various personal characteristics�emotional stability, extraversion, opennessto experience, agreeableness and consci-entiousness in a management institute.The results from this study attest to theutility of using this measure for variouspractical considerations i.e. selection,training, team building, conflict resolutionand leadership development. From thepresent study significant differenceswere found in the personality traits of fulltime males and females students of amanagement institute in Negative Emo-tionality, Agreeableness, Openness toExperience and Conscientiousness. Fe-male management students were foundto be on the higher side of NegativeEmotionality, which is indicative of moresusceptibility towards stress. This can bea warning for female management stu-dents who are going to be tomorrow�sleaders, to take life little easy. They needto seek out a position or role that is es-sentially stress free or has only occasionalstress. For the full time male manage-ment students it is good to know that theirability to perform calmly in high stresssituations is a very positive indicator intoday�s turbulent environment.

In the case of Conscientiousness,several studies provide robust support forits ,usefulness as a predictor of Job Per-formance (Barrick & Mount 1991, 1993Barrick, Mount & Strauss 1993). Femalemanagement students were found to besignificantly high on Conscientiousnessdomain in comparison of their male coun-

terparts. The Conscientiousness factorrefers to the person pursing fewer goalsin a purposeful way. In general focusedpeople tend to be high achievers.

Agreeableness dimension was foundto be significantly higher among femalemanagement students. The one situationin which Agreeableness appears to havehigh predictive validity is in jobs that in-volve considerable interpersonal interac-tion, particularly when the interaction in-volves helping, cooperating and nurtur-ing others. In fact in those settings, Agree-ableness may be the single best person-ality predictor (Barrick, Stewart, Neubert& Mount 1998, Mount et al 1998). An-other study by Antonioni (2001) has beenfound to be useful and relevant. The re-sults of this study suggest some strongrelationships between Big Five Person-ality factors and conflict resolution strat-egies. Managers who scored high onExtroversion, Agreeableness and Consci-entiousness tend to use a win-win col-laboration strategy in resolving conflictswith individuals who report directly tothem. The results of this study also sug-gest that individuals with specific person-ality traits may be more predisposed touse interpersonal conflict resolution strat-egies that match their traits. In thepresent research work it was found thatfemales had higher scores on Agreeable-ness and Conscientiousness than their

Agreeable individual team mem-bers will tend to exhibit interper-sonal skills such as the ability toresolve conflict and communicateopenly.



male counterparts. So the chances ofusing a win-win collaboration strategy willbe more applicable with the males. Tosummarize, agreeable individual teammembers will tend to exhibit interpersonalskills such as the ability to resolve con-flict and communicate openly.

In organizational settings, peoplewho are high on openness to experiencemay have both a broader range and depthof experience, and more of an appre-ciation of the merits of new ways ofdoing things and the potential for im-proving and changing the status quo,than individuals who are low on open-ness to experience. In the present study,as apparent from Table 1, Openness toExperience trait is significantly higheramong female management students ascompared to full time male managementstudents. Ultimately full time female stu-dents will be able to appreciate thingsthat are novel and unique in conjunctionwith their greater sensitivity. And rangeof experience may cause them to comeup with novel solutions to problems andcreative ideas to improve on currentfunctioning.

From Table 2 we can see the signifi-cant difference in the Conscientiousnesstrait. Part time management studentswere found to be more focused, orga-nized and a better planned in their ap-proach, in comparison to full time malemanagement students. It can be sugges-tive of role of experience in developingthis domain. Part time management stu-dents have to work in the day time andattend classes in the evening, whichforces them to be systematic and orga-

nized in their approach towards life ingeneral. Conscientiousness appears to bethe trait- oriented motivation variable thatindustrial �organizational psychologistshave long searched for, and it should oc-cupy a central role in theories seeking toexplain job performance (Barrick, Mount&Judge 2001

Recommendations & FutureDirections

Recent research has clearly demon-strated that personality is a valid predic-tor of job performance, particularly whenthe unique personality requirements of thejob have been accurately defined. Per-sonality assessment is extremely usefulin predicting contextual job performanceas opposed to the technical aspects ofjob performance (contextual perfor-mance being described, typically, as the�soft side� of work �interpersonal effec-tiveness, person-organization fit, etc).Finally, it is necessary to acknowledgethat the Five Factor Model, although acurrent paradigm, in the field of person-ality, is not unanimously accepted, andsome recent criticisms have been made.For example Block (1995) suggested thatfactor analysis is not an appropriate andsufficient base to decide the theoreticalconstructs of personality. Such criticismwas answered by Costa and Mc Crae(1995) and Goldberg and Saucier (1995),who said that the Big Five has been, re-produced a great number of times, withdifferent factor methods, by differentresearchers, with different instruments,and in different languages. Consequentlythe model is not exhaustive, but it man-ages to support a more comprehensive



explanation of various facets of humanpersonality (Salgado 1997).

The population of the sample size isonly 229 in number; however the resultscan be verified using a larger data set.The present research is being confinedto the data collection from one manage-ment institute only and hence the resultsobtained cannot safely be generalized.The data collection with the help of NEO-FFI from a few management institutesmay be able to give a wider applicationto the instrument with the full time andthe part time students.

References

Anderson, G. & Viswesvaran, C. (1998), �AnUpdate of the Validity of Personality Scalesin Personnel Selection: A Meta-analysis ofStudies Published after 1992�, Paper pre-sented at the 13th Annual conference of theSociety of Industrial and OrganizationalPsychology, Dallas.

Antonioni, D. (2001), Predicting Approaches toConflict Resolution from Big Five Person-ality, University of Wisconsin Madison,608: 265-70

Barrick, M, R. & Mount, M.K (1991), �The BigFive Personality Dimensions and Job Per-formance: A Meta-analysis�, PersonnelPsychology, 44: 1-26

Barrick, M.R., & Mount, M.K. (1993), �Au-tonomy as a Moderator of the Relation-ship between the Big Five Personality Di-mensions and Job Performance�, Journalof Applied Psychology, 78: 111-18

Barrick, M.R., Mount, M. K. & Strauss, J .P.(1993), �Conscientiousness and Perfor-mance of Sales Representatives: Test of theMediating Effects of Goal Setting�, Jour-nal of Applied Psychology, 78: 715-22

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Suitability of Instruction Methodology in InformativeManagement Course: An Empirical Study

Ashutosh Muduli & Vinita Kaura

Ashutosh Muduli is Associate Professor, School of PetroleumManagement, Pandit Deendayal Petroleum University, Gandhi Nagar,Gujurat. E-mail:[email protected]. Vinita Kaura isAssistant Professor, Faculty of Management Studies, ModyInstitute of Technology and Science (Deemed University),Laxmangarh, Sikar (Dt.), Rajasthan. E-mail: [email protected]

Instructor�s decision to choose a suitable in-struction methodology depends upon the ma-turity level of learners. Literature reveals theuse of andragogy or pedagogy as instructionmethodology. Self-concept of learner, experi-ence, learning motivation, orientation to learn-ing and domain of instruction are identified asthe factors of learner�s maturity level. The cur-rent study focused on examining the relativeeffectiveness of andragogy and pedagogy inteaching higher level informative course topostgraduate management learners of an au-tonomous business school in Rajasthan. Effec-tiveness of learning is examined through mea-suring learning output. Analysis of results re-veals relatively high maturity level of learnersand therefore the preferred methodology of in-struction shall be andragogy only. Instructorsare suggested to use practical applicationthrough use of videos, experiential exercises,and group activities in which learners can sharetheir experiences.

InstructionMethodology

Optimum learning out-come requires a perfectmatching of learners� learn-ing style and instructor�s in-struction methodology(Beder & Darkenwald1982, Brookefield 1984,Knowles 1984). The learn-ing style of learners is re-flected by the type andrange of activities thatlearners undertake to ac-quire domain knowledge(Beder & Darkenwald1982). Maturity of learnerand familiarity with the do-main of current learning in-fluence the learning style oflearner (Nadkarni 2003).Similarly, instruction meth-odology used by instructorscan be either pedagogical orandragogical. Theinstructor�s decision to useeither pedagogical orandragogical methodology



largely depends on the maturity level oflearners and the familiarity of the learn-ers with the domain. Instructors preferto use pedagogical methodology when thelearner�s maturity level is low and thedomain specific knowledge is negligible;whereas andragogical methodology ismore preferred for highly matured learn-ers and when the learner has more fa-miliarity with the domain.

Nadkarni (2003) commented that �fu-ture studies may examine the relativeeffectiveness of andragogy and pedagogyin teaching higher level courses to ma-ture learners. Further, research in teach-ing higher level courses to mature learn-ers mostly confined to either teachinggeneral management or decisional toolssuch as strategic management, market-ing management, organizationalbehaviour, accounting etc. (Govekar &Rishi 2007, Karns 2005, Nadkarni 2003,Bale &Dudney 2000). Research in ex-amining the relative effectiveness ofandragogy and pedagogy in teachinghigher level informative courses to ma-ture learners is very rare. Again, in Indiawe haven�t come across any empiricalstudy related to the above said areas. Thisresearch gap has encouraged the re-searchers to pursue the current study.

The current study focused on identi-fying the most preferred instruction meth-odology for an informative course titled

�Changing Business Environment� (CBE)offered to a batch of postgraduate man-agement learners of an autonomous busi-ness school in Rajasthan, India. For thispurpose, data were collected from thelearners to explore the preferred instruc-tion methodology. Secondly, maturitylevel and domain awareness of the learn-ers were ascertained to examine the dy-namics of learners style of learning. Fi-nally, effectiveness of learning is exam-ined through measuring learning output.Opinion study of the learner was con-ducted to know how far the learning hasbeen successful in realizing learners�objective.

Conceptualisation

Learning is an activity that learnersengage in to acquire particular skills andknowledge (Brookefield 1984). The typeand range of activities that learners un-dertake to acquire domain knowledgereflects the learning style of learners(Beder & Darkenwald 1982). The learn-ing style of learners is contingent on thedomain of instruction and the maturity oflearners (Nadkarni 2003). The basicpremise of the adult learning literature isthat the better the fit between the learn-ing style of learner and the instructionalmethodology of instructor, the morefavourable the learning outcomes result-ing from the activity of learning (Beder& Darkenwald 1982, Brookefield 1984,Knowles 1984). With this background inmind, an attempt is made here to describethe three important components of alearning activity that is learner�s matu-rity, instruction methodology and learn-ing outcome.

Andragogical methodology ismore preferred for highly ma-tured learners and when thelearner has more familiarity withthe domain.

Suitability of Instruction Methodology in Informative Management


Learner�s Maturity

Smith and Delahaye (1987) describedlearner�s maturity as including the amountof knowledge the learner already has inthe subject area, the level of interest andneed to acquire the learning, the degreeto which the learner is willing to acceptthe responsibility to learn, and the degreeof skill in learning the learner possesses.Stuart and Holmes (1982) suggest thatlearner �s maturity consists of thelearner�s past learning experiences, ex-pectations, attitudes to the forthcominglearning event, and prior knowledge.Nadkarni (2006) observed that learnermaturity consists of the learner�s pastlearning experience, expectations, atti-tudes to the forthcoming learner event,and prior knowledge of the domain. Onthe basis of the above literature, weidentified self-concept of learner, expe-rience, learning motivation, orientationto learning and the amount of domainknowledge as the characteristics oflearner�s maturity.

Self- Concept of the Learner

Self-concept of the learner refers toself-directed learning. A self-directedlearning is a process in which individualstake the initiative, with or without the helpof others, in diagnosing their learningneeds, formulating learning goals, identi-fying human and material resources forlearning, choosing and implementing ap-propriate learning strategies, and evaluat-ing learning outcomes (Knowles 1970).The self-concept of learners varies froma passive recipient of knowledge to self-directed and responsible learning. The

movement from dependency to self-direct-edness is, what Lieb (1991) considered asthe resultant of �the normal maturing pro-cess of life�.

Experience

Experience influences learner �slearning style. As a person matures heaccumulates a growing reservoir of ex-perience that becomes an increasing re-source for learning. As Marienau (1999)observed �a hallmark of an educated per-son is the capacity to reflect on and learnfrom experience such that the learningyields meaningful interpretations of lifeoccurrences and informs future action�.

Motivation

Learning motivation has been definedas the willingness to attend and learn ma-terial presented in a developmental pro-gram (Noe 1986). As a person matureshis readiness to learn becomes orientedincreasingly to the developmental tasks ofhis social roles. Learners are ready to learnthose things they need to know in order tocope effectively with life situations.

Orientation to Learning

Learning preferences of the learnerdepends on goal orientation of thelearner. As a learner matures, his timeperspective changes from one of post-poned application of knowledge to imme-diacy of application and accordingly hisorientation towards learning shifts fromsubject-centred to problem centred. Forexample, an adult learner knows whatthey want before they enrol in the course,



because they know where they want togo. They appreciate a course that is wellorganized and has goals delineated clearlyand preferably congruent with their own(Lieb 1991). They prefer learning that willhelp them perform tasks that they con-front in their life situations.

As a learner matures, his time per-spective changes from one of post-poned application of knowledge toimmediacy of application and ac-cordingly his orientation towardslearning shifts from subject-centred to problem centred.

Domain Knowledge

Learners� level of domain knowledgealso acts as a determinant of learningmaturity level. As Smith and Delahaye(1987) observed that the amount ofknowledge the learner already has in thesubject area affects the maturity level ofthe learner. The inherent contrast be-tween different subjects such as pureversus applied, quantitative versus quali-tative, or analytical versus perceptualsuggests that more subtle differencesmay prevail across different disciplinessuch that the dynamics of teaching andlearning may manifest themselves incharacteristic ways (Nadkarni 2003).The results of studies evaluating the re-lation between instructional styles andlearning outcomes in subjects such asmathematics and statistics that are quan-titative, conceptual, and analytical maynot be applicable to management domainssuch as organizational behaviour or stra-tegic management that are qualitative,

perceptual, and practical in orientation(Nadkarni 2003). Marketing educatorshave also given considerably more empha-sis to active (Wright, Bitner & Zeithamel1994) and experiential learning activities(Gremler et al. 2000, Kennedy Lawton &Walker 2001, Smith & Van Doren 2004).

Andragogical & PedagogicalMethodologies

Knowles (1984) identified two con-trasting instructional styles in adult edu-cation: andragogical and pedagogi-cal. Pedagogy is derived from the Greekwords paid (child) and agogus (lead oraccompany) while andragogy is derivedfrom aner (adult) and agogus. Pedagogyinvolves adults leading or accompanyingchildren while andragogy is characterizedby adults leading adults (Bale & Dudney2000). Pedagogical styles are moreteacher-driven and directed methods,whereas andragogical methods are morelearner-centered or self-directed styles(Nadkarni 2003). Knowles (1984) com-pares the assumptions of pedagogy andandragogy as follows:

1. The role of the child is that of a depen-dent learner; the adult, due to the matu-ration process, is a self-directed learner.Adults have a need to �take charge�of their learning and we as teachersshould nurture this natural tendency.

2. Children have no experiences of worththat they can bring to the learning set-ting; adults, as they grow and mature,accumulate a wealth of experiencesthat can be a rich resource for learning.

3. Children are brought, or made to go,



to school when society deems it time;adults come to learn when they arecompelled by the need to cope with a�life change� or to satisfy some otherreal-life circumstance.

4. Younger learners see learning as amatter of accumulating subject mat-ter content that will be used whenthey are older; adults view learning asa means to improve their competencylevel, and they want to apply whatevernew knowledge immediately.

Knowles argued that andragogicalmethods are universally more appropriatefor adult education than pedagogical meth-ods. This is because adult learners are moreoften the initiators of their own learningexperience; they exert more control overlearning processes and outcomes, andtherefore prefer more power and autonomyin the learning context (Brim &Wheeler1966). Unlike the practice of pedagogy,which is teacher-centered, andragogy islearner-centered, with the role of theteacher primarily that of a facilitator.

Learning Outcome

Outcomes are the consequences ofparticipating in a particular project, course,

or program, such as an academic degreeprogram. Learning outcomes are the re-sultant of an interaction between the learn-ing style of learners and the instructionalmethodology of instructor. The better thefit, the more favourable will be the learn-ing outcomes. (Beder & Darkenwald 1982,Brookefield 1984, Knowles 1984).

Student-learning outcomes provide ameans for clearly stating the expected out-comes of instruction, or more broadly, theexpected outcomes of a program. Measur-ing learning outcome requires both qualita-tive and quantitative measures to beadopted by the instructor. Qualitative mea-sures of learning outcome are better indi-cators of student learning than quantitativemeasures such as examination performance(Ramsden 1992, 2003). Student satisfac-tion, achievement, persistence, and reten-tion have been used as qualitative measures(Beder & Carrea 1988, Charkins et al. 1985,Conti & Welborn 1986, Graham 1988),whereas quantitative measures like exami-nation results, grades etc. have been usedas a measure of learning outcome (Watkins& Hattie 1981, Entwistle & Ramsden 1983).A common set of learning outcomes thatmay be found in a business degree pro-gram is provided in Table 1.

Table 1: Learning Outcomes Found in a Business Program

l Analytical and statistical skills (problem solving)l Communication skills (oral and/or written)l Content specific knowledge (e.g., financial theories, analysis, reporting, and markets) Critical

thinking skillsl Ethical understandingl Global awarenessl Group and individual dynamics in organizationsl Motivational and leadership skillsl Multicultural and diversity understandingl Organizational skillsl Use and management of information technology



Learner Maturity & InstructionMethodology

Stuart and Homes (1982) argue thatlearner maturity is an important consider-ation in selecting appropriate style of in-struction. In other words, selection of in-struction methodology (i.e. andragogy orpedagogy) to teach an informative input topost graduate management learners willdepend on learners� level of maturity. Theself-concept of learners varies between theandragogical and pedagogical methods.The pedagogical method assumes learnersprefer to play the role of passive recipientof knowledge. On the other hand, theandragogical method assumes that learn-ers prefer to be self directed and educa-tors have the responsibility to encourageand nurture the transformation from depen-dency to self-directedness (Knowles 1970).

The importance of experience alsodiffers between andragogical and peda-gogical methods. In the pedagogicalmethod, learners are assumed to havelimited experience to assist in learning.In contrast, andragogy assumes learnershave many experiences that assist in thelearning process ( Knowles 1970). Peda-gogy concentrates not on learning fromexperience, but instead on instituting anexperience base (Forrest & Peterson2006). While, andragogical teachers as-sume learners have experiences, use ofsuch experiential knowledge is necessaryfor the education process to be effective(Forrest & Peterson 2006).

Assumptions made on learner�s mo-tivations or readiness to learn, help de-fining the differences between the two

learning models. When describing readi-ness to learn, Knowles (1970) discusses�teachable moments�. Pedagogy as-sumes that learners tend to experienceuniform teachable moments; therefore,standard curricula combined with exter-nal motivations are considered appropri-ate. According to Knowles teachablemoments for adults are not uniform.Andragogy implies that a curriculummust be flexible enough to capture teach-able moments, with adjustment for chang-ing needs. Furthermore internal factorstend to be more motivational for adults.Under pedagogy, learners assume thatchosen course topics will help them toacquire skills that will be relevant anduseful in the future. Under andragogy,learners tend to seek immediate rel-evance in education. Any knowledgegained tends to be quickly applied to thelives of adult learners; therefore, anandragogical curriculum focuses on com-petency development that is immediatelyrelevant to adult learners.

Domain & Learning Output

Instructor�s choice of instructionalmethodology depends on domain as well.As Nadkarni (2003) observed �the inher-ent contrast between different subjectssuch as pure versus applied, quantitativeversus qualitative, or analytical versusperceptual suggests that more subtle dif-ferences may prevail across differentdisciplines such that the dynamics ofteaching and learning may manifest them-selves in characteristic ways�. For ex-ample, in lower level introductorycourses, the instructor�s primary functionis to build strong conceptual understand-



ing in the learners. A pedagogical methodof instruction giving more thrust to con-cept building through lecture basedmethod seems more appropriate for suchkind of courses.

A myriad of studies have shown thatinstructional context strongly influenceslearning outcomes such as student satis-faction, achievement, persistence, andretention (Beder & Carrea 1988,Charkins et al. 1985, Conti & Welborn1986, Graham 1988). Attempting to linkinstructional methodology, domain andlearning output, Miglietti and Strange(1988) commented that �the importanceof disciplinary differences in assessingthe outcomes of teaching styles alwaysmediated through learning styles�. Em-pirical studies in learning also concludedthat �the relation between instructionalmethodology and learning outcomes insubjects such as mathematics and statis-tics that are quantitative, conceptual, andanalytical may not be applicable to man-agement domains such as organizationalbehavior or strategic management thatare qualitative, perceptual, and practicalin orientation� (Nadkarni 2003). Market-ing educators have also given consider-ably more emphasis to active (Wright,Bitner & Zeithamel 1994) and experien-tial learning activities (Gremler et al.2000, Kennedy, Lawton & Walker 2001,Smith & Van Doren 2004).

On the basis of the above discussion,we propose the following hypotheses forthe study:

Null Hypothesis 1. There is no sig-nificant difference between andragogy

and pedagogy (instruction methodology)for informative inputs for Post Graduate(PG) management learners. The abovehypothesis leads to the following sub hy-pothesis:

Null Hypothesis 1a. There is no sig-nificant difference between andragogyand pedagogy (instruction methodology)with respect to self concept for informa-tive inputs for PG management learners.

Null Hypothesis 1.b. There is no sig-nificant difference between andragogyand pedagogy. (instruction methodology)with respect to experience for informa-tive inputs for PG management learners.

Null Hypothesis 1.c. There is no sig-nificant difference between andragogyand pedagogy ( instruction methodology)) with respect to motivation/readiness tolearn for informative inputs for PG man-agement learners.

Null Hypothesis 1.d. There is no sig-nificant difference between andragogyand pedagogy (instruction methodology)with respect to orientation to learning forinformative inputs for PG managementlearners.

Null Hypothesis 2. Learning outcomefor the informative inputs for PG man-agement learners is not very high.

Methodology of the Study

Primary and secondary data wereused for this research. Primary data iscollected from an autonomous BusinessSchool in Rajasthan, which is exclusively



for women. A questionnaire was admin-istered on MBA part I learners in springsemester. Total strength in MBA part Iwas114 learners of whom 95.6% submit-ted satisfactory responses.

Measures

The survey instrument included itemsthat assessed Preferred Learning Style (24items) and Learning Outcome (5 items).To measure Preferred Learning Style, weused Student�s Orientation Questionnaire(SOQ) used by Bale & Dudney (2000).The SOQ was a modification of an earlierquestionnaire developed by Hadley (1975).Hadley�s (1975) questionnaire contained 25andragogical and 25 pedagogical items(Deveci 2007). The modified SOQ usedby Bale & Dudney (2000) has 41 state-ments, with 20 being andragogical and 21being pedagogical. We further modifiedSOQ for our research and confined thenumber of questions into 24 statements, 12being andragogical and 12 being pedagogi-cal. The statements were scored on a 5-point Likert scale ranging from 5 (almostalways) to 1 (almost never). Cronbach�salpha test is conducted to test the reliabil-ity of data and its value is found .63 (Table2). Learning Outcome is measuredthrough an instrument containing five items:course coverage, course relevance, instruc-tion methodology used, evaluation systemused and learning from the course. Respon-dents were asked to share their satisfac-tion through a 5-point Likert scale rangingfrom 5 (excellent) to 1 (very poor).

Table 2: Reliability Test

Cronbach�s alpha .63

Statistical Analysis

For the purpose of analysis of data, de-scriptive analysis, paired sample T test analy-sis and one sample T test analysis were usedon a standardized data set using SPSS ver-sion 11.0 and MS Excel. Tables 3- 6 showmeans, standard deviations, paired sampleT test analysis and one sample T test analy-sis. Paired sample T test analysis was doneto investigate the significant difference be-tween andragogy and pedagogy (instructionmethodology), and significant differencebetween andragogy and pedagogy (instruc-tion methodology) with respect to self- con-cept, experience, motivation and orientationto learning for informative inputs for PGmanagement learners. One sample T testwas done to measure the learning output.Paired sample T test is analyzed to investi-gate the significant difference betweenandragogy and pedagogy (instruction meth-odology). The paired sample T test analysisindicates that for the 114 subjects, the meanscore on the andragogy methodology of in-struction (M=3.97) was significantly greaterat the p<.05 level (note: p=.000) than themean score on the pedagogy methodologyof instruction (M=3.44). With this the nullhypothesis 1, that is, �there is no significantdifference between andragogy and peda-gogy for CBE course� is rejected. This im-plies that the preferred instruction method-ology is andragogy for CBE course. In otherwords, the instructor may use more experi-ential learning based methodology than lec-ture and discussion based methodology forteaching CBE to the learners.

The preferred instruction meth-odology is andragogy for CBEcourse.



Table 3: Paired Sample Statistics between Pedagogy and Andragogy

Mean N Std. Deviation Std. Error Mean

Pair 1 Pedagogy 3.4495 109 .55254 .05292Andragogy 3.9725 109 .51745 .04956

Table 4: Paired Samples Test between Pedagogy and Andragogy

Paired Differences t df Sig.

Mean Std. Std. 95% ConfidenceDeviation Error Interval of

Mean the Difference

Lower UpperPair 1 Pedagogy - -.5229 .68848 .06594 -.6536 -.3922 -7.930 108 .000

Andragogy

Table 5 : Paired Samples Statistics among Learners Maturity level across Pedagogy - Andragogy

Mean N Std. Std.Deviation Error Mean

Pair 1 And Self Concept 3.9174 109 .81795 .07835Ped Self Concept 3.4862 109 .93902 .08994

Pair 2 And Experience 3.7064 109 .71106 .06811Ped Experience 3.5229 109 .80042 .07667

Pair 3 And Motivation 3.7798 109 .69865 .06692Ped Motivation 3.7615 109 .76859 .07362

Pair 4 And Orientation 4.1284 109 .70843 .06786Ped Orientation 3.0459 109 .79798 .07643

Paired sample T test is conducted toinvestigate the significant difference be-tween andragogy and pedagogy (instruc-tion methodology) with respect to self-concept, experience, motivation and ori-entation to learning. The paired sample Ttest analysis indicates that the mean scoreon the andragogy methodology of instruc-tion with respect to self-concept (M=3.91)was significantly greater at the p<.05 level(p=.000) than the mean score on the peda-gogy methodology (M=3.48), the meanscore on the andragogy methodology of

instruction with respect to experience(M=3.70) was significantly greater at thep<.05 level (p=.047) than the mean scoreon the pedagogy methodology (M=3.52),the mean score on the andragogy meth-odology of instruction with respect tomotivation (M=3.77) was insignificant atthe p<.05 level (p=.000) than the meanscore on the pedagogy (M=3.76), andandragogy methodology of instruction withrespect to orientation to learning (M=4.12)was significantly greater at the p<.05 level(p=.000) than the pedagogy methodology



Table 7: Learning Output-One Sample Test

Test Value= 3 t df Sig.


Mean the Difference

Lower UpperVar Learning 4.25 .124 .055 1.10 1.41 22.59 108 .000

Output

(M=3.04). With this the null hypothesis1.a., 1.b., and 1.d. are rejected, where asthe null hypothesis 1.c. is accepted. Thismeans that the learners are self directed,they bring practical experience andknowledge to the educational activity andare problem or performance centred. It

is also proved that learners are not moti-vated by internal factors such as need tolearn. Rather, they seem to be more mo-tivated by external factors such as grade,placement etc.

In Table 7, one sample T test is con-

Table 6: Paired Samples Test among Learners Maturity level across Pedagogy - Andragogy

Paired Differences t df Sig.


Mean the Difference

Lower UpperPair-1 And Self .4312 1.18139 .11316 .2069 .6555 3.811 108 .000

ConceptPed SelfConcept

Pair-2 And SelfConcept .4312 1.18139 .11316 .2069 .6555 3.811 108 .000Ped SelfConcept

Pair-3 AndExperience .1835 1.04673 .10026 .0152 .3822 1.830 108 .047PedExperience

Pair-4 AndReadiness .0183 1.00905 .09665 -.1732 .2099 .190 108 .850PedReadiness

Pair-5 AndMotivation 1.0826 1.12323 .10759 .8693 1.2958 10.062 108 .000PedMotivation



ducted to investigate the significant dif-ference between Instruction methodol-ogy (andragogy/ pedagogy), Maturitylevel (high/low) and Learning output forinformative inputs for PG Managementlearners. The result of the analysis indi-cates that the mean satisfaction of theclass (M=4.25) was significantly higherat the p<.05 level (p=.000) than theinstructor�s goal (satisfaction level) of 3from a five point scale. With this the nullhypothesis 2. i.e. �Learning outcome forthe informative inputs for PG Manage-ment learners are not very high� is re-jected. This means that if the instructoruse andragogy methodology of instruc-tion the learning output will be very high.

Discussion

The results of the study proved thatandragogy is the most suitable method ofinstruction for teaching an informativecourse to post graduate managementlearners. The results support the tradi-tional view on adult education that self-directed, experiential instructional meth-ods are most suitable for adult learners(Brookefield 1984, Knowles 1984).

The results of the study provedthat andragogy is the most suitablemethod of instruction for teachingan informative course to postgraduate management learners.

The suitability of andragogy for thegiven population is primarily based on thematurity level of the learners. The resultsof the study indicates that the maturitylevel of the learners pursuing a post-

graduate management course is relativelyhigh for three learners maturity dimen-sions i.e. self -concept, experience, andorientation to learning except motivation.The high maturity level across self-con-cept, experience, and orientation to learn-ing is because of the deliberately chosencareer through rigorous admission tests.When learners intentionally chose thecareer of management and thereforeadmitted in to a management programmefrom a self funded autonomus B school(where the fees is relatively higher thangovt. funded B� Schools), the learners areexpected to be self-directed. The find-ing that the learners bring practical ex-perience and knowledge to the educa-tional activity is quite surprising consid-ering the low level of experience of thelearners. However, perhaps earlier ex-posure to such informative courses, par-ticularly at the graduation level mighthave helped the learners to bring moreexperience to the class The finding thatlearner�s orientation to learning is high,is quite natural and expected becauselearners of a professional programme areexpected to be problem or performancecentred. However, the results do notagree with the assumption that learners�maturity with reference to motivation isvery high. The result proved that learn-ers are not motivated by internal factorssuch as need to learn. Rather, they seemto be more motivated by external factorssuch as grade, rigid structure etc. Again,the result is quite surprising. May be thisis because the population of the study isfemales only. In Indian culture, the soci-ety considers the marriageable age ofaverage females as 22-24. By the end ofa PG management programme, the stu-



dents are expected to be very close tothe said age level. This might have low-ered the internal motivation of the learn-ers resulting in more concern for exter-nal motivation like grades or final result.

The result proved that learnersare not motivated by internal fac-tors such as need to learn. Rather,they seem to be more motivatedby external factors such as grade,rigid structure etc.

Limitations

First limitation is that the sample unitconsists of one unit only (A deemed uni-versity) where as the sample size is only114 learners of a PG department of anautonomous B school. The findings maynot be generalised across all learning en-vironments. Secondly, the scope of thestudy confines only to a single subject(Changing Business Environment) underinformative course headings. Coveringmore subjects related to the informativecourse area may increase the varianceand therefore the results can be morevalid. Finally, the measurement of Learn-ing Output may cover quantitative mea-sures like GPA scores etc.

Conclusion

Management education is more quali-tative than quantitative. For a given prob-lem, there may be a variety of solutionsbased on assumptions. So, instructorshave to create understanding among thelearners for different real situationsrather than information dump. Therefore

we suggest the instructor to use practi-cal application through use of videos,experiential exercises, and group activi-ties in which learners can share theirexperiences in groups in every class forinformative domain as well. The meth-odology can be emphasized more by us-ing simulation and role-playing activitiesand by encouraging learners to sharepersonal experiences. Long and compre-hensive case discussions can be used fre-quently with minimal intrusion from theinstructor. The findings further encour-age free communication through groupactivities such as class simulation and roleplaying where the instructor adopted alaissez-faire approach.

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Predictors & Outcomes of Employee Engagement:Implications for the Resource-based View Perspective

Jyotsna Bhatnagar & Soumendu Biswas

Jyotsna Bhatnagar (Email: [email protected]) isAssociate Professor (HRM), Chairperson-PGHR &Soumendu Biswas (Email: [email protected]) isAssistant Professor (HRM) in ManagementDevelopment Institute, Gurgaon.

This paper extends the resourcebased view of the firm to employeeengagement and explores linkageswith firm performance. It arguesthat employee engagement interactswith other intangible variables suchas the sense of justice and psycho-logical contract which an individualfeels and expects, respectively. Theindividual�s psychological contractis shaped by organizations� HR poli-cies along with many social cuesfrom the work environment. This mayaffect the employee engagement.Further, there may be a positive ef-fect of Employee Engagement onOrganizational Commitment and Or-ganizational Citizenship Behavior.The entire equation may lead to highfirm performance which in turn mayaffect Employee Engagement. It pro-poses a conceptual model of theseintangible variables and their link-age with the tangible variable of firmperformance.


Resource-based View

We extend the resource based viewof the firm to employee engagement andtry to explore linkages with firm per-formance. By developing these intan-gible capabilities of employee engage-ment, it�s antecedents and outcomes,which are path dependant, a firm canstay ahead of it�s competitors (Teeceet al 1997; Colbert 2004) and leads toVRIN which is difficult for competitorsto imitate (Barney 1991).This is in linewith the dynamic capability perspective,which extends the RBV (http://www.valuebasedmanagement.net methods_barney_resource_based_ view_firm.html/accessed 28th March 2009). It alsofills in the lacunae pointed by research-ers like Foss et al (1996b). Foss andIshikava (2006) point out to the short-comings of RBV and state that processorientation has not made the theorydynamic. Foss (1996b) speculates thatvarious �competence-based,� �capabili-ties,� �dynamic capabilities,� etc. ap-proaches which all try to highlight dy-namics in various ways (e.g., Hameland Prahalad 1994) in RBV should bethe focus of research..



The resource-based view suggeststhat human resource systems can con-tribute to sustained competitive advan-tage through facilitating the developmentof competencies that are firm specific,produce complex social relationships, areembedded in a firm�s history and culture,and generate tacit organizational knowl-edge (Barney 1991). Much work hasbeen done in behavioral perspective,leading to a non-conclusive view thatrole behaviour may be copied by com-peting firms (Colbert 2004). HR practicesand strategic HR roles on the other handemanate certain intrinsic motivationaleffects like Organizational Commitmentand lead to high firm performance(Bhatnagar 2007, Bhatnagar 2009a).Themotivational basis of employee work at-titudes and behaviors is regarded as animportant component of research agendarelating to management practices (Aryee,Budhwar & Chen 2002) especially in anemployment relationship domain(Bhatnagar 2009a:171). In the currentstudy we explore the processes whichemanate in organizations due to certainHR practices in the workplace. We arenot studying the HR practices of the or-ganization in this paper, but the processeswhich serve as an important competitiveadvantage for the firm. These are cap-tured through the sense of justice andpsychological contract and individualfeels. The formation of the individual�spsychological contract is shaped by com-pany policies related to recruitment, com-pensation, claims etc along with socialcues from the work environment (Boxall& Purcell 2002).This in turn may affectthe employee engagement. There may bea positive effect of the Employee En-

gagement on Organizational Commitmentand Organizational Citizenship Behaviour.There may be an interactive effect be-tween these, leading to lower intentionto quit. The entire equation may lead tohigh firm performance which in turn mayaffect Employee Engagement. We exam-ine this variable in the configurationalapproach (Delery & Doty 1996) of theo-rizing SHRM. The configurational schoolin organization studies follows a holisticprinciple of inquiry and is concerned withhow patterns of multiple interdependentvariables relate to a given dependentvariable (Meyer, Tsui & Hinings 1993).Researchers gather multiple dimensionsof organizations, such as strategies,structures, cultures, and processes, intotypologies of ideal types and treat thetypes as independent variables (Colbert2004:344).

Measurement of EmployeeEngagement

Employee Engagement is a key toretention of talent (Glen 2006) and is anarea where lead has been taken by prac-titioners (Bennett & Bell 2004, Baumruket.al 2006, Gallup Management Journal2006, Parsley 2006, Woodruffe 2006). Itis an area where rigorous academic re-search is required (Macey & Schneider2008, IOP Speical Issue 2008)

Employee engagement is a key toretention of talent

Employee Engagement (Cartwright& Holmes 2006, Joo & Mclean 2006,Rothbard 2001) is an important mediator

Predictors & Outcomes of Employee Engagement


variable which research studies in Indiaand globally have not investigated(Bhatnagar 2007a, Saks 2005). In theirresearch, Robinson, Perryman andHayday (2004) note that Employee En-gagement has been highlighted by prac-titioners, but largely undermined in aca-demic literature. Although Kahn (1990),Saks (2006), and Bhatnagar (2007a) havetried to provide a concrete conceptualdefinition of the Employee Engagementconstruct, yet literature revealed that theconceptualization and definition of theconstruct is frequently contaminated withits identification with other outcome vari-ables such as job involvement, intrinsicmotivation, organizational commitment,and organizational citizenship behavior.(Bhatnagar 2007a; Saks 2006) This wasseen when Gallup q 12 (Buckingham &Coffman 1999) or Gallup WorkplaceAudit was used (Bhatnagar 2007a). Wewould like to extend the work and wouldmeasure using Employee Engagementwith a different scale of Saks (2006) inthe Indian context. It is hypothesized:

Hypothesis 1: Employee Engag-ement is a holistic measure of job En-gagement and Organizational Engag-ement.

Predictors of EmployeeEngagement

Measurement of employee engag-ement has entered into academic andpractitioner debate (Meyer & Gagne2008:61). The authors state that SelfDetermining Theory has guided the mea-surement of engagement relevant vari-ables like: need satisfaction, motivational

states, psychological and behavioral out-comes in a variety of contexts (e.g., Ryan& Connell 1989). The authors proposeto map the antecedents of EmployeeEngagement, which reflect a degree ofneed satisfaction. Variables of justice, likeprocedural and distributive may providea perception of fairness to the employ-ees. The formation of the individual�spsychological contract is shaped by com-pany policies related to recruitment, com-pensation, claims etc along with socialcues from the work environment (Boxall& Purcell 2002). The motivational basisof employee work attitudes and behav-iors is regarded as an important compo-nent of research agenda relating to man-agement practices (Aryee, Budhwar &Chen 2002) especially in an employmentrelationship domain (Bhatnagar2009a:171).

Over the past decade or so, numer-ous studies have provided empirical sup-port to the notion that psychological con-tract as an important motivator for em-ployees (e.g.,) Sturges, Conway, Guestand Liefooghe, 2005, Rousseau 2004).Wilhelm et al. (2007) state that the re-sults of these studies and highlight thatwhen individuals perceive breach ofpromises by their employer; their moti-vation and commitment to the organiza-tion decreases and their intention to leavetheir jobs increases (Tekleab, Takeuchiand Taylor 2005) as cited in Bhatnagar(2009:172). This current study proposesto measure the predictors of EmployeeEngagement. These are variables of jus-tice and psychological contract. The au-thors propose to test the following hy-pothesis:



Hypothesis 2: Procedural and distri-

butive justice; transactional and relationalpsychological contract will be predictorsof Employee Engagement

Outcomes of EmployeeEngagement

Consultants have focused on Em-ployee Engagement encompassing insome combination affective commitment(e.g., pride in the organization, willing-ness to recommend the organization asan employer), continuance commitment(e.g., intention to remain with the orga-nization), and OCB, described as discre-tionary effort (e.g., feeling inspired by theorganization, being willing to go above andbeyond formal role requirements). Macey& Schneider 2008:57). Bhatnagar (2007)reports studies on organizational commit-ment as an explanatory factor of employ-ees� mobility. Linkages betweenmentoring and organizational commitmentand source of support and target of com-mitment have been explored by Lin et al.,(2005), Payne & Huffman (2005),Stinglhamber and Vandenberghe (2003).However, Bhatnagar and Sharma(2009:292) report recent research(Iverson & Zatzick 2007: 456) which hashighlighted �the economic and politicalconflicts associated with such practices(Godard 2001a), including the financialcosts that may offset productivity gains(e.g., Cappelli & Neumark 2001) and theintensification of work that results ingreater burnout and stress for employ-ees (e.g., Green 2004, Ramsay,Scholarios & Harley 2001). They havefurther found organizational commitmentto be a predictor of firm performance in

Indian sample. They found the firm�scompetitive advantage emerging due toorganizational commitment. More re-cently Employee Engagement has beenrelated to building a firm�s competitiveadvantage. Employee Engagement, infact, can make or break the businessbottom line (Lockwood 2006). Martel(2003:30, 42) is of the opinion that in or-der to obtain high performance inpostindustrial(sic), intangible work thatdemands innovation, flexibility, and speed,employers need to engage their employ-ees. Engaging employees�especially bygiving them participation, freedom, andtrust�is the most comprehensive re-sponse to the ascendant postindustrialvalues of self-realization and self-actu-alization. Performance data of the bestcompanies in the US show that in all thepractice areas discussed previously. Ob-jectives are more easily met when em-ployees are engaged and more likely tofall short when they are not. In order tomaintain an Employer brand we see anemergence of a series of studies on em-ployer of choice, which also measureengagement index and financial perfor-mance (Coleman 2005).

Objectives are more easily metwhen employees are engaged andmore likely to fall short when theyare not.

A recent SHRM Conference (2006)reported the results of a new global Em-ployee Engagement study showing a dra-matic difference in bottom-line results inorganizations with highly engaged em-ployees when compared to organizations



whose employees had low engagementscores (Bhatnagar 2007a). A compellingquestion is: how much more productiveis an engaged workforce compared to anon-engaged workforce? (as cited inSeijts & Crim 2006 and reported inBhatnagar 2007a).

According to Soupata (2005) orga-nizations should strive towards �enter-prise excellence�. In this context, pro-cesses such as employee commu-nication, employee relations, and theirlearning and development assume an im-portant role in predicting an employee�sperformance and his/her attachment tohis/her job and organization. It is in thiscontext that we consider employee en-gagement as a peremptory construct inexplaining an employee�s attachment tohis/her job and his/her organization. Asreported by Xanthopoulou et al. (2009 :184), the motivational process of the jobdemands�resources ( JD-R) model(Bakker & Demerouti 2007) suggeststhat job resources are the main initia-tors of employees� work engagementand consequently of enhanced perfor-mance. Job resources refer to physical,social, or organizational aspects of thejob that are functional in achieving work-related goals, reduce demands and theassociated costs, and stimulate personalgrowth and development (Bakker &Demerouti 2007). As intrinsic motiva-tors, job resources fulfill basic humanneeds (i.e. need for belonging) and fos-ter individuals� development (Deci &Ryan 1985). As extrinsic motivators,they encourage employees� to exert ef-fort towards a task (Gagne´ & Deci2005). In both cases, employees may

become more engaged in their jobs, be-cause they derive fulfillment from it(Schaufeli & Bakker, 2004) and inturnthey perform better (Bakker 2009).

Further, given the logic of self deter-mining theory (Meyer & Gagne 2008:61)the current study proposes to measurethe antecedents and outcomes of Em-ployee Engagement, which would predicthigher firm performance at the organi-zational level and lower intention to quitat the individual level . These support di-rectly the outcome variables of EmployeeEngagement as pointed by Macey andSchneider (2008). They focus primarilyon task performance and organizationaleffectiveness as outcomes of engage-ment. This further supports the SDTtheory implications on employee wellbeing as pointed by Meyer and Gagne(2008:61). Individuals who experiencethe feeling of well being in an organiza-tion due to high Employee Engagementmay exhibit lower intention to quit.

Individuals who experience thefeeling of well being in an organi-zation due to high employee en-gagement may exhibit lower inten-tion to quit.

Extending this work and building onRBV, the authors propose organizationalcommitment, lower intent to quit, andfirm performance to be the outcome vari-ables at individual and firm levels. Thesewould provide a competitive advantageto the firm. This line of research wouldfill in the caveat in RBV as pointed byColbert (2004). It answers the question:



how does a firm actively build and con-tinuously renew strategic human and or-ganizational resources to fuel competi-tive advantage?

With the resource-based view of thefirm as the basis, the authors propose thatEmployee Engagement would lead tohigher levels of organizational commit-ment, lower levels of quit intention, andhigher level of firm performance as theoutcomes. This would lead to an inimitableand sustained competitive advantage to thefirm. It is expected that by proving thisline of thought, the authors would be ableto answer the doubts raised by Colbert(2005) that firms may find it difficult todevelop and renew strategic human andorganizational resources and practices tomaintain competitive advantage.

Hypothesis3: An employee�s commi-tment to his/her organization and Orga-nizational Citizenship Behavior may in-teract to result in lower intention to quit.

Hypothesis 4: Organizational Commi-

tment and Organizational CitizenshipBehaviour will be predicted by EmployeeEngagement.

Hypothesis 5: Organizational Commi-tment and OCB will predict lower inten-tion to quit

Hypothesis 6: Firm Performance will

predict Employee Engagement.

Mediator Role between Predictors& Outcomes

Furthermore, we intend to conceptual-ize Employee Engagement as a factor withinthe wider concept of �Hidden Assets� (Ehin2005) of an organization. Besides, we aimat testing the proposed conceptual model(Fig. 1) as a non-recursive one wherein weposit Employee Engagement as an impor-tant mediator variable, in place of an out-come variable as suggested by previous lit-erature (Kahn 1990, May et al. 2004).

Hopkins and Washington (2006) in-vestigated the perceptions of distributivejustice, procedural justice, organizationalcommitment, organizational satisfaction

and turnover intentions ina downsizing context.Results suggested thattrust partially mediatedthe relationship betweendistributive justice andboth organizational .satis-faction and affectivecommitment. Additionally,the relationship betweenprocedural justice andturnover intentions was

Fig. 1 - The Proposed Conceptual Model

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mediated by trust perceptions (Hopkins& Washington 2006:477).

Later, a study by Loi et al (2006)investigated the empirical linkage be-tween employees� justice perceptions,perceived organizational support, orga-nizational commitment and intention toleave. A hypothesized model was devel-oped to empirically test the linkage be-tween the relationships among employ-ees� justice perceptions, perceived or-ganizational support (POS), organiza-tional commitment and intention toleave. This model was tested using hi-erarchical regression analyses on asample of 514 practicing solicitors inHong Kong. The results indicated thatboth procedural and distributive justicecontributed to the development of POS,and POS mediated their effects on or-ganizational commitment and intentionto leave. As expected, organizationalcommitment was negatively related tointention to leave.

More recently, a relationship antec-edent model was developed by assimi-lating research findings on organizationalstruct-ure, internal communication, andorganizational justice into relationshipmanagement theory by Kim (2007:170)where justice is the mediator betweeninternal communication, organizationalstructure as antecedents and organiza-tional trust, commitment satisfaction andrelationships as outcome variables.

Evidence also suggests that de-creased perceptions of organizational jus-tice and trust can adversely impact anemployee�s level of commitment and sat-

isfaction with the organization (Cohen-Charash & Spector 2001, Mishra andSpreitzer 1998). The accumulation ofthese negative perceptions and feelingsmay lead to an increase in turnover amongsurvivors (Aryee, Budhwar & Chen2002, as cited in Hopkins & Washington2006:478). Recent research in engage-ment literature (Bakker 2009) has con-sistently found work engagement (i.e. apositive affective/motivational reactiontowards the job that is characterized byvigour, dedication, and absorption), whenmeasured as a general well-being indi-cator, has been found to be positivelyrelated to individual job performance (fora review see Bakker 2009). Sonnentag(2003) found that employees� day-levelsof work engagement predicted their day-levels of proactive behaviour, after con-trolling for general levels of engagementand work characteristics. This is in con-sonance with the strain of research citedearlier and that Employee Engagementwould be a predictor to organizationalcommitment, organizational citizenshipbehaviour and may lead to lower intentto quit. Given the mixed findings in re-search we postulate the following hypoth-esis to be tested in Indian industrial con-text.

Hypothesis 7: Employee Engagement

will mediate the relationship betweenJustice and psychological contract asantecedents and organizational commi-tment, OCB, intent to quit and firm per-formance as outcome.

Very few studies investigate the link-age between Employee Engagement andfirm performance. Recent work of



Xanthopoulou et. al., (2009) has foundthis linkage, but with diverse variables.Xanthopoulou et. al., (2009) investigatedhow daily fluctuations in job resources(autonomy, coaching, and team climate)are related to employees� levels of per-sonal resources (self-efficacy, self- es-teem, and optimism), work engagement,and financial returns. Forty-two employ-ees working in three branches of a fast-food company completed a questionnaireand a diary booklet over 5 consecutiveworkdays. The multi-level analyses, uti-lized in the research study, confirmed thatday-level job resources had an effect onwork engagement through day-level per-sonal resources, after controlling for gen-eral levels of personal resources and en-gagement. Day-level coaching had a di-rect positive relationship with day-levelwork engagement, which, in-turn, pre-dicted daily financial returns.

Harter, et. al,. (2002a) used meta-analysis to examine the relationship at thebusiness-unit level between employeesatisfaction-engagement and the busi-ness-unit outcomes of customer satisfac-tion, productivity, profit, employee turn-over, and accidents. Generalizable rela-tionships large enough to have substan-tial practical value were found betweenunit-level employee satisfaction-engage-ment and these business-unit outcomes.An implication is that changes in man-agement practices that increase em-ployee satisfaction may also increasebusiness-unit outcomes, including profit.Further, in a related work Harter et al(2002 b), stated that methodologically intheir meta-analysis, they could not ad-dress the issue of statistical causality,

which they have tried to establish throughcase studies. Looking at this gap in lit-erature we propose to test our model sta-tistically and would apply Amos (version17.0; Arbuckle & Wothke 1999) for thesame, and would conduct our data tostructural equation modeling.

Changes in management prac-tices that increase employee sat-isfaction may also increase busi-ness-unit outcomes, includingprofit.

In a related research by Schneider,Hanges, and Smith (2003) on employeeattitude data from 35 companies over 8years were analyzed at the organizationallevel of analysis against financial (returnon assets; ROA) and market performance(earnings per share: EPS) data using laggedanalyses permitting exploration of prior-ity in likely causal ordering. Analyses re-vealed statistically significant and stablerelationships across various time lags for 3of 7 scales. Overall Job Satisfaction andSatisfaction with Security were predictedby ROA and EPS more strongly than thereverse (although some of the reverse re-lationships were also significant). Researchhas usually not indicated reverse causalindicators on employee engagement thoughrelated studies (Schneider, Hanges, &Smith 2003), quoted above, on Employeeattitude, Job satisafaction and Financial per-formance are present.

In our study we propose a linkagebetween firm performance and EmployeeEngagement, but in a reverse feedbackloop. This entails that those firms which



are financially robust will have a higherEmployee Engagement score. This lineof research is in consonance with thefindings of a study by Towers Perrin(2003). Their Talent Report reflectedoperating margin with 5%, 10%, 15%change in engagement. More recently,MacLeod (2009) found in both public andprivate sectors that leadership, line man-agement, employee voice and integrity arekey enablers of engagement and that thecorrelation between engagement, well-be-ing and performance is repeated too of-ten for it to be a coincidence. The studywas conducted in the western context.

We posit thus:

Hypothesis 8: There may be reverse

causality between Firm Performance andEmployee Engagement.

Further the study by Bhatnagar(2006) reported vast differences in or-ganizational learning capabilities in Indianindustrial sectors, especially in the sun-rise sectors at that time (IT, ITES). Fol-lowing that line of research and variancefound in the Indian context, and given thecontext of recessionary pressures on theeconomy, we would like to test the fol-lowing hypothesis:

Hypothesis 9: Managers of Indian in-dustry sectors will differ in EmployeeEngagement and intent to quit.

Hypothesis 10

: Managers in Sunrisesectors like ITES may have higher Em-ployee Engagement and firm perfor-mance linkage than managers of manu-facturing/engineering sectors

The hypotheses above are presentedin a proposed conceptual path model(fig.1) along with a competing model(fig.2). Which ever model emerges aftertesting the hypothesized relationships andapplying structural equation modeling toconfirm or reject the hypothesized rela-tionships, will be adopted for discussionand further implications.

Sample: We collected data for thepresent study from 310 working executivesemployed in different industry sectors. Forthis purpose different strata of managersviz., senior-level, middle-level, and junior-level managers were randomly assigned thesurvey instrument. Thus, purposive sam-pling in selecting the organizations of therespondents and stratified random samplingfor selecting the respondents themselveswas applied for data collection.

Measures: For the purpose of mea-surement, items have been selectedfrom standardized questionnaires tomake up a survey instrument compris-ing 102 items, excluding items relatedto demography. Emotional engagement

Fig. 2: Competing Model: Employee Engage-ment �Correlates and Outcomes

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was measured using 11 items of thescale developed by Saks (2006). Thismeasure takes into consideration twofacets of Employee Engagement, that is,job engagement and organizationalengagement comprising five and sixitems respectively. Organizational jus-tice was calculated on the basis of thescale reported by Collquit (2001). Theconstruct of organizational justice com-prised Distributive justice (four items)and Procedural justice (seven items).Psychological contract comprisingRelational contract and Transactionalcontract are proposed to be computedwith the help of nine items and eightitems respectively of the scale devel-oped by Raja, Johns, and Ntalianis(2004). Organizational commitmentwas computed using the scale developedby Rhoades, Eisenberger, and Armelli(2001). The scale comprises six items.Organizational citizenship behavior(OCB) was computed on the basis ofthe scale developed by Lee and Allen(2002). This scale comprises eightitems. Of these eight items, four repre-sent Organizational citizenship behaviordirected towards individuals (OCB-I)and four characterize OrganizationalCitizenship Behavior directed towardsthe organization (OCB-O). Intention toquit was measured using the three itemscale reported by Colarelli (1984). Firmperformance was measured by takingfirms profit and loss statements fromthe respondents.

Data analysis technique: This re-search is proposed as a non-recursivestudy attempting to confirm certain hypo-thetical relationship(s) between the pro-

posed variables. We propose to examinethe data by administering regression; in-teractive effect and mediating effect us-ing generalized least square (GLM)through the Statistical Package for SocialSciences (SPSS) version 16.0, and test-ing a structural equation model using Ap-plied Moments of Structure (AMOS) ver-sion 16.0 to confirm the causal relation-ships between the identified variables.

Theoretical and practical implica-tions: We will present the model whichis confirmed through our results. Thismodel may strengthen the dynamic na-ture of RBV and will help us draw fur-ther implications for theory based on ourempirical findings in the Indian context.This work contributes to the EmployeeEngagement and RBV literature andthrows important implications for HRmanagers who may design interventionto improve Employee Engagement andincrease competitive advantage for theirfirms.

Acknowledgements

An earlier version of this paper waspresented at the Indian Academy ofManagement Inaugural Conference heldat XLRI Jamshedpur, December 2009.

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Role, Work Perception & Stress in a High Reliability WorkEnvironment

Omer Bin Sayeed & Satish Chandra Kumar

Omer Bin Sayeed is Professor of Organizational Behaviour/HRM in National Institute of Industrial Engineering, Mumbai400087 Email: [email protected]. S.Kumar is Readerin the Department of Applied Psychology, MumbaiUniversity, Mumbai- 400 098.

An empirical study of work attitude, roleefficacy and stress experienced in a highreliability professional group was under-taken using a sample of 52 Indian Air Traf-fic Controllers (ATC) working in theMumbai Airport. Results showed that ATCsexperienced role stress with regard to in-ter-role distance, role isolation, resourceinadequacy, role erosion and role stagna-tion. ATCs maintained high confrontationor problem solving skills in their role fol-lowed by helping relationship, perceivedintegration with the job and managing welltheir inter-role linkages. Results furthershowed significant relationships betweenwork attitude and role efficacy dimensions.Regression analysis within respective ca-nonical variable sets revealed role stressbeing a significant predictor of attitude to-wards supervisors and management, whilerole efficacy dimensions (role making, rolecentering and role linking) showed signifi-cant explanatory power equally stronglywith respect to attitude towards work,working conditions, co-workers, supervi-sors, and management.


Air Traffic Controllers(ATCs)

Air Traffic Control is basi-cally a ground-based systemdedicated to the safe, orderlytraffic control and expeditiousflow of air traffic. The Air Traf-fic Controllers (ATCs) who manthe system are well trained pro-fessionals. They work under ex-tremely demanding conditions forthe safety of more than one air-craft at any given time. Safety ismaintained through a system ofairways and separation standardsand the air traffic controllers pro-vide continuous instructions to thepilot through the medium of VoiceRadio Telephony (VRT) from themoment of start off to the finaltaxiing of the plane into the park-ing slot.

The Air Traffic Control Sys-tem in India is divided into fiveunits, namely, (a) Surface Move-ment Control (b) Control Tower(c) Approach Tower (d) AreaControl Center (e) Flight Informa-tion Center. These units functionin coordination with each other in



order to ensure the objectives of safetyand expeditiousness. The Air TrafficController (ATC) is a trained professional,a quick thinking man who does not havethe privilege to stall. His job calls for agreat deal of control and quick decision-making. All his instruction to the pilot arerecorded continuously on tape and any in-structional delays are traceable to replay.Hence, the ATCs are under continuousscrutiny and function to standards of pin-point accuracy with a traffic load overwhich they have no control. An incorrectdecision on his part can mean a loss ofhuman lives and millions of rupees as he,at any point of time, is responsible formore than one aircraft. Adding to the pres-sure is the almost intolerable requirementthat the ATCs must retain an outwardcalm revealing no feelings of pressure oranxiety to the pilots. Simultaneously, theyhave to maintain an optimum tension levelto ensure mental alertness. These two re-quirements � contradictory in terms ofhuman nature � are exhausting mentallyand in the long run takes a toll on theATCs� mental and physical health (Crump1979). Perhaps, due to these reasons suchprofessions which require higher levels ofmental alertness, continuous monitoring atthe personal level and extremely higherlevels of risk (likely human and financiallosses) involved in making decisions aregenerally termed as high reliability profes-sions. Since ATCs jobs involved all thethree criteria mentioned above, it is butright to characterize their occupationaldomain of work as a high reliability pro-fession.

In 1993, the Government of Indiaannounced the �Open Sky Policy� in civil

aviation. As a result of this liberalizationpolicy there has been an advent of pri-vate airline companies. This has resultedin increased number of flights and con-sequently increased air traffic. Such asituation directly translates into higheramount of work pressure and workloadfor the ATCs. Mumbai (previously knownas Bombay) India�s commercial capitalhas a Flight Information Region (FIR)stretching to 1.2 lakhs square kilometers,making it the biggest FIR in South Asia,yet it operates with a single runway.Technically, Mumbai has two runways,but they cannot be used simultaneouslybecause they intersect each other in themiddle. Being the busiest Airport in thecountry Mumbai handles more than 320flight movements per day (i.e., 24 hours)in addition to 100 flights, which over fly.Besides regular flights, the ATCs atMumbai also have to handle helicoptermovement from Juhu and the Oil Rigs atMumbai High and also the Naval heli-copters. This adds tremendously to theirworkload, as managing helicopter move-ment is very time consuming job.

Review of Literature

Given the highly demanding condi-tions under which the ATCs work and theabsolute nature of the decisions theymust take, most studies in the West onthis group have focused on the stressorsassociated with their jobs (Grandjean1968, Grandjean & Wotzka 1971, Krol1971, Repetti 1993). The primary shortterm but uncontrollable stressors forATCs is their burgeoning workload. It iseasy to observe that there is a direct pre-dictable relationship between the

Role, Work Perception & Stress in a High Reliability Work Environment


workload of a pilot and ATCs� i.e., as theworkload of pilots increases the work ofATCs also increases. ATCs who per-ceived workload to be high reported morehealth complaints. Their moods turned in-creasingly negative and less positive(Repetti 1993). Alexander (1980) reportedthat ATCs who suffered from burnout rap-idly retired from work for medical rea-sons and is also accompanied by loss ofinitiative to enter into active work later.Grandjean and Wotzka�s (1971) study in-dicated that ATCs felt nervous, tense, ir-ritated in difficult situations, were anxious,trembling has increased perspiration, pulserate and heart ache and suffered fromsleeplessness and chronic fatigue. Urinesamples of ATCs also indicated increasein Catecholamine after work as com-pared with subjects who performed nor-mal office work. Dell�Erba, Pancheri andIntreccialagli (1988) found that stressamong ATCs increased after night shift.Average cortisol, prolactin, testosteroneand thyrotropin�stimulating hormone val-ues increased after night shift. Anxietyscores also increased after the night, butthey were not correlated either with workload or hormone values. Folkard andCondon (1987) documented ATCs� nightshift paralysis, which was largely causedby 4 factors that appear to influence thenight workers� deprivation of sleep orsleepiness: these were the time of night,the number of consecutive night shifts,the requirement to work both morning andnight shift starting on the same day andindividual differences in the flexibility ofsleeping habits.

A stress related study conducted byRepetti (1993) demonstrated that in-

creases in job stressors are associatedwith same day deterioration in physicaland psychological well-being. There isalso evidence of direct spillover on par-ent-child interaction. ATCs tended to bemore behaviourally and emotionally with-drawn during their interaction with theirchildren at home. There was also evi-dence of direct spill over of negative feel-ings associated with distressing socialexperiences at work to expression ofanger and greater use of discipline dur-ing interactions with a child later in a day.In line with the above findings Repetti(1994) also noted that negative social cli-mate at work was associated with afather�s tendency to describe his inter-action with a child as having a less posi-tive and a more negative emotional tone.

An organizational climate that theyperceived as uncaring, uncon-cerned for its people, uncommuni-cative and unreceptive is all re-sponsible for negative conse-quences at the workplace.

Singer and Rutensranz (1971) re-ported that high dissatisfaction amongATCs is due to office administration, payand working conditions. Bowers (1983)studied the reasons why 11,500 unionizedATCs walked off their jobs in August,1981. He found that ATCs managers heldand acted on the classic theory of X val-ues and beliefs which created a sizeablegeneration gap between the manager�sattitudes and those of their counter-au-thoritarian subordinates, thereby pavingthe way for the strike. ATCs individu-ally believed that an organizational cli-



mate that they perceived as uncaring,unconcerned for its people, uncommuni-cative and unreceptive is all responsiblefor negative consequences at the work-place. Shouksmith and Burrough (1988)reported that both Canadian andNewZealand ATCs perceived problemsof supervision, physical job conditions,work organization and variability in taskload as major occupational stresses.

In comparison with the Western au-thors� attempt to investigate the charact-eristics of high reliability organizationssuch as ATCs work environment, nuclearenergy generation plants etc., virtuallyvery little work is done on ATCs in India.Kumar, Kulkarni and Sayeed (1998) pro-vided some exploratory data on the ex-periences of stressors, strains and thecoping strategies used by ATCs in theirwork environment. The study revealedthat the salient stressors generally expe-rienced by ATCs were lack of housingand welfare facilities, low monetary in-centive, maintenance problems of equip-ment, transfers, shift duties and owningresponsibility for traveling people. Dis-turbance in Circadian rhythm, sleep dis-turbance, tensions were the major strainsexperienced. The coping strategies fol-lowed by ATCs included (1) analyzing thesituation logically, (2) developing a posi-tive attitude and (3) applying coping strat-egies such as relaxation techniques.

In view of the above, the presentstudy is undertaken to understand the in-trinsic quality of role perceptions (viz.perceived role efficacy) of ATCs and thelevel of role related stresses experiencedby them. In addition, their attitude to-

wards their demanding professional workin a high reliability context, wherein workrelated dimensions such as attitude to-ward work, working conditions, cowork-ers, supervisors and management all havecritical influences to play in his workinglife. Hence, more specifically, the objec-tives of the present study are:

l To investigate the multivariate rela-tionship between role stresses and thework attitude facets.

l To study the multivariate relationshipbetween role efficacy dimensionsand work attitude facets.

Sample

The sample of study consisted of 52(or 34%) of 150 ATCs working in theMumbai Airport. The respondents� agesranged from 25 to 55 years with a meanof 34.7 years. They had experience from1 to 30 years with mean years of experi-ence being 10.7. The 42 (or 81%) of re-spondents had Bachelor of Engineeringdegrees whereas 10 respondents (or19%) had Master of Science degrees totheir credit.

Organizational Role Stress (ORS)Scale

The ORS scale (Pareek 1983) wasused to measure organizational rolestress which consisted of 50 items andspecifically defined 10 dimensions of rolestresses likely to arise in a work context,namely, inter-role distance, role stagna-tion, role expectation conflict, role ero-sion, role overload, role isolation, personalinadequacy, self-role distance, role am-



biguity and resource inadequacy. Theitems are rated on a 5-point semanticanchors ranging from 0 to 4. Since theitems are tested in a variety of work en-vironments (Pareek 1997) they werefound to be appropriate in ATCs workenvironment as well.

Role Efficacy Scale

The Role Efficacy Scale (Pareek1993) consisting of 20 triad items mea-suring individual�s potential effective-ness in his immediate role was used.Combining two items together 20 triaditems allowed to score role efficacy for10 dimensions, namely, Role centrality,integration, proactivity, creativity, help-ing relations, inter-role linkages, super-ordination, influence, growth and con-frontation. These dimensions are fur-ther combined to obtain three major di-mensions of role efficacy, namely, RoleCentering, Role Making, Role Linking.The corrected item-total correlationsand Alpha reliabilities were found to besatisfactory (Sen 1982, Sayeed 1985).

Employee Work PerceptionMeasure

Hafeez and Subbaraya�s (1988) WorkPerception Questionnaire was used,which consists of 15 triad items specifi-cally dealing with employees� attitude to-wards work, working conditions, manage-ment, co-workers, and total organization.The minimum and maximum obtainablescores for the scale is 15 and 45. Higherscores indicated positive attitude towardseach of the above dimensions.

Results

Table 1 reports descriptive statistics ofwork attitude, role stress and role efficacydimensions. It can be seen that higherscores were obtained with respect to atti-tude towards supervisors followed by atti-tude towards management and work.Attitude towards working conditions andco-workers were relatively poor. Amongstrole stress factors, ATCs experienced high-est role stress with regard to Inter-role dis-tance, role isolation, resource inadequacyrole erosion and role stagnation. On theother hand ATCs experienced lowest rolestress on personal inadequacy, role ambi-guity and role expectation conflict. Withregard to one�s potential effectiveness inATC�s role it was noted that they seem tohave high role confrontation (problem solv-ing) skill followed by helping relationship,perceived integration with the job they aredoing and perceived inter-role linkages.There were several inadequate aspects ofthe role perceived by ATCs that yieldedlower scores on role pro-activity, role in-fluence and role centrality.

ATCs experienced highest rolestress with regard to Inter-roledistance, role isolation, resourceinadequacy role erosion and rolestagnation.

Table 2 reports canonical correlationbetween work attitude measures and rolestress dimensions. The reported statis-tics included canonical correlations,Wilks� Lambda and F ratio testing sig-nificance of the canonical correlation. Inaddition, correlation with work attitude



measures and role stress dimensions withtheir respective canonical variables havealso been reported to highlight the degreeof contribution of both the measures tocanonical function.

It can be observed that amongst workattitude measures, attitude towards man-

Table 1: Descriptive Statistics of Personal Correlates, Employee Attitude towards Work,Role Stress & Role Efficacy among AIR Traffic Controllers.

Variable Mean SD Variable Mean SD Variable Mean SD

Attitude 6.94 1.33 Inter 9.15 5.17 Centrality 2.05 1.09towards Rolework Distance

Attitude 3.80 0.76 Role 8.25 4.76 Integration 2.75 1.03towards StagnationworkingCondition

Attitude 4.73 1.10 Role 6.51 4.65 Proactivity 1.71 1.01towards ExpectationCoworkers Conflict

Attitude 8.35 2.23 Role 8.53 4.43 Creativity 2.15 1.07towards ErosionSupervisors

Attitude 6.96 1.76 Role 7.21 5.13 Interrole 2.73 1.27towards Overload LinkageManagement

Total work 30.75 4.68 Role 9.09 4.62 Helping 3.02 1.04Attitude Isolation Relationship

Personal 3.84 3.70 Super 2.25 1.15Inadequacy ordination

Self Role 6.29 4.18 Influence 1.59 1.29distance

Role 4.78 4.47 Growth 2.17 1.02Ambiguity

Resource 9.11 4.32 Confron- 3.48 1.04Inadequacy tation

Total Role 72.61 31.97 Role 10.09 2.54Stress Making Total

Role 5.83 2.32Centering Total

Role 8.00 2.37Linking Total

Role 23.92 5.38Efficacy Total

agement, supervisors and co-workers con-tributed maximum. As expected all the rolestress dimensions have shown correlationswith the respective canonical variable ofwhich role overload, role isolation, role stag-nation and inter-role distance showed veryhigh canonical loadings (correlation with thecanonical variable), whereas personal in-



Table: 2 Canonical Correlations between Work Attitude & Role Stress

Root# Canonical Wilks F PR Lambda

1 0.66 0.27 1.33 NS

Dependent Variable Correlation with Independent Variable Correlation withCanonical Variables Canonical Variables

Attitude towards work 0.39 Inter-role distance - 0.58Working Conditions 0.25 Role Stagnation - 0.76Coworkers 0.66 Role Expectation Conflict - 0.50Supervisors 0.73 Role Erosion - 0.48Management 0.84 Role Overload - 0.78

Role Isolation - 0.77Personal Inadequacy - 0.00Self Role distance - 0.31Role Ambiguity - 0.36Resource Inadequacy - 0.37

Redundancy (%) 16.55 Redundancy (%) 29.55

adequacy showed zero relationship. The re-dundancy statistics showed 16.55 and 29.55per cent of variance with regard to workattitude measures and role stress dimen-sions respectively.

Table 3 presents regression resultsusing work attitude dimensions as depen-dent variables and role stress dimensionsas independent variables. This table be-ing an extension of canonical correlationsprovides details about specific contribu-tion of role stress variables to work atti-tude dimensions in the form of Betaweight and goodness of fit statistics (R-square in percentage form).

As observed in the canonical correla-tion results, the sign of all the regressioncoefficients were negative indicating simi-lar trend of relationship between role stressvariables and work attitude measures. Outof 5 R-squares obtained 2 were found tobe statistically significant explaining 35.66Percent and 32.82 percent of variance in

attitude towards supervisors and manage-ment respectively. Amongst significant re-gression results, role overload tended torelate negatively with attitude towardsmanagement. In addition, personal ad-equacy as one of the role stress variableshowed positive relationship with attitudetowards coworkers.

Table 4 depicts canonical correlationfindings using work attitude dimensionsas dependent variable (First Set) andRole efficacy dimensions such as rolemaking, role centering, and role linkingas independent variables (Second Set).Canonical correlations with significancestatistics, correlations with canonicalvariable and redundancy percentage(variance explained) for each set of thevariables are presented in the table

It can be observed that the canonicalcorrelation indicative of goodness of fitbetween the sets of variable was as highas .64, significant well beyond the .01 level



Table 4: Canonical Correlations between Work Attitude and Role Efficacy

Root# Canonical Wilks F P

R Lambda

0.64 0.44 2.74 0.001

Dependent Variable Correlation with Independent Variable Correlation with

Canonical Variables Canonical Variables

Attitude towards work 0.66 Role Making 0.78Working Conditions 0.55Coworkers 0.55 Role Centering 0.77Supervisors 0.55Management 0.62 Role Linkage 0.54Redundancy (%) 14.30 Redundancy (%) 49.91

Table: 3 Regression Analysis between Role Stress and Work Attitude

Dependent Variable Independent VariableIRD RS REC RE RO RI PI SRD RA RI R2(%)

Attitude -.15 -.14 .05 .01 .17 -.37 .00 -.10 .21 .01 16.01towards work

Attitude .18 -.31 .14 -.16 -.22 .25 .06 -.19 -.11 .24 11.69towardsworkingconditions

Attitude -.09 -.18 -.12 -.27 -.26 .19 .38* .04 .00 -.03 30.18towardsCoworkers

Attitude .13 -.39 -.19 -.04 -.13 -.27 -.09 .24 .09 .15 32.82*towardsSupervisors

Attitude -.12 .07 .00 -.20 -.53** -.23 -.03 .14 -.04 .32 35.66*towardsManagement

*** p<.001; ** p<.01; * p<.05 n = 52

IRD - Inter-role distance RS- Role Stagnation REC- Role Expectation Conflict RE- Role Erosion RO- Role Overload RI- Role Isolation PI- Personal Inadequacy SRD- Self Role distance RA- Role Ambiguity RI- Resource Inadequacy



Table 5 : Regression Analysis between Role Efficacy and Work Attitude dimensions

Dependent Variable Independent Variable

RM RC RL R2(%)

Attitude towards work 0.22 0.29* 0.06 18.43*Working Conditions 0.34* 0.30* - 0.27 19.08**Coworkers 0.15 0.16 0.21 15.29*Supervisors 0.02 0.30* 0.20 17.80*Management 0.33* 0.05 0.18 20.69**

It is interesting to note that all the R-squares were found to be significant, ex-plaining percentages of variance thatranged from 15.29 for attitude towards co-worker to 20.69 for attitude towards man-agement. In addition, Role Centering andRole Making Behaviours taken togetherreceived the highest number of positiveand significant regression coefficientscompared with Role Linking Behaviour,which was not at all significant. It couldalso be noted that both the role efficacyfactors taken together contributed to fourwork attitude dimensions selectively andthe exception was attitude towards co-worker, which was not at all contributedby any of the role efficacy factors.

Discussion

Air Traffic Controllers are one of theprofessional groups of high reliability or-

ganization which have to be taken seri-ously due to two reasons, namely, (1) as aprofessional group which experience jobstresses in a natural stressful work envi-ronment, (2) as a group whose jobs placeextreme demand on individuals to be ex-tremely efficient in their performance.Zeier (1994) argues that this professionalgroup if not taken seriously by manage-ment and policy makers of aviation indus-try the consequences can be serious bothin terms of human lives and compensa-tion to passengers along with damage tothe aircrafts and national property.

The findings obtained showedthat ATCs seem to maintain poorattitudes towards working condi-t ions and co-workers besidesshowing their stress level ashigh.

of confidence. As against the findings ofrole stress variables indicating negativerelationships, all the three role efficacydimensions and work attitude measurespositively contributed to respective ca-nonical functions. The correlations forwork attitude were found to be rangingfrom .55 to .66 and for role efficacy di-mensions it was from .54 to .78. The re-dundancy percentages for respective setsof variables were 14.3 and 49.91.

Table 5 reports multiple regressionanalysis (as an extension of Table 4) be-tween work attitude measures and roleefficacy dimensions referred to above.These findings supplemented the findingsof canonical correlation in that againsteach dependent variable, namely, workattitude dimensions, role efficacy dimen-sions as independent variables are re-gressed which yielded specific contribu-tion made by the role efficacy dimensions.



Work attitude plays a very importantrole in a work environment exactinghigher standard of performance. It isexpected that in such an environment in-dividuals bring out their best through posi-tive attitudes towards work and variousaspects of the organization provided thatorganization equally cares for them. Thefindings obtained showed that ATCs seemto maintain poor attitudes towards work-ing conditions and co-workers besidesshowing their stress level as high. In asimilar line of research, Kumar, Kulkarniand Sayeed (1998) documented that sa-lient stressors experienced by ATC�s inIndia are lack of housing and welfarefacilities, low monetary incentive, main-tenance problems of equipment etc. Mod-ern navigational aids and sophisticatedcomputers and other facilities which areeasily available in Western countries areeither not available or they are not in goodworking conditions in the Indian Airports.Lack of welfare and recreational facili-ties also add to poor work attitude. Thesefindings are fully supported in the presentstudy when we have noted that one ofthe stress causing factors sharply per-ceived by the ATCs is the resource in-adequacy compared with personal inad-equacy least recognized as a stress in-ducing factor.

In India ATCs come under civil avia-tion and in the last few years they havebeen agitating for poor facilities, work-ing conditions and low wages. The wageagreement between government andATCs taking very long time to settle alsoshowed unconcerned and unsympatheticattitude of management. It is possiblethat due to lack of ATCs cooperation,

team spirit and trust caused by aboveconditions, management could have de-veloped negative attitude towards themresulting in myriad work-related problemsin the work environment. Bowers (1983)has shown that managers who acted onthe Theory X values and beliefs contrib-uted more to striking at the workplacethan those managers who acted on thetheory Y values and beliefs. If organiza-tional climate is perceived as uncaring,unconcerned for people, uncommunica-tive and unreceptive it is more likely tolead to greater stress among ATCs. Therole efficacy of ATCs, evaluating theperceptions of their roles across 10 di-mensions showed greater influence inpredicting or enhancing work attitude. Inthis connection, Role Making and RoleCentering (global dimensions) as com-pared with Role Linking were found tobe strongly influencing positive work at-titude of ATCs. It is interesting to notethat when role occupants go beyond whatis expected from the role and performjobs with self-induced role behaviour, itis more likely to increase positive workattitude as individuals will have betterfocus on problem solving behaviour oftheir own, colleagues, superiors and sub-ordinates.

Further, the results revealed that thehighest role stress experienced by ATCswere inter-role distance, role isolation,resource inadequacy, role erosion androle stagnation. The reason for thesestresses could be due to the fact that theirrole in aviation industry is not consideredas important as that of other roles. As aprofessional group they always remainedin the background, whereas pilots and



other professional groups within theaviation industry enjoyed greater impor-tance. Feeling of isolation, perception ofinadequate resources at their disposal andcontinued erosion of their roles arecaused by lower salary and perks ascompared to aircraft engineers and pi-lots whose jobs require social interactionwith colleagues, seniors and managementas well. For the ATCs fewer promotionalopportunities, poor infra-structural facili-ties and also lack of coordination betweenvarious agencies at the airport seeminglycontributed to discontentment and poorsense of well being at the work place. Inaddition, it is also observed that rolestress played an important role in workattitude. As role stress increases bothattitude towards supervisors and manage-ment become unfavorable. Role overloadwas found to be negatively related to at-titude towards management. With theincreased workload without correspond-ing increase in value addition in ATCs�job profile, their perceptions towardsmanagement have shown negative over-tones. It is obvious that there is increasedstress created by both the work elementsand organizational settings. Mohler (1983)documented that ATC�s heavy trafficvolume increases their physiological andpsychological stress, which has an ad-verse impact on both physical and men-tal health of ATCs. Another stressor,which was positively related with attitudetowards coworkers, was personal inad-equacy. As personal inadequacy in-creases attitude towards coworkers be-come less amicable, perhaps indicating aphenomenon that people with lesser self-esteem are more likely to be insecure andtherefore they tend to relate with their

coworkers less effectively. In all prob-ability, this gives rise to a sense of indif-ference and lower degree of involvementin organization where they perform un-der stressful condition.

Feeling of isolation, perception ofinadequate resources at their dis-posal and continued erosion oftheir roles are caused by lowersalary and perks as compared toaircraft engineers and pilots.

It was also shown that role efficacyenhances work attitude in some respects.ATCs had high confrontation skills, fol-lowed by helping relationship, integrationwith the job and perceived inter-role link-ages. In comparison with positive as-pects mentioned above, the poor aspectof their role was pro-activity, which indi-cated that they were performing more ofthe reactive functions of their roles andfulfilling other�s expectations rather thanperforming proactive functions in theirroles. They cannot initiate any action ontheir own because of the nature of workwhich demanded that everything has tobe performed in a structured way and asper certain prescribed norms. They alsofelt that they have least influence andhold less central role compared with pi-lots and other functionaries.

Implications

As the ATC�s role is very importantdemanding high performance reliability,they have to be potentially effective intheir roles, which can reduce their rolestress and enhances their work attitude



simultaneously. Some of the practicalimplications drawn from the presentstudy include conducting counselingprogrammes for ATCs, which could beboth personal and work related counsel-ing. Provision of relaxation training, be-ing a part of stress management trainingprogramme such as yoga can also play avery important role.

Some of the practical implicationsdrawn from the present study in-clude conducting counselingprogrammes for ATCs, whichcould be both personal and workrelated counseling.

More specifically a significant aspectof stress that needs to be asserted as alikely suggestion for improvement is thatthe optimal level experiences of any typeof stressors tend to facilitate the func-tioning of the individual and beyond cer-tain limit, which may be different for dif-ferent people, stressors tend to deterio-rate performance level directly. How-ever, with the repetitive experiences ofstressors performance levels of the indi-viduals undergo a significant and positivechange giving him more latitude for en-hancing the adaptation level. It is there-fore, worth exploring whether with theimproved role efficacy or managing rolemore professionally the stress level couldbe managed? As suggested by our study,management may like to look at thestressful work environment and helpATCs to manage their roles by inculcat-ing some of the suggested qualities of roleefficacy so that their roles benefit frommanaging their role through the role effi-

cacy paradigm. But what is really re-quired is the change of mindset at thelevel of management to consider the oc-cupation activities of the ATCs as a highreliability profession compared with othertypes of professional categories, whereinmental alertness is undoubtedly required,but not necessarily the premium placedby the ATCs on the type of risks inher-ently involved in their job profiles. Ona larger scale enhancing role efficacy ofvarious professional groups of aviationindustry as part of an OD interventionprogramme could also be taken up assuggested for various professional groupsof Indian Railways ( Pestonjee andPandey, 1996).

References

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Bowers, D.G. (1983), �What Would Make 11,500People Quit Their Jobs?�, OrganizationalDynamics, 11 (3): 5-19

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Dell�Erba, G., Pancheri, P & Intreccialagli, B.(1988), �Hormonal Assessment andWorkload Correlates in Traffic Controllersat the End of Night Shift: The Stress Per-spective�, New Trends in Experimental andClinical Psychiatry, 4 (4):197-212

Folkard, S., & Condon, R (1987), �Night ShiftParalysis in Air Traffic Control Officers�,Ergonomics, 30(9):1353-63.

Grandjean, E (1968), �Fatigue: Its Physiologicaland Psychological significance�, Ergonom-ics, 11: 427-36.



Grandjean, E & Wotzka, G (1971), �Fatigue andStress in Air Traffic Controllers�, Ergo-nomics, 14: 159 � 65.

Hafeez, A & Subbaraya, S.V.(1994), �Workers�Attitude Questionnaire�, in U.Pareek &T.V. Rao, Handbook of Psychological andSocial Instruments, Baroda, Samasthi Pub-lications

Krol, V. (1971), �Variations in ATCs� Workloadas a Function of Variation in CockpitWorkload�, Ergonomics, 14 (5): 585-90.

Kumar, S, Kulkarni, R & Sayeed, O.B. (1998),�Stress, Strain and Coping Styles amongAir Traffic Controllers�, Productivity, 39(1): 113-18

Mohler, S.R (1983), �The Human Element in AirTraffic Control: Aeromedical Aspects,Problems and Prescriptions�, Aviation,Space and Environmental Medicine, 54 (6):511-16

Pareek, U (1983), �Organizational Role Stress�,in Goodstein, B.L and Pfeiffer, J.W. (Eds),The 12th Annual for HRD facilitators

Pareek, U. (1993), Making organizational RolesEffective, New Delhi: Tata McGraw-hillBook Company

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Pestonjee, D.M & Pandey, A (1996), �EnhancingRole Efficacy: An OD Intervention�,Vikalpa, 21 (2): 43-52.

Repetti, R.L. (1993), �Short Term Effect of Oc-cupational Stressors on Daily Mood andHealth Complaints�, Health Psychology, 12(2): 125-31.

Repetti, R.L. (1994), �Short Term and Long TermProcesses Linking Job Stressors to Father-Child Interaction�, Social Development, 3(1): 1-15.

Sayeed, O.B. (1985), �Job Stress and Role Mak-ing Behaviour�, Managerial Psychology, 6(1&2):35-57.

Sen, P.C. (1982), A Study of Personal and Orga-nizational Correlates of Role Stress andCoping Strategies in Some Public SectorBanks�, Unpublished Doctoral Disserta-tion in Management, Gujarat University.

Shouksmith, G & Burrough, S. (1988), �JobStress Factors for New Zealand and Cana-dian Air Traffic Controllers�, Applied Psy-chology � An International Review, 37 (3):263-70

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Alok Chandra & Baldev R. Sharma


Predictors of Occupational Stress: An Exploratory Study


Alok Chandra is a serving officer in the Indian Army(E-Mail: [email protected]). Baldev R.Sharma is Professor Emeritus, InternationalManagement Institute, New Delhi.(E-mail:[email protected]).

Based on an exploratory studyusing a purposive sample of 53managerial employees of a pub-lic sector organization, this pa-per has tried to assess the levelof occupational stress experi-enced by the respondents. A sub-sequent search for the predictorsof stress revealed that, out of theeight potential predictors usedfor the study, only two emergedas the critical determinants ofstress. Both of these predictorsturned out to be aspects of theorganizational climate, suggest-ing thereby the greater role playedby the situational factors (asagainst the attributes of the per-son) in creating occupationalstress. If subsequent researchstudies come up with similar find-ings, the outcome of this explor-atory study should be of interestto both academicians as well aspractitioners.

Occupational Stress

Occupational stress has been definedas the non-specific response of the bodyto any demands made upon it (Selye1976). According to Cooper et al. (1994),it is a negatively perceived quality whichstems from inadequate coping withsources of stress and which results innegative consequences in terms of men-tal as well as physical health. Stress isconsidered to be an internal state or re-action to anything consciously or uncon-sciously perceived as a threat, whetherreal or imagined (Clarke & Watson1991).

Various research findings confirmthe relationship between stress and lackof motivation, prolonged strikes, anxiety,absenteeism, burnout, high turnover, in-creased late coming, missing deadlines,making careless mistakes, and so on(Schabracq & Cooper 2000, Murphy1995, McHugh 1993). Chusmir andFranks (1988) have suggested that theaforementioned consequences of stresshave an adverse effect on the overallorganizational efficiency and effective-ness. Organizations are now realizing theimplications of the negative conse-quences of occupational stress and feel



the need to investigate stress- relatedproblems. This study is an attempt to as-certain the level of stress among themanagers of a public sector company andto determine the role of various factorsthat contribute to occupational stress.

Correlates of Stress

The factors that are associated withstress are usually called stressors. Theword �stressor�, like another term called�driver�, has a strong causal connota-tion. In the kind of research reported inthis paper, it is not possible to establishcause- and-effect relationship betweenvariables. Hence we prefer to use termslike correlates or predictors when refer-ring the relationship between stress andsome other independent variable(s).Previous studies on the subject haveidentified three broad categories of pre-dictors of occupational stress. Occupa-tional stress may be caused by environ-mental, organizational and personality-related variables (Matteson &Ivancevich 1999, Cook & Hunsaker2001). Some individuals, irrespective oftheir occupation, experience unaccept-able levels of job-related stress (Schultz& Schultz 2002). On the other hand,certain organizational factors are alsoknown to induce stress and strain foremployees at the workplace (Greenhaus& Bentell 1985).

Organizational Factors: in two re-view articles on occupational stress, Coo-per (1983, 1985) summarized the follow-ing six groups of organizational variablesas correlates of stress:

(1) Factors intrinsic to the job (e.g., heat,noise, chemical fumes, shift work.

(2) Relationships at work (e.g., conflictwith co-workers or supervisors, lackof social support).

(3) Organizational role (e.g., role ambi-guity).2

(4) Career development (e.g., role ofprospects for promotion, lack of acareer path, job insecurity).

(5) Organization structure and climate(e.g., lack of autonomy, lack of op-portunity to participate in decision-making, lack of control over the paceof work).

(6) Home and work interface (e.g, con-flict between domestic and workroles).

The above mentioned factors aretermed as organizational stressors sincethey serve as agents that trigger the vari-ous stress/strain reactions (Von Onciul1996). Foot and Venne (1990) discov-ered a positive relationship between bar-riers to career advancement and stress.According to Kanungo (1981), whenworkers believe that there is a separa-tion between their own job and otherwork-related contexts, it creates a senseof frustration that is eventually mani-fested in a behavioual state of apathy.This is particularly intense for employ-ees whose social needs are high. Work-ing alone on one�s supervisors would leadto occupational stress (Mirovisky & Ross1986, Eugene 1999). Work overload, bothquantitatively and qualitatively, has beenfound to be linked to a variety of psy-



chological and beha-vioural symptoms(Beehr & Newman, 1978, Greenhaus etal. 1987, Miller & Ellis 1990, Roberts etal. 1997).

Personal Attributes: Matteson andIvancevich (1999) suggest that stress isinfluenced by certain personal attributes.Past studies have also indicated that cer-tain personality traits have an impact onstress (Goldberg 1993), Deary andBlenkin 1996, Snyder & Ickes 1985). Forexample, locus of control, a personalitytrait, is found to have a relationship withstress. Weiner (1977) proposed that in-dividuals with an internal locus of con-trol attribute success and failure to theirown actions, whereas persons with anexternal locus of control relate their per-formance to task difficulty and luck.Since there is an inverse relationship be-tween perceived control over daily eventsand stress (Averill 1973, Bernardi 1997),persons with internal locus of control(who believe that they have control overevents) experience lesser amount ofstress. Spector (1986) conducted a meta-analysis and found significant correlationsbetween locus of control and occupa-tional stress.

Apart from locus of control, it shouldbe of some interest to find out whetherpersonal attributes in terms of demo-graphic background have any role to playin influencing occupational stress. In ourreview of literature, we have not comeacross studies that investigate this rela-tionship. Most of the studies were carriedout in the Western world. It would, there-fore, be of interest to find out whether theorganizational factors and personality

traits found as the correlates of stress inWestern societies are also applicable inthe Indian situation. Therefore, we pro-pose to examine the role of age, gender,education, grade and work experience tofind out whether these factors have animpact on occupational stress.

About this Study

This study is aimed at examining therelationship between occupational stressand a number of its potential predictors.Based on this examination, it is intendedto isolate a set of critical determinantsthat together explain maximum variancein occupational stress. Guided by thepreceding review of literature, the follow-ing, two sets of potential predictors wereselected for the present study:

(1) Personal Attributes

(a) Locus of Control

(b) Demographic Factors

(2) Situational Factors

(a) Job Content

(b) Organizational Climate

The hypotheses that are sought to betested through this study are:

Hypothesis 1: The managers with �in-ternal� locus of control experience alower level of stress.

Hypothesis 2: The managers whoperceive their jobs as �enriched� and �em-powering� experience a lower level ofstress.



Hypothesis 3: The managers who perceive theirorganizational climate (in terms of the selected di-mensions) more positively experience a lower levelof stress.

The sample for this study is a purposive one of53 managerial employees working in a large publicsector company. The company is engaged in manu-facturing high precision technical projects and its unitsare located at various sties all over India. Since thepurpose of the study was not to generalize the find-ings for the company as a whole, we decided to coveronly one of its units located in the National CapitalRegion (NCR). The unit covered was the PlanningDivision of the headquarters of the company. The total

strength of managerial employees of the Planning Di-vision was 90 out of which sample covered (N=53)constituted 59 per cent. Grade-wise distribution of thesample vis-à-vis the total strength) is given in Table 1.

Data were collected with the help of a self-ad-ministered �structured� questionnaire over a periodof four days in the month of August, 2009. The ques-tionnaire consisted of the following variables:

(1) Occupational Stress: This 10-item scale was spe-cially designed by the first author for purposes ofthis study. Response to each statement was soughton a four-point scale ranging between 0 (stronglydisagree) and 3 (strongly agree). Being an even-

Table 1: Grade-wise Distribution of the Sample

Sl. Designation (Grade) Total Strength Sample Per Cent

1. Assistant GM 17 11 64.7

2. Senior Dy.GM 8 3 37.5

3. Deputy GM 10 8 80.0

4. Sr. Manager 8 5 62.5

5. Manager 21 14 66.7

6. Dy. Manager 26 12 46.2

Total 90 53 58.9

number scale, it did notallow a person to give a�neutral� response aseach person was requiredto either agree (2, 3) ordisagree (0, 1) with everystatement. The overallscore that a person got interms of stress rangedbetween 0 and 30. Thehigher the score of a per-son, the more stressed hewould be and vice versa.

(2) Locus of Control: To mea-sure this personality trait,we used the scale devel-oped by Rotter. The scalehas 10 pairs of statementsof which one measures�internal� and the other�external� locus of con-trol. The respondent isasked to tick mark onlyone statement from eachpair that comes close tohis own frame of mind. Ascore of 1 was assignedif the selected statementbelonged to internal locusof control and 0 if the se-lected statement belongedto external locus of con-trol. Since our objectivewas to measure the ex-tent to which a respon-dent manifested internallocus of control, the over-all score for this person-ality trait ranged between0 (lowest) and 10 (high-est).



(3) Job Content: A five-item scale tomeasure job content (or job charac-teristics) was previously developedand standardized by the second au-thor. Since response to each state-ment was scored on a four-point scale(0 to 3), the overall score for all fivestatements ranged between 0 and 15.

(4) Organizational Climate: Organiza-tional climate is a multidimensionalconstruct. For purposes of this study,we have chosen the following six di-mensions of climate the scales forwhich were previously developedand standardized by the second au-thor:

(a) Benefits

(b) Career Opportunity

(c) Decision Making

(d) Objectivity & Rationality

(e) Recognition

(f) Training

Each of the above six dimensions ofclimate was measured with the helpof five statements using the four-point rating scale (0 to 3) alreadyexplained. The score range for eachdimension was between 0 (lowest)and 15 (highest).

Findings

Table 2 presents in a summarizedform the level of occupational stress andits potential predictors in the organiza-tion under study. Also presented in thistable are the details of each of the ninevariables used in this study. Barring twovariables (locus of control & benefits),

Table 2 : The Level of Occupational Stress and the Status of its Potential Predictors (N=53)

Var.No. Variable No. of Score Alpha Mean Std.Dev. ; Score

Items Range Score as %

Dependent Variable

1. Occupational Stress 10 0-30 .82 7.94 4.45 26.45

Independent Variables

(Personal)

2. Locus of Control 10 0-10 .58 7.32 2.00 73.20

Independent Variables

(Situational)

3. Benefits 5 0-15 .54 7.96 2.09 53.07

4. Career Opportunity 5 0-15 .72 8.19 2.36 54.60

5. Decision Making 5 0-15 .66 9.34 2.00 62.27

6. Job Content 5 0-15 .70 10.42 1.76 69.47

7. Objectivity 5 0-15 .71 8.98 2.31 59.87

8. Recognition 5 0-15 .82 7.98 2.47 53.20

9. Training 5 0-15 .81 8.28 2.31 55.20



the remaining seven variables haveemerged as highly reliable. In spite ofthe sample size being relatively limited insize, Cronbach Alpha in the region of .7and .8 is considered to be quite high.

Looking at the last column of Table2, it is quite clear that the managerialemployees of this organization do notexperience high degree of occupationalstress. However, any amount of stressexperienced by people at work is dys-functional for both the employees as wellas the organization. It is, therefore, de-sirable that even the present low level ofstress (26.45 per cent) be further re-duced if not removed entirely.

To pinpoint the incidence of occupa-tional stress more precisely, we carriedout microscopic examination of the dataon hand. Stress was measured throughagreement or disagreement with each ofthe 10 statements specially designed forthis purpose. If a person disagreed withall the 10 statements, it would mean thathe was experiencing no stress at all. If,on the other hand, someone agreed withall the 10 statements, it would mean thatthe person experienced stress to the ex-tent of 100 per cent (which, of course, ishighly unlikely to happen). Using re-sponses to the 10-item questionnaire,therefore, we have categorized the pre-cise incidence of occupational stressamong the sample of 53 managerial em-ployees (Table 3).

It should be clear from theabove distribution of respondents that 45per cent of them experience no stress atall. There are, however, 55 per cent of

Table 3: Incidence of Occupational Stressamong the Managerial Employees

Level of No. of Per CentStree (%) Employees

0 24 45.28

10 8 15.09

20 8 15.09

30 4 7.55

40 4 7.55

50 1 1.89

60 3 5.66

70 1 1.89

Total: 53 100

the employees who experience varyingdegrees of occupational stress as shownabove. For the sample as a whole, theincidence of stress is found to be quitelow.

Most of them are prone to at-tribute success and failure in lifeto their own ability, effort and/oractions instead of attributing theirpoor performance to task difficultyor bad luck.

Judging by the very high meanscore (73.20 per cent) for locus ofcontrol, it is obvious that a vast majority ofthe employees fall in the category of�internals�. In other words Most of themare prone to attribute success and failurein life to their own ability, effort and/oractions instead of attributing their poorperformance to task difficulty or bad luck.Such employees are indeed a valuable assetto the organization they work for. The statusof the situational factors is arranged in adescending order in Table 4.



Out of the seven situational factorsstudied, job content has been giventhe highest rating by the respo-ndents.

Out of the seven situational factorsstudied, job content has been given thehighest rating by the respondents. Thisshows that the employees of this organi-zation find their jobs to be well-designedin so far as there is (a) variety as well aschallenge in their work activities, (b) anelement of discretion to carry out the jobresponsibilities, (c) clarity about whatthey are expected to do, and (d) oppor-tunities to utilize their abilities and exper-tise in their jobs. Because of the pres-ence of these job characteristics, theemployees feel that their jobs contributeto their professional development.

With a mean score of 62 per cent,decision-making has also received a fairlyhigh rating. This indicates that the man-agement has empowered the employeesto take independent decisions without in-terference from their seniors and also todevelop their subordinates through ac-

Table 4: Status of the Situational Factors

S.No. Situational Factor MeanScore (%)

1. Job Content 69.47

2. Decision Making 62.27

3. Objectivity 59.87

4. Training 55.20

5. Career Opportunity 54.60

6. Recognition 53.20

7. Benefits 53.07

tions such as job rotation, training andperformance appraisal. The decision-making in the company is perceived asfair and transparent and the managementis viewed as supportive of spot decisionstaken by the employees during crisis situ-ations.

Objectivity is the third situational fac-tor that has been given a high rating (60per cent) by the respondents. As seenthrough the eyes of the employees, per-sons are recruited and promoted in thiscompany by merit and not throughfavouritism based on caste, creed or re-ligion, etc. The performance appraisalsystem of the company is seen as trans-parent and fair and the personnel poli-cies of the company are followed uni-formly in all cases. Even though the threesituational factors described above arereasonably well looked after by the man-agement, there is still scope for furtherimprovement in each of these areas.

The remaining four situational fac-tors (training, career opportunity, recog-nition and benefits) are only moderatelywell-looked-after, as reflected in theirmean scores ranging between 53 and 55per cent. In other words, there is muchmore scope for the management of thisorganization to improve their HR policiesand practices that impinge upon thesefour situational factors.

Analysis of Data

Apart from assessing the level ofoccupational stress and the status of itspotential predictors, the other objectiveof this study was to identify the critical



predictors of occupational stress. In oursearch for those predictors, we begin bylooking at the bi-variate relationships be-tween and among the selected variables.Table 5 presents the 9 × 9 inter-correla-tion matrix. A look at column 1 (or row1) will show that, except for just one vari-able (training), each of the remaining

seven independent variables is negativelyand significantly related to occupationalstress.

The observed relationships betweenoccupational stress and each of its pre-dictors are consistent with the theoreti-cal model on which the present study is

Table 5: Inter-Correlation Matrix for the Selected Variables (N = 53)

Variable Occup. Locus Benefits Career Decision Job Object Recogn. Training

Stress Of ctl. Opp. Making Content -ivity

1 2 3 4 5 6 7 8 9

Occup. Stress 1 1.00 -.431** -.514** -.316* -.329* -.410** -.596** -.352** -.143

Locus of Ctl. 2 -.431** 1.00 .155 .252 .381** .301* .502** .395** .189

Benefits 3 -.514** .155 1.00 .445** .265 .579** .466** .286* .384**

Career Opp. 4 -.316* .252 .445** 1.00 .511** .647** .530** .634** .668**

Decision Mkg. 5 -.329* .381** .265 .511** 1.00 .539** .464** .516** .442**

Job Content 6 -.410** .301* .579** .647** .539** 1.00 .533** .462** .378**

Objectivity 7 -.596** .502** .466** .530** .464** .533** 1.00 .496** .330*

Recognition 8 -.352** .395** .286* .634** .516** .462** .496** 1.00 .609**

Training 9 -.143 .189 .384** .668** .442** .378** .330* .609** 1.00

*P<.05 **P<.01

based. Employees who scored higher interms of �internal� locus of control arefound to experience less occupationalstress than those who scored lower onthis personal attribute. Likewise, employ-ees who gave more positive ratings to thevarious situational factors (except train-ing) were found to experience less stressthan those who gave lower ratings to thesaid factors.

The relationships among variablesdepicted in Table 5 are only zero-ordercorrelations, which can sometimes bespurious. To identify the true relationshipbetween any two variables (say, x andy), it is necessary to introduce additional

variables to find out whether the ob-served correlation between x and y isgenuine and not a reflection of the influ-ence of some other variable (s). The lat-ter possibility is always there where theso-called independent variables are them-selves highly inter-correlated, as is thecase in the present study. In such cases,it is essential to undertake multivariateanalysis of data instead of relying onlyon bi-variate relationships presented inTable 5.

To discover the critical predictors ofoccupational stress, it was decided to usemultiple regression as the tool for furtheranalysis of data. The purpose of this



analysis is to identify (out of a large num-ber of combinations possible) the onecombination of independent variables thatexplains the highest amount of variancein the dependent variable (occupationalstress). That combination may be of anysize, but it must satisfy the additional con-dition that the individual contribution ofeach predictor of stress in the selectedregression equation must not only be sta-

tistically significant (P<.05) but alsonegative (as postulated in the model).Step-wise linear regression analysishelped us in identifying the best equationpresented in Table 6.

Out of the eight potential predictorsof occupational stress selected for thisstudy, only two have emerged as critical.These are two situational factors called

Table 6: Critical Predictors of Occupational Stress (N = 53)

Sl.No. Predictors Zero-Order Std. Beta IndividualCorrelation Coefficient Contribution

(A) (B) (A × B)

1. Objectivity -.596** -.455** .271180

2. Benefits -.514** -.303* .155742

F2,50 = 18.611 P<.01 Total (R2): .426922

* P<.05 ** P<.01

�objectivity� and �benefits�, which togetherexplain a little over 42 per cent of thevariance in stress. Moreover, the individualcontribution of each predictor is not onlystatistically significant but is also negativeas hypothesized. Between these twopredictors, �objectivity� plays a more

important role than �benefits� in influencingoccupational stress. When the effect ofthese two predictors is held constant (thatis, controlled), the relationship betweenstress and each of the remaining sixvariables becomes non-significant, asshown in Table 7.

Table 7: 2nd - Order Partial Correlations Between Occupational Stress and each of the�Excluded Variables�

Sl.No. Excluded Variables Partial t d.f. PCorrelation Value

1. Career Opportunity .098 .682 49 n.s.

2. Decision Making -.056 -.391 49 n.s.

3. Job Content .013 .092 49 n.s.

4. Locus of Control -.239 -1.722 49 n.s.

5. Recognition -.061 -.4251 49 n.s.

6. Training .180 .281 49 n.s.

Note: �n.s.� stands for not significant.



Role of Background Variables

Apart from the variables already dis-cussed in this paper, the questionnaire hadalso sought data regarding the back-ground profile of the respondents withreference to the following five param-eters: age, work experience, grade, edu-cation, and gender. Data relating to gen-der and education could not be used forfurther statistical analysis due to the ab-sence of adequate variation among therespondents. To illustrate, out of the 53respondents, 49 (92.5 per cent) weremales, while 47 (88.7 per cent) were

graduates or post graduates. There was,however, adequate variation in terms ofthe remaining three variables.

An employee�s grade being anordinal-scale variable cannot be used forpurposes of correlation. Hence, we dividedthe sample into two groups: grades 1 and 2(low) with N = 26; and grades 3 to 6 (high)with N = 27. Treating these two groups asindependent samples, we compared theirmean scores on occupational stress. Theresults of the t-test show that employeesin higher grades experience greater stressthan those in lower grades (Table 8).

Table 8: Comparison of Mean Scores on Occupational Stress

Grade N ; Stress Standard t Value d.f. P

Score Deviation

Grades 3 to 6 (high) 27 9.59 4.68 2.947 51 P<.01

Grades 1&2 (low) 26 6.23 3.52

Total 53 7.94 4.45

Since age and experience are highlycorrelated (r=.979), each of them is amirror reflection of the other. As shownbelow, when the effect of one of these

Table 9: Correlation between Stress, Age &Experience

Stress Age Experience

Stress 1.00 .332* .347*

Age .332* 1.00 .979**

Exp. .347* .979** 1.00

*P<.05 **P<.01

Age and work experience werecorrelated with occupational stress and bothof them were found to be significantly andnegatively related to stress (Table 9).

two variables is controlled, the partialcorrelation between the other variableand stress becomes non-significant.

(a) Partial correlation between age andstress, controlling for the effect ofwork experience. �.. -.040 (n.s)

(b) Partial correlation between workexperience and stress, controlling forthe effect of age. �.. .114 (n.s)

As both age and experience areindividually correlated with stress, it wasdecided to add both of them to the list of 8independent variables already discussed forcarrying out another regression analysis.The purpose of the additional analysis was



to ascertain whether age and/orexperience, in conjunction with certainsituational variables, turns out to be criticalpredictor(s) of stress. The revisedcalculations showed once again that thesame combination of the two variables(objectivity and benefits) is a criticalpredictor of occupational stress. When theeffect of these two predictors is controlled,the partial correlation between stress andthe two background factors becomes non-significant, as shown below:

(a) 2nd-order partial correlation betweenage and stress, controlling for theeffect of �objectivity� and �benefits�

� .102 (n.s.)

(b) 2nd-order partial correlation betweenwork experience and stress, control-ling for the effect of �objectivity� and�benefits� � .055 (n.s.)

Conclusion

This exploratory study was designedto assess the level of occupational stressamong the managerial employees of apublic sector organization. The other ob-jective of the study was to identify thefactors that contribute to occupationalstress. As the findings show, the respon-dents of this study experience a fairly lowlevel of stress (26.45 per cent). Onepossible reason for this low level of stresscould be the choice of the unit selectedas the sample for this study. Work in thePlanning Division of an organization isgenerally of an autonomous nature freefrom bureaucratic hassles and interper-sonal conflict. This view is corroboratedby �job content� scoring the highest rat-

ing (69.47 per cent) among the seven situ-ational variables.

To discover the factors that contrib-ute to occupational stress, we had se-lected a set of eight potential predictorson the basis of review of previous stud-ies on the subject. Barring just one vari-able (training), each of the remainingseven variables was found to be nega-tively and significantly correlated withstress. Subsequent multivariate analysisrevealed only the following two situ-ational factors as the critical determi-nants of occupational stress:

(a) objective and impartial decision-mak-ing; and

(b) adequate welfare benefits.

In other words, subjective and par-tial decision-making and inadequate wel-fare benefits are found to cause resent-ment that leads to stress among the em-ployee.

Subjective and partial decision-making and inadequate welfarebenefits are found to cause resent-ment that leads to stress amongthe employee.

Although the incidence ofoccupational stress is not very high amongthe managerial employees of theorganization covered by this study, 55 percent of the respondents do experiencesome degree of stress. If the managementof this organization were to reduce oreliminate even this low level of stress,they will have to concentrate on the two



areas of concern to the employees �namely, objectivity and benefits. Animprovement in these two areas is likely toreduce occupational stress among theemployees.

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Emotional Intelligence & Managerial Effectiveness : Roleof Rational Emotive Behaviour

Nivedita Srivastava & Shreekumar K. Nair

Nivedita Srivastava is Fellow Student at NationalInstitute of Industrial Engineering (NITIE), Mumbaiand a Organisation Development consultant. E-mail:[email protected]. Shreekumar K. Nairis Professor (OB & HRM) in the same InstituteE-mail : [email protected]

In recent times, emotional intelli-gence has been hailed by both aca-demicians and practitioners as a softskill that is critical for managers tosucceed in their professional roles.Considerable research interest isseen today in the hitherto neglectedarea of human emotions and theirimpact at the workplace. This paperpresents the results of an empiricalstudy undertaken to see the influ-ence of emotional intelligence andrational emotive behaviour on mana-gerial effectiveness. The studysample consisted of 305 managersfrom diverse industries in the publicand private sectors. Results showedthat both the variables positively in-fluence managerial effectiveness.Further, rational emotive behaviourwas found to moderate the relation-ship between emotional intelligenceand managerial effectiveness. Impli-cations of these findings are dis-cussed in the paper.


Introduction

It is an undeniable fact that only high-performing organizations employinghighly result-oriented managers can sur-vive and grow in today’s globalized era.High-performing organizations, no doubt,try to attract the best talent from the jobmarket. In fact, hiring potentially effec-tive and result-oriented managers has, inrecent times, become the greatest chal-lenge for HR managers of any progres-sive organization. However, hiring poten-tially effective managers calls for aproper understanding of the personalityrelated factors that invariably influencea manager’s effectiveness in his job.Only continuing research in this areawould help in identifying important per-sonality variables which can predictmanagerial behaviour.

Although by common understanding,effective managers are those who deliverresults and add value to the company,some of the researchers tried to definethe concept of managerial effectivenessand distinguish it from other related con-cepts. Reddin (1970:4) distinguished be-tween managerial effectiveness, appar-ent effectiveness and personal effective-



ness while defining managerial effective-ness as “the extent to which a managerachieves the output requirements of hisposition”. Mintzberg (1973) observedthat all managerial jobs are similar in na-ture and therefore they could be describedby certain common behaviours or roles.He put forward ten managerial roles fall-ing under three categories: (1) interper-sonal (figurehead, leader, liaison), (2) in-formational (monitor, disseminator,spokesperson), and (3) decisional (entre-preneur, disturbance handler, resourceallocator, negotiator). According toMintzberg, managers working in differ-ent positions could be effective depend-ing on the combination of these ten roles.Das (1991) compared Mintzberg’s mana-gerial roles with Indian managerial rolesand found certain skills such as interper-sonal relations, crisis management, em-ployee counselling, oral communication,etc. as critical to become an effectiveexecutive in India. A study by Das &Manimala (1993) on middle and seniorlevel managers employed in a variety oforganizations revealed that several of theroles suggested by Mintzberg are playedby Indian managers. Roles such as‘leader’, ‘monitor’ and ‘entrepreneur’were found to be the important aspectsof the managers’ job whereas, roles suchas ‘figurehead’, ‘negotiator ’, and‘spokes-person’ were found to be lessimportant aspects of the managers’ job.

There are several theoretical conc-eptualizations of managerial effecti-veness incorporating various managerialroles, skills, and competencies availablein literature. Yukl (1989) integrated sev-eral decades of managerial-role research

into a taxonomy of managerial behaviour.A role-based framework is consistentwith Katz and Kahn’s (1978) open sys-tems approach in which roles are deter-mined by inputs from the environment aswell as variations in style as determinedby the individual. They definedbehavioural roles as the “recurring ac-tions of an individual, appropriately inter-related with the repetitive activities ofothers so as to yield a predictable out-come” (p.125). Other significant modelsof managerial effectiveness include theones proposed by Luthans et al (1988),Balaraman (1989), Quinn (1990), Gupta(1996), Hamlin (2002), and Srivastava &Sinha (2007).

Gupta (1996:399) defined managerialeffectiveness as the “ability of a man-ager to carry out the activities requiredof his position while achieving the resultsboth current and in terms of developingfurther potential”. Using factor analysis,16 dimensions of managerial effective-ness were identified, viz., confidence insubordinates, communication & task as-signment, networking, colleagues man-agement, discipline, resource utilization,management of market environment, con-flict resolution, integrity & commun-ication, client management & compe-tence, motivating, delegation, image build-ing, welfare management, consultative,and inspection & innovation. This modelhas been developed for the Indian con-text and it seems to encompass all therelevant dimensions of managerial effec-tiveness incorporated in other models. Acloser look at these 16 dimensions revealsthat there is high degree of man-manage-ment focus inherent in Gupta’s (1996)

Emotional Intelligence & Managerial Effectiveness : Role of Rational Emotive Behaviour


construct. This means that personal vari-ables that are related to managers’ abil-ity to manage people can have a signifi-cant impact on their managerial effec-tiveness (Nair & Yuvaraj 2000).

Personal variables that are relatedto managers’ ability to managepeople can have a significant im-pact on their managerial effective-ness

A few studies have examined the roleof certain personality variables on mana-gerial effectiveness in the Indian context.For instance, Rastogi and Dave (2004)studied the managerial effectiveness oftop and lower level managers in produc-tion and marketing departments in rela-tion to their personality type using asample of 80 managers from various pri-vate sector organizations from the stateof Uttar Pradesh in India. The Manage-rial Effectiveness Questionnaire (Gupta1996) was used to measure managerialeffectiveness. The major findings werethat in the production department, bothtop and lower level managers havingType-B personality were found more ef-fective and in marketing department top-level managers having Type-A personal-ity and lower level managers having TypeB personality were found more effectivein comparison to their counterparts.

Emotional Intelligence &Managerial Effectiveness

In the last decade, there has been agrowing interest in the role of emotionsand emotional intelligence (EI) on mana-

gerial behaviour (Callahan Fabian 1999,Bryant 2000). Researchers are particu-larly trying to understand the role emo-tions and emotional intelligence play inthe organization through change efforts,leadership effectiveness, training andorganizational performance.

The genesis of the study of EI hasits roots in David Wechsler’s idea of“non-collective aspects of general intel-ligence”, which reaches as far back as1940 (Wechsler 1940). Subsequently,Leeper (1948) proposed that “emotionalthought” is part of and contributes to “logi-cal thought” and intelligence in general.These early proposals were succeedednearly half a century later by the ideasof Harvard University’s HowardGardner, who felt that intelligence en-compasses multiple dimensions, combin-ing a variety of cognitive aspects withemotional intelligence (or “personal in-telligence” as he called it). The emotionalor personal dimension of his concept of“multiple intelligence” included two gen-eral components that he referred to as“intrapsychic capacities” and “interper-sonal skills” (Gardner 1983). On theother hand, Mayer and Salovey lookedprimarily at six components of “emotionalintelligence” that are very similar toBarOn’s components (Mayer et al.1990).

Based on Gardener’s (1983) theory,BarOn (1997a) defined emotional intelli-gence as “an array of non-cognitive ca-pabilities, competencies, and skills thatinfluence one’s ability to succeed in cop-ing with environmental demands andpressures”. This suggests that non-cog-



nitive intelligence helps to predict suc-cess because it reflects how a personapplies knowledge to the immediate situ-ation. In a way he suggested that mea-suring emotional, personal, or social in-telligence is to measure one’s ability tocope with daily situations to get along inthe world.

A study by Singh (2001) concludedthat different professions do require dif-ferent levels of EQ. However, having ahigh or average EQ may not be labelledas ‘good’ or ‘bad’ in a profession. It isnecessary to have a right balance of vari-ous emotional competencies which mayhelp one become a star performer. It alsofound that many professions exhibitedmoderate EQ. However, it should not beinterpreted that high EQ is not requiredin these professions.

Having a high or average EQ maynot be labelled as ‘good’ or ‘bad’in a profession.

Studies have indicated positive rela-tionship between emotional intelligenceand managerial success. For instance,Daftuar et al (2000) investigated the re-lationship between EQ and sixteen dimen-sions of managerial effectiveness usingEQ Map of Cooper & Sawaf (1997).They found the self- awareness of man-agers to be positively correlated with 9dimensions; resilience with 12 dimen-sions, interpersonal connection with 12dimensions, integrity with 12 dimensionsand intuition with 14 dimensions of mana-gerial effectiveness. Shipper et al (2003)explored the relationship between EI and

managerial effectiveness using a cross-cultural sample of 3,785 managers of amultinational firm located in U.S, UK, andMalaysia. They found that empathy, self-awareness, and self- regulation are highlyrelated to managerial effectiveness. In astudy by Sy et al (2006), participants were187 food service workers and their 62managers at nine divergent locations ofthe same restaurant franchise. The re-sults of this study also support previousresearch (e.g. Wong & Law 2002, Lawet al. 2004) indicating that employees withhigher EI have higher job performance.The study suggests that employees withhigh EI are more adept at using theiremotions to facilitate job performance.Employees with high EI are more adeptat using their emotions to facilitate jobperformance. In the Indian context, simi-larly, Kumar (2001) found high correla-tions of emotional intelligence with teamcohesiveness, organizational effective-ness, job satisfaction, and transforma-tional leadership among executives.

Rational Emotive Behaviour

Rational Emotive Behaviour (REB),another construct having emotional un-dercurrents has, in recent times, beenfound to have implications for manage-rial behaviour. The theory behind Ratio-nal Emotive Behavior Therapy (REBT),developed by Albert Ellis (1973), positsthat our feelings are primarily caused bythe specific thoughts and messages we

Employees with high EI are moreadept at using their emotions tofacilitate job performance.



tell ourselves. Rational Emotive Behav-ior Therapy (REBT) is active-directive,but is also unusually post-modernistic andconstructivist in that it specializes inshowing clients how their conscious andunconscious absolutistic philosophies leadto much of their dysfunctional feelingsand behaviours, and what they can do tomake themselves more open-minded andflexible in their intra-personal and inter-personal relationships (Ellis 1998). Ellisposited that if people could be preventedfrom indulging in irrational thoughts andbeliefs, they would improve their abilityto direct their energy toward self-actu-alization (the rational drive), which hebelieved could best be accomplishedthrough reason (Ellis 1994). The ABCframework is the cornerstone of rationalemotive practice. In this framework, ‘A’stands for an activating event, ‘B’ standsfor beliefs or evaluative cognitions of theworld, and ‘C’ stands for emotional andbehavioural consequences.

Rational Emotive Behaviour Therapyhas been used to study the influence ofrational thinking and emotions and its in-fluence on personality since long. REBTconsists of belief systems which furthercomprises rational beliefs which areprovable and verifiable, are associatedwith appropriate emotions, and more pro-ductive and self- helping behaviours.These are usually logical and consistentand lead to desirable and happy feelings.On the other hand, irrational beliefs dealwith no evidence to support the belief,and are associated with inappropriateemotions. They are also associated withless productive and self-helpingbehaviours. These beliefs are often illogi-

cal and inconsistent and often lead toundesirable and miserable feelings.

Kilburg (1996) has described a num-ber of the typical goals of coaching, in-cluding (i) increasing the client’sbehavioural range, flexibility, and effecti-veness; (ii) improving the client’s socialand psychological awareness and com-petencies; (iii) increasing the client’s tol-erance and range of emotional responses;and (iv) strengthening the client’s hardi-ness and stress management skills. Giventhe identified outcomes of the REBT pro-cess, they believed it is possible to usethe basic principles of this therapeuticapproach to meet a number of thesegoals.

Executive coaching forms an impor-tant aspect of Managerial Effectiveness.Sherin and Caiger (2004) have suggestedbehavioural change as an important com-ponent of executive coaching and thussuggested the use of REBT for execu-tive coaching. The study suggested thatmuch of executive coaching involves as-sisting them to strategically developadaptive work behaviours. Underlyingmany of these interventions is the needto effect behavioural change. Indeed,many coaching models includebehavioural change as a fundamentalaspect of their process. For example,Saporito’s (1996) four stages of execu-tive coaching include effecting and moni-toring behaviour change as a key com-ponent of the coaching which is an im-portant managerial process. An emotion-ally intelligent person is high at traits likeassertiveness, independence, empathy,inter-personal relationship, happiness, etc.



An emotionally intelligent person is alsoefficient at stress tolerance and impulsecontrol. Additionally, such a person is alsooptimistic and believes in reality testing,thus, helping in understanding as to howrational he or she is.

An emotionally intelligent personis high at traits like assertiveness,independence, empathy, interper-sonal relationship, happiness, etc.

In a study by Spörrle and Welpe(2006), by adopting the theoretical frame-work of Rational Emotive BehaviorTherapy (Ellis 1962, 1994), the cognitiveantecedents of functional behaviour andadaptive emotions as indicators of emo-tional intelligence (EI) were examinedand central assumptions of REB weretested. In an extension of REB, it washypothesized that adaptive emotions re-sulting from rational cognitions reflectmore EI than maladaptive emotions,which result from irrational cognitions,because the former leads to functionalbehaviour. The results of the first studyusing organizational scenarios in an ex-perimental design confirmed central as-sumptions of REB and supported the hy-potheses. In a second correlational studythe connection between rational cognitionsand EI by measuring real person datausing psychometric scales was replicated.Both studies indicated that irrational atti-tudes result in reduced job satisfaction.

The Study

This study was carried out with thefollowing objectives.

1. To find out the nature of relation be-tween Emotional Intelligence andManagerial Effectiveness.

2. To ascertain the nature of relation-ship between Rational EmotiveBehaviour and Managerial Effective-ness.

3. To study the role of Rational Emo-tive Behaviour in the relationship be-tween Emotional Intelligence andManagerial Effectiveness.

Based on the review of relevant lit-erature, the following hypotheses wereformulated and verified in the study.

Hypotheses

H1.Emotional Intelligence will be posi-tively related to Managerial Effec-tiveness.

H2.Rational Emotive Behaviour will bepositively related to Managerial Ef-fectiveness.

H3.Rational Emotive Behaviour will mod-erate the relationship between Emo-tional Intelligence and ManagerialEffectiveness.

Methodology

1. Emotional Quotient Inventory(EQi): BarOn (1997b, 2000) de-scribes the Emotional Quotient in-ventory as a self report measure ofemotionally and socially competentbehaviour which provides an estimateof one’s emotional and social intelli-gence. The instrument was initiatedin the early 1980s as an experimen-tal tool. EQ- i, consists of 15 sub-



scales with 133 items. It has a fivepoint rating scale. A score of 1 isawarded if the respondent haschecked on Very Seldom or Not Trueof Me, 2 to Seldom True of Me, 3 toSometimes True of Me, 4 to OftenTrue of Me and a score to Very Of-ten True of Me or True of Me. Outof the 133 items belonging to differ-ent sub-scales 57 are to be reversescored.

Emotional Self Awareness (ES), Self-Regard (SR), Assertiveness (AS),Independence (IN), and Self – Ac-tualization (AS) constitute Intra-per-sonal skills. Inter-personal skills onthe other hand consist of Empathy(EM), Social Responsibility (SRES),and Interpersonal Relationship (IR).Additionally there is the adaptabilityscale, which consists of Reality Test-ing (RT), Flexibility (FL), and Prob-lem Solving (PS). Equally importantis the Stress Management skill whichincludes Impulse Control (IC) andStress Tolerance (ST). The Generalmood scales on the other hand areHappiness (HA) and Optimism (OP).Bar On (2000) has reported the in-ternal reliability by using theCronbach alpha ranging from 0.70for Social Responsibility to 0.89 forSelf –Regard. Kumar (2001) in hisIndian study reported the internalconsistency of the 15 sub-scalesranging from 0.65 to 0.89. TheCronbach alpha value of EQi com-puted in this study is 0.68.

2. Rational Behaviour Inventory: TheRational Behaviour Inventory (RBI)developed by Shorkey and Whiteman

(1977) has a five point rating scale.It consists of 37 items. The reliabil-ity index computed in this study is 0.75.

3. Managerial Effectiveness Scale:This scale developed by Gupta (1996)consists of 45 items measuring 16 di-mensions. The scale has been fur-ther factor analysed giving 3 factorsnamed as Activities of His Position,Achieving the Results and Develop-ing Further Potential. It has positivelyand negatively worded items with afive point rating scale. Positive itemsare scored by assigning 5 to a ratingof Always; 4 to Usually; 3 to Neu-tral; 2 to Sometimes; and 1 to Never.The test-retest reliability and splithalf reliability are 0.73 (Gupta 1996).The Cronbach alpha value computedin this study is 0.88.

Sample

The present study consisted of 305managers from several industries acrossIndia including manufacturing, informationtechnology, human resource consulting,banking, energy, and telecommunication.Out of the 305 managers, 197 participantswere middle level managers and 108 wereentry level managers. A sample of around300 executives was primarily the targetsample so as to ensure a good mix ofmale- female, middle level- entry level, andprivate-public sector categories of execut-ives. It has been seen that the roles andresponsibilities of entry level and middlelevel managers (viz. team working; deci-sion making; planning and organizing) arequite similar in nature in comparison to



senior level managers where the roles andresponsibilities include transformationalleadership, strategic thinking, mission andvision formation of the organization. First-line managers are primarily involved inproject management activities. Middle-level managers are heavily involved inpersonnel supervision activities, thoughthey are still involved in project manage-ment. Upper-level managers are heavilyinvolved in strategic planning, howeverthey also have involvement in projectmanagement and personnel supervisionbut, comparatively to much lower extent(Friedman & Fleishman 1990). For thispurpose, it has been decided to adopt pur-posive sampling method to study entrylevel and middle level managers to main-tain the homogeneity of the sample. Togive a wider representation of the mana-gerial population, the sample comprisedmanagers from public sector as well asprivate sector industries. Out of the 305managers, 148 were from public sectorand 157 from private sector companies.These managers were from some of thetop companies located in the major metrocities of India where the need to managerisk, handle stress, and to adapt efficientlyis high. The entry-level managers rangedin age from 21 years to 40 years with an

average age of 28 years whereas, themiddle-level managers ranged in age from24 years to 58 years with a mean age of38 years. It was ensured that an entrylevel manager has a minimum of 1 yearof experience and a middle level managerhas a minimum experience of 3 years.

Results & Discussion

In order to study the distribution ofdata, descriptive statistics like Means andStandard Deviations were found out. Forthe purpose of testing the hypotheses andestablishing relationships among the vari-ables, statistics like correlation and simpleregression were used. Further, Fisher’s rto z transformation test was used to studythe effect of the moderating variable.

In order to ensure that the public sec-tor and private sector samples do not dif-fer significantly on the variables understudy, t-test was conducted. The resultsof t-test signify non-significant differencein Emotional Intelligence (t = 1.056,p<0.06, df = 147). Hence, the twosamples were combined and all statisti-cal analyses were done for the totalsample. The statistical package used fordata analysis in this study is SPSS 15.0.

Table 1: Descriptive Statistics of Independent and Dependent Variables

Variable N Mean Minimum Maximum S D

Intrapersonal 305 263.59 209 312 18.45Interpersonal 305 103.83 61 135 16.89Adaptability 305 88.95 58 115 10.61Stress Management 305 60.54 34 82 9.149General Mood 305 61.61 43 80 8.064Rational Emotive Behaviour 305 21.03 7 34 5.135Activities of his position 305 108.76 69 152 15.52Achieving the results 305 23.90 10 32 4.309Developing further potential 305 20.570 8 30 4.223



Table 3 reveals that Emotional Intel-ligence (Adaptability Skills, Stress Man-agement, and General Mood) is a signifi-

cant predictor of Activities of His Posi-tion factor of Managerial Effectiveness.It can be seen from Table 4 that emo-

Table 1 shows the descriptivestatistics of the independent and dependentvariables. Minimum- maximum ranges,means, and standard-deviations are listedin table 1. All variables have a high meanvalue. The specific skills of Emotional

Intelligence and Rational EmotiveBehaviour have high standard deviationvalues indicating a good spread of scoreswhile variables of ManagerialEffectiveness have low standard deviationvalue.

Table 2: Inter correlation Matrix

Intra- Inter- Adap- Stress General Rational AHP ATR DFPpersonal personal tability Mgt. Mood Beh.

Intra-personal 1

Inter-personal 0.718** 1

Adap-tability 0.789** 0.658** 1

StressMgt. 0.591** 0.471** 0.698** 1

GeneralMood 0.728** 0.625** 0.713** 0.471** 1

RationalBeh. 0.214** 0.095 0.214** 0.342** 0.119* 1

AHP 0.04 0.11 0.125** 0.30** 0.31** 0.25** 1

ATR 0.004 -0.021 0.064 -0.04 -0.004 0.135** 0.682** 1

DFP 0.069 0.23** 0.179** 0.047 0.122* 0.064 0.867** 0.685** 1

* Significant at 0.05 level (2- tailed); ** Significant at 0.01 level (2- tailed)

Results of correlational analysis pre-sented in Table 2 reveal that there is astrong positive relation between EmotionalIntelligence and Managerial Effective-ness. Results also show a significant posi-tive relation between Rational EmotiveBehaviour and Activities of His Position

and Achieving the Results factor of Mana-gerial Effectiveness. In addition, a strongcorrelation between Emotional Intelli-gence and Rational Emotive Behaviour isseen. All of the five specific skills of Emo-tional Intelligence are significantly corre-lated to Rational Emotive Behaviour.

Table 3: Simple Linear Regression of Activities of His Position with Factors of EmotionalIntelligence

DV IV R2 Adjusted R2 β F (1,303)

Intra-personal 0.001 0.000 0.030 0.484Activities of His Inter-personal 0.012 0.008 0.11 3.724Position Adaptability 0.105 0.051 0.124** 4.779

Stress Management 0.269 0.234 0.305** 4.786General Mood 0.134 0.112 0.324** 4.35




tional Intelligence is not a significant pre-dictor of Achieving the Results. Table 5depicts that Emotional Intelligence (In-ter-personal Skills, Adaptability, and Gen-eral Mood) is a significant predictor ofDeveloping Further Potential. Also, it canbe seen from Table 6, that Rational Emo-tive Behaviour is a significant predictor

of Activities of His Position, Achievingthe Results, and Managerial Effective-ness as a composite score.

Emotional Intelligence is not a sig-nificant predictor of Achieving theResults.

Table 4: Simple Linear Regression of Achieving the Results with Factors of Emotional Intel-ligence

DV IV R2 Adjusted R2 F (1,303)

Intra-personal 0.001 0.000 0.003 0.004

Activities of His Inter-personal 0.000 0.000 -.020 1.131

Position Adaptability 0.032 0.028 0.113 1.225

Stress Management 0.011 0.001 0.041 0.139

General Mood 0.012 0.011 0.0296 1.501

Table 5: Simple Linear Regression of Developing Further Potential with Factors of Emo-tional Intelligence

DV IV R2 Adjusted R2 F (1,303)

Intra-personal 0.004 0.001 0.068 1.437

Developing Inter-personal 0.16 0.13 0.130** 5.235

Further Potential Adaptability 0.22 0.21 0.179** 10.080

Stress Management 0.020 0.018 0.04 1.675

General Mood 0.14 0.11 0.121** 4.558


Table 6: Simple Linear Regression of Factors of Managerial Effectiveness and ManagerialEffectiveness with Rational Emotive Behaviour

IV DV R2 Adjusted R2 F (1,303)

RE B Activities of His Position 0.18 0.17 0.239** 6.19

Achieving the Results 0.15 0.146 0.135** 5.649

Developing Further Potential 0.004 0.007 0.06 1.232

Managerial Effectiveness 0.23 0.21 0.25** 5.92




The results of Fisher r to z transfor-mation test reveal that Rational EmotiveBehaviour acts as a moderating variablefor the effect of Emotional Intelligence onManagerial Effectiveness (z= 2.25**,p< 0.01).

Significant positive relation has beenfound between Emotional Intelligence (R2

= 0.19,

β

= 0.37***, p<0.001) andManagerial Effectiveness. This supportsHypothesis 1 which states that EmotionalIntelligence will be positively related toManagerial Effectiveness. It can be notedfrom the results that Emotional Intelligenceis a significant predictor of ManagerialEffectiveness. This is in line with thefindings of the study by Shipper et al (2003)which conclude that empathy, self aware-ness, and self regulation are highly relatedto managerial effectiveness.

Significant positive relation has beenfound between Rational Emotive Behaviour(R2 =0.18,

β

= 0.239**, p<0.01) andActivities of His Position factor ofManagerial Effectiveness. Significantpositive relation has been found betweenRational Emotive Behaviour (R2 = 0.15,

β

= 0.135**, p<0.01) and Achieving theResults factor of Managerial Effectiveness.Also, Rational Emotive Behaviour has beenfound to significantly predict ManagerialEffectiveness as a whole (R2 = 0.23,

β

=0.25**, p<0.01). This partially supportsHypothesis 2, which states that RationalEmotive Behaviour will be positivelyrelated to Managerial Effectiveness.DiMattia (1993) argued that the rationalemotive behaviour approach suits theorganizational context because of itspreventive, psycho-educational emphasisand its short-term, solution-focused

It was hypothesized that RationalEmotive Behaviour acts as a moderat-ing variable in the relationship betweenEmotional Intelligence and ManagerialEffectiveness. To study the effect ofthis moderating variable, the significanceof difference of correlation has beenstudied between the values of r ofManagerial Effectiveness correspondingto ‘High’ Emotional Intelligence and

‘Low’ Emotional Intelligence scores. Forthis purpose, the Fisher r to z transfor-mation test has been used. Required cor-relation for high and low sub-groupswhich were already formed were com-puted. In order to implicate only extremesub-groups on each of the two dimen-sions, those above P

66 and below P

33 cut-

off points were considered in this analy-sis (Table 7).

Table 7: Fisher r to z Transformation Test for Rational Emotive Behaviour as a ModeratingVariable for Emotional Intelligence (IV) and Managerial Effectiveness (DV)

Moderating Groups Correlated Variables r zVariable

Rational Emotive High Group (n=102) EI & ME 0.24 +2.25**

Behaviour

Low Group (n=107) EI & ME -0.017

**significant at 0.01 level



orientation. When successful, the REBprocess functions to increase the client’scapacity for rational, critical, and psycholo-gically sophisticated reasoning and therebyallows the client to challenge and replaceany unrealistic expectations that might havenegatively influenced his or her perform-ance (Ellis 1994).

The Fisher r to z test confirms thesignificant moderating effect of RationalEmotive Behaviour (z= 2.01**, p< 0.01)on the relation between EmotionalIntelligence and Managerial Effectiveness,thereby, lending support to Hypothesis 3.This suggests that when EmotionallyIntelligent executives display RationalEmotive Behaviour, they can be predictedto be effective on their jobs. Possibly,Rational Emotive Behaviour providesexecutives with a set of rational choicesto choose from (rather than being victimsof one’s own habit patterns), thereby,ensuring high level of managerialeffectiveness.

Conclusions& Implications

Emotional Intelligence as a wholeseems to be a significant predic-tor of Managerial Effectiveness.

The study reveals that Emotional In-telligence as a whole seems to be a sig-nificant predictor of Managerial Effec-tiveness. Except Achieving the Results,all other factors of Managerial Effective-ness are predicted by Emotional Intelli-gence. This helps to conclude that highlevel of Emotional Intelligence could leadto high Managerial Effectiveness. This

conclusion of the present study is sup-ported by a few earlier studies (e.g.,Daftuar et al 2000 and Shipper et al,2003).

Also, the moderating effect of Ra-tional Emotive Behaviour has been foundsignificant between Emotional Intelli-gence and Managerial Effectiveness.The effect of Emotional Intelligence onManagerial effectiveness is affected byRational Emotive Behaviour. The abilityto behave in a rationally emotive way byEmotionally Intelligent managers wouldenhance managerial effectiveness in anorganisation.

Hiring managers on the basis oftheir Emotional Intelligence aswell as Rational EmotiveBehaviour could ensure better fitwith managerial positions requir-ing higher levels of effectiveness.

This study suggests the quintessen-tial role of behavioural variables such asEmotional Intelligence and Rational Emo-tive Behaviour for identifying result-ori-ented executives for organisations. Thetwo-fold approach of hiring new person-nel with these two behavioural skills andat the same time training the existing per-sonnel on these skills would have a com-pound leverage effect. EI is yet not inambit of organisational development ini-tiatives of the Indian corporate sector.Hiring managers on the basis of theiremotional intelligence as well as rationalemotive behaviour could ensure better fitwith managerial positions requiring higherlevels of effectiveness.



The present study has a few limita-tions. Firstly, the sample is heterog-eneous as the participants are from sev-eral industries. However, it is argued thatheterogeneity of a sample contributestowards wider generalization of the find-ings and therefore it can be consideredto be the strength rather than the weak-ness of a research (Kaur 1992, Shukla1988, Srivastava 1990). The matter re-mains debatable as the non-random sam-pling method imposes further constraintson the generalization issue. However,since no significant difference was foundin the mean Emotional Intelligence scoresof public sector and private sector ex-ecutives, the homogeneity of the sampleis ensured. Secondly, the sample chosenconsists of only entry-level and middle-level executives and does not involve thetop-management. The top-managementexecutive could not be included in thestudy because of the length of the ques-tionnaire affecting the response time andbecause of the differences in their com-petencies when compared with the othertwo levels. Thirdly, all the measures usedto assess the variables are self-reportassessments.

While extending this research, futurestudies could focus on selecting a par-ticular sector of industry to enhance thefocus of the study. Also, studies couldfocus exclusively on the top managementof the corporate sector to study the ef-fect of Emotional Intelligence and Ra-tional Emotive Behaviour on strategiccompetencies. Future studies could alsouse qualitative data sources like 360 de-gree feedback.

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Ravindra Jain & R. Premkumar


Management Styles, Productivity &Adaptability of Human Resources: An Empirical Study


Ravindra Jain is Professor in BusinessManagement, Faculty of Management Studies,Vikram University, Ujjain 456010 E-mail:[email protected]. R. Premkumar isRegistrar in National Institute of IndustrialEngineering (NITIE) Mumbai. E-mail:[email protected]

The participative, altruistic, profess-ional and organic management stylesare the most desirable amongst thevarious management styles. Thepresent study aims to assess the extentto which such management styles arepracticed in Indian organizationsacross public sector and privatesector enterprises and acrossmanufacturing and service providingorganizations and to measure theirimpacts on �HR Productivity� and �HRAdaptability�. It has been found thatin Indian organizations across thesectors, such management styles arepracticed to a �moderate extent� andhave high positive correlation withone another. �HR Productivity� and�HR Adaptability� are also found atmoderate levels. The selected fourmanagement styles may be consideredas the safest and developmentoriented to practice in a wide varietyof organizations.

Management Styles

Management styles are collectivelylearnt behaviours, subject to all the infirmitiesof human learning. They incorporate boththe contents of decision making and theprocess of decision making and are alignedto goal setting, strategy formulations andstrategy implementation. They areprofoundly influenced by the distinctivesocial culture and climate in which anorganization operates. The distinctive wayin which managers perform the variousfunctions in an organization decides theirmanagement styles. There is a coremanagement style that reflects the valuesand norms of a culture and this is practicedin the given organizational climate andculture. Such a core management style mayhave variations and mainly includeconservative style, entrepreneurial style,professional style, bureaucratic style,organic style, authoritarian style,participative style, intuitive style, familiarstyle, altruistic style, innovative style etc.Given the choices, unlimited number ofmanagement styles can be visualized.

There is evidence that the use of anurtured, paternalistic, benevolent style ofmanagement, especially when combined

Management Styles, Productivity & Adaptability of Human Resources


with a demanding style that expectssubordinates to perform, is correlated withaspects of organizational effectiveness(Khandwalla 1995). The most predominantleadership style among all categories ofscientist and administrative professionalswas found to be �direction oriented style�followed by �participation oriented style�(Muthayya & Vijay Kumar 1985). Ansari(1986) found that �Nurturant TaskLeadership Style� positively influenceorganizational commitment, job satisfactionand HR effectiveness. The majority ofmanagers adopt �high task � high relatio-nship� as their primary leadership style(Kool & Saksena 1989). The study ofSharma (1997) concluded that the humanand fair management style has been themost critical determinant of organizationalcommitment.

Unblemished participative, organicand management styles are likely to beeffective in curbing a number of problems,viz., delay in problem solving, problem ofpoor team work and administrative problem;such styles are also positively correlatedwith the mechanism of organizationallearning; in the situation of greater rate ofchange in industry, faster pace ofglobalization, multicultural society, andgreater need for sustainable development,the practice of participative, organic,professional and altruistic styles would bemore effective and therefore the fourmanagement styles, viz., participative,altruistic, professional, and organic, are themost desirable amongst the variousmanagement styles (Khandwalla 1995).

The results of earlier researches, thus,indicate that management styles vary from

culture to culture and within the specificculture from industry to industry.Management styles also vary from onesetting or situation to the other or within anindustry; and from time to time in the sameculture, industry and in an organizationalsetting or situation. Styles vary widelybecause organizations differ in terms oftheir type, purpose, size, operating context& environment, genesis etc. Theorganization�s operating context influencesmanagement styles only to some extent;internal factors of an organization (includingrole and style of top & senior executives)shape management style to a greaterextent; thus, the management style, thoughpartially constrained by the organization�soperating context, and is also, at leastpartially, a strategic choice of management.Keeping all the above mentionedobservations in mind, in the current contextof faster pace of globalization, multi-culturalorganizations, faster pace of internal andexternal changes in organizational environ-ment and fast growing need for sustainabledevelopment, management styles practicedin variety of organizations need to be studiedafresh in order to look for broad generali-zation. Such an endeavour may revealways by which organizations enablethemselves to perform better in future.

Management styles vary fromculture to culture and within thespecific culture from industry toindustry.

The Study

The present study was exploratory innature. The objectives of the study were



(i) to assess the extent to which the selectedfour management styles, viz., participativestyle, altruistic style, professional style andorganic style are practiced in Indianorganizations; (ii) to make a comparativestudy as regards to ongoing practices of thefour management styles in private sectorand public sector organizations frommanufacturing and service providing sectors;(iii) to study the effectiveness of humanresources in terms of their �productivity� and�adaptability� in Indian organizations and alsoto make a comparative study of the sameregarding the private sector and public sectororganizations from the manufacturing andservice providing sectors ; and (iv) tomeasure the impact of the ongoing practicesof the selected four management styles onthe �productivity� and �adaptability� of

Table 1 Coverage of the Executives in the Sample Survey

Type of Organization No. of Executives in the Sample Total No. of

Manufacturing Service Providing Executives inOrganizations Organizations the Sample

Private Sector Organizations 80 50 130 (43.3%)

Public Sector Organizations 106 64 170 (56.7%)

Total 186 (62.0%) 114 (38.0%) 300

Note: Figures in parentheses are percentages of the executives in respective categories to the total no.of executives in the sample.

Table 2 Age and Gender Profile of the Respondents in the Sample Survey

Age Range (in years) No. of Executives in the Sample Total No. of

Male Female the Executives inthe Sample

Between 25 to 35 73 10 83 (27.7%)

Between 35 to 50 165 25 190 (63.3%)

Above 50 24 03 27 (9.0%)

Total 262 (87.3%) 38 (12.7%) 300

Note: Figures in parentheses are percentages of the executives in respective categories to the total no. ofexecutives in the sample.

human resources with reference to Indianprivate sector and public sector organiza-tions from the manufacturing and serviceproviding sectors.


Primary data were collected throughadministering the relevant questionnaires tothree hundred executives belonging to bothpublic sector and private sectororganizations from manufacturing andservice providing sectors, the details ofwhich are given in Table 1. Three hundredrespondent executives belong to variousstrata of sex, age-group, qualification levels,and group of varying length of workexperience, details of which are given inTables 2, 3 and 4.



Management styles Questionnaire(MSQ) (Four Point Likert Type Scale)developed by Khandwalla (1995) andHuman Resource Effectiveness (Produc-tivity & Adaptability) Scale (HRES) (FivePoint Likert Type Scale) developed byPremkumar (2007) were used to collect therelevant data for the study. The MSQcontains forty two items which are listedin Appendix I. The HRES contains eightitems which are listed in Appendix II.

A pilot study was conducted with asample of sixty managers of various publicsector and private sector organizations fromboth manufacturing and service providingsectors. The MSQ yielded an overall highreliability coefficient [Cronbach Alpha (α )= 0.97 approx.] which indicates highreliability of the instrument. All the forty-

two items of MSQ were subjected to itemssum correlation analysis which resulted intostrong correlation with each other. HRESScale has yielded approx. 0.65 as reliabilitycoefficient [Cronbach Alpha ( )] whichindicates towards the reasonable reliabilityof the construct.

Data analysis was carried out usingstatistical software SPSS. The variousstatistical tools used for the analysis of datainclude arithmetic means, standarddeviation, t-test, multiple regression analysisand correlation analysis.

Key Variables

Participative Management Style:The most common form of participativemanagement style is group decision-mak-

Table 3 Profile of Educational Qualifications of the Respondents in the Sample Survey

Qualification in the Sample Number of Executives

Matriculation 07(2.3%)

Graduate Degree 163(54.3%)

Post Graduate Degree 70(23.4%)

Professional Diploma 60(20.0%)

Total 300


Table 4 Profile of Length of Work Experience of the Respondents in the Sample Survey

Range of Length of Work Experience of Number of Executives in thethe Executives Sample

Below 05 Years 58 (19.3%)

Between 05 to 10 Years 88 (29.37%)

Above 10 Years 154 (51.4%)

Total 300




ing in which the group head does not actas a boss but coordinates and facilitatesdecision making by the group as a whole.This sort of decision making is based onfree and frank discussion, sharing of in-formation and views, generation of manyalternatives and the gradual emergenceof a consensus view to which everyonefeels at least some commitment to thedecision made because it has emergedthrough participation of all concerned(Khandwalla 1995). Particip-ative man-agement style is positively correlated withthe group�s performance / organizationalperformance (Singh et al. 1979, Sinha,1980, Khandwalla 1990, Maheshwari1992). However, participative manage-ment style is very difficult to practice assharing power / authority with subordi-nates / peers is not easy for the manag-ers who are more often delighted by exer-cising their authority or they are oftendriven by the need for power.

Participative management style isvery difficult to practice as sharingpower / authority with subordi-nates / peers is not easy for themanagers.

Altruistic Management Style:Altruistic is unselfish concern for otherpeople�s happiness and welfare as well asa feeling of compassion for others. Almostall the good management styles have thealtruistic base but they are often affectedby the organization centered considerations.�Altruistic Management Style� goes beyondorganization centered considerations tolarger social concerns and the pursuit oflarger ideals / social goals (Khandwalla

1995). Such social concerns / social goalsmay include affirmative actions for charityfor weaker sections of society, employmentof socially disadvantaged groups of people,removal of discrimination against women,maintenance of ecological balance,regionally balanced economic development,workers� education & training, ensuringrepresentation of various stakeholders inthe decision making process etc. However,excessive altruism in business organizationsmay negatively affect organizationaleffectiveness.

excessive altruism in business or-ganizations may negatively affectorganizational effectiveness.

Organic Management Style: Themanagers who practice organic stylebelieve: (a) in providing multi-channel &multi-directional information network ;(b) in creating widespread awareness oforganization�s goals, business strategiesand action plans among employees at alllevels ; (c) in using cross-hierarchical andcross-functional teams; (d) in having flatorganizational structure and low formal-ization; (e) in adopting decentralized de-cision making; in giving prime importanceto those having expertise relevant to aproblem / situation in the process of de-cision making; (f) in creating a work en-vironment for nurturing flexibility, trans-parency, openness, mutual understanding,experimentation, learning, development,creativity & innovation ; (g) exercisingcontrol not through positional power butrather by peer pressure and mutual in-teraction; and (h) in emphasizing greatercommitment to the organization�s



progress, expansion & well being ratherthan to loyalty to the position holders.Wherever rapid changes in technology,system, process and people�s behavior isrequired, organic management style pro-vides desirable results.

Professional Management Style :The managers who practice professionalmanagement style believe: (a) in deci-sion-making by formally educated &trained people having high technical /professional qualifications; (b) in usingexperts extensively for relevant actionresearches before decision-making; (c)in giving prime importance to long-termplanning and strategy formulation; (d) informulation, internalization and followingof code of professional ethics; (e) in us-ing research and experience based highstandardized work-methods and proce-dures; (f) in exercising control by sys-tematic and sophisticated way; (g) in fol-lowing an all-pervasive scientific ap-proach for designing and implementationof business strategies ; and (h) in using�management information system (MIS)�for putting all the above mentioned thingsinto action. Professional managementstyle is also one of the four styles whichhad the positive correlation with a num-ber of indicators of organiz-ational effec-tiveness. Despite the vast difference inthe matter of socio-economic and culturalconditions among cross-cultural coun-tries, professional management style mayyield good results across the countries /cultures. However, in many cases / onmany occasions, it may be noticed thatprofessional managers have a tendencyto get stuck in endless systematizationand causal analysis without getting down

to decision-making and action. This kindof potential flaws may be foreseen in thepractice of professional managementstyle.

Professional managers have atendency to get stuck in endlesssystematization and causal analysiswithout getting down to decision-making and action.

�Productivity� of Human Resource

One of the major goals of HRD is toensure high �productivity of human re-sources� in an organization. Productivityimplies a concern for both �effective-ness� and �efficiency� (Robbins 2004). Ifhuman resources contribute to transfer-ring inputs into outputs at the lowest costand thus contribute to the achievementof organiz-ational goals, the human re-sources will be termed as productive.Productivity also depends on achievingorganizational goals efficiently. �Effi-ciency� is the ratio of effective output tothe input required to achieve it (Robbins2004). In case of manufacturing indus-tries, there is a potential to improve effi-ciency and effectiveness by looking atthe hardware of machines as well as thesoftware of human resources. On theother hand, in services sector, quality ofservices (efficiency or effectiveness ofthe services) exclusively depends on qual-ity of human resources and their qualityof interactions.

�Adaptability� of Human Resources

�Adaptability� means one�s ability tochange one�s ideas or behaviour in order



to deal with new or changed situationand in this sense adaptability of humanresources is the employees� ability andself-efficacy by which they can executecourses of action required to deal withprospective situation and to contribute tointroduce necessary changes in internalorganizational climate in fine tune withthe changes in external environment.�Adaptability� of human resources alsorefers to the employees� confidence intheir competence and potential effective-ness for mobilizing their cognitive re-sources and courses of actions in thematter of performing their jobs and roles.Performance attainments, past experi-

ences, behaviour of role models, socialpersuasion, and psychological & physi-ological arousal of the individuals influ-ence the degree of adaptability of thehuman resources.

Data Analysis & Findings

By analyzing the data given in Tables5-14, the following findings have beenarrived at :

1. The selected four management styles(viz., participative, altruistic, organicand professional) were found to bepracticed to a moderate extent in both

Table 5 Four Management Styles Practiced in Indian Organizations

Management Styles Mean values (N = 300) The Extent of Practice

Participative 2.93 Moderate ExtentAltruistic 2.89 Moderate ExtentProfessional 2.77 Moderate ExtentOrganic 2.65 Moderate Extent

Note:Set standards for the Statistical AnalysisHigh degree : For mean values 4 and aboveModerate degree : For mean values 3 and above but less than 4.Low degree : For mean values less than 3.

Table 6 Management Styles in Indian Public Sector & Private Sector Organizations (t-test Results)

Management Private Sector Public Sector t-value SignificanceStyles Organizations Organizations

(N = 130) (N = 170)

Mean Standard Mean StandardValues Deviation Values Deviation

Participative 2.84 .64 2.99 .68 -1.86 .06Altruistic 2.89 .69 2.89 .67 .029 .97Professional 2.74 .62 2.99 .68 -3.15 .00*Organic 2.55 .69 2.73 .69 -2.17 .03*

* Significant at 0.05 level of significance (Table value = 1.96) Note: set standards for the Statistical Analysis:High degree : For mean values 4 and aboveModerate degree : For mean values 3 and above but less than 4.Low degree : For mean values less than 3.



Table 7 Management Styles Practiced in Indian Manufacturing and Service ProvidingOrganizations (t-test Results)

Management Manufacturing Sector Service Providing t-value SignificanceStyles Organizations Organizations

(N = 186) (N = 114)


Participative 3.00 .62 2.74 .73 3.25 .00*

Altruistic 2.93 .65 2.77 .75 1.96 .05

Professional 2.96 .62 2.73 .70 2.91 .00*

Organic 2.72 .66 2.47 .74 3.01 .00*

* Significant at 0.05 level of significance (Table value = 1.96)Note: set standards for the Statistical Analysis:

High degree : For mean values 4 and aboveModerate degree : For mean values 3 and above but less than 4.Low degree : For mean values less than 3.

Table 8 Inter-Correlations among the Selected Four Management Styles as Practiced in IndianOrganizations

Karl Pearson�s Correlation

Dimensions Participative Altruistic Professional Organic

Participative 1

Altruistic .830(*) 1

Professional .819(*) .808(*) 1

Organic .764(*) .728(*) .778(*) 1

* Correlation is significant at the 0.05 level (2-tailed)

Table 9 Degrees of �Productivity� and �Adaptability� of HR in Indian Organizations

Dimensions of HR Effectiveness Mean Values Standard Degree(N = 300) Deviation

Productivity of Human Resources 3.5 .65 Moderate

Adaptability of Human Resources 3.3 .77 Moderate

Overall Effectiveness of Human Resources 3.4 .64 Moderate

Note : Set standards for statistical analysis:




Table 10 Degrees of �Productivity� and �Adaptability� of HR in Indian Private Sector and PublicSector Organizations (t-test Results)

Dimensions of Private Sector Public Sector t-value SignificanceHR Organizations OrganizationsEffectiveness (N = 130) (N = 170)


Productivity 3.33 .25 3.12 .23 -1.865 .163

Adaptability 3.24 .45 3.22 .43 .029 .977

Overall HR Effectiveness 3.33 .65 3.49 .77 -3.115 .222*

* Significant at 0.05 level of significance (Table value = 1.96)Note: Set standards for the Statistical Analysis:


Table 11 Degrees of �Productivity� and �Adaptability� of HR in Indian Manufacturing and ServiceProviding Organizations (t-test Results)

Dimensions of Perceptions of Executive Perceptions of Executive t-value SignificanceHR of Manufacturing Sector from Service SectorEffectiveness (N = 186) (N = 114)


Productivity 3.5479 .56808 3.3273 .75610 2.860 .005*

Adaptability 3.4287 .72586 3.2018 .82484 2.481 .014*

Overall HR Effectiveness 3.4930 .56164 3.2696 .74688 2.93 .004*

* Significant at 0.05 level of significance (Table value = 1.96)Note: Set standards for the Statistical Analysis:


Table 12 Correlation Between �Productivity� and �Adaptability� of HR

Dimensions of HR Effectiveness Karl Pearson�s Correlation

Productivity Adaptability

Productivity 1 .657(**)

Adaptability .657(**) 1

** Significant at 0.01 and above level (2-tailed).



private sector and public sector or-ganizations as well as both manufa-cturing and service providing sectors.

2. The professional management styleand organic management styles werefound to be practiced to a moderateextent but with significant variation(at 0.05 level of significance) be-tween public and private sector or-ganizations as well as betweenmanufacturing and service providingorganizations.

3. Altruistic management stylewas found to be practiced to a mod-erate extent but without signifi-cantvariation (at 0.05 level of signifi-cance) between public sector andprivate sector organizations as wellas between manufacturing and ser-vice providing organizations.

4. Participative management style wasfound to be practiced to moderateextent without significant variationbetween public sector and privatesector organizations but with signifi-cant variations between manufac-turing and service providing organiza-tions.

5. The selected four management styleswere found to be positively correlatedwith one another.

6. Both �Productivity� and �Adaptabil-ity� of human resources in Indian or-ganizations were perceived to existat moderate level and that too with-out any significant variation betweenprivate sector and public sector or-ganizations, but with significantvariation between manufacturing andservice providing organizations at0.05 level of significance.

Table 13 Multiple Regression of the Relationship between Management Styles and Effectivenessof Human Resources

Model R R Square Adjusted Std. ErrorR Square Estimate of the

Relationship Between the Overall HR .940(a) 0.885 .700 .57904

effectiveness and the Various Managerial Styles

Predictors: (Constant), Organic, Altruistic, Professional, Participative

Table 14 ANOVA Test for the Significance of Multiple Regression Analysis of the RelationshipBetween Management Styles and Effectiveness of Human Resources

Model Sum of df Mean F Sig.Squares Square

Relationship Between Regression 26.336 4 6.584 19.637 .000(a)

the Overall HR Residual 98.911 295 .335

effectiveness and Total 125.247 299the Managerial Styles

Predictors: (Constant), Organic, Altruistic, Professional, Participative

Dependent Variable: Overall HR Effectiveness



7. �Productivity� and �Adaptability� ofhuman resources were found to bepositively correlated with each other.

There exist a strong positive re-lationship between the manage-ment styles and the effectivenessof human resources in terms oftheir �Produc-tivity� and �Adapt-ability�.

8. There exist a strong positive relation-ship between the management stylesand the effectiveness of human re-sources in terms of their �Productiv-ity� and �Adaptability�. Multiple re-gression analysis (Tables 10 & 14)shows that the selected four manage-ment styles (viz., participative, altru-istic, organic and professional) havesignificant impact on the effective-ness of human resources in terms oftheir �Productivity� and �Adaptabil-ity� in Indian organizations.

Discussion & Implications

India has wide diversity in culture anddemocratic nature of politics. In such abackground, the diverse managementstyles are practiced in Indian organiza-tions. Apart from the selected four man-agement styles (viz., participative, altru-istic, organic and professional), all othervarieties of management styles (e.g. au-tocratic) are also operative though to alesser extent in Indian organizations. Dueto the practice of deep rooted politicaland industrial democracy, participativemanagement style is always stressed topractice. The transitional nature of In-dian society (as it is changing rapidly

from a traditional, rural, less democraticto a modern, dynamic, more democraticand urban one), and the transitional na-ture of Indian economy (as it is changingfrom regional / national character totrans-national / multinational one) rein-forces the need for the practice of or-ganic and professional managementstyles. The globe is poised on the brinkof an ecological disaster; eco-friendlinessand sustainable development are likelysolution; and therefore, there is need tostress on fast movement from self-centeredness towards altruism and hencemore significant would be the practiceof altruistic management style along withthe participative, organic and professionalmanagement styles. Growing awarenessof the social responsibility has also led tothe practice of altruistic managementstyle. Growing competition in domesticas well as globalized economies also ledto the practice of team work orientedorganic management style.

In a study of 103 Canadian compa-nies, the participative management stylewas significantly associated with an in-dex of organizational effectiveness(Khandwalla 1977). Some Indian re-search also indicated that participativemanagement style is associated withemployees� productivity and job satisfac-tion. (Singh et al. 1979, Moitra 1977,Sinha 1980). The results of the presentstudy further validated the same relation-ship. In a study of private sector compa-nies operating across the countries, apositive association was found betweenthe degree to which the manage-mentwas professionalized and the perceivedeffectiveness of the organization



(Negandhi & Prasad 1971). The resultsof the present study supported such afinding.

In India nurturant and task ori-ented style of leadership givesgood results in terms of theirprodu-ctivity�, and �satisfaction�.

In the present study, organic and pro-fessional management styles were alsofound positively associated with HR pro-ductivity and HR adaptability. InKhandwalla�s (1995) study of Indian or-ganizations, participative, organic, pro-fessional and altruistic managementstyles were found to have positive cor-relation with �performance stability� and�employees morale� (which are indicatorsof organizational effectiveness) whereasonly participative management style (notthe other three) was found to have posi-tive association with the employees�adaptability. However, in the presentstudy, both �productivity� and �adaptabil-ity� of the human resources were foundto have positive correlation with the se-lected four management styles and thusthe results of the present study supportthe findings of the Khandwalla�s studyto a great extent but not fully.

Keeping the above mentioned re-search findings in view, it is concludedthat the effectiveness of human re-sources in terms of their �Productivity�or job performance and �Adaptability�are affected substantially by the practiceof the selected four management stylesacross the manufacturing and serviceproviding organizations belonging to both

public sector and private sector.Khandwalla (1995) assessed variousmanagement styles in terms of the fol-lowing criteria, viz., OrganizationalLearning Capacity, AdministrativeSmoothness, Managerial DevelopmentPotential, and Versatile Excellence.Based on such an assessment the fourmanagement styles, viz., Participative,Altruistic, Professional, and Organichave been found as the four best man-agement styles. The results of thepresent study revealed that such man-agement styles are good enough so faras the effectiveness in terms of �Produc-tivity� and �Adaptability� is concerned andtherefore it is concluded that such man-agement styles may be considered as thesafest and development oriented stylesto practice in a wide variety of organiza-tions. Managers must become more con-cerned with developing their people. Suchconcern would improve workers, attitudeand behaviour having implications forchange in the culture of the organizationand improvement in productivity (Joshi2001). Organizational leaders are trulyeffective only when they are motivatedby a concern for others, when their ac-tions are invariably guided primarily bythe criteria of �the benefit of others evenif the results in some cost to self�(Kanungo & Medonca 2001). Managers�concern for the development of othersenables them to practice participative andaltruistic management styles more effec-tively. Participative culture encouragesthe use of personalized relationship, ex-change of benefits and assertiveness, anddiscourages the use of asserting exper-tise and negative sanctions to facilitatethe success of organization; culture works



as a moderator, if managers use appro-priate influence strategies contingentupon the respective culture, it would bemore successful (Tripathi & Tripathi2009).

References

Ansari, M.A. (1986), �Need for Nurturant � TaskLeaders in India: Some Empirical Evidence�,Management and Labour Studies, 11 (1): 26-36

Joshi, J.R, (2001), �High Performance Culture�,Indian Journal of Industrial Relations, 37(1):18-30

Kanungo, R. N. & Mendonca, M, (2001), EthicalDimensions of Leadership, Thousand Oaks,Sage, California

Khandwalla, P. (1977), The Design ofOrganizations, New York, Harcourt BraceJovanovich

Khandwalla, P.N., (1995), Management Styles, TataMcGraw-Hill Publishing Co., Ltd., NewDelhi

Khandwalla, Pradeep N. (1990), ExcellentManagement in Public Sector, New Delhi,Vision

Khandwalla, Pradeep N. (1992), OrganizationalDesigns for Excellence,

New Delhi, Tata McGraw Hill � Hill PublishingCompany Ltd

Kool, R. & Saksena, N.K. (1989), �Leadership Stylesand Its Effectiveness among IndianExecutives�, Indian Journal of AppliedPsychology, 26 (1):9-15

Maheshwari, B.L. (1980), Decision Styles andOrganizational Effectiveness, New Delhi,Vikas Publishing House

Moitra, A. (1977), �Practice of ParticipativeManagement�, Lok Udyog, 11 (2): 35-39

Muthayya, B.C. & Vijaykumar, S. (1985),�Leadership Styles, Perceived Need Satisfa-ction and Subjective Job CharacteristicsAmong Scientific Personnel�, Indian Journalof Industrial Relations, 21 (2): 173-97

Negandhi, A. & Prasad, B. (1971), ComparativeManagement, New York, Appleton � Century� Crofts

Premkumar R. (2007), Strategic HRD Practices,Facilitators and Managerial Styles in IndianOrganizations, (Unpublished Ph.D. Thesis),Vikram University, Ujjain

Sharma, M.P. (1997), �Organizational Commitmentand Its Determinants�, Indian Journal ofIndustrial Relations, 33(2): 193-210

Singh, P., Warrier, S. & Das G. (1979), �LeadershipProcess and Its Impact on Productivity,Satisfaction and Work Commitment�,Decision, 6, 1979

Sinha, A. (1980), The Effect of Leadership Styleson the Quality of Education, DoctoralDissertation, Patna; Patna University

Sinha, J. (1980), The Nurturant Task Leader: AModel of the Effective Executive, New Delhi,Learning Concept

Sinha, J.B.P, (2001), �Matching Leadership Roleswith the Nature of Organizations�, IndianJournal of Industrial Relations, 37(1), 80-92

Tripathi, Sangeeta & Tripathi Nachiketa (2009),�Influence Strategies & OrganizationalSuccess: Moderating Effect of OrganizationalCulture�, The Indian Journal of IndustrialRelations, 45 (2): 213-27



Appendix I

Variables Pertaining to Management Styles (MS) Selected for the Present Study*

(A) Goal Setting and Strategic Formulation

MS-1 (A) Organization�s goals are set and strategy for reaching them is evolved at meetings ofcommittees of senior and top level managers.

MS-2 (A) Departmental/divisional/sectional goals are set and strategy for reaching them is evolvedat meetings attended by most managers of the department/division/section.

MS-3 (A) At meetings to take major decisions, there is a great deal of openness, frankness,sharing of information, and emphasis on looking several rather than a few alternatives,examination of the pros and cons of each alternative, and selection of an alternative onthe basis of consensus.

MS-4 (A) There is a strong emphasis by management on team work and co-operation at the topand senior levels of the organization.

MS-5 (A) The management gives great emphasis to the organization�s core values and idealswhile making major decisions.

MS-6 (A) The top management exhibits a great deal of integrity and honesty in pursuing goalsand implementing strategies.

MS-7 (A) The top management keeps in mind the interests of not only owners but also especiallyof employees and customers� organizations while taking major decisions.

MS-8 (A) Goals are set and strategy formulated on the basis of a lot of systematic research,forecasts, and data based analysis.

MS-9 (A) The costs and benefits of alternative strategies are quantified to the extent possible,and these data are carefully considered while making strategic choices.

MS-10 (A) The management devotes considerable efforts to evolve comprehensive strategic whoseelements fit in and support one another.

MS-11 (A) Management does a good deal of long term planning and goal setting.

MS-12 (A) The management makes it a point to share information about the challenges before theorganization and the organization�s goals and plans with not only top and seniormanagers but also middle and lower level managers and even non-supervisory staff.

MS-13 (A) Information pertaining to the organization�s performance on its goals is widely sharedwith managers and other staff.

MS-14 (A) In this organization goals and strategies emerge after a great deal of discussion andinteraction at all levels.

MS-15 (A) The organization is committed to playing a good corporate citizen role (specialemployment opportunities for disadvantaged communities, investments in communitywelfare, pollution control and proper waste disposal, etc.)

MS-16 (A) The organization makes it a point to disseminate among staff members information ondevelopments in the economy, significant innovations in its fields of operationdevelopments relating to the markets things in government policies etc.



B. Co-ordination of Inter-dependent activities

MS-1 (B) Coordination of activities that need careful orchestration is usually sought by formingcommittees of representatives of these activities.

MS-2 (B) There is great emphasis on co-operation and team work between heads of departments.

MS-3 (B) In sorting out co-ordination problems the management�s emphasis is on serving thelarger interests and goals of the organization, a spirit of sacrifice and accommodation,fairness and justice.

MS-4 (B) There is great emphasis on sharing targets, budgets, and achievements of eachdepartment/division with the rest, so that in planning and executing activities, managersof departments/divisions are well aware of each other�s commitments, problems, andconstraints.

MS-5 (B) Management emphasizes that operating conflicts should generally be resolved as fardown the hierarchy as possible and preferably by people sitting down and talking outtheir problems face to face.

MS-6 (B) For designing innovations and changes, or for tackling complex issues, managementoften sets up inter functional or inter disciplinary task forces headed by effectivecoordinators.

MS-7 (B) All major activities and new initiatives are carefully planned in advance to minimizelater coordination difficulties.

MS-8 (B) There is full freedom for managers to approach managers of other departments at anylevel for getting jobs done, and no insistence at all that all such contacts must berouted through �proper channels�.

C. Control of Operations

MS-1 (C) Operations at all levels are reviewed collectively through the mechanism of periodicperformance review meetings.

MS-2 (C) Control of operations is sought to be achieved by widely disseminating operatinginformation, widespread sharing of operating problems and constraints, and use oftask forces or teams to over come problems or constraints and get results.

MS-3 (C) Professionalism is strongly stressed in this organization, and professional identityand pride ensure that task related commitments are met.

MS-4 (C) A fairly comprehensive formal management information and control system has beeninstitutionalized in the organization.

MS-5 (C) In this organization there is much peer group pressure for excellent performance andfor meeting task related commitments.

MS-6 (C) Managerial and other personnel so strongly identify with the mission of theorganization, its vision of excellence and core values that no effort is spared in theirpursuit.

MS-7 (C) Control and accountability are sought not primarily through cost or profit centers butrather through responsibility centers in which accountability is for efficiency orproductivity, profitability, quality and innovation.



D. Human Resource Management

MS-1 (D) The practice in the organization is to involve even new employees in decision makingby making them members of appropriate committees.

MS-2 (D) As far as personnel matters are concerned, this organization operates on trust ratherthan mistrust.

MS-3 (D) Supervisors and mangers of this organization are rewarded for practicing theparticipative form of leadership.

MS-4 (D) Employees are well rewarded for their competence in solving problems at work.

MS-5 (D) Jobs are defined broadly rather than narrowly, and employees are encouraged tointerpret their roles creatively. Supervision is general rather than detailed.

MS-6 (D) Innovation and experimentation at all levels are rewarded.

MS-7 (D) The biggest rewards in this organization go to those who get results within time andcost parameters.

MS-8 (D) There is a strong emphasis at all levels on research based rather than ad hoc or casualdecision making.

MS-9 (D) There is a strong emphasis on building up expertise at all levels and in all operatingareas, and a program of providing technical training to cover all employees has beeninstitutionalized.

MS-10 (D) There is a strong emphasise on human resource development through schemes ofhuman relations and competence building, training, rotation, job enrichment,decentralization, counseling, career planning etc.

MS-11 (D) Functions, inductions and training programme, and in internal newsletters or otherforms of communication, norms of good conduct, values, the organization�s mission,its vision of excellence, etc. is strongly emphasized.

*[Source : Khandwalla 1995]

Appendix II

Variables Pertaining to HR Effectiveness (HRE) (in Terms of �Productivity� and �Adaptability�)**

HRE -1 Thinking now of the various things produced by people you know in your division,how much are they producing?

HRE �2 How good would you say is the quality of the products or services produced by thepeople you know in your division?

HRE �3 Do the people in your division seem to get maximum output from the resources(money, people, equipment, etc.) available to them? How efficiently do they do theirwork?

HRE �4 How good a job is done by the people in your division in anticipating problems thatmay come up in the future and preventing them from occurring or minimizing theireffects?



HRE �5 From time to time newer ways are discovered to organize work, and newer equipmentand techniques are found with which do the work. How good a job do the people inyour division do at keeping up with these changes that could affect the way do theirwork?

HRE �6 When changes are made in the routines or equipment, how quickly do the people inyour division accept and adjust to these changes?

HRE �7 What proportion of the people in your division readily accepts and adjust to thesechanges?

HRE �8 From time to time emergencies arise, such as crash programmes, schedules movedahead, or a break down in the flow of work occurs. When these emergencies occurthey cause work overloads for many people. Some work groups cope with theseemergencies more readily and successfully than others. How good a job do people inyour division do at coping with these situations?

**[Source : Premkumar 2007]

Timely, Continuous & Credible Communication &Perceived Organizational Effectiveness.

Reeta Raina

Reeta Raina is Assistant Professor& Chairperson(Business Communications Area), ManagementDevelopment Institute, Gurgaon 122001. E-mail:[email protected]

Managers typically spend between 60 %and 80% of their time communicating.Inability to communicate effectively andefficiently can jeopardize the businessinterests. The present study investigatedthe effectiveness of downward communi-cation as perceived by managers andhow it impacted the effectiveness of or-ganization which was evaluated on fiveparameters namely: planning, organizati-onal structure, organizational culture,communication, and outcome. Resultsshowed that there was a positive corre-lation between effectiveness of down-ward communication and the organiza-tional effectiveness. The organizationalculture or the leaders at various hierar-chical levels who provided accurate,timely and clear information and correctfeedback to the subordinates improvedthe performance in terms of planning,structure, and communication. Suchfirms enjoyed good reputation in themarket and the morale of the employeeshas been high.


Organizational Communication

Internal communication activi-ties are a determinant of how ef-fectively organizations meet theirgoals (Farace et. al.1977, Goldhaber& Rogers 1979, Danowski 1980).Coordination and integration of vari-ous human activities are possibleonly if there is an effective systemof communication in the organiza-tion which provides for exchange ofinformation and sharing of variousideas. Managers typically spendbetween 60 % and 80% of their timecommunicating. It is through mana-gerial communication that the em-ployees get their job instructions,come to know about their job ex-pectations, rationale behind the job,their contributions, performancefeedback etc (Luthans & Larsen1986, Kanter 1991). Inability tocommunicate effectively and effi-ciently can jeopardize the businessinterest related managerial func-tions, especially controlling and or-ganizing (Koul 2000)

Communication is the processmost central to the success or fail-

Reeta Raina


ure of an organization. Many of the prob-lems that occur in an organization may beattributed to failure of communication. Re-search suggests that poor communicationalone is a major contributor for most busi-ness and industrial organizations runningat less than 12% efficiency. If employeesare not given adequate information norallowed to contribute to the solution ofproblems, they may revert to being thecause of them, resulting in increased ab-senteeism, lower productivity and griev-ances and so on (Hubbards1999, Hargieet al. 1999, Armour 1998). Managers,therefore, clearly have the main respon-sibility of facilitating and encouraging opencommunication, reducing barriers to com-munication and eliminating boundaries,which hinder the understanding of end-to-end workflows so that it helps in achiev-ing overall mission of the firm. Creatingand using symbolic behavior �walking thetalk-is a key (Kotter 2007 ). What lead-ers do and how they direct their attentionallows followers to trust and understand(Buckingham & Coffman 1999, Miller1997). In �a key-perhaps the key-to lead-ership� is the effective communicationof a story� (Harris & Nelson 2008). Ef-fective interpersonal communication skillsallow various symbols �language, strongimages, metaphors, physical settings-toinfluence the way people see their worlds;the leader � manages their meanings�(Gabriel, Fineman &Sims 2000 :321).Leaders use symbolic activities to directtheir followers.

Communication is the processmost central to the success or fail-ure of an organization.

Managers are also expected to de-velop communication systems that arecharacterized by effective listening, feed-back, two-way process, and recognition(Domerer 1998). Inadequate informationis the major cause of more than half of allproblems with human performance. Byimproving the quality and timeliness of theinformation people receive, you can im-prove performance by as much as 20 to50% (Boyett & Boyett 1998:288). Tradi-tional hierarchies created and maintaineda power structure where managers madedecisions; passed judgments, gave assign-ments, and determined success or failures(French Bell & Zawacki 2000). Bureau-cracy, structure and Tayloristic work prac-tices produced powerlessness in subordi-nates because superiors make the majordecisions. Establishing rules also toachieve predictability also means impos-ing control using power, and rewarding orpunishing. The consequence is a loss ofcritical employee input, commitment. andmotivation especially given the changingworkforce (Chambers 1998). The moreyour co-workers can depend on you, thegreater the trust and comfort among thestaff. Thus, creating an effective commu-nication system also involves integratingcommunication as a fundamental compo-nent of the management role, obtaining thecommitment of top management, andevaluating the communication process ofall its members on a regular basis. Co-operation over work or relationship couldnot occur at all without communication andsocial interaction (Bovee 2005, Smith1990, Argyle1991).

It has been established that commun-ication is central to successful leadership

Timely, Continuous & Credible Communication & Perceived Organizational Effectiveness


activities (Bennis & Naus 1997, Clemes& Mayer 1987, Drucker 1998, Hackman& Johnson 2000, Miller 1997). �In writ-ing on leadership and in business people�saccounts of their own leadership crises,the ability to communicate effectivelyemerges repeatedly as the most impor-tant skill to cultivate�( Barrier 1999:28) .The ability to communicate effectivelyincreases productivity, not only of man-agers but of organizations as well.Achieving success in today�s workplaceis closely tied to the ability of employeesand managers to communicate effec-tively with each other and with peopleoutside the organization. While there is avast range of literature available in thefields of communication both in the Westand America, research into organizationalcommunication area in the Indian con-text is at an early stage.

The command-and�control style oftraditional management structuresare questioned by the new gener-ation of employees.

Organizational effectiveness is an es-sential part of competitiveness and Indianeeds to increase its competitiveness forbecoming a major economy of the world(Pillania 2008a).With liberalization of In-dian economy, one of the visible affect isthe dramatic change in the compositionof its workforce. This change in the com-position of the work force is likely to beunidirectional, as more and more businessis conducted in multicultural societiesacross the global village. Secondly, thesystem of hierarchy which is very strongin the Indian culture finds itself being

challenged by the notion of collaborativeand team based organizations. The com-mand-and�control style of traditionalmanagement structures are questioned bythe new generation of employees who areincreasingly becoming more demanding,expecting to be respected and valued asindividuals in the workplace and are quitevocal about it. They like open communi-cation with their managers, want to maketheir own decisions, want to share theirideas and their enthusiasm, and not justbe told what to do (Schaefer 1993,Offerman & Gowing 1990, Loden &Rosner 1991, Dean & Snell 1991).

These cataclysmic changes have putorganisations under tremendous pressurecalling, among other things, to employpeople: (a) who can best communicatein cross-cultural environment, and (b)reduce barriers to communication whichimpede the understanding of end-to-endworkflow and better performance onstrategic goals. However, a corollary isthat important issues involving informa-tion transmission from those with mana-gerial power to those without have beeninsufficiently explored by the Indianscholars. In fact, communication as aresearch has raised its profile only re-cently in India (Prasad 2005).

The present study is undertaken tofind out the main effect of state, levelsof management and their interaction ef-fect on the perceived effectiveness ofDownward Communication and also tostudy the correlation between per-ceived effectiveness of DownwardCommunication and Organizational ef-fectiveness.

Reeta Raina


Hypothessis

Based on the review of literature thefollowing hypotheses were formulated forthe present study:

l There exists a significant positiverelationship between the DownwardCommunication and organizationaleffectiveness.

l The state has a significant effect onthe Downward Communication in theautomotive industry.

l The levels of management has a sig-nificant effect on the DownwardCommunication in the automotive in-dustry.

l There is a significant interaction ef-fect of the state and the levels ofmanagement on the Downward Com-munication in the automotive indus-try.

Survey Instrument &the SamplingProcess

The study was based on the designand administration of a survey. For thispurpose two scales namely DownwardCommunication Scale developed byGayatri (2001) and Organization Effec-tiveness Scale developed by the authorwere used.

It was decided to study organizationswhich met the following criteria:

l Had more than three distinct man-agement levels which could be clas-sified as top, middle and lower man-agement levels.

l Were large enough so that the statis-tically significant sample size couldbe collected.

l Had similarity of business operations(say manufacturing sector, servicesector etc).

l Organizations should be in differentstates, to enable determining the ex-tent to which Downward Communi-cation processes are able to over-come the impact of socio-cultural,economic and political influences.

Six large-scale automotive manufac-turing firms from Punjab and Haryanawere selected on the basis of the crite-ria that turn-over should be Rs.100 crore,the number of employees should be 500or more and the product should be au-tomobiles or automobile parts. Sincethese were large firms, the workforcewas national in nature (from all overIndia), with a local bias normally man-dated by the state because of politicalreasons. The top management compo-sition is normally more national in char-acter, compared to middle and lowermanagement, to enable better co-ordi-nation among employees from differentcultures and work environment. Thesecompanies are governed by differentstate legislations, have different pre-dominant religions, languages and cul-tures. They compete against each otherin the process of industrialization. Thesestates have different political, economic,and social compulsions.

The management levels were clas-sified in different sets based on the cri-teria: top management level comprised



persons in policy planning and decisionmaking including heads of departmentsand above. Middle management con-sisted of assistant managers and above.Lower management comprised engi-neers, assistant engineers and juniorengineers. However, due to inadequatenumber of personnel at top manage-ment level, it was decided to take atleast ten persons from the top manage-ment levels of each firm to have ap-propriate representation in the sample.A stratified proportionate randomsample of about 100 personnel work-ing at three different management lev-els of top, middle and lower manage-ment were selected from each of thesix firms. They were all men falling inthe age group of 23-55. Thus the totalstratified sample for the study com-prised 631 persons (Top management-60; Middle management-209; lowermanagement-362) at different manage-ment levels working in six large scaleautomotive firms, three each from thestates of Punjab and Haryana.

Data Collection & StatisticalTechniques

Data was personally collected form thesix automotive firms selected for the study.Scales on Downward Communi-cation andOrganisational Effectiveness were admin-istered to managers at the top, middle andlower management levels. A total of 631scales were given to six firms and a totalof 538 filled in scales were received back.To study the main effect of state, levels ofmanagement and their interaction effect onthe perceived effectiveness of DownwardCommunication , 2×3 ANOVA was appliedand t-ratios were worked out wherever Fwas found to be significant. Product Mo-ment Correlations were also arrived at todetermine the extent of the relationshipsbetween Downward Communication andOrganizational Effectiveness.

Analysis & Discussion

Summary of 2×3 ANOVA applied onDownward Communication scores isgiven in Table 1

Table 1: Summary of the 2 × 3 ANOVA for Downward Communication in Automotive Indus-tries Punjab & Haryana

Sources of Variation Sum of Squares df Mean Sum Fof Squares

State (2) 214.25 1 214.25 1.91

Levels of Mgmt. (3) 1202.08 2 601.04 5.36

State into Levels of Mgmt. (2*3) 369.51 2 184.75 1.64

Within 59589.08 532 112.01

Total 62877.68 537 117.09

df 1, 532 F Significant at.01 level = 4.85

F Significant at.05 level = 3.01

df 2, 532, F Significant at.01 level = 6.69

F Significant at.05 level = 3.86

Reeta Raina


States & Downward Communication

It is evident from the insignificant F-ratio of 1.91 (Table 1) that state had noeffect on Downward Communication.The result implies that there were no sig-nificant differences between the automo-tive industries in Punjab and Haryanawith regard to the perceived effective-ness of Downward Communication.Table 2 shows the means and SD ofDownward Communication in the auto-motive industries in Punjab and Haryana.

Table 2: Mean Scores and Standard Devia-tion for Downward Communicationin the Automotive Industries ofPunjab & Haryana

State No of Personnel DownwardCommunicationMean SD

Punjab 273 56.79 11.64Haryana 265 60.33 9.60

The mean scores on DownwardCommunication for automotive industryin Punjab and Haryana were found to be56.79 and 60.33 respectively. (Table 2)Personnel working in these firms find

Downward Communication equally char-acterized by appropriateness, precise-ness, job instructions, explanation of ra-tionale behind the task which helped themin understanding their jobs and achievingorganizational goals and targets, use ofmultiple channels of communication, per-formance feedback, repetition of mes-sages etc. The insignificant differencesin Punjab and Haryana automotive indus-try could be due to similar culture of thetwo states i.e. people within these twostates have more or less similar values,ethics, habits etc.

(b) Management Levels and Downward Communication

F-ratio of 5.37 (Table 1) for Down-ward Communication was found to be sig-nificant at.05 level indicating that thereexist significant differences among topmanagement, middle management andlower management levels regarding per-ceived effectiveness of Downward Com-munication in the automotive industry.Table 3 shows the means and t-ratios ofDownward Communication in the auto-motive Industry of Punjab and Haryana.

Table 3: Significance of Difference between Means of Top, Middle and Lower ManagementLevel Personnel on Downward Communication

Management Levels Number Mean SEM

Group Differences t-ratio

Top Mgmt�) 43 58.55 2.03 TM & MM 1.008Middle Mgmt. 185 60.75 0.79 TM & LM 0.63Lower Mgmt. 310 57.21 0.58 MM & LM 3.59**

t-RatiosDf Significant at.01 level Significant at.05 level226 2.60 1.97351 2.59 1.97493 2.59 1.96

** Significant at 1% (p=0.01 level)



Middle management personnelperceived Downward Communica-tion to be more effective.

t-ratios (Table 3) indicate that therewere significant differences betweenmiddle management and lower manage-ment regarding perceived effectiveness ofDownward Communication in automotiveindustry. Middle management personnelperceived Downward Communication tobe more effective (M=60.75, Table 3) thanthe lower management personnel(M=57.21, Table3). They were of the opin-ion that they received more appropriate,adequate, clear job instructions than thelower management personnel and that con-structive feedback from superiors helpedthem in improving their performance. Inaddition, they felt that there was more useof multiple channels of communication ascompared to lower management person-nel. This could be explained on the basis,that personnel at lower management lev-els may be getting messages through toomany channels leading to confusion or theymay not be getting enough and timely in-formation from their superiors. Differences

between top and middle management per-sonnel and top and lower management levelpersonnel were however found to be in-significant as is evident from insignificantt-ratios (t= 1.00; 0.63, Table 3). The per-sonnel at top management level foundDownward Communication in the automo-tive industry equally characterized by clar-ity, preciseness and timely transmission ofinformation, appropriateness of feedback,and use of multiple channels of communi-cation as by the middle and the lower man-agement personnel.

Interaction Effect

There exist no significant differencesamong six groups on the basis ofstate and levels of management.

As is evident from F-values.164(Table1), Interaction effect of state variedat two levels, and levels of managementvaried at three levels was found to be insig-nificant on Downward Communication. Theresult indicates that there exist no signifi-cant differences among six groups on thebasis of state and levels of management.All the groups perceived Downward Com-

Table 4: Interaction Effect of State and Levels on the Per-ceived Effectiveness of Downward Communicationin the Automotive Industry of Punjab and Haryana

State Mgmt. Levels Downward Communication

Mean SD

Punjab Top mgmt 59.80 18.00

Middle mgmt 58.75 12.97

Lower Mgmt 55.44 9.71

Haryana Top mgmt 57.47 7.46

Middle mgmt 62.46 8.27

Lower Mgmt 59.30 10.50

munication equally effectivein the automotive industry.Means and SDs for sixgroups entered in Table 4.shows that middle manage-ment personnel in the auto-motive industry of Haryanahad slightly higher mean ef-fectiveness score on Down-ward Communication(M=62.46, Table4), than therest of the five groups.

Reeta Raina


Downward Communication &Organizational Effectiveness

Product moment correlations werecalculated to determine the extent of therelationships between Downward Commu-nication and organizational effectiveness.

Table 5: Correlations between (a) Organisational Effectiveness (OE) and(b) Downward Communication (DC)

Downward Communication Correlation with OE total

Downward communication .67**

df:536 Table value for r significant at.01 Level** =.115

significant at.05 Level* =.088

The correlations between Organiza-tional Effectiveness and DownwardCommunication were found to be signifi-cant at 0.01 level. The results indicatethat there exists significant positive cor-relation between Perceived Effectivenessof Downward Communication and Or-ganizational Effectiveness which impliesthat higher the Perceived DownwardCommunication, higher will be the Per-ceived Organizational Effectiveness andvice-versa.

Organizational Effectiveness &Downward Communication

As is evident from Table I, the correla-tion between Organizational Effectivenessand Downward Communication (.67, Table5) was found to be significant at.01 level ofsignificance indicting a significant positiverelationship between them. This implies thathigher the Perceived Effectiveness of Or-ganizations, higher will be the Perceived Ef-fectiveness of Downward Communication

and vice-versa. In organizations perceivedto be effective, Downward Communicationwill be characterized by accuracy, timeliness,preciseness and clarity of information tosubordinates, constructive feedback, use ofdifferent modes of communication, repeti-tion of important messages.

The results ofthe present studyindicate that ef-fective organiza-tions are per-ceived to be veryopen to its em-ployees. There istransparency in

communication within the organizations.Leaders at different levels of the manage-ment communicate effectively with the em-ployees of the organization. There are fre-quent interactions among the supervisor andthe subordinates and the leaders ensure thatall the employees are knowledgeable aboutthe vision and mission of the organization.This finds support in Farmer�s study (1999)that the leader who flattened the communi-cation hierarchy was more likely to achieveshared vision.

Further, in the perception of the man-agers at the three management levels, jobroles of the individual employees areclearly defined. Appropriate job instruc-tions are given which are precise, timelyand clear. Hence, the individual employeeof the organization has the knowledgeand skills to perform their respective jobs.Employees are explained the rationalebehind the task, helping them to under-stand what and why a job is being donewhich thus, helps the leaders in meeting

* Significant at 5% (p=0.05 level)

** Significant at 1% (p=0.01 level)



the organizational requirements. Thisfinding is corroborated by Wanguri (1984)who found that managers would shareconfidential task related information tosubordinates to motivate them; to developteam spirit, to solicit subordinate input;to provide information when there wasneed-to-know. Brenner and Segband(1973) showed that the subordinates whowere given assignments, clear job instruc-tions, and an easy access to their superi-ors gave supervisors better feedback.Those who received direct assignmentfrom their immediate supervisors feltthey were better informed, had more timeto complete assignments. Roy (1990)however, in his study revealed that su-pervisors, who practiced significant in-tra level variability with regard to amountof information to be given to subordi-nates, did not receive high rating fromtheir subordinates about their credibilityand communication style. It signified lackof intra group cohesiveness and the ten-dency to hold back information in somepeople.

The results of the present study alsoimply that the leaders at different levelsof the management motivate staff to per-form at their optimal level. They feel thateffective organization focuses on highperformance. Thus, performance of em-ployees is closely monitored and regularlyappraised by the organization. The man-agers think that the organization has awell defined performance appraisal pro-cedure and good performance of employ-ees is rewarded. Corrective feedback isprovided to employees of the effectiveorganizations to improve their perfor-mance. Employees receive regular

coaching from their manager\ supervisorto improve their performance. Thus,knowledge of performance level and sug-gestions help improve skills and task per-formance. This finding is supported bythe Pettit et al (1997) that supervisorsmight be able to promote adequate lev-els of job performance and job satisfac-tion among their employees by providingthem with appropriate and accurate in-formation and feedback.

Knowledge of performance leveland suggestions help improveskills and task performance.

Managers at the three managementlevels feel that individual employees ofthe organization have access to informa-tion needed for taking future career de-cisions. In fact development plans ofemployees of the organization are framedevery year in consultation with them, andalso, training of the employees is linkedto their career development. Thus, themorale of the employees within the or-ganization is high and turnover of theemployees is low in the effective organi-zations. Nguyen (2005) study suggesteda significant correlation between mana-gerial communication and leadershipskills and employees� sense of empow-erment and job satisfaction

Further the results suggest that mul-tiple channels of communication-written;circulars, meetings; person-to-person inter-action, telephone- are used in order to in-crease the chances of communication be-ing received and also, facilitate accuracyand reduce the ambiguity of information.

Reeta Raina


And, important messages are repeated toensure accuracy. The findings by Minskyand Marin (2001) and Sullivan (1996)showed that employees� preferences forcommunication channels vary according tothe type of communication task undertaken,thereby lending partial support to the find-ings of the present study.

It can also be implied from the re-sults that managers think that the organi-zational structure is flexible that manytimes, formal channels in the organiza-tions can be bypassed if the message isnot clear or if they want to save on time.But Reif et al�s (1973) study contradictsthe findings of the present study. Thestudy reveals that respondents perceivedthat the formal organizations were morevaluable in satisfying their needs. Reddyand Gayatri (2000) revealed that largeorganizations with higher level of bureau-cratization were able to communicate allpolicies and procedures accurately totheir members and functioned effectively.

Conclusions

Based on the findings of the study ofperceived Downward CommunicationEffectiveness in relation to OrganizationalEffectiveness in the Indian AutomotiveIndustry, the following conclusions canbe drawn from the results thus obtained:

l There is significant positive relation-ship between Perceived Organiza-tional Effectiveness and DownwardCommunication. Thus the first hy-pothesis that there exists significantpositive relationship between thePerceived Effectiveness of Down-

ward Communication and Organiza-tional Effectiveness stands accepted.These findings are corroborated byother research studies such as byMassey (1975), Muchinsky (1977),Roy (1990), Maloney (1993), Kumar(1994), Noone (1996), Pettit (1997)etc.

l There exist insignificant differencesin Punjab and Haryana automotiveindustry with regard to overall per-ceived effectiveness of DownwardCommunication implying that thestate had no effect on the overall or-ganizational communication and itsdimensions. Thus the second hypoth-esis that the state has a significanteffect on the perceived effectivenessof Downward Communication in theautomotive industry stands rejected.However, the researcher did notcome across a study that shows theimpact of state on the Perceived Ef-fectiveness of Downward Commu-nication

l There are significant differencesamong the personnel at three man-agement levels (top, middle andlower) in the automotive industry withregard to Downward CommunicationEffectiveness indicating that levels ofmanagement had an effect on Down-ward Communication. Personnelworking at middle management levelperceived Downward Communica-tion in the automotive industry moreeffective than the personnel at bothtop and lower management levels .Inthe case of Downward Communica-tion, significant differences werefound between middle management



and lower management. Thus, thethird hypothesis that the levels ofmanagement have a significant ef-fect on the Perceived EffectivenessDownward Communication in theautomotive industry stands accepted.Larson and King (1973), Smith andKeil (2003), Rosen and Tesser(1975), Jablin (1979) studies substan-tiate the findings of the present study.

l The interaction effect of state andmanagement levels on the PerceivedEffectiveness of Downward Com-munication in the automotive indus-try was found to be insignificant.Thus the fourth hypothesis that thereis a significant interaction effect ofthe state and the levels of manage-ment on the Perceived Effectivenessof Downward communication in theautomotive industry stands rejected.The researcher again did not comeacross such a study highlighting theinteraction impact of both the stateand the management on the organi-zational communication and its di-mensions.

The managers in their perceptions feltthat leaders at various levels should keepthe employees informed about the impor-tance of their contribution for the orga-nizational functioning. They should en-sure that the employees understand therationale behind the task that will help himin achieving his goals\ targets easily. Ap-propriate, timely, clear and accurate in-structions should be given to the employ-ees regarding their job performance.Knowledge of performance level helpsimprove skills. It is also important to iden-tify the appropriate vehicle for commu-

nication �such as memos, speeches,meetings, videos, newsletters, electronicmessage boards, training sessions, newsreleases, posters and so forth, keeping inmind the rationale, the attitude and thelimitations of the employees or the na-ture of the task involved. Preferably com-plex job instructions should be in a writ-ten form or properly documented to avoidconfusion.

The employees should be providedwith the correct feedback and sugges-tions in order to improve their perfor-mance. Organizations must have welldefined performance appraisal procedurethrough which good performance of theemployees should be rewarded. Workplans of individual employees of the or-ganization should be developed collabora-tively. There should be an easy accessof the information to employees of theorganization, needed for taking futurecareer decisions. The leaders at variouslevels should give required resource sup-port and training to its individual employ-ees for performing their job.

However, the managers at three dif-ferent management levels also, in theirperceptions felt that occasionally, the useof too many communication channelsonly added to chaos than facilitating com-munication and further bypassing hierar-chy created more of uncertainty aboutwho is the real boss. The desired fea-tures of the Downward Communicationwill lead to the satisfaction of employ-ees. Their morale will be high and turn-over of the employees will be low. Orga-nizations enjoy good reputation in themarket.

Reeta Raina


Implications

A culture of engaged employees is oneof the things that can help a business getthrough economic downturn, and high en-gagement levels are often a result of strongleadership communication. The researchfindings of Kaufman et al (1994), Adamset al (1995), Witherspoon et al (1996), Stroh(2002), Appelbaum et al (2003), empha-sized that communicating effectively bothwith external and internal audiences in cri-sis or change situations, is one of the keyfactors in containing damage to thecompany�s reputation and determining ef-fectiveness. Kaufman et al (1994) sug-gested that a careful and right kind of com-munication from the management help or-ganizations to survive the thorniest of thechallenges. Witherspoon et al (1996) find-ings revealed that differential distributionof Downward Communication and incon-sistent use of the potential of new commu-nication technologies such as e-mail af-fected the functioning of the organization.Daly et al (2003) found that there was astrong relationship between efficacy of in-ternal communication and change whichwas dependent upon a host of common andinterdependent variables, communicationbeing one of them. Appelbaum et al (2003)highlighted that mis-management of com-munication strategies during organizationaldownsizing by the management led to a lin-gering and negative impact on survivingemployees behaviour and attitudes demon-strated by decrease in productivity, moti-vation, job satisfaction and increase in ab-senteeism .

While most leaders accept this, manystill find it a challenge to actually com-

municate in a way that inspires theworkforce to go the extra mile. Workingwith leaders who claim to have no timeto focus on communication is one of thesebarriers.

The challenge for the Indian manag-ers, therefore, is to develop an effectivecommunication system by making commu-nication a fundamental component of themanagement role, ensuring transparency,trust and interactive communication climatewhere employees are given opportunitiesto fully voice their opinions and deploy theirtalents and competences. The ability tocommunicate and seek communicationfrom people down the line will effectivelyincrease productivity, not only of manag-ers but of the organizations as well.

This study can be further extendedto other automobile companies in Indiaor an international comparison can beundertaken. Further, it can be extendedto other sectors of Indian economy.

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Book Review

WINNING IN EMERGING MARKETS �A ROAD MAP FORSTRATEGY AND EXECUTION by Tarun Khanna & KrishnaG. Palepu, Harvard Business Press, 2010, pp 247.

This is a fascinating book thatcaptures the essence of �emergingmarkets� very well in about 250 pages.Emerging markets are a source ofopportunity as well as threat, dependingon which lens you use to look at. Theauthors, both originally from India, oneof the most important emerging markets,have been writing on this theme for quitesome time, and this book captures theiraccumulated thoughts on this topic.

The central message is that one hasto understand the socio � political andeconomic landscape of the country beforedoing serious business there. This lessonper se is nothing new as the authors arewell aware of. As strategy gurus, theyknow that a fundamental principle ofstrategy is that it has to be contextspecific, in all respects including time andsituation. What has happened over aperiod of time is that companies haveeither grown more over confident(arrogant?) or have not been noticing therapid changes taking place in many of thedeveloping countries that are �emerging�from the shadow. Also, organizationalrigidities have come in their way. Lackof fast growth opportunities in their ownoriginal backyard has added to thecompulsion for the companies from the�emerged markets� to exploit theseemerging opportunities in countries like

India, Brazil and China. They should havebeen careful to understand the landscapeand its dynamism. But unfortunately,most of them are not entrepreneurial; onthe contrary, they are beauracratic withtoo much of standardization in multiplevalue adding links.

Khanna and Palepu have come outnot only with an explanation for thevariety of challenges faced by �incoming�companies, but have provided a numberof check lists in their tool kit at the endof all major chapters. These arefundamental questions that each strategyexecutive should ask without beingprompted, but as is clear from the variedexperiences of case studies included inthe book, that is not true across the table.Besides, the book is very illustrative witha number of case examples drawn fromdifferent countries.

The authors have clearly explainedthe �emerging market� phenomenon andhow it is different from the others. In theprocess, they have shown how not alldeveloping countries are the same. Forinstance, India�s own membership intothis club was an after effect of economicliberalization and restructuring that havebeen going on for the past two decades.They remind companies that they haveto invest in understanding the dynamics

Book Review


of these countries both at policy andoperational levels to make success oftheir strategy. Besides, they have rightlyargued for identifying support resourcesin host countries to strengthen orsupplement the value links and makethem relevant for the context. Jointventure partnerships are relevant toconsider for this purpose. Perhaps theauthors should have added a line ofcaution that one of the reasons for thefailure of some such partnerships was theexplicit abuse of such partnerships byMNCs as learning vehicles and nothingelse. Many potential partners in theemerging market are aware of such casesand have become guarded.

The book is divided into two parts:the short Part I provides a conceptualintroduction to managing in the emergingmarkets. The running theme across is theneed to spot institutional voids in thosemarkets and responding to them. Theauthors caution companies fromdeveloped countries to assure existenceof organizational mechanisms asunderstood by them, in the emergingmarket economies. In fact, it is notalways institutional voids, but absence ofinstitutional mechanisms as understood inthe West that creates the problem.

Part II of the book has five chaptersof which one is on multinationals enteringemerging markets. The chapter onexploiting institutional voids as businessopportunities (chapter three) is reflectiveof the essence of entrepreneurship insuch economies. I have been arguing thatthe source of an entrepreneurialopportunity is customer dissatisfaction.

Institutional voids represent some suchopportunities. Much of the developmentof emerging markets can be traced tofilling such voids in different ways.

Chapter four is based on an analysisof the experiences of multinationals inemerging economies. The basic messageis that one should not enter without doingadequate home work but if one is alreadyin, don�t run away without looking atoptions to address the challenges.

Chapters five and six coveringcompanies from emerging marketscompeting in their own countries andabroad are interesting from differentperspectives. These reinforce the basicargument to be context specific. Theyunderstand the turf very well and playaccordingly. Also, they are largelyentrepreneurial and / or family businesseswith abundant flexibility and humility toadapt.

One final chapter concluding thediscussion on the Emerging Arena leavesthe readers with a few capsules to consider.They say, �throughout this book, we havetried to show that companies need tounderstand and respond to the�emergingness� of emerging markets � thepersistent institutional voids embedded intheir market structure � to craft strategiesand operate successfully in theseeconomies�(P.203). The four action itemsare worth reproducing here: experiment tofit business models to emerging markets,position your business as a partner inprogress, balance ambition with humility inemerging markets, and appreciate theinherent risks of emerging markets. In



essence, emerging market is forentrepreneurial managers who constantlylook for innovative ways to addresschallenges. The notes running into 14 pagesadd to the scholarship of the book.

This is a relatively short book (will beliked by managers!) that offerstremendous insight into managing businessin emerging market economies. Given that

emerging markets are going to continueto be a key player in the global economy,companies across the spectrum have tobe entrepreneurial to succeed. They willfind the toolkit of very high value.

K Ramachandran,Thomas Schmidheiny Chair Professor ofFamily Business & Wealth Management

Indian School of Business, Hyderabad

CHANGES IN LABOUR INSTITUTIONS IN CHINA: RIGHTSTEPS TOWARDS ACHIEVEMENT OF DECENT WORK ByK R Shyam Sundar, Bookwell, New Delhi, 2009; pp.120

The Chinese economy hasexperienced higher rate of growth; itsimpressive performance is held to belargely due to the controversialadvantage it enjoyed in the labour sectorand this has been at the centre of debateand a subject of corrective discourses bythe West. It is opined that the stupendoussuccess rate in the economic sphere hascome at a tremendous social cost, i.e. risein inequality, environmental damage,heavy job losses, labour and social unrest,sweatshop image etc. There have beenreform measures in the labour sector tocorrect the institutional problems andestablish a just and harmonious society;and new labour laws have beenintroduced to compromise the warringinterests of labour and capital for thesustainability of the firm.

The Chinese legal system has beenreconstructed to bring about �balanceddevelopment� in all spheres of societyand to build a �harmonious develop-

ment�. As a consequence the ChineseGovernment has introduced somesignificant �social laws�; as the sociallaws which in the past accounted formere 2 percent of the total laws, nowaccount for around one-fifth at thenational level and 30-40 percent atregional level. The social laws include,Labour Contract Law, Law onMediation and Arbitration of LabourDisputes, and Law on EmploymentPromotion. The major objectives oflabour reforms were to:

l Institutionalize the employmentrelationship by providing forsupporting labour contracts.

l Redress the imbalances in theIndustrial Relation System (IRS) byproviding for stronger labourprotections.

l Promote harmonious industrialrelations by strengthening the role oftrade unions.

Book Review


l Establish fair labour marketpractices; create effective disputeresolution mechanisms.

l Provide for a comprehensive socialinsurance plan both for urban andrural citizens.

The Chinese policy makers face theunenviable task of maintaining the labourstandards and yet cope up with theproblem thrown up by the economic slowdown. The book under review is to dwellupon various aspects of changes in thelabour institutions in China.

The book is spread over six chapters,in addition to two appendices containingdata tables and details of interviews. Thefirst chapter gives a brief introduction oflabour market and industrial relations inChina. The structural changes in thedeployment of labour force over the yearslead to decline in employment over theyears owing to restructuring and lay off;and also employment in the private sectorincreased from 2.4 million in 1992 to 23million in 2005. The �hukou system�(household registration) in a sense leadto absence of �labour market� and theworkers enjoyed life time job tenurefamously known as the � rice bowlsystem� and this restricted rural to urbanmobility; the hukou system wasgradually deregulated and the contractsystem started in 1983 with certainemployment features which changed overthe years.

Chapter two briefly portrays thefeatures of the labour market and the

Industrial Relation System and restructuringmeasures introduced during themarketisation period. The next chapteranalyses the reasons for introducing the newlaws and regulations. Chapter four is devotedto the unique process of social consultationfor the finalization of new laws and alsogives a detailed description of salient featuresof new labour laws and regulation. Publicparticipation in the legislative process hasbeen recently institutionalised in China asagainst the conventional �tripartiteconsultation� process.

Criticisms and shortcomings of thetwo major laws namely, Labour ContractLaw (LCL)) and the Arbitration Law arereviewed in chapter five. It is viewed thatsome new provisions will increase labourunrest and litigations, or increase labourcosts around 20-40 percent and that willerode the low cost advantage enjoyed byentrepreneurs in China. Chapter sixhighlights the challenges arising from thenew laws including the challenge ofenforcement of labour laws. Conclusionsare contained in the last chapter.

The book is the outcome of a researchproject by the author and is acomprehensive coverage on the subjectof labour institutions in China. The bookis well referenced, is a valuablecontribution to the literature on thesubject and will be a useful resource forthe researchers and policy makers.

Nand DhamejaProfessor, Indian Institute of Public

Administration, New Delhi

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a special (April 2011) issue on

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György Széll

Beyond GDP

Professor Emeritus,

University of Osnabrueck, Germany

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