AIMS INSTITUTES Peenya, Bangalore

AIMS Journal of Research ISSN 2321 - 8487 Volume 11, Issue 2, September 2016

Impact of Management Audit System on Organizational Effectiveness Dr. Nirmala, K - A study of select Public and Private Sector Companies in India

The Role of Employees in Building the Organizational Culture Dr. Denisa Abrudan., & - An Empirical Study Dr. Agata Pierscieniak

Performance of Public Sector Banks in India: Mr. Purna Chandra Rao A comparative study with Private Sector Banks

Dr. Karunakara Reddy, B.A Technology in Banking: Beneficiaries’ perception & Mr. Aravinda Reddy

Case Study: Sasken Communication Technologies Ltd Prof. Ramesh Raj Ayer - The way forward

A PREMIER INSTITUTE FOR HIGHER EDUCATION IN INDIA AIMS Journal of Research

ISSN 2321 – 8487 Volume 11, Issue 2, September 2016

Editorial Board Editorial support Prof. Bhagyalakshmi. M (Sr. Manager, ACR) Dr. Kiran Reddy - Chairperson Prof. Vedavathi M (Manager, ACR) (Founder & CEO) AIMS Institutes

Dr. Sheri Kurian - Member Administrative Support (Registrar, AIMS Institutes) Sri Gopal Reddy. M (Director, AIMS Institutes)

Prof. Jyothirmayee R - Member Editorial Reviewers (Director, ACSD, AIMSIHE) AIMS School of Business Prof. Jayashree Nair - Member Dr. Brahm Sharma (Director, AIQAC, AIMSIHE) Dr. Somanath V.S Dr. Vijay Bhasker Velury Ms. Anagha Gunjal Reddy - Member Dr. Annapoorna S (Director, Secondary Education, AIMS Institutes) Dr. Jayaprakash Reddy. R

Dr. Chitra Das Gupta AIMS School of Commerce (Professor, Dept. of Languages, AIMSIHE) Dr. Karunakara Reddy. B. A Dr. Jayaprakash Reddy. R - Member Secretary (Director, ACR, AIMSIHE) Publisher AIMS Publications Editor-in-Chief Frequency Dr. Kiran Reddy, Founder & CEO Bi-Annual AIMS Institutes 1 st Cross, 1st Stage, Peenya, Cover Design B angalore – 560 058 Mr. Sajjad Shah (AIMS Institutes) E mail: [email protected] AIMS Journal of Research

Volume 11, Issue 2 September, 2016

Editor-in-Chief Dr. Kiran Reddy AIMS Journal of Research

ISSN 2321 – 8487 Volume 11, Issue 2, September 2016

About ACR Views expressed in the papers are those of respective author(s) neither AIMS Journal of AIMS Journal of Research is a bi-annual Research nor ACR, AIMSIHE, Peenya, journal brought out by the AIMS Centre for Bangalore is responsible. Unless authorized, Research (ACR) since its inception i.e. 2005. no part of the material published in the journal The journal is published in March and may be reproduced or stored in retrieval system September every year. ACR is one of the or used for commercial and other purposes. vibrant focused centers of AIMS Institute of Higher Education (AIMSIHE). To promote Research Advisory Committee research culture and to encourage high quality research activities amongst the faculty and Dr. Kiran Reddy - Chairperson students' fraternity are the major objectives of (Founder & CEO, AIMS Institutes) ACR. The journal is addressed to corporate, researchers, faculty in the departments of Prof. Maneesh Reddy, Member Management, Commerce, Information (Director, Strategic Planning, AIMS Technology and Humanities. Thus it is a Institutes) multidisciplinary and aims at providing a platform to research enthusiasts and publish Dr. Sheri Kurian - Member high-quality Academic Papers, Reflective (Registrar, AIMS Institutes) Practices, Case Studies and Book Reviews. Dr. T. Siddaiah - Member, (Professor of Management, AIMSIHE) Research Review Committee Dr. Anjula Gurtoo - Member Dr. Kiran Reddy- Chairperson (Department of Management Studies, (Founder & CEO, AIMS Institutes) Indian Institute of Science, Bangalore)

Dr. Sheri Kurian – Member Dr. Anand. D – Member (Registrar, AIMSIHE) (Department of Management Studies, University of Mysore, Mysore) Dr. Chitra Das Gupta - Member (Professor, Dept. of Languages, AIMSIHE) Dr. Indira – Member (Department of Sociology, Dr. Brahm Sharma – Member University of Mysore, Mysore) (Director, ACS, AIMSIHE)

Dr. Somanath. V.S - Member Prof. Sandhya Sastry – Member (University of Bedfordshire, UK) (Director, ACC, AIMSIHE)

Dr. Jayaprakash Reddy. R – Member Secretary Prof. Roja Reddy – Member (Director, ACR, AIMSIHE) (Director Under Graduate Education & Director Admissions, AIMSIHE) © 2016 AIMS Centre for Research, AIMSIHE, Peenya, Bangalore – 560 058. Prof. Jyothirmayee. R – Member (Director, ACSD, AIMSIHE)

Prof. Ramesh Raj Ayer – Member (Director, ACIL, AIMSIHE)

Dr. Jayaprakash Reddy. R - Member Secretary (Director, ACR, AIMSIHE) CONTENTS

Editorial 01 Dr. Kiran Reddy

Impact of Management Audit System on Organizational Effectiveness 02 - A study of select Public and Private Sector Companies in India Dr. Nirmala, K

The Role of Employees in Building the Organizational Culture - An Empirical Study 09 Dr. Denisa Abrudan., & Dr. Agata Pierscieniak

Performance of Public Sector Banks in India: A comparative study with Private Sector Banks 19 Mr. Purna Chandra Rao

Technology in Banking: Beneficiaries’ perception 27 Dr. Karunakara Reddy, B.A., & Mr. Aravinda Reddy

Case Study: Sasken Communication Technologies Ltd - The way forward 32 Prof. Ramesh Raj Ayer

ISSN 2321 – 8487 Volume 11, Issue 2, September 2016

Editorial

This 2nd issue of 11th volume consists of four performance related parameters such as Capital research papers and one case study. As a adequacy ratio, Asset quality, Management continuous practice, we strictly adhere to double efficiency, Earnings quality and Liquidity. All blind peer review process before we finalise papers these performance related aspects have been for publication. discussed comprehensively and the same has been presented. Based on these parameters, findings Dr. Nirmala in her paper, Impact of Management are drawn after detailed analysis. Audit System on Organisational Effectiveness – A study of select Public And Private Sector Companies Dr Karunakara Reddy and Mr. Aravinda Reddy in India, focuses on Management Audit System in their paper, Technology in Banking: implementation and its impact on Organisation Beneficiaries' perception, examines the perception Effectiveness in both Public and Private sector of customers in terms of E-Banking services companies. She adopted empirical and analytical considering utilities anticipated and the extent of method for the study. She selected as sample ten reception. The customer's survey was undertaken companies from public and private sectors. The on Internet Banking, Mobile Banking, Electronic o u t c o m e o f t h e a n a ly s i s r eve a l s t h a t Fund Transfer, Electronic Payment System, Use Organisational Effectiveness is better in Public of Core Banking facility, and Use of RTGS. sector companies as compared to Private companies. The author states that Management Prof. Ramesh Raj Ayer, discussed a case on Audit System helps in examining managerial SASKEN Communication Technologies Ltd. decisions which have a strong impact on the starting with background of the company, he performance of business organizations. The paper discussed the case in detail including its current concludes that Management Audit System is a challenges and situation analysis. must for every enterprise to be successful in the competitive world. Dr. Kiran Reddy, Editor-in-Chief AIMS Journal of Research Dr. Denisa Abrudan and Dr. Agata Pierscieniak E-mail: [email protected]. in their paper, the Role of Employees in Building the Organizational Culture - An Empirical Study, highlighted the vital role of organizational culture within a company and its importance to all employees. Organizational culture is a process that contributes greatly to motivating and involving employees, providing sustainable development of the company and facilitates the innovative ideas and solutions through the exchange of knowledge between members of the organization.

The authors analyzed the organizational culture of the company Bosch Service Solutions- Timisoara Branch, at Romania, specifically to see if the employees of this company understand the organizational culture and adhere to its base values.

Mr. Purna Chandra Rao's paper on Performance of Public Sector Banks in India: A comparative study with Private Sector Banks is a study on the performance of public sector banks in India and a comparison with private sector banks based on CAMEL model. It deals with different aspects of

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Impact of Management Audit System on Organizational Effectiveness - A study of select Public and Private Sector Companies in India

Dr. Nirmala

Associate Professor, Department of Commerce, Bangalore University, Bangalore E-Mail: [email protected]

KEY WORDS Abstract Management To meet the global challenges companies have to adopt appropriate strategies and structure for Audit System; enhancing the organizational efficiency. Management Audit is one such tool to evaluate the performance of business organizations. The paper focuses on Management Audit System Organization implementation and its impact on Organisation Effectiveness in both Public and Private sector Effectiveness; companies. Empirical and analytical method is adopted for the study. Sample companies Public sector; selected are ten each from public and private sectors. The statistical test like t-test, correlation and Ratio analysis are conducted to evaluate the impact and implementation of Management Private sector; Audit System. The outcome of the analysis reveals that Organisational Effectiveness is better in Ratio analysis. Public sector companies as compared to Private companies. The author states that

Management Audit System helps in examining managerial decisions which have a strong impact on the performance of business organizations. She further opines that this method of evaluation does not need specialized knowledge or tool like operation research etc. The paper concludes that Management Audit System is a must for every enterprise to be successful and compete in global competition.

Introduction pur pose of improving Organizational The management of business is becoming more effectiveness through the attainment of the and more complex because of globalization of Organizational objectives (Anil, B. Roy economies. Almost all the countries are Chowdhury., 1996). It is considered as a liberalizing for the entry of foreign operators. This comprehensive and constructive examination of had resulted in a competitive environment in an Organization, its plans, objectives and means which the business organizations have to function of operations, and an investigation from top level very effectively and efficiently for their survival to lower level of management. It is a critical and to stay as a potential competitor in the global review of all aspects or processes of management socio-economic ambience (Khan, A. Q., 1996). and reviews the performance of various managers and systematically examining, analyzing and Today's mantra of business is “survival of the a p p r a i s i n g t h e m a n a ge m e n t ' s ove r a l l fittest”. To be in the competition they have to performance. evaluate their weaknesses, utilize their strengths and improve their performance. In other words, Management Audit in India they have to undergo a broad examination of their The Indian companies are growing both managerial decisions, achievements, failures organically and inorganically. Many companies delays, etc. and provide all findings, favorable or are competing with global companies in offering unfavorable, which have a bearing on their goods and services. The concept of management performance. All this calls for the conduct of audit is quite novel in the Indian context. “Management Audit” in these organisations. (Satyanarayanachary, T, et al. 2004) in their study conducted regarding the implementation of Management audit therefore, is future oriented, Management Audit System, indicates that it is still independent and systematic evaluation of the in nascent stage and some companies having activities at all levels of management for the foreign collaborations have attempted to

2 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 implement Management Audit in all their One of the basic issues relates to the question that, activities and some are in the process of if implementation of Management Audit System implementing. (Khan, A. Q., 1996) in his study is going to improve the Organizational indicate that the accomplishment of systematic Effectiveness, then why it is not made mandatory Management Audits are very often caused by like financial audit.Is it because of the experience major changes in the business such as change in of some companies where in spite of introduction the top management, mergers and acquisitions, of Management Audit System the organizational succession planning and restructuring/strategic effectiveness has not improved. Does it mean that alignment . Some companies conduct Management Audit System does not have any Management Audit only to those activities or value? Are there problems which make functional areas where the performance is poor or implementation of Management Audit difficult needs immediate improvement to maintain a or is Management Audit still not accepted as proper rate of growth of business and returns. measurement of management performance tool for improving the organizational effectiveness? Or To assess the Organizational effectiveness few is it that the cost and time factor which has come in measures such as return on sales, return on equity, the way of implementing Management Audit market share change and customer satisfaction System in all Organizations or is it because of the are considered. (Rodsutti M.C, & Swierczek non-feasibility in ensuring the co-ordination in the F. W. , 2 0 0 2 ) i n d i c a t e d o r g a n i z a t i o n a l entire Organization? Or is it because Management effectiveness, capabilities-managerial skills, Audit covers non-financial parameters which o r g a n i z a t i o n c u l t u r e , o r g a n i z a t i o n could be theoretical concept requiring some more communication and perceived organization validation and authentication. The other issues reputation are other parameters considered in could be failure of many companies in not having assessing organizational effectiveness. clear-cut idea about their vision, mission and objectives, Organizations feel that the internal Even though, there is theoretically and logically a audit system automatically takes care of clear positive linkage between Management Audit Management Audit and there is no need to have System and Organizational effectiveness, it is still separate Management Audit. These are some of observed that all the companies from both public the question which requires an in-depth study. and private sectors are not very keen in This study is a humble attempt in this direction. introducing Management Audit System. What could be the reason for this? Is Management Audit Review of Literature System a sound concept? Is there any problem in As noted by the authors not much of literature the introduction of Management Audit System? review is available on Management Audit System Or is there a doubt of who is the right person to do and its adoption in enhancing Organizational this type of audit? and so on. All these research Effectiveness by Indian Companies. Management questions needed an empirical study on different Audit System seem to be in the infancy stage due aspects of Management Audit System in the to many reasons like no rules governing the existing scenario relating to implementation of system as in the case of financial audit, who is the Management Audit System and its impact on right person to do the audit and so on. The organizational effectiveness. literature review relates to Management Audit System and Orgnisational Effectiveness is given Statement of the Problem below- The literature review on Management Audit and Organizational Effectiveness indicates a mixed Management Audit is a “procedure for result. Some companies which have adopted systematically analyzing and appraising a Management Audit System have fared management's overall performance”. An effective remarkably better, whereas, in case of some management audit will induce constructive companies, in spite of having Management Audit thinking and reveal the firm's strong and weak System, these companies have failed to improve points and it will also increase the firm's their Organizational Effectiveness. This leads to effectiveness and efficiency and thereby, increase the necessity of studying important issues and the firm's profit (Brown, J R. & Cooper, W. D., problems relating to linkage between 1988). To ensure the effectiveness of Management Audit and Organizational Organizational activities in any Organization Effectiveness. syntheses among three different things needs to be

3 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 established. They are – individual, group and According to the author there are four areas in organizational effectiveness. The causes of developing a frame work for Management Audit. individual effectiveness includes physical First, the criteria for a management audit must be attributes, personality traits, motivation and considered. Second, standards of managerial morale etc., the causes for group effectiveness performance must be developed, if the evaluation comprise of leadership, communication and of management stewardship is to have meaning. s o c i a l i z a t i o n e t c. , a n d t h e c a u s e s o f Third, a method of reporting must be established, organizational effectiveness include technology, so that the auditor can have a structured means of environmental conditions, competence and many disclosing the results of his examination, finally, it other variables (Lawless D., 1972). Flesher D.L., will be necessary to develop management auditing (1993) in his paper claims that the small procedures and standards of documentation to businesses today could probably benefit from a support the report given. The methods of critical management audit of the firm's long-term path and PERT analysis could be used in office financial affairs. Management Audit by management as well as to other activities (Picketh articulating the missions, objectives and expected T. R., 1968). results along with the methods of performance evaluation goes a long way towards improving the Objectives of the Study performance of public enterprises. (Batra, G.S., Based on the research gap found from the 1997). Management Audit helps in examining literature review on Management Audit and managerial decisions which have a bearing on the Organizational Effectiveness and problem performance of business organizations. The statement, the following objectives have been evaluation is more suited as the management of a formulated for this study-. business enterprise need not be equipped with » To compare the implementation of specialized knowledge of tools such as operations Management Audit System between research, advanced statistics etc. they further public and private sector company indicate procedure to conduct management audit » To assess the impact of implementation of and conclude that management audit is a must for M a n a g e m e n t A u d i t s y s t e m o n every enterprise (Satyanarayanachary, T & et al. Organizational Effectiveness between 2004). Similarly Cann J.M., (2004) says while public and private sector companies: organizational agility is certainly essential, so is organizational resiliency. Further he suggests that Hypotheses academics and practitioners must work even more To achieve the above objectives the following closely together to understand the trends and to Hypotheses have been formulated: translate theory into usable and practical recommendations for managing highly dynamic H 1 : T h e r e i s a s i g n i f i c a n t e x t e n t o f Organizational environments. implementation of Management Audit System in functional activities between public and Private Wang Z., (2005) presents general frame work for Sector Companies. understanding the Organizational Effectiveness which includes three-strategy model for global H2: There is a positive impact of Management technology innovation and organizational Audit System on Organizational effectiveness development. The frame work discussed reflected in Management Process between public personnel strategy, system strategy, and and private sector companies. organizational strategy. He concludes that the personnel strategy could play a crucial role in H3: There is a positive impact of Management enhancing the effects of human resources Audit System on Organizational effectiveness management and entrepreneurship by supporting reflected in Production between public and the main dimensions of HRM. The system private sector companies. strategy was use to facilitate technology innovation through knowledge management H4: There is a positive impact of Management while the organizational strategy was adopted to Audit System on Organizational effectiveness create positive organizational culture and high reflected in marketing between public and private performance system. Burton J.C., (1968) reveals sector companies. how the auditors in future would attest the effectiveness of the management's performance. H5: There is a positive impact of Management

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Audit System on Organizational effectiveness Management Audit System partially or fully for at reflected in Accounting and Finances between least last 3 years. Thus, ten public and ten private public and private sector companies. sector companies were selected for the study.

Methodology Organizational effectiveness was measured This study is based on empirical and analytical through financial ratios like Net Asset Ratios, method. There are 245 central government and Profitability Ratios, Net Sales Ratios. Ten years 160 state government public sector companies of data were taken for calculating financial ratios i.e. which 50 percent are not performing well. For from 2003 to 2012. For analysis, the ten years data present study Bangalore based Ten public sector were divided into two parts, pre-implementation companies were selected. Similarly, ten private period and post-implementation period. The sector companies were selected from 282 variables chosen for management process were companies which were listed in Bangalore stock objectives, planning, organization, control and exchange. The criteria followed for choosing systems, and procedures. The functional public and private sector companies were activities were Production, Marketing, Research minimum of ten years in business and having 500 and Development, Accounting and Finance, employees, existence of all functional Human Resource Management and Information departments, clear organization structure with Technology. The data collected were been regular meetings of Board of Directors, head analyzed using statistical tools such as, analysis of office in Bangalore and implementation of variance, Ratio Analysis.

Data Analysis and Discussions

Table-1: The levels of implementation of Management Audit System (overall) in Public and private sector companies

NS: Non-significant The above table reveals the level of implementation accounting (79.02 percent), human resource (79.38 of Management Audit System overall variable wise percent), and information technology (80.51 mean scores in public and private sector companies. percent) which are greater than the private sector It shows that when public and private sector companies. In private sector, research and companies are compared, in public sector development which is 74 percent is greater management process (77.02 percent), production compared to public sector with 71.13 percent. It is (80.10 percent), marketing (75.76 percent), financial evident from the statistical results that the mean

5 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 response on Management Audit System between Public Sector Companies have implemented public and private sector companies for all the seven Management Audit System to the extent of 77.9 different aspects of study are found to be non- percent and private to the extent of 74.51 percent. The't' significant (P<0.05). It further reveals the data test (0.47NS) indicates the difference is not significant. subjected for statistical test indicate the mean response Hence, H1 is rejected i.e. there is no significant under different variables of Management Audit for the difference in the extent of implementation of Public sector (F=0.48NS), private sector (F=0.16NS) and Management Audit System across public and private combined (F=0.41NS). sector companies. Table-2: Management Audit System- Public Sector and Private Sector Companies

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Table 2 indicates the company wise degree of m a n a g e m e n t a u d i t h a s n o t i m p a c t e d implementation of Management Audit System Organizational Effectiveness, where as in case of with regards to management process, production, marketing it is +0.55, R&D +0.14 (not impacted) marketing, research and development and and accounting +0.14. accounting in public and private sector companies. The Karl Pearson's coefficient of correlation for private companies between the level of The Karl Pearson's coefficient of correlation for implementation of Management Audit System on public companies between the level of management process, production and accounting implementation of Management Audit System on the number of ratios which indicate positive management process, production and the number impact as shown in Table 2 which indicates 0.603, of ratios which indicate positive impact as shown 0.27 (moderately positive correlation) and 0.74, in Table 2 which indicates -0.14 and -0.20 and this this reveals there is positive correlation, where as reveals that there is insignificant negative in case of R&D it is -0.026 showing negative correlation i.e. the level of implementation of correlation.

Table-3: Impact of Implementation of Management Audit System on the Organisational Effectiveness

NS= Not Significant, Sig = Significant

The above table indicates the impact between (80.34). implementation of Management Audit System on • Implementation of Management Audit the Organizational Effectiveness through Ratio System on Organizational Effectiveness is Analysis. This table reveals that there is moderately positive across public and private significant impact of Management Audit System sectors. on Accounting and Finance in both public and • There is a significant impact of Management private sector companies and hence accept the Audit System on accounting and finance in Hypotheses(Hyp-5) and Management process in the case of Private Sector companies (p<0.05-Hyp both public and private companies, in case of 2). Apart from these, there is no impact of management process there is significant Management Audit System on Management impact only in private sector companies. Process in public sector companies (Reject Hyp - • There is no impact of Management Audit 2), production and marketing in both the sectors System on management process in public (Reject Hyp- 3, Hyp- 4) sector companies and production and . marketing functions in both the sectors. Significant Findings of the Study • The result of empirical data reveal that there Conclusion was no significant difference in the extent of The present study noted that the Management implementation of Management Audit System Audit System is still at the infancy stage in India, on functional activities like management because not even one company out of twenty process, production, marketing, R&D and s a m p l e c o m p a n i e s h ave i m p l e m e n t e d accounting. Management Audit System fully. The process of liberalization and globalization has gained • The extent of implementation of Management momentum in India, hence, foreign investors, Audit System is found highest in IT (80.51) and non-resident Indians and multi-national production(80.10) in public sector where as in companies are showing keen interest in private sector only in IT the impact was high

7 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 establishing joint ventures, independent The National Public Accountant, 33(7), 31-43. enterprises and investments through capital Burton, J.C. (1968). Management Auditing, market. Today, the changes that take place in the Journal of Accountancy. 125, 41 organizations reflect only the attitudes and Chowdhury, A.B.R. (1996). The Modern Internal perspectives of the individuals who make isolated Auditor- A Work Book on operational decisions. How the decision will affect the and management audit. Kamal law House, organizations overall performance is not assessed, Calcutta, ver y few Organizations having foreign Flesher, D.L. (2003). A Management Audit of collaborations have attempted to implement small business long-term financial affairs. Management Audit System. It is high time that Managerial Finance, 19(8), 14-24. Management Audit System is used for assessing Khan, A.Q. (1996). Globalization and relevance the managerial efficiency and thereby enhancing of Management Audit. Journal of B a n k i n g the Organisational Effectiveness. As such, the and Finance, 14(6), 6-8. author concludes that the parameters such as Maccann, J. (2004). Organizational Effectiveness: management process which consists of objectives, C h a n g i n g C o n c e p t s f o r C h a n g i n g planning, organization, control, systems and Environments, Journal of Human Resource procedures and functional activities relating to Planning, 27(1). p r o d u c t i o n , m a r k e t i n g, r e s e a r c h a n d Picketh, T.R. (1968). Management auditing for development, accounting and finance, human management evaluation. Journal of Small resource management and information Business Management, 6. technology are to be thoroughly examined under Rodsutti, M.C. & Swierczek, F.W. (2002). Management Audit System and its impact should Leadership and organizational effectiveness be measured through effectiveness of in multinational enterprises in Southeast Asia. organization. It was found that there is a positive Jour nal of Leadership & Organisation impact of Management Audit System on development, 23(6), 250-261. Organizational Effectiveness in both public and Satyanaryanachary, et al. (2004). Role of private sector companies, but it is not significant. Management Audit in Evaluation of Business When the implementation of Management Audit Performance, The Journal of IMIS, 4, 11-16. System is compared among public and private Wang, Z. (2005). Organizational effectiveness sector companies, public sector companies are through technology innovation and HRM better. Further the impact of implementation of strategies. International Journal of Manpower, Management Audit System is seen on the 26(6), 481-487. functional activities except on research and development in both public and private sector companies. The Author concludes by suggesting Management Audit System helps in evaluating managerial decisions which has a strong impact on the performance of business organizations. Companies have to implement this system for their success and to compete in the global market.

References Askey, J. M., & Dale, B.B. (1994). Internal Quality M a n a g e m e n t A u d i t i n g : A n Examination, Managerial Auditing Journal, 9(4), 3-10. Aswathappa, K. (2000). Organisational Behavior. Himalaya Publishing House, 560-590. Batra, G. S. (1997). Management Audit as a service to public enterprise management: a study of management audit and the memorandum of understanding (MOU) system in India, Managerial Auditing Journal, 12(3),148-155. Brown, J.R. & Cooper, W.D. (1998). Management Audit – A profit building tool.

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The Role of Employees in Building the Organizational Culture- An Empirical Study

Dr. Denisa Abrudan*., & Dr. Agata Pierscieniak**

*Assoc. Prof. West University of Timisoara, Romania, E-mail: [email protected] ** Assoc. Prof. Rzeszow University, Poland, E-mail: [email protected]

KEY WORDS Abstract Engagement; This paper aims to highlight the vital role of organizational culture within a company and Organizational understanding its importance to all employees. Organizational culture is a process that contributes greatly to motivating and involving employees, providing sustainable development Cultur;, of the company and facilitates the innovative ideas and solutions through the exchange of Organizational knowledge between members of the organization.

Performance; The aim of this study is to analyze the organizational culture of the company Bosch Service Values Solutions- Timisoara Branch, specifically to see if the employees of this company understand the organizational culture and adhere to its base values.

Introduction promoting of the innovative projects, the Nowadays, we all become the witnesess of a new permanent knowledge assimilation, the team world, a world in which we must radically change work orientation, the practice of authority our way of thinking. Asserting that, we have in delegation, the new complex responsibilities mind not only the organization changes but also assumption, the consolidation of the employees the group changes and more than that, the respect, the reliability on the employees and client individual changes. Obvious that these changes orientation have become the main concerns of the are not easily to realise. According as the change companies that desire to achieve performance. passes from the individual to the group and than to the organization, the difficuly degree starts to These organizations are different from the others raise and so does the necessary time for achieving especially because of their performance-oriented it. Instead of a piramidal rigid structure and liable culture, a culture capable of capitalizing the whole to predictible behaviours, come out a variety of organization's architecture: the abilities of their non – hierarchical structural forms while the people, the structures, the systems and the typical behaviours for human resources are of technology, existing a dominant preoccupation of entrepreneurial structure. Comparing the the individuals towards quality and excellence. essential feature of the non–hierarchical organizatorial configurations, it can be noticed Being innovative and capitalizing creativity and certain types of actors and roles while the quality more than quantity both for the individual typology of the managerial practices is completly and organization level, the performant changed. organizations know to appreciate their employees, those who prove to be competitive, The permanent change therefore has become an responsible, talented and having a strong ordinary situation than a particular one. In motivation towards success (Abrudan, 2007). present, in order to be successful, the organizations must constantly adapt to the Literature Review evolution of the internal and external factors. Changes in business often affects a rapid transformation of the mission, vision, core values, More than that, the competitive spirit, the desire basic skills, management style, the political of being the best, the open-minded character, the structures, processes and mechanism of renewal

9 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 of the organization. Any change program organization defines "success". All these elements gravitating around people - changing their mind are clues which are helping outsiders to set, behavior and motivational level. understand the culture of a particular organization (Lunenburg, 2011). Organizations have come to realize, over the years, that improving technology and cutting For an organization to become stronger, costs, enhance performance only up to a point. To competitive and sustainable it requires a go beyond this point, people are the most differentiated culture which is composed of important resource organization that can make elements, such as vision, values, practices and this possible (Kalyani & Sahoo, 2011). people (Coleman, 2013).

A strong culture enables smooth flow of Culture and engagement: pillars of organizational information and feeds harmony between the performance organization members. Improving culture and Leaders should understand that employees internal communication, organizations can engaged in their work are more motivated and become sustainable in the long term. Also, a well- have the desire to stay in organization for a long- established organizational culture helps term, also, they are focusing to a large extent on employees in establishing an identity for the achieving today's and tomorrow's business goals. organization and identifies common objectives, Conversely, disengaged employees can pull down all leading ultimately to organizational the organization and they have the power to excellence. influence: customers, sales, quality, productivity, retention and other critical business areas(Smith- To respond successfully to changes in the business Vorhauser, 2013). environment, the organization needs a flexible and adaptable culture. Managers should regularly In recent years, organizational commitment and review the relevance values of the organization its importance has grown due to changes in the and to examine how to adapt to environmental business environment (Brown et all, 2015). In this changes (Abrudan, 2012). They also need to respect the authors present some arguments: understand how to promote a learning culture in order to influence change through participation, 1. Employees are now like customers teamwork and empowering employees, all of As the job market has heated up and new these are considered necessary in managing technologies have exploded, power has shifted quality affectively (Abrudan, 2007). from the employer to the employee. Websites like, LinkedIn, Face-book and others not only increase When we look at results, organizational culture is transparency about a company's workplace but that who makes the difference, as it has a they make it far easier for employees to learn significant influence on attitudes and behaviors of about new job opportunities and gain intelligence the organization's members. Skills, values about company cultures. employees and leaders play a crucial role in determining the effectiveness and success of an 2. The new leaders will have to prove a greater organization. understanding for new cultural models Today, between the new responsibilities of Organizations can be flexible or rigid, supportive leaders are remarkable understanding and or unfriendly, innovative or conservative. transmission of the organizational culture, both in Therefore, organization theorists have examined the internal and external environment. the important role that culture plays in the life of an organization. 3. The new "world of work" changes the way of people's engagement In general, employees are describing the The world of work is very different from and more organization they belong to or work environment complex than it was only a few years ago. using elements related to organizational culture. Employees today work more hours and are nearly Therefore, they describe the types of people who continuously connected to their jobs by pervasive work in the organization, working atmosphere, mobile technologies. They work on demanding facilities and how people are treated in the cross-functional teams that often bring new organization. Also, they present how the people together at a rapid rate. Flexibility,

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empowerment, development, and mobility all With proper practice of involvement and now play a big role in defining a company's culture empowered by understanding what is important (Abrudan, 2010). for employees, companies can create more motivated employees and high performance. 4. Employees' motivations have changed Committing to an intentional culture that is open, Today's workers have a new focus on purpose, transparent and allow employees to thrive, mission, and work-life integration. Research organizations will achieve the performance and shows that a variety of complex factors contribute success. to strong employee engagement, including job design, management, work environment, Research Methodology development, and leadership. Today, more than This paper aims to highlight the vital role of twice as many employees are motivated by work organizational culture within a company and passion than career ambition, indicating a need understanding its importance to all employees. for leadership to focus on making the work Organizational culture is a process that environment compelling and enjoyable for contributes greatly to motivating and involving everyone. employees, providing sustainable development of the company and facilitates the innovative ideas In order to have involved employees, loyal, and solutions through the exchange of knowledge motivated and performant, companies should between members of the organization. increasingly focus on: Engagement starts on the top The aim of this study is to analyze the Make engagement a corporate priority, and organizational culture of the company Bosch modernize the process of measuring and Service Solutions- Timisoara Branch, Romania evaluating engagement throughout the company. specifically to see if the employees of this Benchmark the company, strive for external company understand the organizational culture recognition as validation of efforts, and reinforce of the company and adhere to its base values. to leadership that the engagement and retention of people. To achieve this purpose, the objectives of this study are: Measure in real time 1. Identification of the organization's values in Put in place real-time programs to evaluate and terms of staff and checking their compatibility assess organizational culture, using models or with individual values. tools to better understand where it is strong, where 2. Determine the level of understanding of the it is weak, and how it really feels to workers. organizational culture of employees. 3. Determination of employee participation in Make work meaningful decision-making process. Focus on leadership, coaching, and performance 4. Determining the level of employee motivation management to help employees make their work in terms of knowledge sharing. meaningful. Reinforce the importance of a 5. Highlighting the degree of employee coaching and feedback culture, and teach leaders satisfaction in the work environment, how to be authentic and transparent. communication facilities and benefits.

Listening to employees The research method is based on a questionnaire Wishes, needs and values of employees will shape survey. The questionnaire contains a set of 23 the future culture of the organization. questions divided into two sections:

Culture and engagement is no longer an arcane Section 1: Identification data (10 questions) topic owned by HR. It is now an imperative for Section 2: Organizational values versus every leader and every executive in the individual values. Organizational culture at organization. Many studies now show that highly Bosch Service Solutions, Timisoara branch (13 engaged companies can hire more easily, deliver questions) stronger customer service, have the lowest The questionnaire was also designed to identify voluntary turnover rates, and be more profitable how employees perceive the company's over the long run (Juchnowicz, 2009, Brown et all, organizational culture, and if they identify 2015). themselves with it, fit with the organization they

11 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 distributed to 30 employees belonging to the 57% of respondents with higher education, operations department, of which 2 employees 36% post-graduate and only 7% of respondents with managerial positions and 28 executive with secondary education; positions within the company. It can me • In terms of seniority in the organization, mentioned that the 30 respondents were whether young managers are between 3-5 years representing 56.6% of the total number of in the company, the situation is different employees in the project Optical Character among executants as it follows: 32% are older Recognition (OCR), where they carried out the than one year, 29% over 5 years 25% have a investigation. length of between 1 and 3 years and only 14% of respondents have a length between 3 and 5 Data processing was done using Excel in years. Microsoft Office. To highlight how employees perceive the Data Analysis and objective-wise result company's organizational culture and identify After analyzing the data and interpreting the with it, we will present important results results, were found interesting aspects in the selectively obtained in Section 2 structure of employees in the company: Section 2. Organizational values versus • The surveyed managers fall into the age individual values. Organizational culture at category between 20-35 years in the company Bosch Service Solutions, Timisoara which means that young people are encouraged and supported to take leadership Question 1. Which of the following values exist positions, and the company is supporting and within your organization: pursuing the development and promotion of a) Responsibility towards employees employees; b) Compliance of laws • In the operations department, most of the c) Loyalty to customers, suppliers and employees employees are female respondents (87%); d) Maintain honesty in business • The level of education among those surveyed e) The morality in the conduct of the competition show that if managers were all educated and f) Treatment of the staff with dignity and respect among employees with executive positions, g) Supporting employees to adopt ethical behavior

Fig 1. Employees with managerial functions

Fig 2. Employees with executive positions

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In terms of values encountered in the company, ethical behavior (17%), treat staff with dignity and according to the fig 1, managers have classified the respect (16%), loyalty to customers, suppliers and existing values in the company as follows: 1st place - employees (15%), morality in the conduct of the loyalty to customers, suppliers and employees, competition (9%) and maintaining honesty in maintaining business honesty, morality in the business (7%). conduct of every section by 20%, 2nd -responsibility to employees, compliance with laws, treat staff with Question 2. Which of the following values are most dignity and respect and support employees to adopt relevant in your point of view? ethical behavior each with 10%. a) Ability to communicate b) Organizational transparency Regarding the employees with executive positions, c) The execution of the provisions of the superiors the results have a wide power range. According to the d) Take responsibility for the consequences of their Fig 2, the importance of values is different as decisions follows: responsibility towards employees (18%), e) Personal safety with the laws (18%), support employees to adopt

Fig 3. Employees with managerial functions

Fig 4. Employees with executive positions

From the point of view of managers according to Following these results we can highlight that both fig 3, the values most relevant were: the ability to managers and employees of the executives believe communicate (33%), organizational transparency that the ability to communicate is an extremely (33%), taking responsibility for the consequences important value to both categories of employees of their decisions (17%) and personal safety (17 ranking this value first. %). Question 3. Ethics and values of the organization are From the perspective of the executives, according in harmony with the values, ethics and your beliefs? to the fig 4, the values most relevant are: the ability Interviewed managers mentioned that 100% of to communicate (29%), taking responsibility for their personal values and beliefs are an average the consequences of their decisions (27%), extent in harmony with the company's values. personal safety (23%), organizational transparency (14%) and making just provisions Regarding the executors, if 57% of respondents superiors (7%). said that corporate values are largely in harmony with the values and personal beliefs, 29% opted for

13 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 variant average, while 14% said the organization's Among executants there is unanimous agreement values are very much in harmony with the values regarding free expression of disagreements that exist and personal beliefs. between personal values and different shares of the company. So if 46% of employees feel largely free to The results generally confirm that the company express their disagreement and 32% opted for values are in harmony with the values and beliefs alternative environment, there are employees who of employees actually beneficial to achieve do not perceive the freedom to express their organizational objectives. Identification with disagreement with the decisions taken by the organizational values is important as it helps company, for example 7% in small measure and employees in mediating personal sacrifices due to another 4% said they do not feel free at all (Fig 6). their affiliation with the organization. Question 5: Are you satisfied with the opportunity to Question 4. If you feel that a decision or action is express your ideas to senior management, the results inconsistent with the organization's values and ethics show that in the Bosch Service Solutions employees you, would you feel free to express it? have the opportunity to express their ideas superiors a) Very much therefore encouraged for the sharing of knowledge b) Largely among employees to achieve organizational c) Middle objectives, but also in order to improve employee d) To a small extent performance. e) Not at all Question 8: Is there a tradition of sharing culture in your organization? The manager respondents in 100%, mentioned that in the company to an middle extent there is a tradition of sharing culture, while performers had different views on this issue: 54% largely 25% average 14% small extent, 7% stating that there is a very great extent a tradition of sharing culture.

Question 10. Within the organization there are formal meetings between employees to discuss various company-specific issues? a) Yes b) No Fig 5. Employees with managerial functions

Fig 7. Employees with managerial functions

Fig 6. Employees with executive positions

Fig 5. shows that the managers surveyed feel free to express disagreement that exists between personal values and sometimes certain decisions or actions of the company, opting for answers from a largely 100%. Fig 8. Employees with executive positions

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In terms of formal meetings among employees in challenges motivate employees to find new sources order to discuss certain situations existing in the of energy and interest to engage as much in the company, according to the fig.7 managers who organization. participated in this study provided an affirmative answer, claiming the existence of such meetings in Regarding the involvement of the employees of 100%. Bosch in the decision making process, using the fig 9, we can see that 50% of managers have argued that Among employees with executive positions, the involvement in decision-making is in average opinions were divided: 57% supported the (50%) while the other 50% mentioned the existence of formal meeting between employees, involvement of employees making process is in the while 43% claimed that no such formal meetings margins. between employees in the company (fig.8). Regarding executants: 43% said that the Question 11. Do you think employees are involved in involvement in decision-making is average, 32% decision-making processes that occur in the mentioned the involvement of employees in small organization? measure, 18% indicated an involvement of a) Very much employees largely, 4% claimed that employees are b) Largely not involved at all in decision-making process, and c) Medium another 3% stated that employees are very much d) To a small extent involved in decision making. e) Not at all Interesting results of our study were obtained to Question 13.

Question 13. If you had the chance, what values would you change in the workplace? a) The relations between employees b) The attitude towards employees c) Pay system d) Methods of motivating employees e) Control and safety procedures

At work: pay system (40%), methods of employee motivation (40%) and attitude towards employees Fig 9. Employees with managerial functions (20%).

Regarding the opinion of executants on the possibility of changing the values of the company, according to the fig. 11 they said they would change: methods of employee motivation (42%) pay system (28%), relationships between employees

Fig 10. Employees with executive positions

By offering employees the opportunity to grow as professionals and new challenges by involving them in the decision-making process, a company can avoid stagnation employees at work. Also new

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Fig 11. Employees with managerial functions

Fig 12. Employees with executive positions

Thus, according to the chart fig. 12 managers have From the perspective of employees with said that if it was possible they would change the managerial functions, the most important following values (16%) attitude towards values were classified as follows: "ability to employees (9%) and control procedures and safety c o m m u n i c a t e " , " o r g a n i z a t i o n a l (5%). We can observe that in the opinion of their transparency", "accountability for the executants the following values such as: consequences of their decisions" and relationships between employees, control and "personal safety". safety procedures which in the opinion of managers polled missing. Regarding the perspective of employees with executive positions, most important values Analyzing the results obtained it can be seen that were classified as "ability to communicate", both managers and employees with executive "taking responsibility for the consequences of positions believe that the motivation of their decisions," "personal security", employees, payroll system, but also the attitude "organizational transparency" and "execution towards employees require increased attention of given tasks from superiors". within the company. It is important to note that both managers and Findings operational employees believe the ability to The objectives established in the research have communicate is extremely important value, been met. both categories of employees have classified 1 Identification of the organizational values this value in the first place. from the staff's point of view and checking the compatibility with individual values 2 Determine the level of understanding of the organizational culture by employees On identifying organizational values from the perspective of employees, we have seen small The obtained results showed that both differences in the classification of these values managerial and operational employees by employees with managerial positions and understand largely the organizational culture those with executive functions. and meet the company's core values. Also,

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most respondents largely supported that benefits, communication facilities and within the company there is a tradition of working environment in the company. It also sharing culture, which influences the culture was noted that the views of employees in understanding by employees and to adhering managerial positions are largely consistent to it. Moreover, both categories of employees with the views of operational employees on claimed that personal values are largely in the issues mentioned above. harmony with the values and ethics of the company. Therefore, employees are willing In terms of communication, it was revealed and have the desire to adopt the company's that the company promotes and encourages values. open communication between employees, which facilitates engagement, loyalty, trust Identifying with organizational values of and employee involvement in achieving employees greatly influence achieving the organizational objectives. desired results and business' success of the Bosch Service Solutions Timisoara. Conclusion 3 Determination of employee participation in Any company can be regarded as a social decision making process structure, formed by a group of people acting 3 together to achieve organizational goals. A According to objective 3 on the degree of company's success is conditioned by the extent to employee participation in decision-making which employees work like a unit to achieve its process, it was found that employees of Bosch goals. A major factor influencing the unity of Service Solutions Timisoara are not action of workers is the so called "organizational participating largely in this process. According culture". to the results, it's obvious that both interviewed managers and operational staff Analyzing the organizational culture in the believe that employee participation in company Bosch Service Solutions Timisoara decision-making is at average level. Even if branch, Romania, reveals interesting aspects employees feel largely free to express their regarding understanding organizational culture opinions and ideas within the company, by employees; satisfaction of employees however their involvement in decision making regarding work environment, communication is less supported by the company. facilities and benefits; values of the organization in terms of staff and checking the compatibility 4 Determining the level of employee motivation with individual values; the degree of employee in terms of knowledge sharing participation in decision-making process and the motivations of employees in terms of sharing According to this objective, we've identified knowledge. After data processing and results that employees are encouraged to share their interpretation, we can see that the statistical ideas and teamwork is very much supported differences are not significant between categories and promoted within the company, fostering of subjects that had participating in the study, the the knowledge sharing between employees. views expressed by employees with managerial Also, both groups of employees claimed that positions and those with executive functions are they feel largely free to express their opinions similar, their percentage being different only in and ideas. So, the company is aware of the certain respects. need and importance of knowledge sharing between employees and especially the role it In this respect, it can be said that the role of plays in generating innovative ideas. employees from Bosch Service Solutions Timisoara branch, Romania in building 5 Highlighting the degree of employee organizational culture is significant because satisfaction upon work environment, adopting the company's core values they become communication facilities and benefits "bearers of culture" and individual values that are in harmony with the organizational values Regarding objective 5, it was found that reinforces a culture that an organization already employees are generally satisfied with the has.

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Recommendations Engagement. The Naked Organization, Following this research, we are proposing some Deloitte University Press. recommendations to improve weaknesses and to Coleman, J. (2013). Six Components o f a assist in the sustainable development of the G r e a t C o r p o r a t e C u l t u r e, H a r v a rd company and employees, namely: Business Review. • Continuation of building and promoting a J u c h n o w i c z , M . ( 2 0 0 9 ) . E m p l o y e e positive culture, open to foster trust and Engagement Phenomenon. Edukacja loyalty among employees; E k o n o m i s t ó w i M e n e d e r ó w : • A greater focus on employees' needs and problemy, innowacje, projekty, 3 (13), 9-21. understanding what matters to them will K a lya n i , M . , & S a h o o, M . P. ( 2 0 1 1 ) . generate more engaged employees, Human Resource Strategy: A Tool of motivated and performant; Managing Change for Organizational • Implementation of programs in real-time Excellence, Inter national Jour nal of to assess the organizational culture, using Business and Management. 6 (8). d i f f e r e n t i n s t r u m e n t s ( s u c h a s Lunenburg, F. C. (2011). Understanding questionnaire) to better understand when it O r g a n i z a t i o n a l C u l t u r e : A K e y is strong, weak and how it is perceived by Leadership Asset, National Forum of employees; Educational Administration and S u p e r v i s i o n • Continuing to promote a culture that Journal. 29 (4). supports open communication will further Smith-Vorhauser, S. (2013). How the Best Places facilitate the participation, involvement to Work are Nailing Employee Engagement, and exchange of innovative ideas among Forbes. employees; and • Granting to employees a certain control Websites work-related, could lead to motivation to http://www.boschservicesolutions.com/ do more than what goes strictly in their www.timisjob.ro responsibility. Also, some degree of www.transilvaniabusiness.ro authority can help to improve morale.

Limitation of the Research The main limitation of the study is the small number of subjects investigated in relation to the number of employees of the company, but the results of this research underline aspects that deserve to be known by the management team of the Bosch company. Also, reduced number of employees with managerial functions (only two) who participated in this study is another limitation of the research. Meanwhile, the subjectivity of respondents is another limit of this research.

References Abrudan, D. (2007). Managementul participativ, o soluie pentru atingerea performanei în organizaii, Ed. Mirton, Timisoara. Abrudan, D. (2012). Elemente de managementul resurselor umane, Ed. Eurostampa, Timisoara. Abrudan, D. (2010). Performana în organizaii din perspectiva resurselor umane, Ed. Solness, Timisoara. B r o w n , D. , C h h e n g , S. , M e l i a n , V. , Parker, V., & Solow, M. (2015). Culture and

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Performance of Public Sector Banks in India: A comparative study with Private Sector Banks*

Mr.V.Ch. Purna Chandra Rao

Asst. Professor, Department of Management Studies, KKR & KSR Institute of technology and Sciences, Guntur, Andhra Pradesh

KEY WORDS Abstract Public and Private This study is on the performance of public sector banks in India and a comparison with private Sector Banks ; sector banks based on CAMEL model. It deals with different aspects of performance related Capital adequacy parameters such as Capital adequacy ratio, Asset quality, Management efficiency, Earnings ratio, quality and Liquidity. All these performance related aspects have been discussed comprehensively and the same has been presented. Based on these parameters, findings are Asset quality ; drawn after detailed analysis. Management efficiency ; Earnings quality; Liquidity

Introduction development process of developing and under The economic reforms in India began as a developed economies. Banking development in response to the macro economic crisis that India has been by and large a state-induced developed in 1991. The crisis manifested itself in activity. As such, banks in India functioned in a rising inflation, high level of fiscal deficit, low highly regulated environment in terms of growth, unsustainable current account deficit and administered interest structure, quantitative balance of payment problems in 1990 due to Gulf restrictions on credit flows, high reserve War. Due to these serious problems, the requirements under statutory liquidity ratio, cash Government of India initiated economic reforms reserve ratio, pre-emption of significant such as deregulation of the real and financial proportion of resources to priority sector etc. All sectors, removal of the License and Permits these factors and forces have resulted in poor asset System from all spheres of production and quality and low productivity. Hence, the domestic trade, liberalization of international Government of India initiated reforms to remove trade in various sectors and integration of the the deficiencies in the banking sector. Indian economy with the world economy. Soon Consequently, the Narasimham Committee was after the initiation of these reforms, the established under former RBI Governor M. Government realized that economic reforms Narasimham in August 1991 to look into all would not succeed without parallel reforms in the aspects of the financial system in India. The financial sector. The financial sector reforms refer Narasimham committee also known as to a general improvement in the functioning and “Committee on Financial System” after a efficiency of the financial system, as a whole and thorough and comprehensive study of the then the removal of impediments to its long term prevailing banking sector made various development. Thus financial sector reforms were recommendations. These recommendations were a necessary concomitant of liberalization of landmark in the evolution of banking policy in the industrial and trade policies. country as these recommendations transformed the Indian banking system from a highly regulated The banking system forms the core of the to a more market oriented system. Banks in India financial sector of an economy. This is because, did not follow proper risk management practices through mobilization of resources and their better though they are prone to various market and non allocation, banks play an important role in the market risks. Hence, regulators all over the world

*This paper is an extraction from author’s Ph.D work. 19 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 have been concerned about threse risks. To early 1990s. Since then, the industry witnessed overcome these risks, the framework for banks rapid growth coupled with improved efficiencies capital structure was evolved in 1988 and India backed by state of the art technology fully adopted Basel 1 guidelines in 1999. implemented initially by a class of newly opened banks popularly christened as new generation Basel is a city in Switzerland which is also the private sector banks. The entry of these new headquarters of Bureau of International generation private sector banks changed the Settlement (BIS). BIS fosters co-operation among banking system dramatically. These banks central banks with a common goal of financial brought with them a new era with latest stability and common standards of banking technology, autonomy in respect of business regulations. Basel guidelines refer to broad areas, management teams, incentive structure supervisory standards formulated by this group of thereby they created a strong niche for themselves central banks- called the Basel Committee on particularly among the rich and preferred classes. Banking Supervision (BCBS). The set of Further, they have entered all the business areas, agreement by the BCBS, which mainly focuses on including government business, MSME, export risks to banks and the financial system are called finance, agriculture apart from their strength areas Basel accord. The purpose of the accord is to of technology related banking and wealth ensure that financial institutions have enough management. capital on account to meet obligations and absorb unexpected losses. India has accepted Basel The new generation private sector banks brought accords for the banking system. about a paradigm shift in service standards and set new benchmarks in terms of application of new With the introduction of Basel I norm, banks were technology, speed in the delivery of services, required to maintain a minimum capital adequacy choices offered to customers in respect of delivery of 8% against risk weighted assets. Subsequently channels, décor and branch ambience and high Basel II and III norms came into force and banks order of marketing orientation. For instance, the have to adhere to the principles of Basel norms. branch ambience of private sector banks has a But banks find it difficult to adhere to the Basel sophisticated look. The front office has been norms and implementing the Narasimham looked after by young, dynamic, enterprising and Committee recommendations. In view of the pro-active personnel. Similarly the private sector above, the study to assess the performance of banks modeled their products and services to suit Public sector banks in comparison with Private the needs of customers. In fact, the entry of new sector banks assumes significance. players has brought about a predictable decline in the market share of public sector banks. For Need for the Study instance, private sector banks have garnered as After the nationalization of banks in 1969 and much as 21% share in the total business by March 1980, the government-owned banks have 2013 up from 4% at the end of 1990. Even during dominated the banking sector. The role of the prolonged phase of economic slowdown and technology was minimal and the quality of service high volatility in interest rates since 2009, private was poor. Banks also did not follow proper risk banks have emerged clear winners. During 2009- management systems and the prudential 13, private banks have managed to improve their standards were weak. All these resulted in poor asset quality due to their prudent lending asset quality and low profitability. The practices. State owned banks on the other hand Government of India in order to overcome these face a host of structural risks. Their aggressive problems and also to streamline the banking lending to sensitive sectors such as infrastructure operations appointed a committee popularly during 2009-13, has led to a steep deterioration in known as 'Narasimham Committee'. The their asset quality. Even public sector banks have committee after a thorough study made various failed to control their non-performing assets when recommendations such as reduction in SLR and compared to private sector banks. The discussion CRR, re-organizing the banking structure etc., reveals that public sector banks have been facing Further, the Government implemented the intense competition from private sector banks. Narasimham Committee recommendations in Against this back ground, an attempt has been true spirit. As a part of reforms, the Government made to compare the performance of Public and allowed the entry of private sector banks in the Private Sector Banks in India.

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Objectives of the Study a twelve year study is sufficiently long enough to • To study the reforms initiated in the banking conduct a study of this sort. sector and also to find out the implications of reforms. Scope of the Study • To assess the performance and find out the The present study is an attempt to make an strengths and weaknesses of public and private enquiry into the performance of both public and sector banks on each of the performance private sector banks in India. The scope of the parameters like Capital adequacy ratio, Asset present study is both wide and narrow. The scope Quality, Management efficiency, Earnings is wide as it covers the entire gamut of the Quality and Liquidity under CAMEL model. activities of banking sector, which include history, growth and development over a period of time. Hypothesis After the banking sector is liberalized, there has The performance of the private sector banks is been intense competition between the public and better as compared to that of the public sector private sector banks. Hence, public sector banks banks during the period of study based on the have to formulate appropriate strategies to Annual Reports under various frame-works overcome the competition from private sector (CAMEL) but on social grounds public sector banks so as to stay and grow in the market. In banks outperformed. other words, both public and private sector banks have to bring changes in their policies in Methodology of the Study accordance with the changing environment. The The following methodology has been adopted to various strategies employed by both public and carry out the present research study. Both primary private Sector banks to improve their performance data and secondary data have been used to carry also form the scope of the study. out the study. Primary data have been collected by interacting with the officials and employees of The scope of the study could also be viewed as various Public and Private Sector banks. The narrow as it covers only the performance related secondary data have been collected from the aspects of both public and private sector banks annual reports, booklets and supplements based on CAMEL model. In fact, an in depth published by Reserve Bank of India from time to enquiry lends itself to incisive analysis and time. As the study is mostly based on secondary comprehensive coverage to get better insight into data, the researcher largely relied on various the issues relating to the performance of both banking publications and several other Public and Private Sector banks in India. publications of Governmental and non- Governmental agencies besides the research Limitations of the Study output of individual researchers related to The study makes an attempt to evaluate the different segments of the study. Wherever performance of both Public and Private Sector information is found to be scarce in such banks in a comprehensive way. As the study is publications, the researcher collected the same by mostly based on secondary data, the truthfulness visiting the Internet sites of RBI and different of the study to a considerable extent depends banks. In addition to this, magazines, journals, upon the exactness of the data published by RBI, periodicals, news papers and other relevant public sector banks, private sector banks, various publications are also referred at different national other agencies and organizations. Surprisingly, libraries and institutions to supplement the data uniformity in the presentation of data is not found used in the study. It needs no specific mention that in some of the reports even published by the same textbooks also do constitute the source of data. authority. So, cent percent accuracy cannot be The data so collected have been analyzed through attached to the data. Any change in data may the use of statistical techniques such as warrant a revision of ideas. Hence, studies of this percentages and compound growth rates. nature can seldom be all inclusive or final. As mentioned earlier, the study period has been 12 Period of the Study years from 2003-04 to 2014-15. Hence, the The period of study is twelve years from 2003-04 research report incorporated considerable to 2014-15. During this period appropriate and amount of information during the period under relevant data related to the research topic has been consideration. In spite of the above limitations, all collected from different sources. It is believed that efforts have been made to make the study

21 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 comprehensive and analytical. But analytical than that of public sector banks in terms of deficiencies in one form or other form cannot be growth trend and annual growth rate. The t- ruled out in the study. test results support the observation as the calculated t-value is greater than that of the t- Findings critical value. It shows that, there is significant After an in depth analysis of the data collected, the difference exists in the investments made by following findings are made: public and private sector banks.

1 The deposits mobilization of public sector 5 The advances to total assets ratio of public and banks is relatively more than that of private private sector banks have increased gradually sector banks in terms of value. However, during the period under consideration. While private sector banks have an edge over public the ratio of public sector banks moved between sector banks in areas like growth trend and a low of 0.43 times and a high of 0.66 times, annual growth rate. For instance, public sector the ratio of private sector banks fluctuated banks have grown by 5.87 times while private between a low of 0.47 times and 0.62 times sector banks have grown by 6.83 times. Even between 2003-04 and 2014-15. The t-test the T-test results show that the calculated t- results show that the calculated t-value is less value is greater than that the t-critical value. than that of the t-critical value. Hence, it can be Hence, there is enough evidence to reject the concluded that the advances to total assets null hypothesis. In other words, the deposits ratio of public and private sector banks do not mobilization of public sector and private differ significantly. sector banks differ significantly during the p e r i o d u n d e r c o n s i d e r a t i o n . 6 The Debt-Equity ratio of public sector banks is relatively more than that of private sector 2 Public sector banks lent more advances banks. The t-test results also support the compared to private sector banks. However, observation as the calculated t- value is greater the growth trend and annual growth rate of than that of the table value. Hence, there is advances lent by private sector banks are enough evidence to reject the null hypothesis. relatively more than that of public sector In other words, the Debt-Equity ratio of public banks. It is also noticed that the annual growth and private sector banks differ significantly. rate of the advances of these banks have declined gradually during the period under 7 The government securities to total investments consideration. The t-test result shows that the ratio of public and private sector banks do not calculated t-value is greater than that the t- differ significantly. While the ratio of public critical value. Hence, the null hypothesis is sector banks moved between a low of 0.80 rejected. It reveals that the advances lent by times and 1.25 times, the ratio of private sector public and private sector banks are at greater banks moved between a low of 0.63 times and variance. a high of 1.51 times. The t-test results show that the calculated t-value is less than that of 3 The total assets of public sector banks are more the table value. Hence, there is enough compared to private sector banks. However, evidence to accept the null hypothesis. the growth trend and annual growth rate of the Therefore, the conclusion is that the total assets of private sector banks are government securities to total investments relatively more than that of public sector banks ratio of both public and private sector banks do in most of the years of the study period. The T- not differ significantly. test results show that the calculated t-value is greater than that of t-critical value. Hence, it 8 The Gross NPAs to Gross advances ratio of can be concluded that the total assets of public public and private sector banks are more or less sector and private sector banks vary the same with negligible variation, while the considerably. ratio of public sector banks moved between a low of 0.02 times and a high of 0.08 times, the 4 Public sector banks made more investments ratio of private sector banks varied between a compared to private sector banks. However, low of 0.02 times and a high of 0.05 times. It is private sector banks are comparatively better reinforced by the values of t-test as the

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calculated t-value is less than that of the t- than that of the t-critical value. Hence, it can critical value. Hence, there is enough evidence be concluded that the total investments to total to accept the null hypothesis. In other words, assets ratio of public and private sector banks the Gross NPAs to gross advances ratio of do not differ significantly. public and private sector banks do not differ significantly. 13. The total expenditure of public sector banks is more than that of private sector banks. 9 The net NPAs to net advances ratio of public However, the growth trend and annual growth and private sector banks are more or less the rate of the expenditure of private sector banks same while the ratio of public sector banks is more than that of public sector banks in most moved between a low of 0.009 times and a high of the years of the study period. The t-test of 0.030 times, the ratio of private sector banks results show that the calculated t-value is varied between a low of 0.005 times and a high greater than that of the t-critical value. Hence, of 0.028 times.. It is reinforced by the values of it can be concluded that the total expenditure t-test as the calculated t-value is less than that of public and private sector banks differ of the t- critical value. To sum up, the net NPAs significantly during the period under to net advances ratio of public and private consideration. sector banks do not differ significantly. 14. The cost of funds of public and private sector 10 The Gross NPAs to total assets ratio of public banks remain more or less the same. It is and private sector banks differ significantly, reinforced by the values of t-test as the while the ratio of public sector banks moved calculated t-value is less than that of the t- between a low of 0.01 times and a high of 0.04 critical value. In other words, the cost of funds times, the ratio of private sector banks varied of public and private sector banks is more or between a low of 0.01 times and a high of 0.02 less the same. times.. It is reinforced by fact that calculated t- value is greater than that of the t-critical value. 15. The wage bill of public sector banks is far more Hence, it can be concluded that the Gross than that of private sector banks. However, the NPAs to total assets ratio of public sector growth trend and annual growth rate of the banks are relatively more than that of private wage bill of private sector banks are relatively sector banks. more than that of public sector banks in 8 of the 12 years study period. The t-test results 11. The net NPAs to total assets ratio of public show that the calculated t-value is greater than sector banks is relatively more than that of that of the t-critical value. Hence, there is private sector banks. While the ratio of public enough evidence to reject the null hypothesis. sector banks moved between a low of 0.01 To sum up, the wage bill of public and private times and a high of 0.02 times, the ratio of sector banks differ significantly between 2003- private sector banks fluctuated between a low 04 and 2014-15. of 0.00 times and a high of 0.01 times. It is reinforced by the values of T-test as the 16. The wage bill to total expenditure ratio of calculated t- value is greater than that of the t- public sector banks is relatively more than that critical value. Hence, it can be concluded that of the private sector banks during the period the net NPAs to total assets ratio of public and under consideration. It is reinforced by the private sector banks vary considerably. values of t-test as the calculated t-value is greater than that of the t- critical value. Hence, 12. The total investments to total assets ratio of the null hypothesis is rejected leading to the public and private sector banks have declined fact that the wage bill to total expenditure ratio gradually during the period under study. of public and private banks differ significantly. While the total investments to total assets ratio of public sector banks moved between 0.25 17. The total advances to total deposits ratio of times and 0.43 times, the total investments to private sector banks is relatively more than total assets ratio of private sector banks moved that of public sector banks during the period between 0.29 times and 0.37 times. The t-test under consideration. The t-test results support results show that the calculated t-value is less the observation as the calculated t-value is

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greater than that of the t-critical value. Hence, 22. The interest income to advances ratio of public there is enough evidence to reject the null and private sector banks is more or less the hypothesis. In other words, the total advances same. It is reinforced by the fact that the to total deposits ratio of public and private calculated t- value is less than that of the t- sector banks differ significantly. critical value. Hence, there is enough evidence to accept the null hypothesis. In other words, 18. The business per employee of private sector the interest income to advances ratio of public banks is relatively more than that of public and private sector banks does not differ sector banks between 2003-04 and 2008-09 significantly. and after that the opposite trend is noticed. On the whole, there is no significant difference 23. The interest expenditure to deposits ratio of between the business per employee of public public and private sector banks is more or less and private sector banks. It is reinforced by the the same with negligible variation. It is fact that the calculated t-value is less than that reinforced by the fact that the calculated t- of the t-critical value. Hence, there is enough value is less than that of the t-critical value. evidence to accept the null hypothesis leading Hence, it can be concluded that the interest to the fact that the business per employee of expenditure to deposits ratio of public and public and private sector banks are more or private sector banks does not differ less the same. significantly.

19. The deposits per employee of private sector 24. The interest spread of private sector banks is banks is relatively more than that of public far more than that of public sector banks with sector banks between 2003-04 and 2007-08 the exception of the years 2009-10 and 2010- and after that the opposite trend is noticed. On 11. The t-test results show that the calculated t- the whole, there is no significant difference value is greater than that of the t-critical value. between the deposits per employee of public In short, the interest spread of public and and private sector banks. It is reinforced by the private sector banks differ significantly. values of t-test as the calculated t- value is less than that of the t-critical value. In other words, 25. The interest income to total income ratio of there is enough evidence to accept the null public sector banks is relatively more than that hypothesis. of private sector banks. It is reinforced by the fact that the calculated t- value is greater than 20. The advances per employee of private sector that of the t-critical value. Hence, it can be banks is relatively more than that of public concluded that the interest income to total sector banks between 2003-04 and 2008-09 income ratio of public and private sector banks and after that the opposite trend is noticed. On differ significantly. the whole, there is no significant difference between the advances per employee of public 26. The net profit to average assets ratio of private and private sector banks. It is reinforced by the sector banks is relatively more than that of values of t-test as the calculated t-value is less public sector banks in most of the years of the than that of the t-critical value. In other words, study period. The t-test results show that the the advances per employee of public and calculated t-value is greater than that of the t- private sector banks do not differ significantly critical value. Hence, there is enough evidence during the period under consideration. to reject the null hypothesis leading to the conclusion that the net profit to average assets 21. The net profit per employee of public sector ratio of public and private sector banks differ banks differ significantly from that of private significantly. sector banks. The results of t-test support the observation as the calculated t-value is greater 27. The non interest income to total income ratio than that of the t-critical value. In other words, of private sector banks is relatively more than the net profit per employee of private sector that of public sector banks in all the years of banks is relatively more than that of public study period. It is reinforced by the fact that the sector banks. calculated t- value is greater than that of the t- critical value. Hence, there is enough evidence

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to reject the null hypothesis leading to the 33. The government securities to total assets ratio conclusion that the non interest income to of public and private sector banks are more or total income ratio of public and private sector less the same. It is reinforced by the fact that banks differ significantly. the calculated t- value is less than that of the t- critical value. Hence, there is enough evidence 28. The interest spread to total assets ratio of to accept the null hypothesis leading to the public and private sector banks is more or less conclusion that the government securities to the same with insignificant fluctuations. It is total assets ratio of public and private sector reinforced by the fact that the calculated t- banks do not differ significantly. value is less than that of the t-critical value. In other words, the interest spread to total assets 34. Public sector banks are relatively more liquid ratio of public and private sector banks do not compared to private sector banks. It is differ significantly. reinforced by the fact that the calculated t- value is greater than that of the t-critical value. 29. The return on investments of public sector Hence, there is enough evidence to reject the banks is relatively more than that of private null hypothesis. In other words, the liquid sector banks. The t-test results show that the assets to demand deposits ratio of public and calculated t-value is greater than that of the t- private sector banks do not differ significantly. critical value. Hence, there is enough evidence to reject the null hypothesis leading to the 35. The liquid assets to total deposits ratio of conclusion that the return on investments of public and private sector banks are more or less public and private sector banks differ the same. It is reinforced by the fact that the significantly. calculated t- value is less than that of the t- critical value. Hence, there is enough evidence 30. Private sector banks make more returns on to accept the null hypothesis leading to the advances compared to public sector banks. conclusion that the liquid assets to total But the difference between two is minuscule. deposits ratio of public and private sector The t-test results show that the calculated t- banks differ significantly. value is less than that of the t-critical value. Hence, there is enough evidence to accept the References null hypothesis. In other words, the return on Abhiman Das. (1999). Technical, Allocative and advances of public and private sector banks do Scale Efficiency of public sector Banks not differ significantly. in India, RBI Occasional Papers, 6-9, 13- 18. Ajay Kumar Mohanty. (2006). Innovations in 31. The net profit to total income of private sector Banking in the Reforms Era, Professional banks is more than that of public sector banks Banker, 4, 3(2), 29-31. in most of the years of the study period. It is Bagchi, S.K. (2004). Basel II: Operational Risk reinforced by the fact that the calculated t- Management-Need for a Str uctured value is greater than that of the t-critical value. Operational Risk policy in Banks, IBA Bulletin, Hence, there is enough evidence to reject the 11, 26(11), 21-24. null hypothesis. In other words, the net profit Balachandran, M.(2005). Strategic Model for Re- to total income ratio of public and private positioning of PSBs, IBA Bulletin, 8, 27(8), 5-8. sector banks differ significantly. Bhatt, O. P. (2011). Banking: State Bank of India, Banking Finance and Markets, 1(2), 16-18. 32. The liquid assets to total assets ratio of public Braverman, A., & Srinivasan, T.N. (1981). Credit and private sector banks are more or less the and Sharecropping in Agrarian Societies, same. It is reinforced by the fact that the Journal of Development Economics, 3, 9, 289- calculated t- value is less than that of the t- 312. critical value. Hence, there is enough evidence Chen, S. H. (2009). Establishment Of A to accept the null hypothesis. In other words, Performance-Evaluation Model For Service the liquid assets to total assets ratio of public Quality In The Banking Industry, The Service and private sector banks do not differ Industries Journal, 29(2), 235–247. significantly. Dangwal, R.C., & Reetukapoor. (2010). Financial Performance of Nationalised Banks, Nice

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Journal Of Business, 5(2), 67-79. Rajendra Kumar, C., & Sanjay, S. Kaptain. Dilip Das Gupta. (2006). Measuring relative (2004). Banking Role in Rural Development, Efficiency of Financial Institutions, IBA Bulletin, 11, 26(11), 36-39. Professional Banker, 3, 87-88. Rajesh Choudhary, J., & Venkateswara Rao, B. H. Firdos, T. Shroff. (2010). Impact of Technology (2005). Reduction of NPAs-No Longer An on Banking In Public Sector Banks, Journal Insurmountable Task, Indian Economic of Indian Institute of Banking &Finance, 10-12, Panorama,1, 4(4)., 6-8. 11-19. Rudrasen Sarma. (2005). Cost and Profit Ghosh, D.N. (1988). Commercial Banking: Efficiency of Indian Banks during 1986- Lessons from Indian Experience, SBI 2003 – A Stochastic Frontier Analysis, Monthly Review,11. Economic and Political Weekly, 40(12), 1 1 9 8 - Gupta, N.L., & Meera Mehta. (2011). Indian 1209. Banks and Basel-II, an Econometric Saibal ghosh., & Mridul Sag. (1998). Narrow Analysis, Indian Journal of Finance, 6, 11-17. B a n k i n g : T h e o r y, E v i d e n c e a n d Jawed Akhtar, S.M. (2014). An Assessment of Prospects in India, Research Gate, Economic and B r a n c h E x p a n s i o n o f S c h e d u l e d political weekly, 05, 33(19), 1-26. Commercial Banks in India, Journal of Saji Kumar. (2006). The Trends in the Financial Business & Economic Policy, 12,1(2), 85-96. P e r f o r m a n c e o f B a n k s i n I n d i a , Jayashree Menon., & Jaya, G. Puthli. (2006). Professional Banker, 1, 35-36. Performance Highlights of Public Sector Sarkar, P.C. Does. (1998). Ownership Always Banks 2005-06, Indian Banker, 7, 1(7), 34-42. M a t t e r - E v i d e n c e f r o m t h e I n d i a n Jyoti Saluja., & Rajinder Kaur. (2010). Banking Industry, Journal of Comparative Profitability, Performance of Public sector Economics, 262-81. banks in India, Indian Journal of Finance, 4, 17- Selvakumar, M., & Kathiravan, P.G.(2009). A 25. Study of Profitability Performance o f Kanhaiya Singh. (2013). Asset – Liability Public sector Banks in India, Indian journal of Management in Banks: A Dynamic Finance, 9, 3-13. Approach, AIMA Journal of Management & Tapas Kumar Parida. (2014). Impact of Local Research, 5, 7(2/4),31-38. area banks, Bank Quest, The Journal of Indian Manoharan, B.(2007). Prevention of Frauds in Institute of Banking and Finance, Vol. 85, No. 2, 4- P u b l i c S e c t o r B a n k s, P r o f e s s i o n a l 6,.36-43. Banker, 9, 17-22. Tarun Bala., & Devender Singh. (2012). Financial Mark, J. Flannery. (1984). The Social Costs Of Sector Reforms and The Role of Central Bank Unit Banking Restrictions, Journal of Monetary in India: A Post-Global Financial crisis Economics, 13(2), 3, 237–249. perspective, Indian Journal of Finance,8, 6(8), Mayuri Patel. (2009). Cor porate Debt 43-50. Restructuring: Mechanism to manage NPA's, Vashist, A.K. (2004). Commercial Banking in the The Indian Banker, 3, 4(3),, 44-50. Global Environment, Political E c o n o m y Nikhil Mehta., & Ajit Varshmey. (2013). Journal of India, 1-6, 13(1&2), 1-10. Obtaining new banking licences in India: Velayudham, T.K. (2002). Developments in challenges and opportunities, Cognizant 20-20 Indian Banking: Past, Present and Future, insights,11,1-13. Bank Quest, The journal of the Indian Institute of Nishit, v. Davda., &. Ashvin, h. Solanki. (2014). Bankers, 10-12, 23-37. A Review Article on New Private Sector Yadagiri, M., & Srinivas, N. (2012). Performance B a n k s i n I n d i a : C h a l l e n g e s A n d Analysis of Public sector Banks in India, Opportunities, Indian Journal of Research, 12, Finance India, 3, 26(1), 217-230. 3(12) , 93-94. Prakasha Rao, B.K.S., & Venkateswara Rao, B. H. (2006). Performance of Public Sector banks in the Post Reforms Scenario, Professional Banker,11, 35-37. Prasad, K.V.N., & Chari, A.A. (2011). Relative Financial Performance of Public Sector Banks, Indian Journal of Finance, 11, 11-22.

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Technology in Banking: Beneficiaries' perception

Dr. Karunakara Reddy, B.A*., & Aravinda Reddy, M. N**

* Director, M. Com Programme, AIMS IHE, Bangalore ** Assistant Professor, MSRIM, Bangalore

Abstract KEY WORDS Bangalore being Silicon Valley of India comprises of both rural and urban culture. The arrival of E- Business accompanied with technological innovations and globalization is continuously Electronic Banking; propelling the businesses institutes to redefine their business operations in terms of value chain Core Banking reengineering and restructuring commerce models. Likely, the monetary sector is metamorphosing under the impact of competitive, regulatory and technological forces. Facility; Financial institutions especially the banks are currently in transition phase. The banks have put RTGS; themselves in the World Wide Web to take advantage of the internet's power and reach, to cope with the accelerating pace of the change of business environment. This transition of business EPS; process by banks have created new mode of operation called E-Banking. E-Banking in the form Mobile Banking; of internet banking, mobile banking and several other value added services in a big way. Ease, speed, convenience and accuracy are the attractions. However, customers have diverse views on Internet Banking benefits envisaged versus conveyed. The paper examines the perception of customers in terms of E-Banking services considering utilities anticipated and the extent of reception.

Introduction quadrilateral have been instrumental in raising New technology has offered banks some ground- rural per capita income. The next task is to include breaking and complex products, new services that them in mainstream banking. All the stakeholders were not possible before, and most importantly, it – bank, the RBI, telecom and technology players, has changed the way in which we access our the government – need to work together to reach banks. ATMs, debit cards, phone banking, out to rural areas. And they have every reason to, internet banking and mobile banking have for the opportunity to generate profits and ensured that commercial urban banking has shareholders value for all is tremendous. And it is, grown by leaps and bounds in the last two after all, in the interest of India and its socio- decades. Unfortunately, the lack of infrastructure economic growth. has ensured that the rural masses see little of this action. While ATMs are omnipresent in cities, just The use of technology in expanding banking has twenty percent of the rural population has access been a key focus area of the Reserve Bank. to banking facilities. Lack of consistent electric Technological innovation not only enables a supply makes it difficult to roll out any technology broader reach for consumer banking and financial – dependent models of banking. Lack of services, but also enhances its continued and appropriate roads makes it challenge to maintain inclusive growth. There are several factors even what little can be offered. Further advances attributed to India's high growth in the recent in technology are promising to overcome these period - improved productivity, growing hurdles. We have already seen encouraging entrepreneurial spirit, and higher savings, to name initiatives such as solar–powered ATMs, which, the most important. More than most other although on a small scale, have demonstrated the industries, banks and financial institutions rely on difference they can make. Indian policy makers gathering, processing, analyzing and providing have, in last two five year plans, concentrated on information in order to meet the needs of projects to spur rural employment. Projects such customers. Given the importance of information as the National Rural Employment Guarantee in banking, it is not surprising that banks were Scheme, Bharat Nirman and the global among the earliest adopters of automated

27 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 information processing technology. The visible every bank and financial institution is offering benefits of IT in day-to-day banking in India are these products, but it is essential to understand the quite well known. There is “Anywhere/Anytime different aspects of these loan products, which are Banking" through Core Banking Systems, not mentioned in their coloured advertisements. through new, 24 hours, 7 days and 365 days delivery channels such as Automated Teller Plastic Money Machines (ATMs), and Net and Mobile Banking. Plastic money was a delicious gift to Indian In addition, IT has enabled the efficient, accurate market, giving respite from carrying too much and timely management of the increased cash. Now several new features added to plastic transaction volume that comes with a larger money to make it more attractive. It works on customer base. It has also facilitated the formula "purchase now repay later". There are movement from class banking to mass banking. different facts of plastic money. Credit card is The past few years saw us marking some major synonyms of all. milestones in the Indian payment and settlement systems. The introduction of the Real Time Gross Credit card is a financial instrument, which can Settlement (RTGS) System has resulted in be used more than once to borrow money or buy compliance with the Basle Core Principles for products and services on credit. Banks, retail Systemically Important Payment Systems of the stores and other businesses generally issue these. Bank for International Settlements. It also has On the basis of their credit limit, they are of paved the way for risk-free, credit push-based fund different kinds like classic, gold or silver. Charged transfers settled on a real-time basis and in central cards also have same features as credit cards. The bank money. The facility for inter-bank funds fundamental difference is the we can not defer settlement through RTGS is today available across payments charged generally have higher credit more than 55,000 bank branches, in more than limits or sometimes no credit limits. 2500 regional centers across the country – a coverage span perhaps not seen anywhere else in Debit card is characterized as accountholder's the world. mobile ATM, for this we have to have account with any bank offering debit card. Over the years, Banking Technologies the banking sector in India has seen a number of Liberalization brought several changes to Indian changes. Most of the banks have begun to take an service industry. Probably Indian banking innovative approach towards banking with the industry learnt a tremendous lesson. Pre- objective of creating more value for customers. liberalization, all we did at a bank was deposit and Some of the significant changes in the banking withdraw money. Service standards were pathetic, sector are discussed below: but all we could do was grin and bear it. Post- liberalization, the tables have turned. It is a end Mobile Banking user oriented market there. Taking advantages of the booming market for mobile phones and cellular services, several banks Technology is revolutionizing every field of have introduced mobile banking which allows human effort and activity. One of them is customers to perform banking transactions using introduction of information technology into their mobile phones. For instances HDFC has capital market. The internet banking is changing introduced SMS services. Mobile banking has the banking industry and is having the major been especially targeted at people who travel effects on banking relationship. Web is more frequently and to keep track of their banking important for retail financial services than for transactions. many other industries. Retail banking in India is maturing with time, several products, which Rural Banking further could be customized. Most happening One of the innovative schemes to be launched in sector is housing loan, which is witnessing a cut- rural banking was the KISAN CREDIT CARD throat competition. The home loans are very (KCC) SCHEME started in fiscal 1998-1999 by popular as they help us to realize our most NABARD. KCC mode is easier for framers to cherished dream. Interest rates are coming down purchase important agricultural inputs. In and market has seen some innovative products as addition to regular agricultural loans, banks to well. Other retail banking products are personal offer several other products geared to the needs of loan, education loan and vehicles loan. Almost the rural people. Private sector Banks also realized

28 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 the potential in rural market. In the early 2000s bank to another on a 'real time' and on 'gross' basis. ICICI bank began setting up internet kiosks in This is the fastest possible money transfer system rural Tamil Nadu along with ATM machines. through the banking channel. Settlement in 'Real Time' means payment transaction is not subjected NRI Services to any waiting period. The transactions are settled With a substantial number of Indians having as soon as they are processed. 'Gross Settlement' relatives abroad, banks have begun to offer means the transaction is settled on one to one basis services that allow expatriate Indians to send without bunching with any other transaction. money more conveniently to relatives in India Considering that money transfer takes place in the which is one of the major improvements in money books of the Reserve Bank of India, the payment transfer. is taken as final and irrevocable.

E-Banking Objectives of the study E-Banking is becoming increasingly popular To examine customers perception and future among retail banking customers. E-Banking helps potential perception on innovation in banking in in cutting costs by providing cheaper and faster terms of the identified services.. ways of delivering products to customers. It also helps the customer to choose the time, place and Methodology method by which he wants to use the services and 25 urban customers and 25 rural customers were gives effect to multichannel delivery of services by selected for the study from Bangalore district in the bank. This E-Banking is driven by twin engine Karnataka and a survey was undertaken on the of "customer-pull and Bank-push". following innovations: • Internet Banking RTGS • Mobile Banking 'RTGS' stands for Real Time Gross Settlement. • Electronic Fund Transfer RTGS system is a funds transfer mechanism • Electronic Payment System where transfer of money takes place from one • Use of Core Banking facility

Findings of the study Table 1: Survey results on frequency of use of Innovations

Source: Primary data

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Table 2: Benefits of innovations

Source: Primary data

Table 3: Future potentialities

Source: Primary data

The survey on frequency of use of innovations 1.66. The customers in rural area use these reveal that customers in urban area use almost all innovations not so frequently and majority of the six innovations very frequently especially core them has not at all used the innovations like banking, RTGS, Internet banking and Mobile Internet banking, Mobile banking, Electronic banking facilities as the mean score for all the Fund Transfer and Electronic Payment System. innovations are above the expected mean which is The use of core banking and RTGS has come

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nearer to the expected score. A significant finding potential there is a general belief that innovations on the survey is that both urban and rural do show promising signs of growth. customers use Core Banking facility very frequently. There is a significant difference References between urban and rural customers in the usage Geethal, K.T., & Malarvizhi.,V. (2010). rate in most of the banking innovations. Urban Acceptance Of E-Banking Among Customers customers show propensity to use while rural - An Empirical Investigation In India, customers still shy away. Journal of Management and Science, 2 (1), 01-09. Guruprasad, M. (2011). Indian Banking Industry The survey done to find the benefits of – Basics to Basel, International Journal of innovations in banking field exhibit that urban R e s e a r c h i n C o m m e r c e , E c o n o m i c s & customers are very much benefitted by Core Management. 1(8), 59-68. Banking, RTGS, and M-Banking as the mean Prabha Ramseook-Munhurrun., & Perunjodi score of all the innovations are above the expected Naidoo. (2011). Customers' Perspectives of mean that is three. Rural customers were Service Quality in Internet Banking, benefitted mostly by Core Banking facilities; it is Services Marketing Quarterly, 32, 247–264. the only case, were the mean score is more than Rangaswamy, K., & Gopalappa, D.V. (2012). the expected mean among all the innovations. Performance of Various Banking Agencies in Most of the rural area customers are unaware of India Over A Period of Time, International the internet banking, mobile banking, EFT and Journal Of Research In Commerce, Economics & EPS. Management, 2(3), 94-98. Satish Tanaji Bhosale. (2012). Trends and The study is done to find out the future Challenges before Banking Sector: A Study, potentiality of the innovations namely Internet International Journal of Research in Commerce, Banking, M-Banking, Electronic fund transfer, Economics & Management, 2 (3), 140-142. Electronic Payment System, Core Banking Sultan Singh., & Sahila Chaudhry. (2011). E- Facility and use of RTGS. It reveals that the Banking Scenario And its Impact on banking sector will be more beneficial or having Customers' S a t i s f a c t i o n i n I n d i a , very high potential as the mean score for all the International Journal of Research in Commerce & innovations shows more than the expected mean Management, 2 (4),.29- 34. that is 1.66. If they are ranked according to urban Timira Shukla., & Anita Singh. (2011). Banking customers, the innovations stand by Core Banking On IT: Problems and Prospects in State Bank Facility, RTGS, Internet Banking, Electronic of India, International Journal Of Research Fund Transfer, Mobile Banking and Electronic In Computer Application & Management, 1 (1), Payment System respectively. According to rural 45-48. customers the Core banking facility and the RTGS Vanaraj, V. (2011). Impact of Information goes beyond the expected mean which 1.66 but Technology on Indian Commercial banks- A the innovations like EFT and Internet banking comparative study of Kerala and Tamil gets very close to the expected mean of 1.66 that is Nadu, Ph.D Thesis (IMK – Kerala 2.12 and 2.92 respectively. It interprets that these University). innovations also show potentialities in future of banking transactions. If ranked according to the opinion the Core Banking facility gets the first place and second is for the use of RTGS. According to urban customers the Electronic payment system is having less potentiality comparing to other innovations.

Conclusion Even in a moderate to low literate state like Karnataka there is a significant difference in urban rural usage rate. Rural customers are yet to get comfortable with most of the banking innovations. However, while considering future

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Case Study Sasken Communication Technologies Ltd – The way forward

Prof. Ramesh Raj Ayer

Associate Professor, Certified Trainer, Faculty & Corporate Consultant AIMS Institute of Higher Education, Bangalore

Introduction knowledge in chip design, handset services, For a company that is showing agrowth in wireless infrastructure, network engineering, data revenues of 9.6% and in profits of 4.9% in the first networks, hardware design and testing, apart from half of the year 2016,the word crisis would seema convergence technologies. Sasken was hailed as bit inappropriate. But that is exactly what Sasken the next big thing in the Indian IT industry by Communication Technologies Ltd (Sasken) is analysts and observers. Leveraging the hot and facing – a crisis of business continuity. In contrast happening telecom sector in India from 2004 to to the rumors of acquisition going around, the 2009, Sasken's topline grew at a compounded management led by Mr. Rajiv Mody, Chairman & annual rate of 24%. The company went public in Managing Director (Rajiv) has been busy 2005 with an IPO at Rs. 400 a share at a 54% changing strategy and restructuring the company premium which was oversubscribed 78 to overcome the challenges. times.Sasken even attracted FDI of US$ 10 Million from Intel Capital and Citi Group of Rajiv founded the original garage startup in the USA. It also featured regularly as one of the best typical IT context along with 2 classmates. He places to work in. incorporated Silicon Automated Systems (SAS) in Fremont, California, USA. From Silicon Valley Challenges in the current scenario he moved to India's Silicon Valley Bangalore after And then, came a series of setbacks……….and the co-founders left and SAS morphed into the stocks plunged to Rs 123 per share nearly a SASKEN. Rajiv almost single handedly steered its fifth of the high in 2005! fortunes thereafter and bravely decided to focus on just one segment viz Telecom. Since the beginning Sasken had tied itself seamlessly with Nokia, whose fortunes as a phone Background of Sasken maker started to decline. In 2007, when Apple Most corporates in the mobile telecom industry introduced the iPhone, Nokia was the king of the have interacted with Sasken's product or solution handset market and its Symbian platform sometime or other. If the network infra used was dominated the mobile telecom industry. Sasken from Nortel, Ericsson, Alcatel or Lucent who was deeply embedded in Finland with Nokia who covered almost 90% of the market at one point, was its single largest customer. Sasken even went Sasken played a part in it. If you ever used a on to acquireBotania Hitech, a Finnish firm for Nokia, Samsung or a Sony handset there is a high US$ 45 Million in 2006 to provide better local possibility of Sasken being in it. Going even service to an important customer like Nokia. further even chips designed and embedded in Almost 20% of Sasken's revenues were coming devices such as modems from Texas Instruments, from Nokia at that time. ST Microelectronics or Qualcomm, are likely to have a Sasken component or solution in it. Sasken By 2007 destructive changes started happening in had a finger in almost all areas of Telecom the market with the advent of Apple's iPhone and industry at one time. Google's android platform. The new smartphones market started showing stupendous growth. The Sasken's focus on the telecom and semi-conductor smartphones markets' weredominated by Apple's markets helped it build expertise and in depth iPhone with iOS and Google's android platform

32 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 on smartphones like Samsung, HTC, Sony, LG 5% contribute nearly 60% of its revenue. “It was a and many more Chinese, Korean& Indian dream that they chose” says Dr. S Raghunath, models. Nokia was becoming an also ran. Nokia Dean, Indian Institute of Management (IIM) quickly abandoned Symbian and hedged its bets Bangalore, a renowned expert in corporate on smartphones based on Microsoft Windows strategy. “If you go back to the very beginning of Mobile 7 platform. Nokia also moved all its their worries, it was overdependence on the very Symbian related work for the low end Nokia large accounts that was a problem” he adds. phones to Accenture another US led IT MNC. Earlier another Sasken client Motorolawas taken “Such a thing is not unusual in the markets we over by Google and made to switch from Symbian operate in” says Rajiv adding that the company is to Android. making decent profits has a strong IP portfolio and boasts of deep technical knowhow. “It comes Thencomesanother shock! Network equipment down to leveraging existing strengths and maker Nortel networks another important adapting to new requirements” agrees the CFO customer of Sasken collapsed. Nortel networks Ms.Neeta Revankar (Neeta). was unable to face the onslaught of Chinese players like Huawei and ZTE. Different parts of Rajiv says “the effort is to move away from being a Nortel business were getting acquired by those in mere component seller to becoming a complete the industry who had other vendors and hence did solution vendor. From a purely telecom not become customer replacements for Sasken. industryfocused company, Sasken will now adopt The Chinese companies who were also in the a more horizontal view”. “The recent period has forefront of acquisition, unlike their counterparts been challenging but we will drive all round in Europe & US, preferred to keep the entire value efficiency into our system, while streamlining our chain in-house. operations and leveraging our domain strengths”, he adds. On top of all this setbacks Texas Instruments, USA one of Sasken's top 5 clients and a major “The business may have reduced but the effect is revenue generator for Sasken exited its wireless not negativeas we have continued making profits modem business in 2010. and growing our reserves. We should once again be getting back to growth and higher profits from The final nail in the coffin was the global this year” concludes Neetareviewing the downturnpost 2012 that rattled semiconductor financials for the last few years: companies such as ST Microelectronics and Qualcomm,key customer segments for Sasken's (Rs. Crores) semiconductor business. Technology researcher Gartner Inc. predicted that world-wide semiconductor industry is projected to decline by 5.5%.

Sasken's troubles one could say are a mix of self- inflicted injuries and global developments over which it has no control. It also misread the signs in the market which were pointing towards software applications in other areas and the growth in cloud computing. Sasken started out as a products firm and then diversified into providing services for telecom and semiconductor sectors. Experts feel that Sasken's diversification into newer areas of technology came a little too late in the day and cannot immediately make up for fall it is facing from the traditional telecom industry.

Analysing the situation While Sasken boasts of nearly 136 clients, the top

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Speaking on the results this financial year, Sasken In 2008, Sasken entered into a partnership alliance COO Mr. Anjan Lahiri said, “After two quarters with Innovision Research & Technology Plc. UK of flat revenues in Q2 and Q3, we are pleased to for NFC solution. This partnership enabled have registered a growth in this quarter. We are in Innovision to provide its customers with the the middle of a transformation and happy to see Sasken NFC Protocol Stack software solution, for that adding new services and addressing new integration with Innovision's GEM™ Near Field segments is paying rich dividends. The new team Communication (NFC) hardware IP solution. is in place now and we are on our way to remaking Innovision Research & Technology Plc. is leading of our business model based on the tremendous the next generation of NFC/RFID solutions. As strengths of the past 25 years of great customer the leading developer of Short-Range Data delivery”. communication semiconductor system solutions, with particular focus on NFC/RFID (Radio “It's not easy to suddenly make a U-turn and Frequency Identification) and ultra-low-cost expect results right away. It will take at least 3-4 Integrated Circuit (IC), RF electronic design, quarters before it starts reflecting on the topline” Innovision is pushing costs down to enable clients said a leading financial analyst. to get maximum utility for minimum cost. At the heart of the emerging Near Field Communication Rajiv added, “Our business environment remains (NFC) market, Innovision designs and develops challenging due to drastic changes in the strategic NFC/RFID IC solutions for the global mobile direction of large customers and the rapid pace of handset and consumer device sectors. change in consumer devices and related technologies. Despite that we have been able to This relationship underscores both companies' improve profits and holds on to revenues.I think mutual strengths and capabilities. Sasken we have taken appropriate actions and should recognized Innovision's unique market-leading start seeing the numbers looking better from the position for custom NFC hardware Intellectual coming financial year.” Property (IP) with its GEM™ IP offering, whilst the relationship with Sasken further demonstrates Steps taken to overcome challenges Innovision's approach to providing a complete 1. Business continuity & Change NFC IP solution for its customers by working with Contrary to speculators indications Rajiv has not strong partners. called it quits. As part of a revival strategy Sasken first tried to reduce its revenue concentration in Innovision is recognized as the leading NFC select clients in telecom by growing other System-on-Chip (SoC) hardware IP provider with customers. It widened its customer segments by its GEM™ IP, available under an attractive getting into newer verticals such as automotive, licensing program. satellite communications, consumer electronics, infrastructure, retail and BFSI. This combined IP and software solution enables semiconductor companies to develop complete “We are leveraging our domain competencies in NFC capability, either for stand-alone solutions or communication media, embedded technologies, as part of System-on-Chip (SoC) integrated NFC R&D, design and data processing to springboard solutions within wireless connectivity devices into spaces where connectivity and video is such as Bluetooth, Wireless LAN and UWB. becoming increasingly pivotal”, says Dr. G Venkatesh, the CTO of Sasken (Venkatesh). The David Wollen, CEO Innovision, says: “For NFC company is also turning to Android platform and to scale up into mass volume deployment, cost trying to get work from multiple handset vendors control is critical and necessitates NFC becoming like Samsung, Sony Ericsson, HTC and Motorola a feature on a chip rather than an additional says Mr. Swamy Krishnan, CMO at Sasken. In the dedicated chip in the handset. Our advanced last few years Sasken has been making bold moves GEM™ IP uniquely enables customized, cost- into new areas while consolidating existing effective and fast-time-to-market NFC position in the communications space. implementations. By partnering with Sasken, who have demonstrated capability for providing NFC software solutions, and using GEM™ as the baseline hardware solution, we have together offered a truly turnkey solution. I believe this

34 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 partnership is helping many device and chipset extension of the communication space. Sasken's designers to meet the growing demand for high- pure playtelecom strategy made it a leading player performance, low-cost NFC-enabled devices and to deliver next generation solutions in this area. applications.” The new Inmarsat phone offers voice services to remote parts of the world and the target customer Sasken has developed its protocol stack and segment included field and aid operations, private hardware IP to ensure a uniquely seamless and government agencies giving them reach and solution. The solution is targeted for various capability throughout the world.“Sasken offers environments including SoC implementations. expertise in communications technology along The protocol stack supports ISO18092 and with their capability and experience in wireless ISO14443A/B reader/writer modes and provides terminal development. They have become a an ETSI HCI compatible interface towards upper strong partner,” said Perry Melton, CEO layers. The solution is highly configurable and is Inmarsat. “We work closely with Sasken in the designed to work on scarce resources. The design and development of our satellite phone and software stack, available to partners under a offer an innovative and compelling product in a flexible licensing agreement, provides a simple broad portfolio of services over the Inmarsat solution, integrating the GEM™ IP to network.” middleware and application levels to provide a low cost, small space solution with minimal “Sasken's unique strength is its ability to connect processing and power requirement. David adds all constituents of the communication value chain “Licensing NFC silicon IP bundled with a custom which enables it to provide higher value to its full NFC software solution clears the way for customers” says Rajiv.“Sasken solutions leverage semiconductor companies to move to the next strengths ranging from semiconductor design, stage of NFC integration within chipsets and mobile devices and networks and draws on our devices. It will deliver significant unit cost benefits deep domain knowledge in communications to implementers of NFC technology, and which has been demonstrated in our engagement accelerate deployment of NFC in mass markets with Inmarsat a pioneer in mobile satellite like China & India. The GEM™ IP is fully communication services. We are proud to be compliant with NFC standards and includes working with them”, he adds. support for advanced features such as 'battery off', Single Wire Protocol (SWP) and 'zero power in In 2011 Sasken enabled embedded solutions standby' mode“. targeted at consumer electronics, automotive infotainment and adjacent verticals. This was In 2009, Sasken entered into an agreement with done by offering Linux®-based Media Inmarsat, the leading provider of global mobile Framework & Services on Texas Instruments' satellite communications services (LSE: ISAT), to DaVinci™ digital media platform. Original complete development of the next generation equipment manufacturers (OEMS) using digital global satellite hand-held phone. Inmarsat chose electronics can leverage Sasken's integration and Sasken to design and bring into pre-production the customization services on Texas Instruments complete phone, which included the hardware Incorporated's (TI's) DaVinci™ digital media component comprising design, development & platform across various vertical markets, testing of antenna, RF and mechanical elements including consumer electronics, automotive and the software component comprising protocol infotainment and adjacent verticals such as retail stacks, application framework and test lab and healthcare, where media processing, offerings.The handset has undergone the connectivity and other related technologies can be necessary certification processes and confirmed used to bring high efficiency and productivity. its fitness for the global market. The offerings not only lower cost of inputs but also This engagement was a first for an Indian enable OEMs to introduce quality products into company to be involved from the design phase up the market faster. New areas where Sasken's to producing pre-production units. This program solutions and services are available to various also demonstrated Sasken's multisite cross OEMs on TI's leading DaVinci™ digital media functional integration capability to combine its platform include Surveillance, Digital Living hardware and software development centers Network Alliance® (DLNA)-certified appliances, across the globe. Satellite communications is an Rear seat entertainment and Video broadcast.

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“Our experience in working with Sasken has been part of this relationship, Sasken enables OEM and excellent. The team is highly competent and ODM JukeBlox licensees to productize and bring professional, and the programs have been products to market faster by assisting them with a managed end-to-end in a timely manner. The end complete range of embedded software skills, customers' needs and requirements have always including multimedia application development shaped the engagements,” said Tom Kelly, and RF networking experience. Sasken's global Directorat Texas Instruments Inc., USA. reach and scalabilitymakes it an excellent partner to support SMSC customers across many regions. “Sasken's acquisition of Ingenient Technologies SMSC's JukeBlox technology connects tablets, in 2009 and additional investments thereafter have smartphones, PCs, Macs and other consumer enabled us to offer vertical-centric solutions. Our electronics products to a new world of audio deep understanding of TI's platforms, strong entertainment. With the industry's only system- consumer focus and end-to-end solutions enable on-a-chip (SoC) and Software Design Kit (SDK) us to offer a unique position to service and support for networked audio, JukeBlox enables consumers various OEM customers directly,” said to access their local or cloud-based music library Venkatesh. from any device and from any room in the home. Its software platform, with integrated Wi-Fi® In the same year Sasken took a bold step to enter support, enables music streaming to virtually all into an agreement with Qualcomm to set up an home audio equipment including home theater Authorized Test Lab in North America to service systems, A/V receivers, radios, wireless speakers Qualcomm's customers. The test lab is expected to and portable music player docking stations. provide high quality performance testing on 3G/HSPA+ platfor ms and devices for ”Sasken is proud to be associated with SMSC, a compliance with regulatory and operator global leader in connectivity solutions. We requirements. The lab offers testing services, believe our relationship with SMSC will be an including conformance, interoperability support, important step towards achieving our goal of field-testing and assistance in troubleshooting and being a top global system integrator in the debugging. multimedia domain,” said Mr.Rajesh Rao, SVP and Global Head, Sales, Sasken Communication “As a Qualcomm Authorized Test Lab, Sasken Technologies. assists Qualcomm customers in reducing cycle time and costs for platform and device Gene Sheridan, Senior Vice President and certification,” said Bharat Shah, Vice President, General Manager of SMSC's Wireless Products Business Development, Sasken. “We have made Group said, “SMSC's leadership in wireless audio significant investments in this lab to help ensure design for open standards coupled with Sasken's that Qualcomm platforms are tested according to expertise with multimedia applications helps the conformance and regulatory requirements” he OEMs bring innovative, consumer-friendly audio added. products to market faster and ultimately enhance the customer experience”. “We are pleased to have entered into this agreement with Sasken for the benefit of our Audio entertainment has markedly progressed OEM and operator partners,” says Michael during the last decade. With music libraries Warlick, Vice President of Engineering for existing on tablets, smartphones or even on the Qualcomm. “Sasken has established a strong cloud, consumer requirements too have competence in 3G device certification and testing, considerably evolved. Today, users expect easy and we look forward to the benefits this lab will access to the music libraries from all possible provide our customers.” home-audio devices, including home theatres, docking stations, or simple A/V receivers. As this In 2012 Sasken became a licensed JukeBlox® change is taking place, Sasken, through its steady Design Partner. Sasken has been working closely relationships with leading consumer electronics with SMSC, a leading semiconductor company vendors, is at the forefront of providing customers enabling content rich connectivity systems, the extra edge in usability that they seek. building its competency and expertise to help customers design-in SMSC's JukeBlox® wireless In 2012 Sasken announced release of Automotive audio hardware and software capabilities. As a Infotainment solution Software package

36 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 optimized on the Jacinto platform from Texas products to the mobile Internet infrastructure Instruments.With this introduction Sasken, has market. Pinyon designs, develops, and expanded its focus in newer industries like commercially sells mobile wireless products like automotive infotainment and consumer LTE Wi-Fi dongles and LTW WiFi Gateways electronics. As a part of its solution portfolio for amongst others, incorporating proprietary automotive customers, Sasken has developed a antenna solutions based on a patented Air-Wire Rear Seat Entertainment (RSE) / Infotainment technology for HD quality multimedia delivery. software package that leverages the Jacinto Pinyon's wireless products and proprietary Air- platform. The solution is equipped to enable HD Wire technology is designed for 4G/LTE, WiFi, playback of most content found on the Internet, Bluetooth, 3G mobile and other mobile iPod / iPhone / iPad connectivity (including applications. Air-Wire is well suited for playback of video found on these devices), and applications that require high throughput in a playback on multiple screens from a single noisy multipath environment. The initial processor. The solution also allows seamless product, being developed for the Indian market, is playback of smartphone content on the system a 4G LTE WiFi dongle. This Air-Wire LTE WiFi using DLNA. The planned roadmap includes dongle is a powerful mobile Internet device that integration with next generation connectivity uses LTE broadband, with peak download speeds technologies such as LTE to enable access to up to 100 Mbps. It incorporates Pinyon's content in the cloud, support for encode capability proprietary, patented antenna technology to allow video-conferencing, and other features maximizing LTE and WiFi wireless performance, such as Terminal Mode (Mirror Link), Ethernet and Sasken's engineering expertise in integrating AVB support and wireless display support. TI's the hardware and software to expedite the time to Jacinto automotive infotainment processors fuel market. top-notch visual computing and entertainment capabilities for drivers and passengers. The “We are pleased to be partnering with Sasken for processors include dedicated 3D graphic offering a true mobile networking device for India, accelerators and video co-processors that support China, Bangladesh and other TD-LTE markets advanced HMIs and navigation, as well as full that provides consumers with better connectivity 1080p HD video playback and streaming. These and better throughput,” said Debashis Bagchi, platform elements are further complemented by Pinyon Technologies CEO. an integrated digital signal processor (DSP) to allow for real-time radio, audio, speech and other The Air-Wire LTE WiFi dongle (similar looking applications. to a fold design mobile phone) provides Internet connectivity through a WiFi hotspot or a USB “Sasken remains committed to the auto segment. connection. The hotspot operates standalone, We believe that connectivity and multimedia connecting multiple devices. Laptops, gaming technologies are coming together to create very consoles, iPad's and any WiFi device can now interesting solutions and services to customers in access the Internet anywhere through LTE the auto segment. The rate of innovation in this broadband. The Air-Wire LTE WiFi dongle can space is also high. Sasken is making several be connected directly to a computer through the investments in this segment. One such investment USB port, focusing LTE data speeds of 100bps is the CAC. Such a forum gives us insights as well into a device. It supports LTE-TDD, with future as a networking platform and make us better versions supporting LTE-FDD. It supports all equipped to serve this ecosystem”, says Rajesh WiFi devices. Rao, Senior Vice President & Head of Sales, Sasken Communication Technologies Limited ”We are very excited about partnering with Pinyon. The combination of Pinyon's In 2014 Sasken partnered with Pinyon differentiating product design with its proprietary Technologies, a global supplier of next generation technology embedded, and Sasken's engineering mobile wireless networking products with expertise have culminated into an aesthetically proprietary antenna solutions based upon its brilliant product and laid the foundation for a very patented Air-Wire® technology, to deliver LTE strong and long lasting partnership,” said Srinivas mobile broadband product solutions for service Prasad, Vice President at Sasken.The Air-Wire providers worldwide. Pinyon is a global supplier LTE WiFi dongle are now distributed to of next-generation mobile wireless networking consumers through the major service providers in

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India and other LTE markets. growth from smaller clients reduces revenue visibility for future. While the profits have actually By 2015 Sasken expanded and reorganized its increased by nearly 70% since 2008, its revenue business portfolio to better align with the market. base has actually shrunk by a fifth. It now focusses on two key business segments: “Employee morale is low and there is a need to 1 Communication &Devices delegate and communicate more. Rajivand the 2 IT Services with four practices consisting of board have made also made changes at the top and ErND Practice, Testing Practice, Applications brought in experienced Mr. Hari Haran as a nd Da ta Ser vic e P ra c tic e a nd the President – Global Sales, Marketing and Business Infrastructure Practice. Lines (Hari). Hari will be responsible for driving Sasken's global sales and business development The Communication & Devices Business Unit efforts, and will be based in Sunnyvale, not only continues to focus on its traditional California. “I am extremely impressed with business of embedded communications through Sasken's deep engineering capabilities and am the ErND practice capability, but has expanded confident that we will take it together to the next the addressable market by bringing the level,” said Hari. “I am looking forward to capabilities of the new practices to this customer working with the team at Sasken to drive the next segment. This business unit worksin Tier-I Device phase of growth” he added. OEMs, Network OEMs, Semiconductor vendors and other enterprises in the communications and “With this new business structure in place, Sasken devices ecosystem. has embarked on a turn around. We aim to consolidate our position in the coming quarters by The IT Services Business Unit leverages Sasken's delivering consistent performance and being the deep entrenchment in building products and vehicle of bringing competitive advantage to our devices to bring product development capability customers, said Anjan. to the enterprise IT customers. Providing cutting edge technology capabilitiesand particularly the On the other hand a former Sasken employee was tremendous depth in mobile technologies, critical and said “Change and restructuring can combined with industry domain knowledge. This only take you so far. Otherwise, growth will be business unit's focus is on the BFSI and Retail hindered. While it may continue to be profitable, it industry segments. will remain small”. Talks of Sasken being a possible acquisition target abounds amongst On Sasken's new strategic initiatives, Rajiv was investors as well as past employees. The promoters emphaticwhen he said, “Augmenting our deep hold 29% of the company and the reserves could knowledge of mobility and embedded solutions well benefit the acquirer. with Applications & Data, Infrastructure and Testing, give us a much better capability to meet “No question of selling out, we underwent a the needs of our new customer base and help similar experience in 2001 during the dotcom achieve our business objectives”. bust. We survived and went on to thrive. Our employees readily accepted a pay cut of 20% at 2. Restructuring that time. People are our biggest strength, I see no Apart from growing the business the company reason why we cannot repeat it, today we are had to tackle the twin challenges of high attrition stronger than we were at that time”, says Rajiv and low employee utilization. Sasken which had sanguine that these problems can be addressed. 3413 employees in June had an attrition rate of Sasken's original ambition of becoming an IT 34%, which is way above industry average of 15- giant in India however appearsa bit farfetched just 20%. Employee utilization was also only low. now. In either case all stakeholders are concerned and hoping that Rajiv can return Sasken to the There is no clarity on the sustenance of the growth path again or get out before it's too late. existing business. Also smaller clients have shown decline, which add to revenue concerns. Loss of As a measure of showing confidence in the talent due to attrition adds to execution issues. ongoing strategy, the board of directorshas in fact Though it has cash reserves of over Rs.188 proposed a buyback of 19% of the company's Crores, lack of certainty from top clients and poor shares from ordinary shareholders at a premium

38 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016 price Rs 260 per share for a face value of Rs 10/- . While the announcement and newspaper advertisement have been made the official approval will come only after shareholders views are taken by SEBI & Stock exchange's like BSE.

Our revenue numbers in terms of sequential quarter and for the first half have seen smart growth. This is as a result of a concerted approach to widen our service offering portfolio and a relentless focus on account-based growth strategy,” said Rajiv. “On the cost side, our annual salary revision cycle and changes to our business mix has seen some costs increases. However, we have put necessary measures to maintain all margins.

“Our legal expenses were on the higher end last two years, as a result of ongoing litigation over a breach of contract by a licensee in the US; this had put pressure on profits. But now we have won the arbitration award from the court in the US and the award covers our legal expenses. This will be reflected in our annual report for FY 2016 says Rajiv.

“We have invested in a consulting engagement with a global leader in strategic consulting to refine and craft our growth strategy and way forward” he addedlooking at the future with great expectations.

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Annexure

Performance Snapshot for the Financial Year 2011 • Consolidated Revenues for FY 11 at Rs. 546.3 Crores • Down 4.8 % YoY from FY 10 • Consolidated EBIDTA for FY 11 at Rs. 96.4 Crores • Down 5.4 % from FY 10 • Consolidated EBIDTA Margins at 17.6 % • Consolidated PAT for FY 11 at Rs. 73.3 Crores • Down 3% from FY 10 • PAT Margins are at 13.4 % for the year

Key Business Metrics for the year: FY 11 • Software services revenues for FY 11 at Rs. 486.2 Crores • Down 11.2 % YoY from FY 10 • Products group revenues for FY 11 at Rs. 56.1 Crores • Up 119 % YoY from FY 10 • Consolidated EBIDTA margins were at 17.6%. • Services EBIDTA margins for the year was 14.8 %. • Products EBIDTA margins were at 52.8 %. • PAT margins for the year was at 13.4 % • Consolidated EPS was at Rs. 26.89 for the year

Performance Snapshot for the Financial Year 2013 Sasken FY13 revenues at Rs 474.83 Crores, PAT at Rs 31.96 Crores Bangalore, according to Indian GAAP for the fourth quarter and financial year ended March 31, 2013.

Performance Snapshot for the quarter Q4 FY 13 and Consolidated Revenues for Q4 FY 13 at Rs 113.32 Crores were down 2.9 % sequentially over the previous quarter Down 13.0 % YoY from Q4 FY 12

Consolidated EBIDTA for Q4 FY 13 at Rs. 12.58 Crores were down 2.4 % sequentially over the previous quarter and down 50.4 % YoY from Q4 FY 12

Consolidated PAT for Q4 FY 13 at Rs. 7.02 Crores were down 33.2 % sequentially over the previous quarter and down 60.4 % YoY from Q4 FY 12 PAT Margins for the quarter were at 6.2 %.

Key Business Metrics for the year: FY 11 Consolidated Revenues for FY 13 at 474.83 Crores were down 8.7 % from FY 12

Consolidated EBIDTA for FY 13 at Rs. 41.91 Crores were down 45.2 % from FY 12 Consolidated EBIDTA Margins at 8.8 % Consolidated PAT for FY 13 at Rs. 31.96 Crores were 50.1% from FY 12 PAT Margins are at 6.7 % for the year

Key Business metrics for the quarter: Q4 FY 13 Software services revenues for Q4 FY 13 at Rs. 107.40 Crores were down 3.6 % sequentially over the previous quarter and down 7.3 % YoY from Q4 FY 12 Products group revenues for Q4 FY 13 at Rs. 5.58 Crores were however up 19.7 % sequentially over the previous quarter but down 58.2 % YoY from Q4 FY 12.

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Performance Snapshot for the Financial Year 2013 • Consolidated Revenues for FY 13 at `. 474.83 Crores Down 8.7 % YoY from FY 12 • Consolidated EBIDTA for FY 13 at `. 41.91 Crores Down 45.2 % from FY 12 • Consolidated EBIDTA Margins at 8.8 % • Consolidated PAT for FY 13 at `. 31.96 Crores Down 50.1% from FY 12 • PAT Margins are at 6.7 % for the year

Key Business Metrics for the year: FY 13 • Software services revenues for FY 13 at Rs. 445.12 Crores were down 6.3 % YoY from FY 12 • Products group revenues for FY 13 at Rs. 27.44 Crores were down 30.5 % YoY from FY 12 • Consolidated EBIDTA margins were at 8.8%. • Services EBIDTA margins for the year was 6.9%. • Products EBIDTA margins were at 46.8%. • PAT margins for the year were at 6.7 % • Consolidated EPS was at Rs. 13.26 for the year

Performance Snapshot for the Financial Year 2014 • Consolidated Revenues for FY 14 at Rs. 458.03 Crores • Down 3.5 % YoY from FY 13 • Consolidated EBIDTA for FY 14 at Rs. 53.39 Crores were up 27.4 % from FY 13 and consolidated margins at 11.7 % • Consolidated PAT for FY 14 at Rs. 51.47 Crores • Were up 61.1 % from FY 13 • PAT Margins are at 11.2 % for the year

Key Business Metrics for the year: FY 14 • Software services revenues for FY 14 at Rs. 436.65 Crores were down 1.9 % YoY from FY 13 • Products group revenues for FY 14 at Rs. 19.23 Crores were down 29.9 % YoY from FY 13 • Consolidated EBIDTA margins were at 11.7 %. • Services EBIDTA margins for the year was 13.6 %. • Products EBIDTA margins were at -27.0 %. • PAT margins for the year were at 11.2 % • Consolidated EPS was at Rs. 24.36 for the year

Performance Snapshot for the Financial Year 2015 • Consolidated Revenues for FY 15 at Rs. 428.01 Crores were down 6.6 % YoY from FY 14 • Consolidated EBIDTA for FY 15 at Rs. 32.25 Crores were down 39.6 % from FY 14 • Consolidated EBIDTA Margins at 7.5 % • Consolidated PAT for FY 15 at Rs. 119.56 Crores • UP 132.3 % from FY 14 • PAT Margins are 27.9% for the year

Performance Snapshot for the Half Year: H1 FY 16 • Consolidated Revenues for H1 FY 16 at Rs. 237.09 Crores were up 9.6 % YoY from H1 FY 15 • Consolidated EBIDTA for H1 FY 16 at Rs. 22.65 Crores were up 4.9 % YoY from H1 FY 15 • Consolidated PAT for H1 FY 16 at Rs. 20.40 Crores • Down 79.7 % YoY from H1 FY 15 • PAT Margins for the half year at 8.6 %

Key Business metrics for the half year: H1 FY 16 • Software services revenues for H1 FY 16 at Rs. 224.05 Crores were up 7.1 % YoY from H1 FY 15 • Products group revenues for H1 FY 16 at Rs.11.61 Crores were up 95.7 % YoY from H1 FY 15 • Consolidated EBIDTA margins were at 9.5 % • Services EBIDTA margins were at 8.9 % • Products EBIDTA margins were at 22.1 %

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References Business publications Business World, Business India, Outlook-Money, Economic Times, Mint, Financial Express etc. Sasken Technologies Employees, Customers and Vendors Websites www.livemint.com www.sasken.com

42 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016

CALL FOR PAPERS AIMS Journal of Research (AJR) A bi-annual Journal of AIMS Centre for Research (ACR)

Greetings from AIMSIHE, Bangalore!

ACR invites Academic Papers, Reflective Practices, Case Studies and Book Reviews. All papers should provide the details of all authors (specifying the corresponding author) and an 'Abstract' of not more than 500 words.

Academic Papers Academic Papers may be either conceptual or empirical. The length of the paper should be between 5000 and 8000 words. The references should be given in the style prescribed by the Publication Manual of the American Psychological Association (6th edition), which requires the (author, year) format within the text, and the alphabetical listing (by authors' surnames) of the references at the end.

Conceptual Papers should develop strong arguments and new theoretical perspectives in the concerned fields by using evidences from prior research. In other words, conceptual papers should present a comprehensive and focused review of the relevant literature, and develop contingency propositions within a new theoretical perspective.

Empirical Papers should have a short and focused literature review to justify the need for the study and develop the hypotheses, explain the methodology, present the data and their analysis, draw appropriate conclusions, and discuss the theoretical and practical implications of the findings as well as the limitations and directions for future research.

Reflective Practices These are papers (about 5000 words in length) by practitioners (entrepreneurs, executives, consultants, policy-makers) based on systematic reflections on their own experiences. Such reflection should have a 'narrative section' which briefly describes the practice in question, explaining its context, purpose, and scope, and an 'exposition section' which elaborates on the problems encountered by various stake-holders at the implementation stage. The concluding part should contain recommended solutions, especially the desired micro- and macro-level policy initiatives.

Case Studies Case Studies should highlight the unique aspects of any relevant area. The recommended length of the case is 3000-5000 words. The style of writing the case should be narrative with appropriate data support (preferably with tables, figures and annexure).

Book Reviews The reviews should be on the prominent books published recently and not reviewed earlier. The reviews should not be more than 1500 words.

Abstract and Paper Submissions Authors are invited to submit the abstract and full paper on or before 15th July 2015 for September issue and 15th January for March issue in MS Word format by e-mail to: [email protected]. Acceptance/Rejection of papers will be communicated. By submitting a paper, the author(s) make(s) a commitment that the work is original and not published before in any manner.

Guidelines for Submission of Paper The abstract should be in fully italicized text (10-point Times New Roman, 1 line spacing, not exceeding 500 words), explaining the background, the need, aims, methods and the expected findings of the study. In addition, it should contain the title (16-point Times New Roman), authors' names (12-point Times New Roman), designations, affiliations/addresses, telephone numbers and e-mail addresses (10-point Times New Roman), followed by a list of keywords, subject to a maximum of five, which should be arranged in alphabetical order, and be separated by commas with a full stop at the end.

43 ISSN 2321 – 8487 Volume 11, Issue 2, September 2016

The full paper should be prepared as per the guidelines provided for the respective category of paper (Conceptual, Empirical, Reflective Practice or Case Study) as specified.

Body of Manuscript Manuscript must be prepared on standard A4 size paper setting. It must be prepared on a 1 line spacing and double column with a 1-inch margin set for top, bottom, left and right. It should be typed in 12-point Times New Roman font with page numbers at the bottom-right of every page.

Headings All section headings should be in 14-point Times New Roman font and sub-section headings should be in 12-point Times New Roman font. These must be bold-faced, aligned left and fully capitalized. Leave a blank line before each heading.

Figures & Tables These must be simple, centred and numbered, with the titles of figures/tables above the figure/table. Sources of figures/tables should be mentioned below them.

Citation & References References within the text and at the end of the paper should be in the style prescribed in the Publication Manual of the American Psychological Association (6th edition).

Publication All categories of papers will be double-blind refereed by the peer experts for their selection and for publication in the journal.

All submissions must be made to:

Editor in Chief AIMS Journal of Research AIMS Institute of Higher Education 1st Cross, 1st Stage, Peenya Industrial Area Bengaluru, Karnataka - 560 058 Contact: 080 - 2839 0433, Ext - 247 Email: [email protected]

SUBSCRIPTION DETAILS

AIMS Journal of Research can be subscribed to by sending the filled-in form with a demand draft, drawn in favour of Principal, Acharya Institute of Management and Sciences, payable at Bangalore. The subscription fee includes the mailing charges.

Request for subscription should be sent to: The Chief Editor, AIMS Journal of Research, AIMS Institutes, 1st Cross, 1st Stage, Peenya, Bangalore – 560 058, Karnataka.

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