All posts by UMESH RAJ

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SOME CONTEMPORARY CHALLENGES FACED BY NGOs IN DISASTER INDUCED RELOCATIONS AT CHINGWIZI TRANSIT CAMP, ZIMBABWE.

Kudzayi Savious Tarisayi

Abstract

This conceptual paper is based on the desktop research carried out on the contemporary challenges curtailing NGOs in Zimbabwe in general and during the humanitarian crisis in the Tokwe-Mukosi basin in particular. The humanitarian emergency that followed the Tokwe-Mukosi flooding in Zimbabwe has been widely covered in the media. The humanitarian crisis that always follow natural hazards such as floods have been subjected to various researches, however they have been mainly assessing the impact of floods on livelihoods. This study revealed that a plethora of challenges face NGOs at Chingwizi in their endeavour to ameliorate the humanitarian emergency.

Keywords: Non-governmental Organisations, challenges, disaster-induced relocations, Chingwizi, Zimbabwe.

 1.0 Introduction

There is always apparently extensive media coverage of humanitarian crisis that follow any disaster, be it earthquake, floods, cyclones amongst others around the world. This has been the case for the Tokwe-Mukosi floods in Masvingo province, Zimbabwe. International trends indicate that disasters are increasing in intensity, complexity and magnitude and Zimbabwe has not been spared from this trend (Allardce, 2009). Gwimbi (2009:71) states, “The increasing occurrence of disastrous flooding events and the mounting losses in both life and property values in Zimbabwe have drawn attention to the flooding situation in the country, especially the rural areas.” Hardly, a month passes without media reports of a disaster in Zimbabwe or around the world (Allardce, 2009). Fundamentally, all these disasters are human-made, for, a catastrophic event, whether triggered by natural phenomena or human activities, adopts the status of a disaster when the community or society affected fails to cope. Thus, it can be argue that a tropical cyclone is not a disaster in and of itself. Hewitt (1997) argues that natural hazards such as tropical cyclones, floods, earthquakes and droughts tend to spring to mind when the word ‘disaster’ is mentioned but a disaster is correctly defined on the basis of its human consequences, not on the phenomena that caused it.

The humanitarian crisis that always follow these natural hazards such as floods have been a subject of various researches mainly assessing the impact on livelihoods in Ghana (Fredrick et al, 2010) , in India (Afro, 2009) and in Zimbabwe (Tarisayi, 2014) among others. The rallying point of all these researches has been mainly the impact of flooding on people especially the poor who are the most vulnerable. However, there is an apparent gap in literature in as far as the challenges faced by NGOs assisting in these humanitarian crisis. There is always evidently quick apportioning of blame from various quarters on the NGOs actions or lack thereof without due cognisance of the challenges curtailing their operations. This scenario has been glaringly revealed by the humanitarian emergency faced by families in the Tokwe-Mukosi basin in Zimbabwe in January/ February 2014 and the subsequent forced relocations. The media was flabbergasted with articles insinuating failure of NGOs to assist the flood victims. The most pronounced and tellingly headline being, “NGOs turn a blind eye on Chingwizi” (Murwira and Maponga, 2014). These media articles aptly reveal that challenges facing NGOs in responding humanitarian emergency have been elided by researchers, media among others.

 

1.1 NON-GOVERNMENTAL ORGANISATIONS: Towards a definition

Tarisayi (2014) states that the term NGO encompasses a wide-ranging spectrum of organizations and they have been referred to using various terms in different quarters in different parts of the world. Rahman (2003:  44) listed at least 40 similar terminologies used in the literature to refer to NGOs. Gupta (2011:01) states these organisations have been, “Variously referred to as Non-Profit Organizations (NPO) and Voluntary Development Organizations (VDOs), Non-Governmental Organizations (NGOs) are non-profit, non-governmental organizations that an individual joins by choice”.

NGOs come in a multiplicity of shapes and sizes, and thus the definition of an NGO and the choice of terminology is in itself the subject of much debate and limited agreement. The  World  Bank  (1995)  defines  Non-Governmental  Organisations  as  private organisations  that  pursue  activities  to  relieve  suffering,  promote  the  interests  of  the poor,  protect  the  environment,  provide  basic  social  services,  or undertake  community development.  In  another  dimension,  Liebenberg  (2000)  refers  NGOs  to  autonomous, privately  set  up,  non-profit-making  institutions  that  support,  manage  or  facilitate development action by providing socio-economic  activities to the needy. The above definitions have shared reiteration of the centrality of these organisations being private and privately set up. From a legal perspective, Anheier (2001) defines an NGO as a legally constituted institute created by natural or legal persons with the aim of functioning independently from any government. Thus, this legal approach emphasises the notion of operating independent of the government. In addition, NGOs can be reasoned to be registered, private, independent, non-profit organisations that facilitate development to needy communities among others. However, there is confusion due to the recent sprouting of organisations which have been classified as Government NGOs or rather government funded or aligned NGOs.

2.0 RESEARCH METHODOLOGY

This study utilised a qualitative research method which entailed utilization of secondary research or desktop research. This involved gathering data that already exist from various sources such as the media, free access data on the internet and academic literature.  Hall  (1990)  defines  a  desktop  research  as  referring  to seeking  facts,  general  information  on  a  topic,  historical  background,  study  results that  have  been  published  or  exist  in  public  documents.  This  information  can  be obtained  from  libraries,  newspaper  archives,  government,  university,  websites, NGOs  and  CBOs. In addition, data was also captured from websites of NGOs operating in Masvingo province. References were made to secondary sources such as journal articles and books on the activities of NGOs to alleviate poverty.

3.0 CHALLENGES FACED BY NGOs IN DISASTER INDUCED RELOCATIONS

The context in which NGOs operate in the disaster-induced relocations at Chingwizi reveals a number of challenges. These challenges emanate from within the NGOs while others are external.

3.1 RELATIONS WITH THE ZIMBABWEAN GOVERNMENT

The Zimbabwean government has been blamed for curtailing the space within which NGOs operate in assisting people affected by disaster-induced relocations. The NGOs have to channel all their assistance through the office of the Provincial Affairs Minister’s office without directly interacting with the intended beneficiaries. Tandon (1989) and Bratton (1989) concur that governments establish the legal and political context within which NGOs work and their relations with the state may take many forms. NGOs/ state relations may take the form of outright animosity or lack of trust. In Zimbabwe, NGOs and government relations are aptly captured by sentiments made by politicians and government officials. Chanakira (2011) highlights NGOs and government relations by quoting the Zimbabwean President,

We  have  now  a  phenomenon  of  NGOs,  or  shall  I  call  them  phenomena,  for  they  really  are  a  type  of government in the background of a formal government. I don’t know whether this creature is for the better or  for  the  worse,  but  in  our  country  we  have  seen  a  situation  where  they  have  exceeded  their  terms  of reference,  and  perhaps  we  might  have  to  reconsider  the  advisability  of  having  NGOs.

Thus, the relationship between the NGOs and the government can be argued to be poses a challenge in the role of NGOs in disaster-induced relocations. Ulimwengu (2007) concurs that African states generally mistrust NGOs and other non-state actors for a variety of reasons. Hence, due to this mistrust by government of the motives of NGOs in assisting people affected by disaster-induced relocations at Chingwizi NGO programming is curtailed.

In addition, there have largely been frosty relations between the NGOs and the government in Masvingo. This is revealed by the banning of 29 NGOs in February 2012 by the Masvingo governor Titus Maluleke (www.newzimbabwe.com). While the ban was lifted in early 2014, the gulf created by the ban is yet to be filled. NGOs that were formerly banned in 2012 were recalled by the new Provincial Affairs Minister in January 2014, hence giving them just a couple of weeks to operationalize before disaster struck. Thus, it can be reasoned that they were not fully operationalized after the lay-off of two years.

3.2 CIRCUMSCRIBED FOCUS

NGOs reaction or lack thereof to the Tokwe-Mukosi floods and the subsequent relocations of the people to Chingwizi can be attributed to their circumscribed focus. Flooding and disaster-induced relocations can be argued to be a relatively new phenomenon in Zimbabwe. Generally, NGOs have mandates that restrict them from reacting to new phenomena such as flooding, which lies outside their usual domains. Salamon (1987) argues that NGO particularism can also be a sectorial weakness when NGOs fail to respond to interests outside most NGOs narrowly defined constituency. This is buttressed by Murwira and Maponga (2014) observation that out of the 90 NGOs registered under the National Association of Non-Governmental Organisations in Masvingo, only four have extended their help to people at Chingwizi camp since their relocation.

In addition, NGOs whose mandates include human rights did not see it fit to assist people at Chingwizi. Their narrowly restricted definition and focus of human rights mainly revolve around political rights while overlooking the basic rights to shelter, food and education. The findings of this paper reveal that people at Chingwizi are in desperate need of shelter and food among others. Hence, it can be reasoned that the role of NGOs in disaster-induced relocations has been severely hindered by their circumscribed focus.

3.3 FINANCIAL AND MATERIAL CONSTRAINTS

The role of NGOs in disaster-induced relocations at Chingwizi transit camp is also curtailed by financial and material constraints. The people at Chingwizi transit camp were mainly facing constraints in terms of shelter and food as their homes were destroyed by the Tokwe-Mukosi floods. Hence, NGOs and the Zimbabwean government were battling to secure adequate food and shelter for the affected people. However, against this scenario the NGOs were affected by shortages of financial and material resources to meet the demands of the people at Chingwizi who are living in appalling conditions since their relocation. The constraints are appositely revealed by the government’s appeal for financial and material resources to the donor community. Lipsky and Smith (1990) argue that scarcities in material resources also can constrain capacities for NGO initiatives. Thus, NGO efforts at Chingwizi are affected by the material scarcity which can be reasoned to be behind their reluctance to stray from their circumscribed focus. The shortage of materials is revealed by the exhaustion of budgets bemoaned by the NGOs operating at Chingwizi. The NGOs were opposed when it was revealed that there were alarming statistics of STI at the camp. Thus, due to inadequacy of financial resources the NGOs could not cope with the demands of the devastating effects of spate of STIs.

3.4 HUMAN RESOURCES CHALLENGES

Human resources challenges facing NGOs were glaringly exposed by disaster-induced relocations at Chingwizi. Tarisayi (2013) argues that NGO programming in Masvingo is curtailed by human resources challenges. Disaster-induced relocations are a relatively new phenomenon which exposed the inadequacy in terms of training in the NGO personnel. A shortage of well trained and experienced human resources also curtailed NGOs in performing their role. Lekorwe (1999) concurs that NGOs have a human resources weakness in terms of training and experience.

CONCLUSION

This paper concludes that the role of NGOs in disaster-induced relocations is curtailed by various factors. These challenges can be traced from both within and outside their NGOs,that is both internal and external. Among these challenges are relations with the Zimbabwean government, restricted focus, financial and material constraints and human resources challenges. Hence, it can be concluded that NGOs are faced by a plethora of challenges at Chingwizi in their endeavour to ameliorate the humanitarian emergency.

REFERENCES

Afro (2009) Live better with floods: An approach for sustainable livelihood security in district, India

Allardce, M (Ed) (2009) Disaster Risk Management: A resource book for educational institutions in Zimbabwe. Harare, Civil Protection Organisation of Zimbabwe

Bratton, M.  (1989). The Politics of Government-NGO relations in Africa. World Development, 17 (4) 569-587

Burton, I; Kates, R and White, G.F (2003) The environment as Hazard. New York: The Guildford Press

Chakawarika,  B.(2011).Challenges  Faced  by  NGOs  in  the  Political   Harsh  Climate  of Zimbabwe:  Analysing  the  Effects  on  Sustainability  and  Promotion   of  Human Rights.Global Studies. University of Gothernburg.

Freddrick, A; David, O; Genesis, T; Justice, O and Ernest, K.A (2010) Impact of floods on livelihood Vulnerability of Natural resources dependent communities in Northern Ghana, University of Cape Coast, Cape Coast, Ghana

Gupta, S (2011) A Case Study of an NGO’s role in poverty: India, International Journal of Rural Management, Institute of Rural Management, SAGE Publications, Los Angeles

Gwimbi, P (2009) Linking rural community livelihoods to resilience building in flood risk reduction in Zimbabwe: JÀMBÁ: Journal of Disaster Risk Studies, Vol. 2, No.1. pp 71-79

Hall, N. (1990) Social Work Training in Africa: A Fieldwork Manual, Journal of Social Development in Africa, Harare. Online: www.archive.lib.msu.edu Accessed 28 April 2014

Lekorwe, M (1999) Local Government, Interests Groups and Civil Society. In Public Administration and Policy in Botswana. Juta and Co, Ltd Kenwyn, Cape Town

Liebenberg S (2000). Non-governmental organisations as agents of development. In De Beer F and Swanepoel H (eds).  Introduction to development studies.  (2nd Ed).  Cape Town: Oxford University Press.

Lipsky, M. and Smith, S.R.  (1989-1990). Non – Profit Organizations, Government and the Welfare State, Political Science Quarterly, 104 (4) 625-648. www.sagepublications.com

Murwira, Z and Maponga, G (2014) NGOs turn blind eye on Chingwizi. The Herald, 14 April, 2014. www.theherald.co.zw  Accessed 14 April 2014.

Newman, E. Visions of International Studies: Human Security and Constructivist. International Studies Perspectives (2001) 21.

Salamon, L.M.  (1987). Partners in Public Service:  The Scope and Theory of Government-non Profit Relations. In W.W. Powell (ED), The Non Profit Sector: A Research Handbook (pp.99-117), New Haven, CT: Yale University Press. www.sagepublications.com

Tandon. (1989). NGO-Government Relations: A Source of Life or a Kiss of Death? New Delhi:  Society for  Participatory  Research  in  Asia.  Online: www.sagepublications.com

Tarisayi, K.S (2014) Ramifications of flooding on livelihoods: A case of two communal areas in Chivi district in Zimbabwe, The International Journal of Humanities and Social Studies, Vol 2 Issue 2, pp 165-167

Tarisayi, K.S (2013) The efficacy of NGO funded Orphan and Vulnerable Children (OVC) programming in poverty alleviation in Zimbabwe. A case study of the Community Based AIDS Programme (CBAP), in Ward 18, Masvingo district. Unpublished Masters thesis, National University of Science and Technology, Zimbabwe.

www.newzimbabwe.com

AN EXPLORATION OF THE CHALLENGES ENCOUNTERED BY SATELLITE SCHOOLS IN MASVINGO DISTRICT, ZIMBABWE.

 

Kudzayi Savious Tarisayi

 

 

Abstract

This paper explores the challenges facing satellite schools in Masvingo district. Data was generated through semi-structured interviews with teachers, school heads and parents in this study. The sample for this study constituted satellite schools in resettlement (land reform areas) in Masvingo district. The researcher purposively sampled fifty participants from a sample of five satellite schools in Masvingo district. The study findings revealed that satellite schools faced challenges which include water constraints, low enrolment, and poor working conditions for teachers, affiliations and levies, inadequate community support and cooperation, lack of resources among others. The study recommends that the Ministry of Primary and Secondary Education should set up a special fund for supporting satellite schools. In addition, satellite schools should be exempted from paying affiliations and levies until they are registered.

Keywords: satellite schools, challenges, Masvingo district

1.0 Introduction

Discourse on the land reform in Zimbabwe has arguably been pluralistic and proffering a multiplicity of perspectives. Most research has been confined to political and economic narratives without necessarily interrogating the implications of the land reform on social services such as education. Mavundutse et al (2012) state that the advent of land reform in Zimbabwe since the year 2000 has had a profound impact across the socio-political landscape including education. The onset of the land reform has been accompanied by a new phenomenon in education of satellite schools. Langa (2012) state that the birth of satellite schools was a stop-gap measure since the schools do not meet the expectations of conventional schools. While Hlupo and Tsikira (2012:604) define a satellite school as, “budding school operating under the auspices of a well-established mother school. According to the Minister of Primary and Secondary Education, there are 1425 satellite schools in Zimbabwe (The Herald, 2014). According to the Report of the Thematic Committee on Millennium Development Goals on the provision of education in resettled areas the government of Zimbabwe has left the funding and construction of satellite schools to the community (Parliament of Zimbabwe, 2012).

2.0 Objectives of the study

This study was guided by the following objectives;

  • To assess the state of satellite schools in Masvingo district.
  • To identify challenges inhibiting the satellite schools.
  • To make recommendations to address these challenges.

3.0 Methodology

Data for the study was gathered through semi-structured interviews with teachers, school heads and parents. Gill et al (2008) elucidates that semi-structured interviews involve numerous questions that make it easier to discover the parts that give meaning to the research and it also allows the interviewer to choose an impression of the interviewee or get them to explain their response more thoroughly. The researcher purposively sampled five (5) satellite schools and from these four (4) teachers, five (5) parents and one (1) school head per satellite school were sampled. Thus, the researcher utilised a sample of fifty participants.

4.0 Context of the study

The study was carried out in Masvingo district. The district has ten (10) satellite secondary schools. The satellite secondary schools are mainly located in areas inhabited by land reform programme beneficiaries. While a few satellite schools have been established in communal areas. Thus, the study area falls mainly within the resettlement areas of Masvingo district.

5.0 Validity

Struwig and Stead (2001:136) aver that validity is the extent to which a research design is scientifically sound or appropriately conducted. Simon (2011) elaborates that there are various approaches a researcher can use to address validity and reliability in qualitative studies, the most popular include: triangulation of information among different sources of data, receiving feedback from informants (member checking), and expert review. In this study, the researcher will triangulate sources of data as data will be obtained from school heads, teachers and parents. Thus, the utilisation of multiple data sources (teachers, heads and parents) enhanced validity of this study.

6.0 Ethical Considerations

Several ethical issues were given due cognisance in this study. Several ethical issues were considered while collecting data because data collection always costs someone something. Chireshe (2000:06) in Mugweni (2012:149) avers that ethics entail, “… a moral philosophy that deals with making judgements, good or bad, proper or improper, approval or disapproval, right or wrong”. According to Wallman (2006:148), “ethics are the rules of conduct in research”.  The researcher observed voluntary participation, confidentiality and anonymity in this study.

 

7.0 Findings of the study

7.1 Lack of resources

There was consensus among the participants in the study that the main challenge faced by satellite secondary schools in Masvingo district was lack of resources. It was noted by all the participants (100 %) that the establishment and construction of satellite schools was grossly affected by financial resource constraints. While, there was an apparent need for funds to build classrooms, toilets and teacher’s accommodation at the budding schools, efforts were being hampered by lack of resources across the satellite schools.

 

In addition, the participants (80 %) in the study revealed that there was a lack of teaching materials. Teaching materials such as stationery, syllabi and textbooks were revealed as deficient among satellite secondary schools. Teachers who participated in the study also revealed that there were no funds at their schools to finance their attendance of subject panel workshops. Thus, the teachers were not abreast with latest developments in their respective subjects and teaching methods. Hence, the researcher noted that due to the lack of resources satellite secondary schools were facing a multiplicity of challenges.

7.2 Infrastructure

The study also revealed that satellite secondary schools had infrastructural challenges. The majority of participants (90 %) in the study stated that they did not have buildings that meet the minimum functionality requirements as stated by the Ministry of Primary and Secondary Education. From the participant satellite schools only one school had two completed classroom blocks and two F14 teacher’s house. According to the Report of the Thematic Committee on Millennium Development Goals on the provision of education in resettlement areas for a school to qualify for registration it should have at least 2 F14 standard teachers house, at least two classroom blocks and adequate toilet facilities (1 hole: 20 girls and 1 hole:25 boys) (Parliament of Zimbabwe, 2012). From the study it can be revealed that the majority of satellite schools (80 %) do not have adequate infrastructure. The schools are operating from the buildings of primary schools and former farm houses (Hlupo & Tsikira, 2012).

 

The study also revealed that there was a critical shortage of accommodation at the satellite schools. Participants in the study, at one satellite school revealed that they were provided accommodation by a primary school which was four (4) km away from their school site. Thus, it meant that the teachers walked eight (8) kilometres every day to and from work. One respondent remarked, “Tinofamba makiromita gumi zuva rimwe nerimwe rinomera”. (We have have to walk ten kilometres to each and every day of the week to work). Thus, this further reveals glaringly that there was a dire accommodation crisis at the satellite schools.

7.3 Poor working conditions for teachers

The participants revealed that there were poor working conditions for teachers in satellite secondary schools. Seventy percent (70 %) of the participants working conditions for the teachers revealed that teachers working in satellite secondary schools were exposed to appalling and poor working conditions. As has already been highlighted that teachers at some satellite schools have to walk long distances to work. In addition, lack of resources and infrastructural constraints have a bearing on the working conditions of teachers. School heads and teachers were unanimous about the appalling working conditions at satellite secondary schools. This finding concurs with the Mwenezi District Education Officer’s sentiments quoted by the Report of the Thematic Committee on Millennium Development Goals that it is actual unbelievable that there were still able to find teachers to take up posts at such schools (Parliament of Zimbabwe, 2012).

7.4 Affiliations and Levies

The participants in this study revealed that satellite secondary schools were being constrained by affiliations and levies. All secondary schools including satellite secondary schools are supposed to pay affiliations to the National Association of Secondary Heads (NASH), BSPZ as well as levies to the local district authority. The participants revealed that it was actually surprising that despite the evident financial challenges faced by satellite schools, the District Education officials, NASH and Local Authority still expects satellite schools to pay their dues. The incapacitating financial challenges are thus further compounded by these financial obligations. One school head stated, “The local authority has gone to the extent of engaging lawyers to force satellite schools to pay levies despite the glaring challenges at the schools”. Thus, the study revealed the insensitiveness of district education officials, NASH and the local authorities towards the plight of satellite schools in terms of affiliations to a greater extent.

7.5 Community Support and Cooperation

The participants (60%) exposed that satellite secondary schools were not getting support and cooperation from the community. The establishment of satellite schools has not been matched by the community support and cooperation which was evident during the establishment of rural ‘upper-top schools’ just after Zimbabwe’s independence. Participants in the study stated the parents and community have alternative schools for their children thus are not prepared to offer voluntary work at the satellite schools. However, the  Ministry of Primary and Secondary Education  expects  resettled  communities  to  take  up  the  initiative  of  constructing schools but such communities are scratching for a living (Parliament of Zimbabwe, 2012). Therefore, without the community support and cooperation the satellite secondary schools become constrained to a larger extent.

7.6 Low Enrolment

The challenges faced by satellite secondary schools were further compounded by the low enrolment according to the participants (80 %). The satellite schools it was bemoaned had discouraging enrolments as parents shunned the schools due to their lack of resources and poor infrastructure. Due to challenges facing satellite schools parents were opting to send their children to well established schools despite them being distant. Hence, low enrolment further constraints the satellite secondary schools’ capacity to mobilize resources for infrastructural development.

7.7 Water

The participants (90 %) revealed that they had constraints in terms of reliable sources of water at the satellite schools. The satellite secondary schools do not have reliable sources of water within the stipulated distance of 500 metres as recommended by Project Sphere (2004). One participant revealed that, “The staff at our school has resorted to hiring a local farmer to fetch water using an ox-dram scotch cart from a borehole about 4 km away”. Therefore, water challenges further compound the dire situation at the satellite secondary making them less appalling to both staff and pupils to a greater extent.

 

7.8 Conflicts between traditional leadership and appointed leadership of land reform beneficiaries

The findings of this study revealed that there were perennial conflicts between traditional leadership and new leadership among the farmers. On participant elaborated that, “Madzishe nevakuru vemawar vets vakatowana pekurwira”( meaning The traditional leaders and the leadership of war veterans are using satellite schools as a fighting ground to assert their authority in the resettlement farms. Marongwe (2008:285) argues that there was the emergence of power and authority of new actors and institutions such as war veterans and committees of seven which emerged. Committees of seven are management committee made up of seven people put in place to take care of scheme. Thus, this poses a challenge on satellite schools as there is conflict over jurisdiction over the satellite schools. These apparent conflicts are more pronounced during school functions and moreso, when the school approaches the community for help. Hence, it can be revealed from this study that this role conflict between the traditional leadership and land reform beneficiary leadership poses a constraint on satellite schools.

8.0 Conclusion

From the foregoing, it can be concluded that there are a multiplicity of challenges faced by satellite schools in Masvingo district. These include lack of resources, infrastructural inadequacies, low enrolment, and poor working conditions for teachers, affiliations and levies and inadequate community support and cooperation.

 

9.0 Recommendations

From the findings of this study the researcher makes the following recommendations;

  • Satellite schools should be exempted from paying affiliations and levies until they are well established and registered.
  • The government should set up a special fund for supporting satellite schools.
  • Parents should be engaged to contribute voluntary labour in the construction of satellite schools.

9.0 References

Gill, P., Stewart, K., Treasure, E. and Chadwick, B. (2008). Methods of data collection in qualitative research: interviews and focus groups. British Dental Journal, 204

Hlupo, T and Tsikira, J (2012) A Comparative Analysis of Performance of Satellite Primary Schools and their Mother Schools in Masvingo Province, Zimbabwe. A Comparative Analysis of Performance of Satellite Primary Schools and their Mother Schools in Masvingo Province, Zimbabwe

Langa, V. (2012). “Land reform schools in a sorry state,” Parliament: Zimbabwe.

Marongwe, N (2008) Interrogating Zimbabwe’s Fast Track Land Reform and Resettlement Programme: A focus on beneficiary selection. PhD thesis. University of the Western Cape

Mavundutse, O., Munetsi, C., Mamvuto, A., Mavhunga, P.J., Kangai, P., and Gatsi, R (2012) Emerging teacher education needs as a result of land reform in Zimbabwe: a focus on new resettlement areas. Academic Research International, Vol. 3, No. 2.

Mugweni, R (2012) Secondary school teachers’ conceptualisation and implementation of the aids action programme in Zimbabwe. PhD thesis. University of Pretoria

Simon, M.K (2011) Dissertation and Scholarly research: Recipes for success (2011 Edition). Seattle, W.A, Dissertation Success, LLC

Municipal own source revenue compliance and its potentiality (A study of financial management performance of Hetauda municipality in Nepal)

 

Shankar Prasad Upadhyay 

 Dr. Kamal Das Manandhar

Abstract

The major portion of own source revenue of Hetauda municipality is tax. The main purposes of this research study are to expose the own sources revenue potentiality and analyze the municipal revenue compliance in Hetauda municipality. Both analytical and descriptive research designs were applied for the analysis of revenue potentiality and its compliance in Damak municipality. Random sampling method was used to select the municipality and same method was replicated to choose the respondents for questionnaire survey. Questionnaire Survey, Focus Group Discussion, and Key Informants Interview tools were used for data collection. Both the taxpayers and municipal policymaking advisors were the respondents of the study. Participants for focus group discussion and key informants for personal interview were selected purposively. Most of the taxpayers (i.e. 85.8 %) have paid municipal tax revenues and out of them, more than 39 percent taxpayers have paid the municipal tax below one thousand rupees per annum. The contribution of own source revenue to total revenue has been fluctuating over the period of ten years. From the view point of municipal policy making advisors, integrated property tax seems more potential  source of revenue in comparison to other own sources. Tax compliance is to some extent satisfactory. Tax revenue covers the main segment of municipal own source revenues. From the policymaking advisors’ perspective, there is significant correlation (0.669) between service delivery fee and service quality at the one percent level (2-tailed) which indicates that service delivery fee imposed by the municipality for sanitation service is substantially satisfactory.

 Key Words:  financial management, Municipal revenue compliance, Municipal tax revenue, Own source revenue, performance, Revenue potentiality

1. Introduction

The key tax revenue sources of municipalities are usually integrated property tax, house rent tax, house and land tax, vehicle tax, business/profession/enterprise tax, advertisement tax, and commercial video tax in Nepal. Similarly, the major nontax revenue sources are; municipal property rental charge, service fee/charge, building permit fee,  and vehicle parking charge, etc. (LSGA, 1999). Whatever revenue collection method is adopted the municipalities must be transparent and it should be tolerable to the taxpayers (Study Team, 2005). Decision pertaining to the local revenue administration is vital for municipal decision making advisors and decision makers. In general, revenues collected in municipalities are, classified into two categories: internal and external. Internal revenues are also commonly categorized into two types and they are tax and nontax revenues (Wegner, 2008).

Developmental challenges are felt more at local government sphere, because of its closeness to where people live. However, huge service delivery backlogs require the mobilization of all spheres of government to work together in an integrated manner within the spirit of co-operative government. No single sphere of government can fulfill this role and mandate by working alone in isolation. (Tsatsire, 2008). The Government of Nepal has affirmative feelings on the increasing efficiency in service delivery, but it is hindered by several aspects, including lack of regular monitoring of performance and sound procurement plans, nonperformance of competitive tendering and lack of performance auditing as well. Unnecessary stress of expenditures toward the end of the fiscal year is the main reason of these factors (Ministry of Finance, 2008). For the local government benefit principle of taxation is more appropriate and for the central government ability to pay principle is suitable. But, the ground reality in developing countries, like Nepal, is vast difference. There are only a few tax bases in practice. Consequently, the municipality has become very weak to administer the tax. Actually, municipal taxes or fees are paid as a charge for the benefits obtained from the services. Therefore, benefit principle becomes workable only when benefit from local services can be approximately identified (Shrestha, 2009). The central government’s role is mainly regulatory, i.e., requiring the local government level to follow procurement regulations when purchasing transport services. It also plays a financial role by giving grants to the local government (Hansson, 2010).

Rewarding tax payers, positive peer attitude, offering a prize for best taxpayers and aim of low profits etc. are the encouraging factors of municipal revenue compliance. Likewise, inability to be aware of tax laws or insufficient tax education programmes, high rates of tax and non tax revenues, unfairness or chances of misuse of revenues, and complex tax administration procedures, etc. are the probable factors of noncompliance of revenue (Mumumba Omweri Marti, 2010). Especially in developing countries like Nepal, many researches are performed on taxpayers’ attitude towards municipality and the effect of individual interest on tax fraud as well as on other factors influencing tax compliance behavior (James O Alabede, 2011). The fiscal exchange theory of public finance hints that the existence of government expenditures may encourage compliance and the governments can boost compliance by making available goods or services that municipal people demand more efficiently. According to the political legitimacy theory, it is shaped by the degree to which citizens believe the municipality. In conclusion, we come across some indications that tax knowledge and awareness have a significant impression on revenue compliance point of view (Merima Ali, 2013). Tax source is an important own source revenues of municipalities. Both the benefit principle and ability to pay principle of taxation are the basic philosophies (BSBA, 2013). Revenue compliance is related to taxpayer’s perceptions of value for money and fairness in the sub-national revenue system and that appropriate enforcement can be productive (Smoke, 2013). Local revenue collection strategies are varied from municipalities to municipalities. But method of revenue collection unanimously, is an important decision for each municipality. Collection through contractors or public private partnership (PPP) model and direct collection by municipalities themselves are common methods. Whatever may be the methods of revenue collection both accountability and cost effectiveness are most considerable factors for taxpayers and municipalities themselves as well.

The main aims of the present study are to analyze the municipal own source revenue compliance and to explore its potentiality in Hetauda municipality in Nepal.

2. Review of Literature

2.1 Financial Management Performance

Generally, financial management performance depends on overall management performance of any organization.  Qualified personnel and their attitude, working environment, job satisfaction, managerial ability, nature of organization, management of resources, institutional capability etc. are the basic indicators of good management. The implementation of change and performance management, financial management and fiscal decentralization would be impossible if proper qualified staff were not provided to deal with these many complicated issues (Mughees Ahmed, 2012). Apart from accessing money, the effective management of financial resources has been indicated in this empirical study as well as in literature to be one of the primary challenges for municipalities. Municipal financial divisions firstly need to be staffed with the most suitable people. This means at management level as well as operational level. In addition to having suitable staff, any deviation from sound financial management practices should be avoided and in the case of its occurrence, be addressed as a matter of urgency. The issue of human resources is critical to the success of managing municipalities effectively (Plessis, 2013). Qualified and motivated staff are essential for the management of municipal finance efficiently.

2.2 Problems of Revenue Compliance

Many taxpayers pay little attention to tax matters and may not even view tax evasion as an ethical issue. Similarly, the ethical values of them may be much more tempered by situational requirements than unrealistic anticipation (Philip M.J. Reckers D. L., 1994).  Local governments have been able to played important roles in public service delivery and regional development as an integrated part of the overall government, even if not as completely self-contained and self-governing bodies (Kitayama, 2001). In most developing countries, budget execution and accounting processes are either manual or supported by very old and inadequately maintained software applications. This has had toxic effects on the performance of their municipal expenditure management systems, that are often not adequately appreciated (Khemani, 2006, p. 2). The type of government system appears to matter in the propensity to engage in corruption. The literature makes clear that the causes of corruption tend to be complex, but corruption thrives in the developing world because of the prevalence of weak public institutions, low levels of education attained by the majority of citizens, and the presence of an underdeveloped civil society. (Prier, 2007, p. 76). We have so many anxieties on the subject of the management of municipal finance in Nepal. Nepal government and Udle/GTZ (development partner agency for local governments of Nepal) have clearly stated (MLD, udle/GTZ, 2008) that there is no clear transparency for what the levied taxes are utilized. The taxpayers want to have better services for its taxes, but often they are not delivered by the municipal administration. Inter -agency coordination, conflicting laws, cartelling / syndicating of interest groups, low administrative efficiency, negatively motivated local staff, low tax effort, low effort on transparency (dissemination and mass communication), political instability, non tax compliance, and non- feasible local revenue sources are the major revenue mobilization problems (Nepal Government, 2010). Lack of well defined mission and comprehensive functional role, lack of proper structure for the development process, and low quality of staff are also the reasons of ineffectiveness of municipal administration (Adams, 2012, pp. 4-13). Regarding the measurement, explanation and control of tax evasion, we still need to fulfill many gaps in our understanding although we might have learned so many matters of finance and taxation. (Alm, 2012). A challenge for a study of taxpayer attitude is a lack of reliable data due to an individual’s reluctance to reveal one’s own non-compliance. (Merima Ali, 2013, p. 5).

2.3. Revenue Compliance in Nepal: Policy Perspective

Pertaining to the noncompliance of municipal tax by the citizen, Nepal government has made the provision under the Section 260 of Nepalese Local Self Governance Act (1999) that if any person does not pay any tax, duty or charge levied or contracted or any other amount due and payable to the local bodies, it shall be recovered by the District Administration Office as government dues. Likewise the government has mentioned the provision under the sub section 2(a &b) and 4 of section 165 of Nepalese Local Self Governance Act (1999) that if any one does not pay the taxes, fees, charges, tariffs contracted or imposed by the Municipality and any other amount due and payable to it, the municipality may take actions. Besides the provisions stated in the section 59 of Local Bodies Resource Mobilization and Management Manual (2012) issued by the Nepal Government, the local bodies have to fulfill all the conditions of budget authority, circulars and directions issued from the concerned ministries, and the provisions of minimum conditions and performance measures (MCPM) manual (MoFALD, 2012).

The Department of Revenue Investigation of Nepal has set the preventive module for revenue compliance. The preventive strategy includes compliance of the acts and rules, mobilization of flying and emergency squad, adherence of code of conduct of investigation officials, issuance of guidelines and orders, use of information technology etc. (Nepal Government , 2014).

2.4 Municipal Revenue Potentiality

Internal sources of revenue are more stable and consistent than external sources. External sources of revenue are less reliable source of financing because of wide fluctuation in nature. These sources, therefore, should have the supplementary in municipal financing. Municipalities must be authorized to expand their internal revenue base and modify the tax rate according to local situation so that they can collect adequate revenue to meet their financial needs (Thapa, 2004, p. 4). So far the static revenue collection trend of integrated property tax does not mean that the tax potential is already achieved. For instance, the incorporation of integrated property tax into the total revenue of municipalities was 8% in the FY 2005/06. In addition, governments should strive for high collection rates for all revenues owed and keep the payment-making process simple and easy for citizens (Larson, 2007, p. 34). The Government of Sri Lanka has perceived seriously regarding revenue manuals and revenue surveys to identify information about current and potential revenue sources that can help local officials keep taxes, fees and charges at levels intended by policymakers (Ministry of Local Government and Provincial Councils, 2008, p. 36).  Revenue compliance is the support of municipal people or prospective taxpayers to the revenue programs execution. It has always been an important issue in revenue administration for choosing the system of compliance that best serves the implementation of revenue policy. The knowledge for local governments about operation of an efficient tax administration is essential for local revenue improvement. In deciding the extent of compliance the determinant factor is information collection mechanism, a key consideration is relationship and trust with the taxpayers at the local level and monitoring. Clearly, individual taxpayers’ rights appear of greater importance. Potential harassment of taxpayers is also of an anxiety (MLD, 2010).

For increasing revenue compliance, municipalities must ensure that their job descriptions, competency requirements, advertisements, selection criteria and appointments are associated with the requirements set out in the regulations. (National Treasury Republic of South Africa, 2011). Municipalities are fully responsible for formulating and executing local or municipal policies and programmes in partnership with other local governance performers and they have substantial roles in bringing local actors together to form a common vision of how to take action to issues raised in a coordinated way (MLD, 2012). Nepalese municipalities still have a revenue potential increase of almost 60%. It is the fact that there is high resistance of taxpayers and integrated property tax in many municipalities is not full-fledged.  Missing revaluations of tax rates and the potential of integrated property tax in Nepal is quite obvious. The high taxpayer resistance is based on the mistrust against the local administration (MLD, udle/GTZ, 2008, p. 9). Tax compliance is obviously critical for effective municipal revenue generation. There is limited empirical evidence, but available analysis indicates that compliance can be improved or deteriorated under decentralization. The effect seems to depend on economic conditions, citizen attitudes about municipalities, and differences in municipal or local bodies’ political dynamics, including the willingness and ability of municipalities to administer the tax code (Smoke, 2013 ). So many researches are required for moderating effect of risk preference on relationship between taxpayer’s attitude towards tax evasion and his/her compliance behavior to check the consistency of the results produced by this study on this moderator. (James O. Alabedi, 2013).

The main sources of own revenue for municipalities are usually property taxes, business licenses, market fees and various user charges. They have the potential to provide substantial and reliable revenue if well administered, but in practice all have serious drawbacks (ICTD, 2013).

  1. Research Area, Design and Methodology

3.1 Research Area

Hetauda is a municipality and district administrative headquarter of Makawanpur and has been an industrial district for the last forty years. It is situated in the central southern part of Nepal through which east-west highway from Mechi to Mahakali and north-south road linked with capital city Kathmandu to Raksaul (India) is crossed. As stated in the population monograph report of CBS, Hetauda municipality is inhabited by nearly 84 thousand 6 hundred 71 people (CBS,Nepal, 2014).

( Figure – 1, Map of Makawanpur District, Source: NeKSAPInfo, 2013)

3.2 Research Design and Methodologies

In Nepal, the formation processes of Metropolitan and Sub- metropolitan cities are different than municipalities. Only fifty three municipalities are the population of the study out of fifty eight. Four sub- metropolitan cities and one metropolitan city (Kathmandu) are not able to be representative samples of all the municipalities. So, the study excluded these big five from the study population. In this study, non-probability sampling technique was applied for the selection of municipality and Hetauda municipality was selected as a sample from the Central Development Region (Hill Ecological Belt) of Nepal. Analytical and descriptive research design has been adopted to analyze the compliance of municipal own source revenues and to find its potentiality in Hetauda Municipality.

Municipal taxpayers and policy making advisors were the respondents of the study and they were selected in random basis. In total, 34 samples were taken from municipal policy-making  advisors including several local political party members, CCI (Chamber of Commerce and Industries) members, civil society members, and others  and 134 samples were taken from municipal taxpayers (business, agriculture, and service sectors) in Hetauda municipality.

A 5- point Likert Scale and dichotomous self administered questionnaires were developed. A total of 221 questionnaire forms (170 of taxpayers and 51 of policy making advisors) were used, out of which 189 (148 of taxpayers and 41 of policy making advisors) were effectively returned from the respondents. The successful questionnaire return rate of both the taxpayers and municipal policymaking advisors was 85.52 percent. Sixteen (12 of taxpayers and 4 of policy making advisors) questionnaires were incomplete out of the successful returns. On the basis of first come first response, only 168 questionnaires (134 questionnaires of taxpayers and 34 questionnaires of policy making advisors) were authorized for the research study purpose out of 173 properly answered questionnaire forms.

A cross sectional method of survey was applied for collection of primary data and secondary information were obtained from Hetauda municipality, MoFALD ( Ministry of Federal Affairs and Local Development), District Development Committee (DDC) Makawanpur, Urban Development Through Local Efforts (udle/GTZ) and Local Bodies’ Fiscal Commission of Nepal. Relevant articles, journals, books, as well as published and unpublished materials and performance of the associated organizations working with municipalities were accepted for the macro analysis of the research. For the analysis of secondary data, various analytical tables have been set up and different analytical tools of statistics including SPSS-20 software have been used for the analysis of primary data.

This research study has been limited to Hetauda municipality because of time and cost constraints.  So, the results concluded from the primary and secondary data taken from the municipality may not be representative to all classes of municipalities (i.e. Metropolitan and Sub-metropolitan Cities) in Nepal.

  1. Results

There were total 168 respondents (134 municipal taxpayers and 34 municipal policy advisors), among them 71.5 percent respondents were male and female respondents were 28.5 percent. Out of 34 municipal policy advisors, thirty one (more than 90%) persons were males. Out of them, 19 respondents (55.90%) were local political party members, 8 respondents (23.52%) were CCI Members, and 7 respondents (20.58%) were civil society members and others. Likewise, more than 57 percent taxpayer respondents were engaged in business activities and about 9 percent taxpayer respondents were involved in agriculture sector. Similarly, about 34 percent taxpayer respondents were involved in government and non government services. Both types of respondents’ views have been collected to analyze the municipal tax compliance and to find out the potentiality of own sources revenue of Damak municipality. On the basis of questionnaire survey conducted in February to May 2014, the scenario of municipal tax compliance, potentiality of revenue, and expressed reasons for non compliance municipal revenues are presented and

past 10 fiscal years. Among them, house rent tax has the highest growth rate (i.e. 34.19%) during the study period. In the same way, integrated property tax (IPT)/house land tax has lowest (11.03 %) growth rate in the same period. In comparison to the collection amount, the performance of integrated property tax (IPT) is far better than other tax and nontax revenues. Likewise, building permit fee is the second largest own revenue source of Hetauda municipality during the study

municipality. In an average, the salary expense has increased 11.01 percent in the study period.  Likewise, both the administrative expenditure and total expenditure have increased 10.56 percent  and 27.21percent respectively. The growth rate of salary expenditure indicates that the growth of other administrative expenditure is lower than salary expenditure which indicates that either Hetauda municipality has been suffering from overstaffing or exercising to reduce overheads.

Figure: 1(Financial management performance Analysis)

( Fiscal Year 2003/004 to 2012/013)

(Source: Annual Reports of Ten Fiscal Years of Hetauda Municipality Office)

Above figure (Figure: 1) illustrates the financial management performance of Hetauda municipality in the fiscal year 2003/004 to 2012/013. The average grant receipt performance is more than 64.47 percent, whereas average own source revenue receipt performance is only 5.98 percent. The average total revenue receipt performance and the average administrative performance are   21.31 percent and 10.56 percent respectively. The performance of administrative expenditure is nearly double than own source revenue collection performance. It signifies that Hetauda municipality should to increase revenue administration power to cope with administrative e

The above table (Table: 3) depicts that 33.6 percent taxpayers of Hetauda municipality have paid municipal taxes below than Rs.1000/- per year. Out of 134 taxpayers, 19 taxpayers have not paid the municipal tax by showing various causes. Besides these spoken or latent causes, the municipal policy making advisors and tax payers have expressed the possible reasons of evasion of tax and non tax revenues.

The following figure (Figure: 2) presents the reasons of municipal tax evasion by the potential taxpayers. Out of 19 non taxpayers, 7 non taxpayers (36.8%) have not paid the tax in Hetauda municipality by showing the cause of lack of information.  Furthermore, 4 municipal people (21.1%)  have not paid the tax  by considering  municipal tax is secondary tax.  High tax rate, chances of tax rebate in future and inability are the reasons for tax evasion as expressed by the 8 citizens of Hetauda municipality.

The above figure (Figure: 3) displays the major own source revenue potentiality in Hetauda municipality. All the tax and nontax revenues are potential sources in Hetauda municipality from the view point of taxpayers. Comparatively, business/ profession tax is more potential.

Figure: 4    (Policymakers Views on Potentiality of Major Own Source Revenue)(Sources: Field Survey Report, 2014)

The above figure (Figure: 4) depicts the degree of potentiality of major own sources of revenue from the view point of municipal policy making advisors. Integrated property tax is highly potential revenue source of Hetauda municipality from the policy perspective. Similarly, service fee and building permit fee are potential sources of revenue.

Figure: 5

Service Quality (Comparative Views)

(Source: Field Survey Report, 2014)

The above figure (Figure: 5) shows that the comparative views of taxpayers and municipal policymaking advisors on municipal service quality. From view point taxpayers and municipal policymaking advisors, municipal service quality is moderate and strong respectively in Hetauda municipality. It indicates that they have not similar observations on municipal service quality.

Figure: 6 ( Comparative Views on Municipal Service Delivery Fee)

(Source: Field Survey Report, 2014)

The above figure (Figure: 6) reveals the integrated views of taxpayers and municipal policymaking advisors on service delivery fees levied by Hetauda municipality. From the view point of taxpayers and municipal policymaking advisors, municipal service delivery fee is partially satisfactory and satisfactory respectively in Hetauda municipality. It signifies that they have different feelings on service delivery fees imposed by the municipality. From the policymaking advisors’ perspective, there is significant correlation (0.669) between service delivery fee and service quality at the one percent level (2-tailed).

  1. Discussion

The average growth rate of house and land tax/integrated property tax -IPT is 11.03% in the fiscal year 2012/013 to 2003/004.  In comparison to the collection amount, the performance of integrated property tax is far better than other tax and nontax revenues. Likewise, building permit fee is the second largest own revenue source of Hetauda municipality during the study period. Therefore, Hetauda municipality should to set further strategies primarily for the collection of integrated property tax and building permit fee efficiently, and other potential revenue sources.

The growth rate of total administrative expenditures is lowest than the growth rate of salary expenditure (i.e. 10.56 % < 11.01%).  Likewise, the growth rate of development expenditure (social program and capital expenditure) is higher than the growth rate of administrative expenditures of Hetauda municipality during the study period.

The performance regarding the different types of central grants is more than 64 percent, whereas own source revenue performance is about 6 percent. The average total revenue performance and the average administrative expenditure performance are 21.31 percent and 10.56 percent respectively. According to the report of  udle/GTZ, the performance of own source revenue to total revenue of the fiscal year 2006/07 in Hetauda municipality was only 28.54 percent which was much lower than set standard i.e.60 percent (udle/GTZ, 2008). It signifies that Hetauda municipality has to make additional plan to reduce the performance gap.

19 respondents (14.2%), out of 134 have not paid the municipal tax by showing various causes.

Out of 19 non taxpayers, 7 non taxpayers have not paid the tax in Hetauda municipality by showing the cause of lack of information.  Furthermore, 4 municipal people have not paid the tax by considering municipal tax is secondary tax.  High tax rate, chances of tax rebate in future and inability are the reasons for tax evasion as expressed by the 8 repondents/citizens of Hetauda municipality. The results indicate that individual moral beliefs are highly significant in tax compliance decisions (Philip M.J. Reckers D. L., 1994)

All the tax and nontax revenues are potential sources in Hetauda municipality from the view point of taxpayers. Comparatively, business/ profession tax is more potential. Integrated property tax is highly potential revenue source of Hetauda municipality from the policy perspective. Similarly, service fee and building permit fee are potential sources of revenue. Property tax is at present and will most likely continue to be an important source of revenue in urban councils (Fjeldstad, 2000). House and land tax is the second largest revenue source of all the municipalities of Nepal (Silwal, 2012). It can be hypothesized that the tax revenues will be spent more in accordance with taxpayers’ preference, which in turn increases tax morale (Schneider, 2006). When taxpayers get feedback from their governments in connection with the use to which their taxes are put, their voluntary compliance levels may increase as a result (Adafula, 2013, Sep 19)

From view point taxpayers and municipal policymaking advisors, municipal service quality is moderate and strong respectively.  It indicates that they have not similar observations on municipal service quality. Likewise, from view point taxpayers and municipal policymaking advisors, municipal service delivery fee is partially satisfactory and satisfactory respectively in Hetauda municipality. It signifies that they have different feelings on service delivery fees imposed by the municipality.

6. Conclusion and Recommendations

Tax revenue wraps the major portion of own source revenues of Hetauda municipality. This study recaps that the potentiality of municipal own source revenue and its compliance are different matters. About forty percent taxpayers of Hetauda municipality have paid minimum amount of tax ( i.e less than Rs.1000/- per annum), which indicates that either the tax administration power is low or there is lack of tax education and revenue mobilization plan. To some extent, revenue compliance is satisfactory even though the rate is minimal. The expectation of the most non taxpayers is that there is probability of tax rebate by the municipality in future, which clearly shows that the municipality has worked out such type of policies in the past.

Integrated property tax is highly potential own source revenue and business/enterprise tax, house rent tax, building permit fee and service charge are potential own source revenues of Hetauda municipality. The contribution of tax revenue to the own source revenue and the total revenue is not consistent within the study period. Municipal service quality is moderate and likely to be strong and service delivery fee for municipal services is partially satisfactory in Hetauda municipality from the view point of taxpayers.

On the basis of the above conclusions, the study recommends the following:

  1. Solidarity on potential local revenue collection with revenue mobilization plan and the municipal tax compliance campaign should be carried out parallel.
  2. Municipal tax and nontax revenue education programme should be launched effectively.
  3. Tax administration power should be enhanced.
  4. Tax rate should be reworked regularly

7. Acknowledgement

I am grateful to the Prof. Dr. Kamal Das Manandhar for his regular support and guidance to me. I also thank to the lecturers of Makawanpur Multiple Campus Hetauda, Mr. Sangam Chaulagain, Bhaskar Chandra Adhikari and Mr. Yam Bahadur Silwal for their gracious support.  Also I am thankful to Mr. Pashupati Babu Puri (Executive Officer, Hetauda Municipality) and all the respondents for their amiable cooperation.

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The Relationship between Risk Management Committee Characteristics and Modified Audit Opinion in Malaysia

Suhaimi Ishak

Abstract

The purpose of the study is to examine the relationship between risk management committee (RMC) characteristics and modified audit opinion in Malaysia among the non-banking and financial companies listed in Bursa Malaysia. Data is collected from the annual reports of a sample of 300 companies for a period of 2004 until 2009. Both descriptive and multivariate analyses are employed to address the research objectives. The results indicate that separate RMC is negatively related with acceptance of modified audit opinion. Besides, the larger the size of RMC and the higher number of overlapping status for RMC’s members, it probably will higher the acceptance of modified audit opinion. Further, modified audit opinion that has been received at prior financial year is likely to receive the same opinion at current financial year. However, the status of auditor whether big or small firm is not related to modified audit opinion. The findings provide empirical evidence on the development and importance of RMC and its characteristics for the quality of companies’ financial reporting.

Keywords: risk management committee; risk; modified audit opinion; Malaysia

 

ntroduction

The global economic downturn has exposed the poor risk management practices of many companies and organization (Baker, 2011). At the Corporate Governance Week 2010 and 2011 which jointly hosted by Security Commission (SC) of Malaysia and Bursa Malaysia (BM), the both chairmen of these regulatory bodies stressed about the risk management process and board’s awareness on that process as a key element in the corporate governance practices in a company. The remark was pointed to the board as a key person in establishing and implementing well of risk management process in the company. The remark also is a signal to the board of director (BOD) to give more attention to the company’s risk management profile and the formation of committee at the board level that concentrate on the risk management profile is one of the good initiatives. Again, the deputy executive of SC at the ASEAN Audit Regulators Group Forum 2013 in Kuala Lumpur has stressed about the auditors to consider seriously when assessing the risks surrounding clients’ financial statements. Meanwhile, the objective of the study is to examine the relationship between the risk management committee’s characteristics (separate RMC, RMC size and RMC overlapping) and modified audit opinion issued by the auditors in Malaysia. We seek to ascertain whether RMC enhance the quality of financial reporting particularly on risk profile of the organization. We apply the modified auditor opinion as measure to the quality of financial reporting. In Malaysia, under the best practices in corporate governance of Malaysian Code on Corporate Governance (MCCG) (2007) and (2012) (Revised) clearly stated the board has principle responsibility for “identifying principal risks and ensuring the implementation of appropriate systems to manage these risks”. BOD has the responsibility in setting the strategies and creating the environment for effective risk management system in a company and the existence of RMC is a good step for the effective of the system (Yatim, 2010). The formation of RMC with focusing on the broad areas of risks including internal and external risks will help company in managing those risks without depending only on the audit committee. Some expertise on the company business’s external environmental are needed in RMC rather than depending on audit committee members which have expertise in internal control and accounting transactions. For example, RMC members with expertise on business opportunity and investment will evaluate the company’s viability in future and reducing the risks of going-concern. This situation will reduce the acceptance of modified audit report by the company. The job profile of RMC with focusing on broad areas of risks can reduce the exposure of risks by the company including the external risks such as going-concern risks and competition risks. Consequently, the probability of receiving the modified audit report particularly on risks issue is less due to the effective managing the risks exposure to the company. Theoretically, this situation creates a linkage between RMC and modified audit report and further on the quality of financial reporting.

To be an effective committee, RMC as a board committee should has the strong attributes whether in term of its composition (board size and director’s type), board process (frequency of meetings) and board characteristics (knowledge, skill, experiences, academic qualification, relevant training and multiple directorships). The strong composition of RMC, its process and characteristics is parallel with the argument in resource dependency theory. The theory as proposed by Preffer and Salancik (1978) argued that board (RMC) as a crucial resource to the organization and also acted as a bridge between organization and external link.

The formation of separate RMC is still voluntary in most countries in the world including Malaysia and the function of risk management sometimes is combined with Audit Committee (AC) or directly under the Board of Director (BOD) of the company (Subramaniam, McManus & Zhang, 2009). This study tries to relate whether the existence of separate RMC probably will reduce the issuance of modified audit opinion by auditor. Board size is prominently used in corporate governance studies (Dalton, Daily, Johnson & Ellstrand, 1999) and viewed as an important element of company’s governance quality (Musteen, Datta & Kemmerer, 2010). For the risk issues, the smaller board is expected to gain better oversight function due to the less difference of ideas and approaches. Ong and Wan (2008) argued that larger board may have conflicting in executing and maintaining the board effort norms as the oversight function. They may have conflicting among them for the monitoring and decision made. However, for the company’s business and industry risk oversight function, the vast knowledge and experiences of board’ members are needed (Dalton et al., 1999) and the knowledgeable and experienced directors would be gained through outside as the independent non-executive directors who are not involved with the company’s management function and duty. Some companies have limited members of BOD. The same directors might hold several positions as members of some sub-committee of BOD. The member of RMC might be a member of remuneration or audit committee and the overlapping of directorship by directors is view as the insight to the corporate governance mechanism (Zajac & Westphal, 1996).

The structure of this paper is as follows. The next section provides a brief review of past research and hypotheses development. Followed by research methodology section, analysis of result and discussion. The conclusion and recommendation is presented in last section.

Previous Research and Hypotheses Development

The study on the association between risk management committee’s characteristics and modified audit opinion remains scant and limited. However, some previous study have examined the relationship between board’s characteristics or audit committee composition and audit opinion (see Carcello & Neal, 2000; Farinha & Viana, 2009; Masyitoh & Adhariani, 2010; Wenyao & Qin, 2007; Pucheta-Martinez & Fuentes, 2007). The role of RMC in risk management is relatively unexplored and the literature on that field is limited and scant. Tufano (1996) added the lack of research in risk management committee was due to the lack of meaningful data on risk management practices. Again, Subramniam and Carey (2011) reported that the establishment of formalized system of risk management in organization is more recent development. The establishment of RMC is seen to be a complement to the oversight function of board of director and might be able to reduce the burden of task by audit committee. Zaman (2001) suggested it is impossible to expect the audit committee to implement more than high level review given their lack of expertise and time. It was also supported by Fields and Keys (2003) that RMCs have gained popularity as an important oversight committee. The argument is parallel with agency theory that RMC as a board committee should acted on behalf of the shareholders at all. Furthermore, Subramaniam et al. (2009) added that the existence of separate RMC with focusing on the risk profile was also able to increase the quality of internal monitoring in relation to risk management. Thus, the probability of the company to receive modified audit opinion is less and the first hypothesis is generated as follow:

H1:      The existence of separate or distinct RMC is negatively associated with the probability that the company will receive modified audit report.

A smaller board size is seem to be better for oversight responsibility to monitor financial reporting and related internal control (Farinha & Viana, 2009). However, in their study, the result showed the insignificant relationship between board size and the company to receive modified audit report. It means a board size seems to have no influence on modified opinion. The result is consistent with the earlier study by Wenyao and Qin (2007) which found insignificant relationship between board size and audit opinion and the characteristic of board size was irrelevant to the determinant of audit opinion issued. However, Xie, Davidson and Dadalt (2003) reported the negative relationship between board size and earning management activities. In term of accounting fraud, Beasley (1996) found a positive relationship between the number of board members and the occurrence of accounting fraud. In resource dependency perspective, Boyd (1990) argued that sometimes the small board size is due to the scarcity of resource or competitive uncertainty. The earlier study by Pucheta-Martinez and Fuentes (2007) found a positive relationship between the audit committee size and the company to receive qualified audit opinion. Therefore, the study suggests that RMC size can influence on the probability that modified audit report will be issued by the auditor. A smaller RMC size is better for directors’ monitoring functions and less probability that the auditor will issue modified audit report. This situation leads to the second hypothesis:

H2:      RMC size is positively associated with the probability that the company will receive modified audit report.

One director might be a member of twice or more boards’ committees. A member in the audit committee might be a member of RMC. The overlapping of directorship by directors is view as the insight to the corporate governance mechanism (Zajac & Westphal, 1996). Bettenhausen and Murnighan (1985) argued that the experience and knowledge from the other board membership can be brought to the other board committees and the focal and change can be performed. While Alderfer (1986) mentioned that the multiple board membership experience leads to the affecting board decision it is consistent with resource dependency perspective that board as resource in organization should has a pool of experiences. Most importantly and in agency view, several board membership experiences increased the board oversight control on behalf of shareholders (Mizruchi, 1992). The overlapping of members among boards’ committees gives advantages to the BOD entirely because all the committees are the board committee and not related to management function (Carcello & Neal, 2000). The result of each of committees is needed each other. The poor performance of a company is caused by the less directorship member of directors (Gilson, 1990) and the argument was supported by Kaplan and Reishus (1990) that the less directorship member by directors contribute to the emergence of financial distress company. Thus, the next hypothesis is as follow:

H3:      RMC overlap is negatively associated with the probability that the company will receive modified audit report.

 

 

Research Methodology

We use the logistic regression analysis to examine the relationship between modified audit opinion and the variables proposed for the characteristics of RMC. The model used to test the hypotheses is as follows:

MA= β0 + β1 SEPRMC + β2 RMCSIZE + β3 RMCOVER + β4 PRAUREP + β5 BIG4 + ε

where :-

 

 

Variable Definition and Measurement

According to Aren et al. (2009) there are five types of audit reports, namely standard unqualified or clean audit report, unqualified with explanatory paragraph or modified wording, qualified, adverse and disclaimer audit report. For the purpose of this study, the unqualified with explanatory paragraph (modified wording), qualified (except for), adverse and disclaimer audit report are classified as modified audit opinion. If a company received modified audit report, the data is valued as ‘1’ in the worksheet and if a company received the audit report other than modified audit report, the value of ‘0’ is coded accordingly.

Researcher considers the existence of separate RMC if the committee has a single committee with title of ‘risk management committee’ without any combination with any other committees including audit committee. Any combination of task and responsibility of risk management with other committees’ task are considered no existence of separate RMC (Combined RMC). For the purpose of this study, if the company has a separate RMC, it is coded as ‘1’ and if a company has not a separate RMC, the value of ‘0’ is coded. This criterion has been used by previous studies such as Subramaniam et al. (2009) and Yatim (2009).

RMC size is the total number of RMC’s members sitting on the committee until the end of financial year. A member will be considered as a RMC’s member if the appointment as member is at least six months and above. If the appointment as RMC’s member is below six months or the resignation is above six months from the financial year end, he or she can not be considered as RMC’s member. (see Farinha & Viana, 2009; Pucheta-Martinez & Fuentes 2007).

RMC overlaps refer to the dual or more functions of RMC’s members on the different board committees. A Member of RMC might be a member of audit committee or other board committees at the same time. For a company, a member of RMC or any other board committees has become a member of other board committees such as remuneration committee and audit committee at the same time but not all the members having such situation. For the measurement purpose, researcher compares the composition of RMC with all the other board committees’ composition to identify the members of RMC with dual or more functions at the same time. Then, the total numbers of RMC’s members with dual or more function are divided by the total number of RMC’s members. The figure is used for this study. This measurement has been applied by Carcello and Neal (2000).

Prior audit report refers to the audit report that a company has received for prior financial year. The researcher has read the independent auditor report that is located at the end of the annual report booklet. The researcher has carefully read the report starting from the first sentence until the last sentence of the report in order to identify the type of the audit report. For the measurement purpose, the researcher coded a dummy of ‘1’ if the company received modified audit opinion for prior financial year audit and a dummy of ‘0’ if the company received clean audit report for prior financial year audit. This measurement has been used by previous study (Pucheta-Martinez & Fuentes, 2007; Carcello & Neal, 2000).

Big 4 refer to the four largest international audit firms in the world. They are PricewaterhouseCooper, Deloitte Touche Tohmatsu, Ernst & Young and KPMG. The researcher looks at the bottom of auditor report sheet to identify the audit firm audited the company. The name of auditor and audit firm stated at that side. If the audit firm is one of the Big 4, the data is coded as ‘1’ and if the other audit firms or not a Big 4 audited the company, the data is as ‘0’. More studies have used this criterion for their researches (Yatim, 2010, Kabir, Sharma, Islam, & Salat, 2011; Farinha & Viana, 2009; Pucheta-Martinez & Fuentes, 2007).

Data Collection and Sampling Procedure

The population frame for this study is all the public-listed companies excluding banking and financial institutions listed in Bursa Malaysia’s website from the period of financial year ended 2004 until 2009. Based on the data gathering through the Bursa Malaysia’s website, there are approximately more than 130 companies with modified audit report for the same period (2004-2009) and there are more than 200 companies which have a separate or a stand-alone RMCs disclosure for the said period (Bursa Malaysia’s website, 2012; Yatim, 2009; 2010). Banking and financial institutions are omitted from the sample as the nature and regulations of these firms are significantly different from non-financial companies. The public-listed companies are chosen for this study. Public-listed companies have published the annual report that publicly available and can be accessed through the Bursa Malaysia’s website.

A match sampling approach is adopted as a control procedure (see Ballesta & Garcia-Meca, 2005; Wenyao & Qin, 2007; Sekaran, 2003). Firstly, the researcher selects the companies with modified audit report for the period of study (2004-2009). Then, they matched to the control samples which have the clean audit report based on the conditions that paired companies are in the same industry, most similar in companies’ size (total assets) and in the same period of financial year (Ballesta & Garcia-Meca, 2005; Wenyao & Qin, 2007). To keep reliable and independence, once a control company has been matched to the corresponding company in the test sample in particular year, it is not allow to be matched again with another company (test sample) in another year (Ballesta & Garcia-Meca, 2005). Besides, any company with never stated of whether separate or combined RMC or risk management matters, it is dismissed as the subject in the sample’s list. Lastly, in this study, there are 150 samples with modified audit opinion are gathered and are matched with 150 samples with clean audit opinion. Therefore, the total number of samples in this study is 300 samples.

 

 

 

 

Analysis of Result and Discussion

Descriptive Statistics for Samples

Table 1 presents the descriptive statistics result for all the companies, modified audit opinion companies and clean audit opinion companies together with the result of t-test. For variable of Separate RMC (SEPRMC), the result shows an average of 13 per cent from the samples have the separate RMC for all companies but in modified audit opinion companies, the result shows only 6 per cent of the samples have separate RMC while for clean audit opinion companies the result shows an average of 20 per cent of the samples have the separate RMC. As expected earlier, the percentage of companies with separate RMC is larger in clean audit opinion companies due to the characteristic of this separate RMC and its function. For the result of Independent t-test, it shows statistically significant for variable of Separate RMC with level of p < 0.01. It is means that there is a significant difference in average for this variable between two different sets of samples (modified and clean audit opinion companies).

Variable Definition:

For RMC Size (RMCSIZE), the result for three categories of companies (all, modified and clean companies) reveals quite similar with average three members. However, in the modified audit opinion companies, two members are recorded in minimum and maximum with seven members of RMC. It is different in clean audit opinion companies, the result states between three and six RMC members. The difference result indicates that in modified audit opinion companies sometimes have very small members of RMC and maximum can be with quite high. Yet, in t-test, the result reveals statistically insignificant for variable of RMC Size.

The result of descriptive analysis also reports for the variable of RMC Overlapping (RMCOVER). All the groups of samples including all companies have minimum with zero per cent of RMC members have overlapping status or do not hold some other board committee members in the same company. While 100 per cent in maximum for the RMC members with overlapping status for all the categories of samples. In average, the modified audit opinion companies recorded with 77 per cent of RMC members with overlapping status and only 72 per cent recorded in group sample of clean audit opinion companies. This difference is statistically significant at weak level (p < 0.1) as showed in the result of t-test.

For the control variable of Prior Audit Report (PRAUREP), the group of all companies recorded 34 per cent in average for the companies received modified audit report for prior year. The descriptive analysis also shows a larger value for the modified audit opinion companies with average of 67 per cent of the samples have received modified audit report for prior year whereas only 0.7 per cent of samples have experienced the said situation for the group of clean audit opinion companies. The huge difference is already expected by the researcher and the result of t-test also reveals the statistically significant at strong level (p < 0.01) for this difference of mean.

Lastly, for Big4 (BIG4), the result of mean for the sample of modified audit opinion companies is at 47 percent whereas for the sample of clean audit opinion companies is at 41 per cent which mean that 41 per cent of the companies in clean audit opinion companies audited by Big 4 audit firms. However, the mean difference for this variable is not statistically

(Pearson Correlation Matrix) for Variables

Table 2 reports the result of correlation among the variables. The correlations are quite low, generally below 0.3 except for a pair of Modified Audit Opinion (MA) and Prior Audit Report (PRAUREP) which are correlated at 70 per cent with significant at level of 0.01. It is means that MA and PRAUREP have strong relationship with assumption of that PRAUREP has major effect on MA. Besides, Separate RMC also has an effect on MA with correlation by 21 per cent and it is significant at 0.01 levels. The other variables that correlated are between Separate RMC and RMC Size, Separate RMC and PRAUREP, RMC Size and RMC Overlap, RMC Size and Big4. The result also reveals that there is no higher correlation with more than 0.85 which means no multicolinearity problem exist in the samples.

 

 

 

Logistic Regression Analysis

Table 3 reports the logistic regression result. The model consists of independent variables (characteristics of RMC) and control variables with Modified Audit Opinion as dependent variable. The result reports the level of correct classification (the percentage of correct predictions) at 83 per cent while Cox & Snell R Square and Nagelkerke R Square report at 49 per cent and 66 per cent respectively. The Chi-square’s test reports at 203.123 and the model is significant at level of 0.00 (p < 0.01). All the independent variables (characteristics of RMC) are statistically significant while for the control variables, only the variable of PRAUREP is significant.  All the variables are significant at expected direction except for variable of RMCOVER which is significant at positive direction.

 

SEPRMC          = 1, if the existence of separate RMC, otherwise 0

For hypothesis of Separate RMC (SEPRMC), it is statistically significant at level of 5 per cent and following the proposed direction with negative sign. For coefficient, SEPRMC reports at more than 200 per cent and it means that if a company has separate RMC, the probability of the company wills not to receive modified audit opinion is at 200 per cent. The examples of companies that have separate RMC are Opcom Holdings Berhad, Bolton Berhad and Genetec Technology Berhad. The result supported the argument by Subramaniam et al. (2009) that the existence of separate RMC with focusing on the risk profile is also able to increase the quality of internal monitoring and quality of financial reporting in relation to risk management. Consequently, the likelihood of the company to receive modified audit report particularly for risk issues is less. Meanwhile, Harrison (1987) reported that RMC is seen to specifically enhance the accountability of the board as it provides an independent oversight of various board activities especially on the risk issues. Due to the contribution of the RMC, Fields and Keys (2003) argued that RMC has gained popularity as an important oversight committee even though most of the countries in the world are still not to reserve as mandatory requirement to form the separate RMC in a company. The result is supported the proposition of first hypothesis (SEPRMC) that the existence of separate RMC will influence the company not to receive modified audit report. This result is also consistent with the requirement under MCCG 2007 and 2012 which clearly stated that the board has principal responsibility on the risk process including the identification of principal risk until the implementation of appropriateness system to manage those risks. Consequently, the formation of separate RMC as a board committee is able to enhance the effectiveness of risk oversight function by BOD as reported in the result of this study which the existence of separate RMC give impact on the company not to receive modified audit opinion.

For second hypothesis (RMCSIZE), the result also shows a statistically significant at level of 10 per cent with positive direction as expected earlier. For coefficient, the result present at 69 per cent with indication that if a company with higher number of RMC size, the probability it will receive modified audit opinion is at 69 per cent. The result is consistent with the earlier study by Beasley (1996) which found a positive relationship between the number of board members and the occurrence of accounting fraud. However, the result is inconsistent with the finding study done by Xie et al. (2003) that there is a negative relationship between board sizes and earning management activities. While Wenyao and Qin (2007) found insignificant relationship between board size and audit opinion. A big size of committee cause some members ignore their responsibility and assume the other members will look for the duty and responsibility. As a conclusion for this hypothesis, the size of RMC has influence on modified audit opinion.

Besides, there is also a significant (p < 0.05) positive association between RMC Overlapping (proxy by RMCOVER) and modified audit opinion received by the company. The statistical result shows more than 170 per cent for beta coefficient for this variable meaning that if there are RMC members with overlapping status, more than 170 per cent of the company will receive modified audit opinion. However, the expected sign is negative association between RMC overlapping and modified audit opinion. Some reasons would explain the situation and even though the experience and knowledge from the other board membership can be brought to the other board committees and the improvement can be performed as reported by Bettenhausen and Murnighan (1985) but the burden of tasks should be borne by the RMC members. They might not be able to perform well at a board committee (RMC) even they have successful at the other board committees. They also have to spend a lot of time to the several board committees and the concentration on a RMC that focus on risk profiles is at a minimum of time. The other reason might be due to the knowledge gained through multiple board membership that lead to the board oversight control (Mizruchi, 1992) and they have more aware on the risk issues. The highest awareness on risk issues probably gives highest attention by auditor before the modified audit opinion will be issued. As a conclusion, the result provides support to this hypothesis

For control variable, Prior Audit Report (proxy by PRAUREP) is statistically significant (p < 0.01) and with a positive sign as proposed earlier. For coefficient, it is recorded more than 600 per cent and it indicates if a company got modified audit report at prior year, it is 600 per cent likelihood of the company will receive modified audit report in current year. The result is consistent with some previous researches as performed by Pucheta-Martinez and Feuntes (2007) and Mutchler, Hopwood and McKeown (1997). They found that modified audit opinion that has been received at prior year has higher potential to be received at the same in current year. For companies those received modified audit opinion at prior year, they might not be able to solve the issues at current year. Hence, they have probability to receive the same modified audit opinion at current year. This situation leads to the issuance of same modified audit opinion by the auditor which the old issues are concerned by them. As conclusion from this result, Prior Audit Report has a strong association with modified audit opinion that issued by the auditor.

For Big 4 (BIG4), the result states statistically insignificant and there is no relationship between Big 4 audit firms and modified audit opinion. The finding indicates that Big 4 audit firms have no influence on the issuance of modified audit opinion by the auditor. This situation is consistent with study done by Farinha and Viana (2009) that Big 4 audit firms have no significant relationship with modified opinion issued by the auditor.

Conclusion and Limitations

The result from the statistical analysis has shown some significant findings. Firstly, the result documented that the existence of separate risk management committee (RMC) affects the issuance of modified audit opinion by the auditors. The finding contributes to the knowledge and literature that the existence of separate RMC has implication on modified audit opinion specifically for Malaysian environment. The existence of separate RMC probably will reduce the issuance of modified audit opinion. Consequently, the formation of separate RMC as a board committee is able to enhance the effectiveness of risk oversight function by BOD as reported in the result of this study which the existence of separate RMC give impact on the company not to receive modified audit opinion. The regulators and policy makers have to consider for this situation. The formation of separate RMC should be mandatory in future as to perform the risk oversight function at board level.

Secondly, the size of RMC probably affects the issuance of modified audit opinion. The big size of RMC probably the issuance of modified audit opinion is high. The company and regulators have the choice whether to form the big or small RMC since this board committee has influence on modified audit opinion.

The regulators and policy-makers should also be aware on the overlapping status of board members. They have to look at the number of board committees sited by the board members. Some board members sited for more than two or three board committees in the same company at the same time. They also have to spend a lot of time to the several board committees and the concentration on RMC that focus on risk profiles is at a minimum of time. The result of this study shows the higher status of board overlapping will probably higher in acceptance of modified opinion.

Lastly, the acceptance of modified audit opinion by a company at prior accounting year has effect on the acceptance of same modified opinion at current year.  For companies those received modified audit opinion at prior year, they might not be able to solve the issues at current year. Hence, they have probability to receive the same modified audit opinion at current year.

This study is like as the other studies which has the limitations. This study used the secondary data as the samples which the company’s annual reports are used as the main source. May be in the future, the researcher can use the different method in data collection such as interview with auditors and risk officers. Questionnaires also can be used by the researcher in order to collect the primary data. These type of data collection methods are important to the researcher to know some others implicit information that rose up by the auditors or other respondents. The formation of RMC is till voluntary and not mandatory in most countries in the world. The study for the efficiency of this board committee is limited and scant. Future study should be done on its efficiency in term of other indication like the company market share, profit and investment opportunity. The study should also examine the roles played by this board committee for said indication besides the characteristics of RMC. In term of research framework, this study used modified audit opinion as the dependent variable. May be the other researchers will use qualified audit opinion or going-concern opinion as the dependent variable in the framework. The scope is different for qualified or going-concern audit opinion compared to modified audit opinion. The treatment for each type of auditor report is different and some different results would be produced if different type of auditor report is used as dependent variable in the study.

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Delineation of watershed in Amravati tehsil using geomorphological investigations through Remote Sensing and GIS techniques

Khadri S.F.R*, Sachin Thakare and Pooja Surkar

  Abstract:

In this study an attempt has been made to understand various geomorphological factors controlling the various landforms which in turn helpful in the delineation of watershed in Amravati tehsil through remote sensing and GIS techniques. The study area exposes part of Pedhi River and Kholad River which is a part of Wardha Watershed. The present investigations have helped to understand the groundwater potential as well as nature of the watershed with the help of detailed geomorphological investigations. Satellite remote sensing data as well as topographic data has been widely utilised in this study to identify the watershed and groundwater potential zones with the help of latest available techniques.

The results of the present study demonstrate the presence of various hydro geomorphological zones showing their groundwater potentialities which vary from excellent to poor. The study area covering Pedhi watershed shows excellent to good ground water quality whereas the Kholad and Kapasi watersheds show moderate to poor ground water quality. Overall, the present study demonstrates the useful ness of remote sensing and GIS techniques in the delineation of potential aquifers in the region which plays a major role in the sustainable   management of water resources in the Amravati region.

Key Words: Remote Sensing, GIS, Geomorphology, Watershed, Satellite, Topography.

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Introduction:

A watershed can be defined as the area of land that drains to a particular point along a stream. Each stream has its own watershed. Topography is the key element affecting this area of land. The boundary of a watershed is defined by the highest elevations surrounding the stream. A drop of water falling outside of the boundary will drain to another watershed (Sewickley Creek Watershed Conservation Plan, 2003). From a planning standpoint, watershed is considered the most ideal unit for analysis and management of natural resources. For optimal use of environmental resources in a region, integrated watershed development approach is still viewed by many to be the most ideal as it helps in maintaining the ecological basis of resources utilization (Sahai 1988). Geomorphology is defined as the science of landforms with an emphasis on their origin, evolution, form, and distribution across the physical landscape. The science that deals with surface features of the earth, their forms, nature, their origin and development is termed as geomorphology. DAVIS (1912) first projected the concept of geomorphic cycle. According to bauling (1950), the role of factors that are important the geomorphology are lithology, stratigraphy, climatic variation and the regional basis for the development of landforms. The use of remote sensing technology for Geomorphological studies has definitely increased its Importance due to the establishment of its direct relationship with allied disciplines, such as geology, soils, vegetation/Land use & hydrology.

Geomorphological mapping involves the identification and characterization of various landforms and structural features. The various landforms can influence a conservation area in many ways like slope gradient, elevation and aspect, affect the quantity of solar energy, water, nutrients and other materials, while the slope affect the flow of materials. Slope is also the deciding factors of intensity of disturbance, such as fire and wind, which are strongly influenced by the pressure of vegetation (Swanson et al 1988).

Study Area:

Amravati Tehsil basically part of Amravati city and the villages around it lying between 220 45” N to 210 20” N and 770 32” E to 780 02” E. Amravati is District place and major city in Vidharbha region. Amravati names comes from Hindu goddess “Ambadevi”, in Mahabharata epic Amravati is a capital of Vidarbha Naresh, and it is a part of Varhad (Berar).

Geography:

Amravati Tehsil is bordered with Achalpur tehsil as well as Murtizapur Tehsil in North direction and Chandur Bazar Tehsil touches the boundary in east and west direction. Wardha River is naturally separate Amravati District from Wardha District. Wardha River is a major River of Vidarbha region which is join Painganga River in the boundary of Marathwada. Pohra Malkhed is protected forest area in Amravati. The average elevation is 543m from MSL.

Climate:

Climate of Amravati Tehsil is hot and dry, April to June Month having extremely heat and temperature goes to 450 C as well as winter season temp goes down 110 C which shows temperature variation, Rainy season start from end of June Month to September in an average.

Soil:

There are three main types of soil present in Amravati Tehsil which is-

  • Deep Black Soil b) Medium Black Soil           c) Shallow black Soil

Crop pattern:

Amravati Tehsil is having different types of Crop Pattern such as Cotton, Sorghum (Jawar), Green Gram (Moong), Soybean etc. but Amravati tehsil as well as whole District is famous for Orange (Citrus Spp.)

 Rail/Road:

In Amravati tehsil Badnera is Major Railway Station of Central Railway. National Highway 6 is passed through the Amravati Tehsil.Fig.1 shows the location of Amravati Tehsil.

Fig. 1 Location Map of Study Area

Materials and Method:

Data Used

  1. Toposheet Approved by Survey of India Having 1:50000 scale
  2. Satellite Imagery LISS data having 23.5m resolution
  • ERDAS Imagine Remote sensing Software
  1. ARC GIS Software

 

 

Methodology

 

 

Fig.2: Flowchart showing the methodology used for Watershed

Software used:

  • Arc GIS 10: This software has been developed by ESRI Inc. it is one of the leading software for desktop GIS and mapping. Arc GIS gives the power to visualize, explore, query, and analyze data geographically. In this project Arc GIS has been used to display raster map, digitizing different features and querying the data for finding the attributes for any feature on map. Arc GIS Spatial Analyst is a tool which helps in analysis and understanding of spatial relationships in our data. Reclassify tool has been used to reclassify different data and raster calculator has been used for overlay analysis and calculation of final results.
  • Generation of contour map: Contours are polyline that connect points of equal value of elevation. The elevation points were prepared from toposheets on a scale of 1:50000 collected from Survey of India (SOI). The collected toposheets were scanned and registered with tic points and rectified. Further, the rectified maps were projected. All individual projected maps were finally merged as a single layer. The contours were digitized with an interval of 10m. The contour attribute table contains an elevation attribute for each contour polylines. The contour map was prepared using Arc Map of Arc GIS 10. Contour map is a useful surface representation because they enable to simultaneously visualize flat and steep areas, ridges, valleys in the study area.

Fig. 3: Contour Map of Amravati Tehsil

  1. Generation of digital elevation model (DEM): A DEM is a raster representation of a continuous surface, usually referring to the surface of the earth. The DEM is used to refer specifically to a regular grid of spot heights. It is the simplest and most common form of digital representation of topography. The Digital Elevation model for the study area was generated from the Tin.

Fig. 4: Digital Elevation Model of Amravati Tehsil

  1. Generation of slope map: The Slope function in Arc GIS 10 calculates the maximum rate of change between each cell and its neighbors. Every cell in the output raster has a slope value. The lower the slope value indicates the terrain is flatter and the higher the slope value, the steeper the terrain. The output slope raster was calculated in both percent of slope and degree of slope. Slope map was prepared from the DEM.

Fig. 5: Slope Map of Amravati Tehsil

 

  1. Generation of watershed: Watershed of the study area was demarcated using the software Arc GIS. Drainage pattern was taken as the input data.

Fig. 6: Drainage Map of Amravati Tehsil

 

Fig. 7: Water body of Amravati Tehsil

Fig. 8: Watershed of Amravati Tehsil

  1. Ground Potential zones map: Ground Water Potential Zones map of Amravati Tehsil Shown in fig. 9 having four different types of zone, they are Excellent, Good, Moderate and Poor. The Ground Water Potential Zone of Study area generated with the help of drainages, geomorphology and land use land cover with integration of Remote Sensing and GIS technique as well as Geology of that area plays an important role. Geomorphology of the study area having alluvial plain, Denudation Hills and Platues. During weighed overlay analysis, the ranking has been given for each individual parameter of each thematic map and weights of 25%, 35%, 30% and 10% were assigned according to their influence for Soil, Hydro-geomorphology, Land use/Land cover, and Slope themes respectively and obtained the ground water potential zones in terms of Excellent, Good, Moderate and Poor zones in the form of a GIS map.

Fig. 9: Ground Water Potential Zone of Amravati Tehsil

 

  1. Geomorphology Map: Geomorphology as a science developed much later than geology although several aspects of geomorphology are embedded in geological processes. Geomorphology deals with the genesis of relief forms of the surface of the earth’s crust. Geomorphological mapping and necessary supporting data are crucial to developing countries that are usually under severe environmental and demographic strains. Approaches and methods to map the variability of natural resources are important tools to properly guide spatial planning. In this paper a comprehensive and flexible new geomorphological combination legend that expands the possibilities of current geomorphological mapping concepts. The piece-by-piece legend forms a “geomorphological alphabet” that offers a high diversity of geomorphological information and a possibility for numerous combinations of information. This results in a scientific map that is rich in data and which is more informative than most previous maps but is based on a simple legend. The system is developed to also be used as a basis for applications in GIS.
  2. 10: Geomorphological Map of Amravati Tehsil

Results and Discussion

Five major watersheds were identified in the area. The area occupied by the largest watershed is 167 Sq.km and it falls under the Sub-watershed category which covers around 66.01 % of the area under study, the second watershed has an area of 37 sq km and this also falls in the sub-watershed category and covers around 14.62 % of the study area, the third watershed has an area of 35 Sq.km and falls in the category of Micro-watershed occupying about 13.83 % of the study area. There are two small watersheds having an area of 5 Sq. Km. and 9 Sq. Km respectively falling in the category of Mini-watershed and covers around 4% of the study area

  • DEM is the 3-D presentation of the surface derived by the interpolation of contour map. It represents x, y and z-axes in pixel size of the order 23.5 meters. The altitude or z axis ranges from 291 meters to 466 meters above sea level
  • Digital slope was derived from DEM on pixel size of order 23.5 meters
  • Ground water potential zones were identified on the basis of slope of the area. Five classes i.e. very good, good, moderate, poor, very poor, were identified. Most of the area comes under very good and good ground water potential zones. The area which has 1-3% slope has very good ground water potential due to nearly flat terrain, area having 3-5% slope has good ground water potential due to slightly undulating topography and some run-off, area with 5-10% slope has moderate ground water potential because these areas have relatively steep slope leading to high run-off, areas with 10-15% and 15-35% slope has poor ground water potential due to steep slope and higher run-off

Geomorphology:

Geomorphology as a science developed much later than geology although several aspects of geomorphology are embedded in geological processes. Geomorphology deals with the genesis of relief forms of the surface of the earth’s crust. Certain Natural Processes are responsible for the forms of the surface of the earth. The earth’s surface forms are primarily due to hypo gene or endogenous processes, which include diastrophism, leading to geologic structure, tectonic activity and volcanism leading to volcanic landforms.

Alluvial Plain:

An alluvial plain is a relatively flat landform and created by the deposition of highlands eroded due to weathering and water flow in study area. The sediment from the hills is transported to the lower plain over a long period of time. It identified on the imageries dark reddish moderate to fine texture due to agriculture activities. Alluvial deposits of the area constitute gravel, sand, silt or clay sized unconsolidated material. The area under alluvial plain cover in geomorphological map is 246 sq km.

Denudational Hills

Denudetional hills are the massive hills with resistant rock bodies that are formed due to differential erosional and weathering processes. These hills are composed of Vindhyan sediments which are fractured, jointed having no soil cover moderate to steep slope. On the satellite image, these landforms were identified by light or dark brownish with mix green color due to thick forest cover. The area under Denudetional hills cover in geomorphological map is 32 sq km.

Structural Hills

Structural hills are representing the geologic structures such as- bedding, joint, lineaments etc. in the study area. They are located in the eastern parts of the study area having greenish and reddish tone with rough texture on the satellite image. The area under structural hills cover in geomorphological map is 3 sq km.

Flood Plain

A flood plain is an area of land that is prone to flooding. People realize it is prone to flooding because it has flooded in the past due to a river or stream overflowing its banks. A flood plain usually is a flat area with areas of higher elevation on both sides. The area under flood plain cover in geomorphological map is 1 sq km.

Habitation Mask:

A habitation Mask is an area of land that is occupied by human being. It is human settlement area. It is defined as an area of human habitation developed due to non-agricultural use and that which has a cover of buildings, transport, communication utilities in association with water, vegetation and vacant lands. The area under Habitation Mask cover in geomorphological map is 118 sq km.

Plateau:

A plateau is an elevated land. It is a flat topped table standing above the surrounding area. A plateau may have one or more sides with steep slopes. The area under plateau cover in geomorphological map is 458 sq km.

Water Body:

It is an area of impounded water, areal in extent and often with a regulated flow of water. It includes man-made reservoirs/lakes/tank/canals, besides natural lakes, rivers/streams and creeks. The area under water body cover in geomorphological map is 32 sq km.

References:

  1. Bolstad P.V., and Stowe. An Evaluation of DEM Accuracy: Elevation, Slope, and Aspects. Photogrammetric Engineering and Remote Sensing. 1994. 60 (11) 1327-1332.
  2. Ramaswamy S.M. (2011) “Remote Sensing in Geomorphology”
  3. Felicísimo A.M. Parametric Statistical Method for Error Detection in Digital Elevation Models. ISPRS Journal of Photogrammetry and Remote Sensing. 1994. 49 (4) 29-33.
  4. Heal G. (2000) “Nature and the marketplace Washington, DC”, Island Press.
  5. Goudie, A. S., 2004, Encyclopaedia of Geomorphology, vol. 1. Routledge, New York. ISBN 0-415-32737-7
  6. Karunali Vora (2011), “Application of RS and GIS in Watershed Land use Development of Sabarmati River of Ahmedabad, Gujarat, India”, National Conference on Recent Trends in Engineering and Technology.
  7. Krishnamurthy J and Srinivas G, Role of geological and geomorphological factors in groundwater exploration: a study using IRS LISS data, International Journal of Remote Sensing 16(14), 1995, pp 2595–2618.
  8. Neha Nagraj (2012) Geomorphological Study of Walgaon-Achalpur Region, Amravati District Maharashtra using remote sensing and GIS Techniques. International Journal of Science, Environment and Technology, Vol. 1, No 5, 2012, 473 – 478
  9. Simon P (2010), “Remote Sensing in Geomorphology,” Oxford Book Company, Jaipur, 2010.
  10. Rajashree V Bothale, Vinod M Bothale, J R Sharma (2011) “Delineation of Eco watersheds by Integration of Remote Sensing and GIS Techniques for Management of Water and Land Resources”, ISPRS Commission IV Symposium on GIS ‘IAPRS’, Vol. 32/4,
  11. Richard John Huggett (2007) “Fundamentals of Geomorphology”
  12. Sahai (1988), “Coastal Environment”,
  13. Sewickely Creek Watershed Conservation Plan (2003) “The Pennsylvania Rivers Consevation program”
  14. Welch R. 3-D Terrain Modeling for GIS Applications. GIS World. 3 (5) 26-30. 1990
  15. Yaw A. Twumasi & Edmund C. Merem (2007) “Management of Watersheds with Remote Sensing and GIS: A case study of River Niger delta Region in Nigeria”, International Journal of Environmental Research and Public Health, Vol.4, No. 2, ISSN: 1661-7827.
  16. Yongheng MA (2004), “GIS application in Watershed Management”, Nature and Science, Vol.2

The Study on Influence of Psychological and Socio Cultural Factor on the Share Market Operations. Reference to Batticaloa District, Eastern Province, Sri Lanka.

Revathy 

Stock market is an important part of the economy of a country. The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country to a great extent. That is the reason why, the government, industry and even the central banks of the country keep a close watch on the happenings of the stock market. The stock market is important from both the industry’s point of view as well as the investor’s point of view.

This study focuses the influence of psychological and socio cultural factors to implement on stock market in Batticaloa District in the Eastern part of Sri Lanka. This study was conducted with two research objectives: to find out the degree of psychological characteristics of potential investors regarding the stock exchange and to evaluate the level of support of socio culture environment to implement in share market.Self motivation, perception and attitude is the dimension of identifying the psychological characteristics. Social culture factors are including language skill, brokers support and culture support to mature the socio culture supportive.The study was conducted among the potential investors reside in the various part of the Batticaloa District. The data were collected from the 100 sample of people. The proportionate stratified random sampling method was used to select the sampling units and the structured questionnaire was used to collect the data. The data were analyzed using Univariate Analysis and Bivariate analysis techniques. The unit of analysis was individual person.

Finding of the study revealed that respondents (potential investors) were moderate level supportive to implement the stock exchange as indicated by the degree (measured as mean value) of their psychological characteristics (Self motivation 3.5), perception (3.4), and attitude (3.4). Socio cultural environment (3.17) was moderate level influence. In overall this study was find out moderate level supportive to implement the stock exchange in Batticaloa.

Keywords: Investment, Psychology, Stock Exchange, Investor, and Socio Culture Environment

 

 

  1. INTRODUCTION

An island nation situated at the Southern tip of India, Sri Lanka is often referred to as the Pearl of the Indian Ocean. With the end of a bitter three decade long civil conflict, the country is taking advantage of new found peace and stability and growing economic prosperity to make its mark as a global logistics center.

Increased political stability is laying the way for strong growth on investment as the Government formulates long term robust development plans to drive economy wide sustainable growth.

Our nation is developing nation and agricultural one for hundred years due to our capability of resources, gain knowledge and technology requirements even we greater than some nations. If we want to become leading one we should change our habits of investment.

Eastern province is a one of the nine provinces in Sri Lanka. The Batticaloa is a one of the district in Eastern Province. Our society based on knowledge income and saving has an essential role and making the most valuable effects by using financial system at an economic entity level.

The fundamental factors such as economy, industry and company analysis play a key role in investment decision process. In earlier there are few ways to invest their money for more money such as purchasing land and gold, invest in education and business ,life insurance, bank deposit share market etc.. But now there are twenty sectors for investment in stock exchange. Each and every sector is important to develop the nation.

The word Investment refers to the deployment of surplus funds either in the financial assets or in the physical assets with the expectation of getting an optimum return in future. R.Jayaraman, Dr.G.Vasanthi, M.S.Ramaratnam, (JBM&SSR Volume 3 ,2014).

These are under the stock exchange there are twenty sector to invest the money which is functioning under the capital market. First we understand the capital market. The Financial Market, which is the market for credit and capital, can be divided into the Money Market and the Capital Market. The Money Market is the market for short-term interest- bearing assets with maturities of less than one year, such as Treasury bills, commercial paper, and certificates of deposits. The major task of the Money Market is to facilitate the liquidity management in the economy. The main issuers in the Money Market are the Government, banks and private companies, while the main investors are banks, insurance companies and pension and provident funds. The Capital Market is the market for trading in assets for maturities of greater than one year, such as Treasury bonds, private debt securities (bonds and debentures) and equities (shares). The main purpose of the Capital Market is to facilitate the raising of long-term funds. The main issuers in the Capital Market are the Government, banks and private companies, while the main investors are pension and provident funds and insurance companies.

 The Financial Market can be also be classified according to instruments, such as the debt market and the equity market. The debt market is also known as the Fixed Income Securities Market and its segments are the Government Securities Market (Treasury bills and bonds) and the Private Debt Securities Market (commercial paper, private bonds and debentures). Another distinction can also be drawn between primary and secondary markets. The Primary Market is the market for new issues of shares and debt securities, while the Secondary Market is the market in which existing securities are traded. (http://www.cse.lk/static/introduction

Investment, first of all we will learn here that what Investment is? Is Investment just a money or capital? Is Investment just a part of your salary or Income? We will answer all these questions in a single line that Investment is that part of your money whose nominal value increases along with the inflation or time to increase its real value. We will learn some benefits of investing which you must know before investing in stock market.

The part of money which you park in some avenues like Bank Deposits, Real Estate, Jewellery or Stock Market to get some return on that capital in future is also known as Investing or Investment.

There are many Instruments of Stock Market called Securities like Shares, Bonds, Debentures etc. and this stock market have its own benefits in his own way for every person who invest in stock market. We will discuss here the advantages and the benefits of investing in Stock Market which you must know before Investing in stock market.

Easy Liquidity: It is the very first benefits of investing, In stock market shares and securities are traded in very high volume which make it a volatile market so there is very easy liquidity in stock market, like if you want to turn your investment in stock market into cash then you can do that very easily. Flexibility: Investing in stock market is very flexible like the market has ups and downs in prices at every trade session, price of stock market moves with the rapidity and flexibility of this market.

Regulatory Framework: Stock Market works under some regulatory framework to protect and safeguard all its investors. For example: In Sri Lanka the Securities and Exchange Commission (SEC) works as a Regulatory Framework Body to safeguard all investors. Maximum Returns: According to the long term perspective it is found that Investing in Stock Market gives maximum returns. For example:

Business Taste: Well, According to me it is the best benefits of investing in stock market you can ever have, here from Business Taste I mean that when a person trades or invest in stock market everything is here works like a business a modern style business. Sole Proprietorship: If you invest in stock market then you are starting your own business where your investment is your capital, like the more your trade is in profit the more your business grows and you are the only person to run this business that is why investing in stock market is your sole proprietorship business.

While in the midst of important transformation to an industrialized economy, its traditional stronghold in the service industry is growing with simultaneous speed. The change in the mindset of the investor’s leads to change in the trend of investment ways. The investor’s sentiment may either be optimistic or pessimistic. The people sentiment and socio culture sentiment are complimentary to each other. Any change in social change lead to a substantial change in the investor’s behavior similarly any change in the investors’ sentiment leads to a substantial change for social culture environment.

At presently telecommunication, bank and industry and food & beverage sectors are very popular one in the capital market and several advantages on investing shares even in the Batticaloa district still there is so many traditional ways are following by the people on investment. Here share investment way is infancy investment way. It should be encourage due to globalization and survive in future change.

Therefore, I have intended to study the influence of social and psychological factors on implement in share Market in Batticaloa District.

  1. PROBLEM STATEMENT

The Sri Lankan share market continues to shine as one of the best performing ones. According to Bloomberg news service in 2009.CSE is one of the most modern stock exchange in South Asia a fully automated trading platform and market capitalization of over US$ 23 billion, it has been one of the best performing stock market in the world, with average daily turnover US$ 18 million. http://kenangasl.com/why-sri-lanka/colombo-stock-exchange-cse/

Batticaloa is one of the districts in Sri Lanka, Still now Stock Exchange did not located in Eastern Province. There are huge amount of lands, higher education institutes, big amount of population who are knowledgeable and so many financial institutions.

If the stock exchange will be establish in Batticaloa district, that gives great investment opportunity to public and it will lead to economic development.

Therefore this present study aims to find out the influence of psychological and socio culture environment to establish the stock market in Batticaloa district.

  1. RESEARCH QUESTIONS
  2. What is the degree of psychological characteristic of potential investors in stock exchange?
  3. To what extent the socio culture environment is favorable to implement in the stock exchange?

4.OBJECTIVES OF THE STUDY

  1. To find out the degree of psychological characteristic to implement in Stock Exchange.
  2. To evaluate the level of favorable of Socio Culture environment to implement in stock exchange.
  3. SCOPE OF THE STUDY

This research is possible to study level influence of psychological and Socio culture factors to implement the share market, based on gender, education, ethnic group, designation, monthly income level, and investors’ behavior of particular people who are living in Batticalo district.

Therefore the researchers have scope of this study to the Batticaloa district and also selected 100 people which use in proportionate stratified random sample size in Divisional Secretariat Divisions in Batticaloa district to carry out this research study.

 

 

  1. LITERATURE REVIEW

Psychological Characteristic

Investors are normally assumed to make their financial decisions rationally according to classical economic theories but some novice investors make unsuitable investment decisions based on irrational exuberance (Ricciardi, 2008).

The investor sentiment is primarily based on investor’s psychology. Individual expectation, Individual optimism, individual ability and individual confidence are the four major psychological components of investor sentiments. On other words the investors sentiments are run by individual expectation, individual optimism, individual ability and individual confidence (R.Jayaraman,Dr.G.Vasanthi.M.S.Ramaratnam, JBM&SSR 2014)

Psychological factors operating within individual partly determine people’s general behavior and thus influence their behavior as consumer. Primary psychological influence their behavior as consumer are perception, motives, learning, attitudes and personality and self concept. Even though these psychological factors operate internally, they are also very much affected by social factors outside the individual. (Pride M Ferrell .O. C, 2006)

Emotional development of children and is part of developmental psychology, the study of changes in behavior that occur through the life span. Cognitive psychology deals with how the human mind receives and interprets impressions and ideas. Social psychological looks at how the actions of others influence the behavior of an individual.

(http:/www.medterms.com/script/main/art.asp/articlekey)

The persons buying choices are also influenced by four major psychological factors motivation, perception, learning, and beliefs and attitudes. (Philip Kottel, 2005)

Consumer attitudes are composite of a consumer’s beliefs about feelings ,about behavioral intentions towards some “object “ – within the context of marketing , usually a brand, product category, or retail store. These components are viewed together since they are highly interdependent and together represent forces that influence how the consumers will react to the object.

 Consumer attitude are considered by many marketers to be accurate predictors of consumer behavior, making the study of attitude formation and change an important topic. Attitudes are learned tendencies to perceive and act in a consistent way toward a given objective or idea, such as a product, services, brand, company, store or spoke person. This definition emphasizes the impact on attitude of several of other concepts.

The attitude is a person’s enduring favorable or unfavorable evaluation, emotional feeling, and action tendencies toward some object or idea. People have attitudes towards almost everything: religion, politics, clothing, music and foods. Attitudes put people into a frame of mind: liking and disliking an objects, moving towards or away from it (Phillip Kottler

Socio Culture Environment

According to Kottler views culture factors exert the broadest and deepest influences on consumer behavior. Culture, subculture and social class, reference group, family and social roles and particularly important in buying behavior.

  1. METHODOLOGIES

Sample of the Study

 

The total population for the study was in Batticaloa district people. There are 100 people were  selected who are resident of Divisional Secretariat division in Batticaloa District (100%) as sample by using stratified random sampling method.

Data Collection Method

In considering objectives it was a cross – sectional one in the time horizon because data were collected in a one single time from the respondents but the unit of analysis was the people of the selected area in the Batticaloa district.

The questionnaire is a structure technique for data collection. The primary data were collected through questionnaires and interviews from the respondents. The questionnaire developed based on three parts, namely research information, personal information and investor’s behavior. In this research questionnaire is closed ended. In general closed questions are considered as more efficient and reliable than open ended questions. In the research one of the ordinal measures called “Likert’s five points rating scale” is used to require respondents to order their answers.

  1. Methods of Data Analysis

Data Presentation and Analysis

The data were analyzed by using univariate analysis and bivariate analysis techniques. In this case, the unit of analysis was individual person of selected area in Batticaloa district.

Method of Data Evaluation

Each variable is given a scale from 1-5 to show the extent of agreement, based on responses, univariate measures were calculated for each of variables. The mean value is lying in the range of 1-5. The range is explore the particular result of this study the range between 1 and 0.25 is express the low level influence for this study. The range between 2.5 and 3.5 is assumed moderate level influence on this study. The range above 3.5 to 5 is considered high level influence on this study. This decision rule is used to measure the level of influence. It shown in the table.

  1. Implication and conclusion

Psychological characteristic of people on Share Market operations in Batticaloa district.

Psychological Characteristic variable with three dimension including self motivation, perception and attitude are evaluated the influence of Psychological Characteristic of people on the share market operations in Batticaloa. We test through univariate analysis and bivariate analysis techniques. This outcome express the mean value is 3.4733 and standard deviation is 0.4524. It is shown in the table 3

If we want to invest in share market we should wish on the activities. That desire depends on our mind likewise involvement on share market operations also leads by our mind. The society should be support to run the business.

The first objective is obtained through the psychological characteristic variable. It is moderate level supportive on this study.

Extent of Social Cultural Environment Supportive to Invest on Share Market Operations.

Socio Culture variable with three dimensions are knowledge on share market, stock brokers support and cultural support. Those dimensions help to identify the influence of socio culture environment. We test through univariate analysis and bivariate analysis techniques. This outcome express the mean value is 3.1733 and standard deviation is 0.23915.

The second objective is obtained through the socio culture factors. It is moderate level supportive on this study.

Overall Result

 

Eventually when we observe the influence factors for an establishment of the stock exchange in Batticaloa district. Table 4   clearly discloses that influence factors are moderate level to establish the stock exchange in Batticaloa district.

  1. CONCLUTION AND RECOMMENTATION

To examine two variable of research we have used six dimensions. All research variables have been measured due to the nature of measurement and research objectives have been investigated with using of mean and standard deviation that summarized in Tables.

It is commonly believed that the investment decision of the investors is driven by the sentiment of investors. Investor’s psychological characteristic and socio culture trends were carefully indentified with the help of existing review of literature. The study has revealed that image factor has appeared as the most influence factor in determining investors decision making. Similarly individual optimism has become the key factor in influencing the sentiment of the investors.

In Batticaloa district there are many educational institutes those are higher education as university, college of education, teacher’s training college, international school and vocational training center even it is distant from share investment, there are low level of awareness and lack of stock brokers firm and information center on this type of investment. In any type of education should change the people and their society. These institutions can be change through subject of finance and investment. We can revolve the people’s investment pattern through provide psychological training as skill, attitude and knowledge development. This step change social culture environment due to most of them are more believe on educated people so if we change the educational society’s investment pattern other type of society also change into share market. Those are possible; the stock exchange will be established in Batticaloa district because visible services are more invited by the people. Based on this type of investment way some are known well some are unknown therefore, we assume this is a childhood investment way  in Batticaoloa, We state without building we cannot run the business perfectly based on our research.

Finally this study convey people are mostly involved all type of investment even experientially traditional investment is well known by the people than share investment because inadequate resources and deepest knowledge on this field. Psychological and socio cultural motivational factors are motivated the people to invest in share market so implementation is necessary one in Batticaloa district.

Reference 

  1. Alexander William, Gordon. J, Sharpe. F, Feffery v,bailey, Fundamental of investment ,3rd ed
  2. Barnewall,M.M(1987) Psychological characteristic of individual investors.
  3. Bhole L.M, (2004) Financial institution and market, 4th ed, publish by Tata Mcgrow –hill, New   Delhi,    5, 17.2-19.12
  4. Central Bank of Sri Lanka, (2008), Recent Economic Development -Highlight of 2008 and Prospect for 2009, Central Bank Publication
  5. Cornett and Saundress, (1998), Fundamentals of Financial Institutions Management, Irwin McGraw-Hill, New Delhi, pp26-29
  6. Daily news , Thursday November 5 2009
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  15. S, saravavel.P, (2005/2006) marketing research and consumer behavior

 

HRD and Management in Banking Sector

BHARTI VIJ

Abstract: Management of an organization plays an important role in designing Human Resource policies and their execution. It reflects the attitude of the top management about the ‘people’. Human Resource Development (HRD) has assumed considerable importance in the recent years. Be it a business organization, or a bank or an office, the development of human resources is necessary for its efficient and effective working. In an evolutionary process when developing economy struggles to attain higher levels of living. It can hardly over look the need of developing its human resources to meet bigger and developing new challenges of raising the quality of life of the masses. Human Resource development is a continuous process to ensure the development of employee competencies, dynamism, motivation and effectiveness in a systematic and planned way. HRD has been given due importance by all the organizations in India as it aims at developing all the employees of an organization in a planned manner to acquire and apply their existing capabilities as well as their inner potentials. The present study has been made to analyse and interpret HRD and Management in Banking Sector Industry in India. Major public sector bank SBI has been chosen for the study. The results show that the relationship between management and HRD quite good in this bank and improve in efficiency.

Key Words: HRD, management, People as Assets, Willingness, Commitment, Trust etc.

INTRODUCTION

‘People’ is the most important and valuable resource every organization or institution or institution has in the form of its employees. Dynamic people can build dynamic organizations. Effective employees can contribute to the effectiveness of the organization. Competent and motivated people can make things happen and enable an organization/institution to achieve its goals. Therefore, organization should continuously ensure that the dynamism, competency, motivation and effectiveness of the employees remain at high levels. Human Resource development is thus a continuous process to ensure the development of employee competencies, dynamism, motivation and effectiveness in a systematic and planned way.

T V Rao  (1991) in his work on Human Resource Development has defined HRD in organizational context as a process by which the employees of an organizational are helped in continues planned way to a) acquire or sharpen capabilities required to perform various functions associated with their performance or future expected roles b) develop their general capabilities as individuals & discover & exploit their inner potentials for their own and/or organizational development purposes and c) develop an organizational culture in which superior – subordinate relationship, teamwork & collaboration among the sub-units are strong & contribute to the professional well-being, motivation & pride of the employees.

HRD is concerned with the development of human resource in an organization. Development means improving the existing capabilities & helping them to acquire new capabilities required for the achievement of the corporate as well as individual goals.

Leonard Nadler of George Washington University (USA) who is acclaimed as the originator of the concept of HRD sometimes in the early seventies  defines it as a series of organized activities (such as training, education & development) conducted within specified period of time & designed to produce behavioral change.

HRD in Banking Sector

The core function of HRD in the banking industry is to facilitate performance improvement. Factors like skills, attitudes and knowledge of the human capital play a crucial role in determining the competitiveness of the financial sector. The quality of human resources indicates the ability of banks to deliver value to customers. HRM strategies include managing change, creating commitment, achieving flexibility and improving teamwork. Liberalisation has not only triggered changes in the whole economy, including the banking sector, but has also thrown up challenges for banks, in general, and public sector banks, in particular. Whether Human Resource Management (HRM), an important element in the business process evolution, post-liberalisation, has given a strategic telescopic focus is subject to debate. The primary emphasis needs to be on integrating human resource management strategies with the business strategy. HRM strategies include managing change, creating commitment, achieving flexibility and improving teamwork.

‘State Bank of India (SBI), with a 200 year history, is the largest commercial bank in India in terms of assets, deposits, profits, branches, customers and employees. SBI provides a range of banking products through their vast network of branches in India and overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. The Government of India is the single largest shareholder of this Fortune 500 entity with 61.58% ownership. SBI is ranked 60th in the list of Top 1000 Banks in the world by “The Banker” in July 2012.

Review Of Literature

A number of studies have been conducted with respect to Large Scale Industries on HRD practices in this bank. However, little effort has been made to study HRD practices in state bank of india.

Abraham 1988: 48-64, in his studies on HRD practices have been made in the past. A review of literature has been made to highlight the type of practices, other organizations are making so that a linkage could be established. HRD climate is an integral part of organizational climate.

Raman (1989:342-365) in his study on HRD experiences in State Bank of India underlines the main objectives of HRD for the bank is to create a climate of openness and trust, build a collaborative culture whereby everyone is an important member of an effective team, promote human capabilities and competencies in the organization, bring integration of individual and organizational goals, improve quality of life.

Usha Krishna (1986) explores the HRD sub-systems in the Sundram Fasteners Ltd. (SFL). The HRD unit there started working on organizational structure (focusing on clarifying reporting relationships, outlined key responsibility areas), manpower planning, placement, development oriented performance appraisal system, training and development, rewards and career planning.

Rao (1989: 210-25), Discussing the HRD initiatives in Steel Authority of India Ltd (SAIL) has mentioned that the areas were identified as ‘Priority of Action’ include- improvement in work culture, optimum use of installed capacity, increase in productivity, generate profits through control of costs, customer satisfaction.

Rao (1992: 350-371), in his analysis of 14 organizations, mentioned that L & T was the first to start integrated HRD system, inspiring other organizations to do so. Several organizations, however, made some innovations in the HRD Sub-systems. A Study conducted by XLRI centre for HRD in 1984 shows that HRD climate data was available for 6 organizations including Voltas , Jyoti Ltd. SBI, L& T , CGL, SBP and ICC. Examining the results, Rao and Abraham (1986: 73-85) reveal that L & T and Voltas have HRD climate to the extent of 60 per cent on 100 point scale and remaining 5 are in the middle range (around 50 percent).

Objectives of the Study

The study aims at achieving the following objectives.

  1. To study HRD and management in public sector bank in India i.e., State Bank of India.
  2. To study the subsystem relation to management and HRD.
  3. To study the role of management in developing human resources of their organizations.

Research Methodology

Banking sector is large one spread ever length and breadth of the country so we are constrained to limit our study to public sector banks i.e., State Bank of India.

For the purpose of the study the date has been collected on the basis of questionnaire which included questions on the perception of top management about its human resources and creating HRD climate in its organization. A sample of 120 respondents on random basis includes employees from both the selected banks. For the present study respondents were drawn from the various branches of the banks located at Ambala, Kurukshetra and Panchkula.

Statistical Analysis

The data was converted into scores by using 5- point scale. The data was tabulated and summarized by adding the scores of all the respondents and classified in two parts: The perception of the top management about its human resources and HRD Climate of the organization resulting there from. For the 1st part i.e. perception of the top management about its human resources, the opinions of the respondents have been presented on the 5 point scale by converting the respondents for each point of the scale into percentage. For the second part i.e. HRD Climate, the opinions of the respondents were sought on 13 parameters were added together to observe as to what type of developmental climate existed in the public sector undertakings under study. The opinions were converted into scores on 5 point scale. Average scale of 3 and around indicated a moderate tendency on that dimension existed in the organization where as score around 4 denotes „good‟ HRD climate on htat dimension. To make the interpretation easier, the mean score was converted two percentage score by using the formula: (Mean Score -1) x 25 = Percentage Score (Rao, 1991: 39). This was done by assuming that a score of 1 represents 0 percent, a score of 2 respondents 25 percent, a score of 3 respondents 50 percent, a score of 4 respondents 75 percent, and a score of 5 residents 100 percent. The percentage score thus indicated the degree to which the particular dimension existed in the company out of 100.

Limitations

As the study is limited to one public sector bank, its results cannot by generalized due to different management perception and HR practices in different organizations. Despite these limitations, the study provides insight into perception of the management about HR which can be used for further research in this area and can help the bank employees to improve HRD in their organizations and thereby increase their productivity and efficiently.

Analysis and Interpretation

The policy and philosophy of the management plays an important role in the development of Human resources in any organization. Effective management policy is, therefore, viewed as a subsystem of HRD. As indicated earlier, the opinions of the respondents have been analyzed to study the Perception of the Management about its Human Resources.

1 The Perception of the Top Management about its Human Resources

The opinions of the respondents on this subsystem on a number of variables including the importance given to Human Resources by the top management, management’s commitment to ensure employee development, willingness of the management to invest their resources for employee development, readiness of the people to help each other, team spirit, developing employee potentials, using employee potentials for career planning, enhancing inter-group competence, encouraging people to improve their capabilities, creating climate of trust, openness, collaboration, pro-activity, its commitment to bring in organizational change, and its awareness to the environment changes were obtained and analyzed as under:-

  1. A) Importance given to Human Resources by the Top Management

Top Management believes that human resources are extremely important and are needed to be treated more humanly in the organizations. Opinions of the respondents on this variable (Table-1: a) indicate that more than 33.83 per cent of the respondents sometimes true with the statement whereas 19.83 per cent of the respondents mostly true and rarely true with the statement. It indicates that the managements of this public sector undertaking consider the human resources in their organization to be extremely important to them. Further, 15.70 per cent of the respondents partially mostly true and partially not at all true with the statement indicating that some of the employees or the departments are not fully aware of the management policies or do not agree with them.

  1. B) Management gives importance to Human Resources

Top Management in State Bank of India believes that human resources are extremely important and are needed to be treated more humanly. More than 27.27 per cent of the respondents described the statement (Table-1: b) as almost always true; whereas 31.40 per cent of the indents expressed the statement to be sometimes true’.

  1. C) Development of Subordinates by the Superiors

Top Management in State Bank of India believes that human resources are extremely important and are needed to be treated more humanly. More than 27.27 per cent of the respondents described the statement (Table-1: c) as almost always true; whereas 31.40 per cent of the indents expressed the statement to be sometimes true’.

  1. D) Willingness of the Management to Invest their Resources for Employee Development

The management of State Bank of India seems to be willing to invest their time and resources for employee development. This view has been confirmed by 31.40 per cent of the respondents expressing it to be ‘sometimes true’(Table-1: d) where as 36.36 per cent of the respondents considered it to be ‘Mostly true’.

  1. E) Management helps juniors to learn their job

from the opinion of the respondents (Table-1: e), in State bank of India, seniors in this bank take active interest in their juniors and help them learn their job. There was good relationship between senior and juniors and they help each other in their job. 31.40 per cent of the respondent viewed this statement as ‘mostly true’ and 14.05 per cent of the respondents considered it to be ‘almost always true’.

  1. F) Creating Atmosphere of Trust and Openness

  From the opinion of the respondents (Table-1: f) it can be inferred that management of the organizations are creating an atmosphere of trust and openness. The employees in State bank of India are not afraid to express or discuss their feeling with their superiors. It appears that superior and subordinate relationships are good. 13.23 per cent of the respondents fully agreed with this view point where as 30.16 per cent the respondents considered the statement to be ‘Mostly true’. . In the opinion of the respondents of this bank, 56.44 per cent considered the statement to be ‘mostly true’, whereas 23.76 per cent considered is to be sometimes true and another 11.57 per cent felt it to be rarely true.

  1. G) Freedom to take Initiative (Pro-activity)

“Pro-activity” seems to exist in these units as evident from the opinions of the respondents State Bank of India, it appears that the organization partially allows the employees to take initiative and do things on their own without having to wait for instructions from superiors as 25.62 per cent of the respondents considered this statement(table-1: g) to be ‘mostly true’ and another 30.58 per cent of the respondents considered it to be ‘sometimes true’ indicating that in some of the departments there is lesser degree of freedom to take initiative. It may be due to the nature of work requiring precision and quality in these departments.

  1. H) Identification of Employee Potentials for Career Planning

The top management of Punjab National Bank makes efforts to identify and utilize the potential of the employees. In the opinions of the respondents of State Bank of India, were divided as 19.83 per cent of the respondents considered the statement (Table-1:h) to be ‘almost always true’ whereas 33.06 per cent of respondents considered the statement to be ‘sometimes true’. It can be inferred that employee potentials play an important role in their career development.

  1. I) Management guide and prepare for future responsibilities

In the opinion of the respondents, managers guide their juniors and prepare them for future responsibilities/roles they are likely to take up as 37.19 percent mostly true and 25.62 percent sometimes true in this statement(Table-1:i). The management helps them to find proper path for their role play in the future.

  1. J) Enhancing Inter-group Competence

A study of the Table-1(j) shows that a sizable number of respondents about 36.36 per cent of the respondents of State Bank of India were of the opinion that ‘manager’ in this organization believe that employees behaviour can be changed and people can be developed at any stage of their life by viewing the statement to be ‘mostly true’ whereas 26.45 per cent of them were of the opinion that the statement is ‘sometimes true’ (Table-1: j). This view indicating that management does not pay attention to the developmental needs of all the employees in the organization.

  1. K) Encouragement to Improve Employee Capabilities

  Employees are encouraged to improve their capabilities by the managements of the public sector undertakings. The managements believe that this will result in enhanced employee competencies, better performance and achievement of organizational goals. Employees are encouraged to experiment with new methods and try out creative ideas in State Bank of India. In the opinion of the respondents of this bank, 27.27 per cent considered the statement to be ‘mostly true’ where as 30.58 per cent considered is to be sometimes true and another 21.49 per cent felt it to be rarely true.(Table-1:k)

  1. L) Creating Team-spirit

‘Team spirit’ is of high order in State Bank of India as evident from the seems to be in the opinions of 34.71 per cent of the respondents who termed it as ‘mostly true’ another 17.36 per cent considered it to be ‘almost always true’. However, 27.27 percent of the respondents ‘sometimes true’ (Table-1:L) to it indicating that more efforts are needed in some of the employees or departments in these organizations.

                                                                        Table-1

From the above discussion, it can be inferred that in the present economic scenario of globalization, the public sector undertakings seem to be quite aware of the changes taking place in the world market. The increasing competition from the MNCs has necessitated improving employee competencies, efficiency and professionalism in their approach. The public sector undertakings are trying to develop employee potentials and creating a climate of change and development in their organizations. Much more is needed on their part to cut costs and build quality and efficiency. In the succeeding discussion efforts have been made to analyse the existing HRD in this organizations.

Conclusion

The following conclusions can be drawn on the basis of above analysis and discussion:

  1. Management policy is an important sub-system of HRD in both banks. In view of the respondents, the management of both public sectors in general believes that its human resources are important to them. In SBI, management policy is better than PNB. Further, it is evident from the opinions of the respondents that the management makes efforts to ensure that employees enjoy their work. It appears that development of subordinate is considered to be an important part of the job of the superiors in most of the cases. Further, management also invests its time and money for employee development to some extent as evident from the views expressed by the respondents.
  2. More than 60 per cent of the respondents in general agreed that the managements are making efforts for identifying and developing employee potentials. Further, these potentials are used for career planning of the employees. Employees are also encouraged to improve their competencies and management enables them to enhance their inter-group competence.
  3. The management is trying to build up developmental climate as evident from the opinions of the respondents. Nearly 65 per cent of the respondents stated that there exists climate of trust, co-operation, proactivity, openness and team work. It indicates that the HR development practices in these organizations are picking up due to the philosophy of the management.
  4. A study of the parameters indicates that the opinions of the respondents are closely associated on all these aspects which again strengthen conviction of the top management about its commitment for the development of its human resources.
  5. Existence of good HRD was observed in this public sector undertaking. It indicates that the management is building congenial atmosphere for all round development of the employees.

On the whole, the study reveals that the top management has a strong perception about the importance of its human resources that the organization cannot grow without the development of the people working in it and therefore, it is committed to invest its resources for their development. However, there is still a good scope for improvement as indicated earlier. The changing paradigms in HR need to be incorporated for better development of the HR and the organization. New concepts are to be practiced and new policies need to be framed for further growth of the organization.

References

Aurora Rajinder and VaziraniNitin G. (2001): “Management and Human Resource Development”, Pune: Everest Publications.

Bansal, M.P. (1991): “HRD in Public Enterprises”, RBSA Publishers, Jaipur.

Chauhan Daisy & Chauhan S.P. (2002): “Future directions for HRD: Aligning the HR Function To Organizational Goals”, Management & Change, Vol.6 No. 2 (Winter 2002)]

Jain, V K, Singhal, K C, Singh, UC (1995), “HRD Sub-Systems at the top Management Level”, South Asian Journal of Management, April-June.

Jain, V. K., HRD Practices in Indian Industries, Anmol Publications, New Delhi, 1996.

  1. K. Jain, “HRD Climate Factors in Indian Industries – A Case Study”, International Journal on Development Research, December, 2013.

Rao, T.V., Readings in Human Resource Development, Oxford & IBH Publishing Co. Pvt. Ltd., New Delhi, 1991.

Reddy A. Jagan Mohan (2006): “HRD: Origin, Concept and Future”, PJMR, Vol.10, No.1 & 2, April-Oct. 2006.

Sadri Jayashri (2006): “HRD in the Era of LPG”, Personnel Today, Oct-Dec. 2006.

Singh, Anil Kumar (2005), “HRD Practices and Philosophy of Management in Indian Organizations”, Vikalpa, Vol. 30 No. 2, April-June.

Swarajya, Laxmi C. (2005): “HRD in select public enterprises in Andhra Pradesh”, Discovery Publishing House, New Delhi.

 

Human Resources Management in Nigerian Tertiary Institutions: The Obafemi Awolowo University Experience

 

Jegede Charles Temitope 

 

ABSTRACT

Human Resources are the life blood of an organization. They are endowed with discretionary decision-making power and thus have competitive advantages over other resources. This paper examined human resources management in Nigerian tertiary institutions with a view to examining the challenges facing human resources management in Obafemi Awolowo University Ile-Ife of Nigeria. This study was necessitated by the need to ensure improved organizational performance and attainment of objectives as higher institutions of the 21st century. Both primary and secondary sources of data were utilized for the study. Primary sources of data were collected through structured questionnaires. Secondary sources of data were from internet sources, journals, books, unpublished theses among others on the field of human resources management and higher education administration.  A total of 180 questionnaires were distributed to members of staff drawn from all the four unions in Obafemi Awolowo University, Ile-Ife, Nigeria. Data were analysed using descriptive statistics The findings from empirical studies revealed that they are many challenges of human resources management in Nigerian tertiary institutions such as inadequate funding, violent trade unionism among staff, ambiguity in policy interpretations, low productivity, poor quality of work life, poor health and safety at work among others. The study concluded that these challenges of human resources management in higher institutions should be addressed in order for Nigerian tertiary institutions to attain their objectives as institutions of the 21st century.

Keywords: Challenges, Human Resources Management, Organizational Performance, Tertiary Institutions.

INTRODUCTION

Human resources are the life-blood of any enterprise or institution. They combine other resources in the right mix to formulate appropriate strategies for the accomplishment of the desired objectives of the enterprise. This important attribute of HR assist the enterprises to make rightful decisions and respond effectively to the threats and opportunities within the environment of the organization (Farant, 1982: Gerald, 1995; Hanif, 2002). Thus the enterprise depends highly on its HR for success and survival. This dependence continuously   increases the complex and turbulent nature of the business environment of this century (Anyim and Ikemoria 2011).

According to Ogunsaju (2006), human resource management is the effective mobilization of human resources based upon appropriate recruitment, selection, training and placement of appointed staff in order to achieve the organizational set down goals and objectives. Human resources are useful tools employed in harmonizing the needs of the employees with goals and objectives of the organization on a continuous basis (Akintoye et al, 2008).

The success of an organization is not only determined by the quality of personnel available but how well these human resources harnessed and coordinated towards, realizing the goals of the organization (Vance, and Paik, Y. 2006).

It is on this note that the study examined human resources management in Nigeria tertiary institutions with a view to understanding the challenges facing human resources management in Obafemi Awolowo University Ile-Ife, Nigeria.

Objectives of the study

The objectives of the study are to

  1. review literature on human resources management
  2. examine the challenges facing human resources management in Nigeria tertiary institutions; and
  • suggest ameliorative measures to alleviate the challenges of human resources management in Nigeria tertiary institutions.

Literature Review

Nakpodia (2010) defined human resource management as part of management, which is concerned with people at work and with their relationship within the organization. London Institute of personal Management (1963) described human resource management as “the responsibility of those who manage people as well as descriptive specialists in management. This recognition acknowledged that human resource management is a distinction function of management in any public or private organization. The Personnel and Industrial Relations defined human resource management as “the process of developing, applying and evaluating policies, procedures, methods and programmes relating to the individual in an organization.

Human resources are saddled with the responsibility of designing and implementing policies and programmes that will enhance human abilities and improve the organizations overall effectiveness. The human resources practitioners play four critical rules in an organization or institution. They are to

  1. create and implement policies of an organization
  2. offer advice and counsel the employees on matter ordering on productivity, safety at work,

    or career among others.

iii. control of human resources programmes and laid down procedures; and

  1. provide services that assist line managers in performing their job or serving the organizational

     units.

Challenges of Human Resources management in Nigerian Tertiary Institutions

Anyim et al. (2011) identified the major factors militating against effective human resource management in Nigerian higher institutions. They include

  1. Poor productivity of workers in Nigeria
  2. Poor quality of work life
  • Insecurity and hazardous environment
  1. Quota system in employment
  2. Labour dissatisfaction at work
  3. Changing role of government or state in industrial relations
  • Economic recession; and
  • Diversity of workforce

Owojori and Asaolu (2010) maintained that the problems of human resources management in Nigeria higher institutions include inadequate financing, violent trade unionism among staff, disagreement on policy matters, lack of trust and ambiguity in policy interpretations.

From the foregoing discussion, it can be deduced that the problems militating against effective  of human resources management in Nigeria tertiary institutions include the following:

Inadequate finance: – Lack of finance could be responsible for inadequate facilities such as office furniture and fittings, instructional materials, delay in salary delay/non-payment of allowances etc. which could result in face-off taking a variety such as confrontation and strike.

Violent trade unionism among staff: – Misinformation, misinterpretation or lack of good communication network could cause trade unions to be aggressive and get out of hand. This is one of the hindrances to human resource management in Nigeria higher institutions.

Lack of trust: – There is usually lack of trust between management and members of staff in higher institutions. This could result in poor communication or ambiguity in communication content and selection in our union.

Staff recruitment and selection: – According to Ogunruku (2010), the principle of recruiting the best staffs into higher institutions have been compromised, this has impacted negatively into the human resource management in Nigerian higher institutions.

 Dictation from the political class: – There have been worries over time about this the type of people that are appointed to represent the external community on the governing councils of higher institutions in Nigeria. Often times, they are basically and prepondently politicians without cognate knowledge of the higher institution culture and ethos. This political class could dictate policies to the disinterest staff. This causes internal conflicts in higher institution community.

Disagreement on policy matters:  Policy matters could be source or disagreement. Instances abound when discrepancy in salary/remuneration among staff of different unions (e.g. ASUU and NASU) have created problems for university management.

Methodology

A total of 180 questionnaires were distributed to members of staff drawn from all the four unions in Obafemi Awolowo University, Ile-Ife, Nigeria. Data were analyzed using descriptive statistics. All hand was on deck to ensure that are the accurate number of questionnaires distributed to respondents were collected accordingly.

The results of the findings from general profile of the members or staff and problems of managing human resources are illustrated in table 1 and 2 below.

The results of the findings from Table 2 show that majority of the respondents attest to the fact that human resource management face serious challenges which include inadequate finance, violent trade unionism, lack of trust, politicization of staff recruitment, dictation from the political class, disagreement on policy matters, insecurity and hazardous environment.

Conclusion

The study examined the challenges facing human resources management in Nigerian tertiary institutions. It also reviewed literature on human resources and problems of human resources  management in Nigeria tertiary institutions. Data were analyzed using descriptive statistics.

The study concluded that the problems facing human resources management in higher institution should be addressed in order for them to attain their stipulated objectives as institutions of the 21st century.

 

Recommendations

In the light of the crucial issues discussed, the paper recommends as follows:

  1. The government should provide adequate funding to higher institutions for proper maintenance of equipment, facilities and other expenditures of emergent need.
  2. There should be democratization of administrative processes in the Nigerian higher institutions.
  • Nigerian higher institutions must employ ICT in order to provide better human resource management service to their constituents and stakeholders.
  1. University autonomy on policy making matters should be encouraged and a consistent and effective communication network should actually be maintained.
  2. Staff welfare should be given priority to enhance greater productivity and cooperation.
  3. Management of higher institutions must ensure that there is good rapport and human relation between heads of the various departments, sections, units and their staff.
  • Higher institutions in Nigeria must look inward on ways of generating or improving on its internally generated revenue to complement government efforts.
  • Regular trainings should be organized for head of the various faculties, directorates, units, institutes, departments and sections in the art of personnel management.
  1. Finally, professional administrators should master their areas competently in order for

 higher institutions to have effective and efficient  human resources management.

References

[1] Akintoye, I.R., Adidu, F.I. Owojori, A.A. (2008). “Management and organization: A Book of

Reading” Akure: Tonygay Educational Publishers Ltd.      

[2]Anyim, F. C., Ikemefuma, C. O., Mbah, S. E. (2011) “Human Resource Management Challenges in Nigeria Under Published Economy” International Journal of Economics and

Management Sciences, Vol. 1, pp. 01-11.

[3] Farant, J. S. (1982) “Management or Higher Institutions” Lagos: Macmillan Publishers

[4 ]Gerald, P. B. (1995) ‘‘Administration of Higher Education’’ New York: Harper and Row

 Publishers

[5]Hanif, A. and Saba, K. (2002) “A Study of Effectiveness of Human Resources at Elementary

 Levels: Master Degree Thesis, Unpublished, Lahore: University of the Punjab.

[6] London Institute of Personnel Management, (1963) “Human Resource Management:An

Overview” An Address at Golden Jubilee of Institute of Personnel Management London.

[7]Nakpodia, E. D. (2010) “Human Resource Management in School Administration in Delta State,         Nigeria, Journal of Social Science 23 (3): pp-179-187.

[8] Ogunruku, A. O. (2010) “Excellence in University Administration in the 21st century: Nigerian Universities in Perspective” Birthday Lecture in honour of Chief Deji Adegbite (first

Registrar University of Ado-Ekiti).

[9] Ogunsaju, T. O. (2006) “Human Capital Management for Effective Corporate Governance” Paper      presented at a Workshop titled: Corporate Governance for Sustainable and National Development.

[10]Owojori, A.. A.. and Asaolu T .O. (2010), “Critical Evaluation of Personal Management Problems in the Nigerian School System” International Journal of Education Science, 2(1) pp.1-11.

[11] Vance, C.M. and Paik, Y. (2006) “Managing A Global Workforce: Challenges and Opportunities     in International HRM”. New York: Sharpe Publishers.

Observation on Social, Economical and Political status of Dalit Christians: A study in Puthukottai District.

                                 Mr. S. Yesu Suresh Raj                               

Mr. N. Sivasekaran

Abstract                                              

              This paper reviews the empirical study on Excluded people (Dalit Christians) in Indian Society. Dalit Christian is more painful and humiliating to compare than other communities because of the Caste of the society. Dalits who converted to Christianity did not escape the caste system which has a strongly fixed presence in Indian society.  The problem of Dalit has elicited considerable interest in the minds of researchers in recent times.  In this study main objectives is to identify the Justice, Social, Economical and Political status of Dalit Christians in Puthukottai District and to suggest a suitable action plan for their sustainable development. Tools for Data Collation In the present study data were both ‘primary’ as well as ‘secondary’ sources. The dates were collected primary sources constituted of the respondent of all age groups and the sample size was study has been drawn by using census method.  Total sample selected for the study are 9310 respondents, in this study would used family census method. The researcher was selected four Taluks in Puthukottai District and each four Taluks, ten areas have selected based village, urban, semi – urban in this method were selected areas. Design of the Study here, descriptive design will be used to describe the data. The collected data were analysed with the help of descriptive and simple percentage.  The collected data were analyzed to get a better understanding of the Justice, Social, and Economical and Political statues of Dalit Christains in Puthukottai district.

 

 

Key words:  

                Christians, people, Society, Dalit, conversion. Discrimination

  Introduction:

The word “Caste” originates from Spanish word ‘Casta’. Caste means ‘breed, race, and complex of hereditary qualities.’ The English word ‘Caste’ is an adjustment of the original term ‘Casta’.  According to Anderson, Parker and Williams “Caste is that extreme form of social class organisation in which the position of individuals in the status hierarchy is determined by basis of birth into a particular group”. Martindale and Monochest defined Caste as “an aggregate of persons whose share of obligations and privileges are fixed by birth, sanctioned and supported by religion and usage.

According to Henry Maine “Castes started as natural division of occupational classes and eventually upon receiving the religious sanction became solidified into the existing caste system. The caste system comes into being when it becomes an integral part of religious dogma which divides the people into superior and inferior groups with different responsibilities, functions and standards of living.”

According to Magasthens “It is not permitted to contract marriage with a person of another caste or to undertake an occupation other than ancestral nor for the same person to undertake more than one, except if he is of the Caste of Philosophers, when permission is given on account of dignity”.  The Indian caste system is systematically divided people bases on birth, the status of birth only give the richest life for all. Any one born in out of caste his definitely suffer untouchability.  No one could not escape the caste system. The Indian caste system is desired person life. This is give one sight pleasure life anther side burden or painful life.

Jatis /Varnas:

In ancient India, society member was systematically divided that each group performed a specific job. Each group is necessary for society. According to Mahatma Gandhi “each group is same at all, there is no different in low and high”. In 1000 B.C.E., the earliest known the society described the metaphor (symbol) of human body.

According the Rig Veda, the ancient Hindu book, the primal man – Purush – destroyed himself to create a human society. The different Varnas were created from different parts of his body. The Brahmans were created from his head (scholars, teachers, fire priests), the Kshatrias from his hands (kings, warriors, law enforcers, administrators), the Vaishias from his thighs (agriculturists, cattle raisers, traders, bankers), the Sudras from his feet (artisans, craftsmen, service providers). Untouchables (Certain people like foreigners, nomads, forest tribes and the chandalas, who dealt with disposal of the dead were excluded or prohibited altogether and treated as untouchables). The Indian caste system is not only follow the Hindu people even it follow Muslims and Christians etc.

According to Sir H. Risley: “A caste may be defined as a collection of families or groups of families bearing a common name which usually denotes or is associated with specific occupation, claiming common descent from a mythical ancestor, human or divine, professing to follow the same professional calling and are regarded by those who are competent to give an opinion as forming a single homogeneous community”. According to Hindu tradition, Indian societies are scientifically divided and obviously classify castes (jatis). Caste is order one’s occupation, food habits, dress codes, marriage, dine and interaction with members of other castes. The high caste people enjoy more wealth and opportunities while low caste people live with more difficulties.  There is very rare upward mobility in the caste system.

Untouchables / Dalit Christians:

According to orthodox rules anyone who does not belong to the four Varnas, meaning foreigners, are untouchables. According to Manu Smritis, the people who follow the lowest kind of occupations include scavenging, leather work, removal of the carrion etc, are to be regarded as untouchables.

The Indian Caste systems divided people unequal and hierarchical order. The out of caste people or bottoms of consider ‘impure, polluting, untouchable and lesser human beings’ by upper caste people. The untouchables called the different names in different periods. In Vedic era, they were known as ‘Chandala’. In Medieval period, they were addressed as ‘Achhuta’. In the British Government period, they were known as ‘Exterior Caste’. In the present time, they were known as the ‘Scheduled Caste’ by the Indian Constitution. According to Dr.D.N Majumdar “Untouchables castes are those who suffer from various social and political disabilities many of which are traditionally prescribed and socially enforced by higher castes.”

The first impact is the harsh fact of social stigma. The untouchables are considered polluting and are therefore kept at a distance. Their mere presence as well as their belongings are discarded or avoided. They are made to live separately and often cannot share such common village amenities as the well. The stigma of untouchability is attributed to the traditional occupation of the jati and affects all members of that jati regardless of actually being engaged in that occupation or not. Those jatis who clean up, deal with dead animals or eat their meat, are ritually unclean and beyond the pale. The vast majority of so called untouchables are actually engaged in agricultural labour. For many, their traditional occupation is simply a supplementary and temporary work over and above their main agricultural occupation.

Untouchables are very poorly compensated for their labour and thus forced to live a life of constrains. Their diet is poor; their clothes are few and rarely clean; their homes are small, fragile and unhealthy; and they are hopelessly overwhelmed with debts. Poverty and indebtedness means bondage to and dependence on the village strong man of the moment.

Mahatma Gandhi, the father of nation, says “Untouchability is the hate fullest expression of Caste System and it is a crime against God and man”. Mahatmas want to relief the caste problem to SCs. But he was favour of caste hierarchy, that is affected SCs.

“According to Dr. B. R. Ambedkar: untouchables form an entirely new class i.e. the fifth varna apart from the existing four varnas. Thus, untouchables are not even recognized under the caste system of Hindus”. The social reformers, freedom fighter, genuineness persons are considered out of caste because they are not accept the Indian caste system. The punishment of caste order was to produce lot of caste problem in India.

They were forbidden entry to many temples, to most schools, and to wells from which higher castes drew water. Their touch was seen as seriously polluting to people of higher caste, involving much remedial ritual. In southern India, even the sight of some untouchable groups was once held to be polluting, and they were forced to live a nocturnal existence. These restrictions led many untouchables to seek some degree of emancipation through conversion to ChristianityIslam, or Buddhism. However, caste systems and the ensuing discrimination have spread into Christian, Buddhist, Muslim and Sikh communities. The Dalit change the religions but not change the status. The statement of Dr. B. R. Ambedkar and Mahatma Gandhi said Dalit remains a Dalit which ever religion he embraces in India. The Indian government appointed various commissions for to find out the reality of Dalit Christians. According to Government commission: The backward class commissions like Kaka Kalekar Commission (1951), Kumar pillai Commission (1965), Elayaperumal Commission (1969), Sattanathan Commission (1970), Chidambaram Commission (1975),  Mandal Commission (1982), and Mandal Case Judgment (1992) found the socio – economical, educational, employment, and political disabilities of Dalit Christians in the society and Church. Dr. Jose Kananaikil conducted National sample survey of Indian Social Institute (1986) identified that Scheduled Caste convert Christianity suffer more socio – economical, educational, employment, and political disabilities than the Hindu Dalits.

Statement of the problems:

 

  • Untouchability practices still exist in the church and the positive changes have not taken place.
  • There is no monitoring committee of the laity to monitor the admissions and the employment is taking place as said in the ten points program. The habitat of the Dalits still looks miserable and the church of the Dalits.
  • Equality is a dream. There is a long way to move further.
  • Educated become alienated from their community and there is least instance of the educated coming back to the hamlet and work for the development.
  • Dalit Christians bargaining power is weak due to lack of various capitals.
  • The Dalits Christians are not appointed in the powerful positions in the hierarchy of the church.
  • The Dalit youth are discouraged from becoming clergy or religious.

 

Research Methodology

 

Objectives of the study

  • To identify the Justice, Social, Economical and Political status of Dalit Christians in Puthukottai District.
  • To suggest a suitable action plan for their sustainable development.

Tools for Data Collation

            In the present study data were both ‘primary’ as well as ‘secondary’ sources. The dates were collected primary sources constituted of the respondent of 6 months and above and were by Participatory scientific observation, Interview schedule, and Secondary sources include census reports, articles, newspaper reports, journals and books.

Sample Size

            The study has been drawn by using census method.  Total sample selected for the study are 9310 respondents, in this study would used family census method. The researcher selected four Taluk in Puthukottai District and each four Taluk ten areas have selected based on village, urban, semi – urban, in this method selected area total respondents data have collected.

Design of the Study

           Here, descriptive design will be used to describe the data. Descriptive research design is a scientific method which involves observing and describing the behaviour of a subject without influencing it in any way.

Collection of Data    

            The collected data were analysed with the help of descriptive and simple percentage. Census method of tools used to collect data. The collected data were analyzed to get a better understanding of the Justice, Social, Economical and Political statues of Dalit Christians in Puthukottai district.

Analysis and Interpretation

Figure: 1 Personal detail of the respondents

From the above table, it is clearly found that 26.32 per cent of the respondents belonged to the age group of below 20 years. 48.25 per cent belonged to the age group of 30 – 40 years, and were 25.43 per cent belonged to the age group of above 60 years.

       The respondents were enquired about their Residence 65.34 per cent of the respondents are from rural area, 14.47 per cent are from urban area, and 20.19 Per cent are from Sub – urban area.

The respondents were enquired about their family type, 82.42 per cent respondents are reported that, they are from nuclear family, 17.58 per cent are from joint family.

        The respondents were asked about marital status 40.32 per cent of the respondents are married, 59.68 per cent are unmarried.

The respondents were asked about their monthly income of their family 27.26 per cent are earning money below Rs.4000, 2.64 per cent are earning Rs.4000 – 6000, 1.16 per cent are earning money above Rs.6000 and 68.93 percent of the respondents are not earning but  depend on family earning members.

            From the above table, it’s clearly found educational status 3.83 per cent of the respondents were Higher Secondary studied (+2), 4.79 per cent are studying Degree and Technical Education, 5.08 per cent were completed Degree and Technical Education, and 86.30 per cent were qualified ( 0 – 10th standard)

          The respondent were asked about employment status 28.08 per cent of the respondents are Daily cooly, 0.11 per cent Teacher are working on Christian Institution, 0.39 per cent are working on Government employee, 0.13 per cent teacher working on Government school, 2.34 per cent working on private institution, 1.47 per cent unemployment, 67.48 per cent dependents on family members (Children, Home Maker, Old age)

          The respondents were enquired about Religious Father and Religious Sister 0.01 per cent of the respondents are Religious Father, 0.02 per cent is Religious Sister and 99.97 per cent are lay people

The respondent were asked about willing for to start new political party for Dalit Christians 83.24 per cent of the respondents are willing, 4.17 per cent are unwillingness and 12.59 per cent are none of the said

 

Findings

  • 83 per cent of the respondents were Higher Secondary studied (+2)
  • 79 per cent are studying Degree and Technical Education
  • 08 per cent were completed Degree and Technical Education
  • 30 per cent were qualified ( 0 – 10th standard)
  • 08 per cent of the respondents are Daily cooly
  • 11 per cent Teacher are working on Christian Institution
  • 39 per cent are working on Government employee
  • 13 per cent  teacher working on Government school
  • 34 per cent working on private institution
  • 48 per cent dependents on family members ( Children, Home Maker, Old age)
  • 01 per cent of the respondents are Religious Father
  • 02 per cent is Religious Sister
  • 97 per cent are lay people
  • 24 per cent of the respondents are willing

Recommendation

  1. The Christian minority educational Institution should to give 50 percentages of seats for Dalit Christians students.
  2. The Government should provide scholarship and other educational support for Dalit Christians as well as Dalit Hindu students.

  1. Dalit and Non – Dalit Christians must understand the meaning of Christianity and should follow their life.
  2. Caste system was prevent humanity among the society, therefore should eradicate caste system.
  3. Caste Christians should join with Dalits Christians for their development
  4. The Indian Churches have been served many schools and Hospitals under their control. Through this institution create an awareness among the people for reduce caste violence.
  5. The Social reforms of the Churches do not bring any successful results in Dalit’s Christians upliftment. Hence, the Churches should more careful in future while announcing social reform measures.
  6. Foreign funds – Churches and Action Groups in India get lots of money from Missions abroad. These are received for Dalit and Dalit Christians cause. But, usually such kinds of funds are not used purposefully. Therefore proper spend funds for Dalit and Dalit Christians development.
  7. The efforts to Indianise the Churches should be stopped with immediate effect as it allows a kind of Indians culture to take roots in the Churches.
  8. Church run institution should provide employment opportunity for their empowerment
  9. Indian Church should ban all forms of divisions and separations or exclusion viz. in the church, in the funeral paths and in the Church festivals, etc.
  10. The Christian minority educational Institution must to give free cost education for economically most backward Dalit Christian students. Because more than student dropout their education due to economic situation.
13.  To encourage higher education, particularly technical and professional education among Dalit Christians, the Diocesan and Religious Congregations should jointly create a scholarship Fund as an encouragement deserving students

14.  The Christian minority educational Institution and social worker should to give more awareness for Dalit Christian for an Importance of the education. Weekly once and summer period will conduct special lecture on English communication skills and Personality development course etc as well as religious education for their development.

15.  Take effective steps to appoint Dalit members in the administration of the Church and related organisations according to the proportion of Dalit population.

16.  Work at having reservation policy for the Dalits/Tribals in the diocesan/religious institutions.
17.  Make efforts to recruit candidates of Dalit origin for priesthood and religious life in keeping with their numerical strength.
  1. Central and state Government should provide employment opportunities and other rights as well as Dalit Hindu.
  2. Diocesan and congregations should encourage Dalit youth for Religious spiritual service and guide become a good clergy.
  3. More than people like to start new political party. It is very useful for convenience your need on central Government and state Government.

 

Conclusion

In Puthukottai district, the Dalit Christians are economically poor, political powerless, socially depressed. A change of religions has not cleaned their scar and not brought big changes. “Baba Sahib Dr. Ambedkar and Mahatma Gandhi made statements that Dalit remains a Dalit which ever religion he embraces. And the Mandal commission report of affirms “there is no doubt that social and educational backwardness among non Hindu communities is more or less of the same order as among Hindu communities. Thus, both from within and without, caste amongst non – Hindu communities receive continuous sustenance and stimulus” Indian government is playing politics with this community. Mr. Masih said, “The denial of reservation status to the Dalit Christians is a discrimination and human rights violation.”  There is a need to educate and create awareness among the Dalit Christians for social justice. The Christian leader should shoulder the responsibility and make sincere efforts to organize Christian community on one platform. They should join with all other Dalit liberation organizations for socio-economic justice.

The church needs to rethink its stand in respect of the poor and marginalised Dalits of the church. This is the foremost and important part of the Church before confronting the enemies of the society. And finally among the missiological discussions, let me present a Lutheran Theologian Richard H. Bliese’s view on Church’s mission today in our Indian Context. His view is based on Paul’s Rev. A. Vincent Thomas 279 Global Religious Vision, Vol. 3/IV famous theological position on freedom, “There is neither Jew nor Greek, there is neither slave nor free person, there is not male or female; for all are one in Christ Jesus” (Galatians 3:28). He observes: “The Indian Churches should consider grounding their mission efforts not on the shallow waters of liberation and renewal but on the ocean depths of Paul’s gospel of freedom”. He explains the Gospel of freedom in three ways. 1. It is not wholistic. He affirms that this approach is primarily with the responsibility of the state to establish a just and orderly society. 2. It is very wholistic. This freedom according to him is that it is a freedom from slavery and from all oppressions. He claims that through faith we are free from all bondages. 3. It recognises the church’s engagement in revolution against the political unjust orders which prohibit freedom when the Gospel of freedom of Paul is under threat and attack. By explaining Paul’s Gospel of freedom, he affirms that this ‘missional orthopraxis’ is well suited to situation such as this today in our own context.

 Reference

  1. Dave PN, CL Anand, RG Wolf (1988). Pupils Achievement of the Primary Stage. In: MB Bouch (Ed.), Volume1. Baroda:  Society for Educational research and Development,    48-52.
  2. Govindra AR, NV Varghese (1992). Quality of Primary Education. An Empirical study.  Journal of Educational Planning and Administration, 9(i):  17-35.
  3. Ramaiah A. 2004 Untouchabililty and inter caste relations in rural India: the case of southern Tamil Village. J. Relig. Cult. 70, 1–13.
  4. Dalit muslims, Christians demand Scheduled Caste Status The Hindu. 14.3.2014.
  5. Prakash Louis., (2007) Dalit Christian: Betrayed by State Church, Economic and Political Weekly, XLII, No.16.pp.1404.1408

  1. Rijo M John and Rohit Muthatkar, (2005), State wise Estimates of Poverty among Religious groups in India, Economic and Political Weekly.13 pp.1337-1344
  2. Rowena Robinson (2014) Minority Rights versus Caste Claims Indian Christians and Predicaments of Law, Economic and Political Weekly, XLIX, No. 14, 5. pp.82-91
  3. , S.M (1996) Dalit Christian in India, Economic and Political Weekly,Vol.XXXI, No.50. pp.3243-3244
  4. Riemer A.S., (2009) Christian Dalits, Sage publication, New Delhi: pp.47-112
  5. Rowen Robinson and Sathianathan Clarke., (2003) Religious Conversion in India, Oxford University Press, New Delhi: pp.323-350
  6. , S.M. (2005) Understanding Indian Society: The Non Brahmanic Perspective, Rawat Publication, New Delhi.
  7. Madan T.N (1991) Religion in India, Oxford University Press, New Delhi: pp.379-389
  8. Fuller, C.J.Indian Christians: Pollution and Origins.Man, New Series, Vol. 12, No. 3/4. (Dec., 1977)
  9. Henderson, Carol. Culture and Customs of India. Greenwood Press, 2002.
  10. Koshy, Ninan. Caste in the Kerala Churches. Bangalore: Christian Institute for the Study of Religion and Society, 1968.
  11. Manickam, Sundararaj. Studies in Missionary History: Reflections on a Culture-contact. Christian Literature Society, 1988.
  12. Azariah M. The Un-Christian Side of the Indian Church. Alit Sahitya Academy, 1985.
  13. Kenneth, Ballhatchet (1998). Caste, Class and Catholicism in India, 1789–1914. Routledge.
  14. http://shodhganga.inflibnet.ac.in
  15. http://www.historyteacher.net
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  17. http://krishna.org
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  26. cwmission.org

 

The Study on Influence of Psychological and Socio Cultural Factor on the Share Market Operations. Reference to atticaloa District, Eastern Province, Sri Lanka.

A.Andrew

Stock market is an important part of the economy of a country. The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country to a great extent. That is the reason why, the government, industry and even the central banks of the country keep a close watch on the happenings of the stock market. The stock market is important from both the industry’s point of view as well as the investor’s point of view.

This study focuses the influence of psychological and socio cultural factors to implement on stock market in Batticaloa District in the Eastern part of Sri Lanka. This study was conducted with two research objectives: to find out the degree of psychological characteristics of potential investors regarding the stock exchange and to evaluate the level of support of socio culture environment to implement in share market.Self motivation, perception and attitude is the dimension of identifying the psychological characteristics. Social culture factors are including language skill, brokers support and culture support to mature the socio culture supportive.The study was conducted among the potential investors reside in the various part of the Batticaloa District. The data were collected from the 100 sample of people. The proportionate stratified random sampling method was used to select the sampling units and the structured questionnaire was used to collect the data. The data were analyzed using Univariate Analysis and Bivariate analysis techniques. The unit of analysis was individual person.

Finding of the study revealed that respondents (potential investors) were moderate level supportive to implement the stock exchange as indicated by the degree (measured as mean value) of their psychological characteristics (Self motivation 3.5), perception (3.4), and attitude (3.4). Socio cultural environment (3.17) was moderate level influence. In overall this study was find out moderate level supportive to implement the stock exchange in Batticaloa.

Keywords: Investment, Psychology, Stock Exchange, Investor, and Socio Culture Environment

 

 

  1. INTRODUCTION

An island nation situated at the Southern tip of India, Sri Lanka is often referred to as the Pearl of the Indian Ocean. With the end of a bitter three decade long civil conflict, the country is taking advantage of new found peace and stability and growing economic prosperity to make its mark as a global logistics center.

Increased political stability is laying the way for strong growth on investment as the Government formulates long term robust development plans to drive economy wide sustainable growth.

Our nation is developing nation and agricultural one for hundred years due to our capability of resources, gain knowledge and technology requirements even we greater than some nations. If we want to become leading one we should change our habits of investment.

Eastern province is a one of the nine provinces in Sri Lanka. The Batticaloa is a one of the district in Eastern Province. Our society based on knowledge income and saving has an essential role and making the most valuable effects by using financial system at an economic entity level.

The fundamental factors such as economy, industry and company analysis play a key role in investment decision process. In earlier there are few ways to invest their money for more money such as purchasing land and gold, invest in education and business ,life insurance, bank deposit share market etc.. But now there are twenty sectors for investment in stock exchange. Each and every sector is important to develop the nation.

The word Investment refers to the deployment of surplus funds either in the financial assets or in the physical assets with the expectation of getting an optimum return in future. R.Jayaraman, Dr.G.Vasanthi, M.S.Ramaratnam, (JBM&SSR Volume 3 ,2014).

These are under the stock exchange there are twenty sector to invest the money which is functioning under the capital market. First we understand the capital market. The Financial Market, which is the market for credit and capital, can be divided into the Money Market and the Capital Market. The Money Market is the market for short-term interest- bearing assets with maturities of less than one year, such as Treasury bills, commercial paper, and certificates of deposits. The major task of the Money Market is to facilitate the liquidity management in the economy. The main issuers in the Money Market are the Government, banks and private companies, while the main investors are banks, insurance companies and pension and provident funds. The Capital Market is the market for trading in assets for maturities of greater than one year, such as Treasury bonds, private debt securities (bonds and debentures) and equities (shares). The main purpose of the Capital Market is to facilitate the raising of long-term funds. The main issuers in the Capital Market are the Government, banks and private companies, while the main investors are pension and provident funds and insurance companies.

 The Financial Market can be also be classified according to instruments, such as the debt market and the equity market. The debt market is also known as the Fixed Income Securities Market and its segments are the Government Securities Market (Treasury bills and bonds) and the Private Debt Securities Market (commercial paper, private bonds and debentures). Another distinction can also be drawn between primary and secondary markets. The Primary Market is the market for new issues of shares and debt securities, while the Secondary Market is the market in which existing securities are traded. (http://www.cse.lk/static/introduction

Investment, first of all we will learn here that what Investment is? Is Investment just a money or capital? Is Investment just a part of your salary or Income? We will answer all these questions in a single line that Investment is that part of your money whose nominal value increases along with the inflation or time to increase its real value. We will learn some benefits of investing which you must know before investing in stock market.

The part of money which you park in some avenues like Bank Deposits, Real Estate, Jewellery or Stock Market to get some return on that capital in future is also known as Investing or Investment.

There are many Instruments of Stock Market called Securities like Shares, Bonds, Debentures etc. and this stock market have its own benefits in his own way for every person who invest in stock market. We will discuss here the advantages and the benefits of investing in Stock Market which you must know before Investing in stock market.

Easy Liquidity: It is the very first benefits of investing, In stock market shares and securities are traded in very high volume which make it a volatile market so there is very easy liquidity in stock market, like if you want to turn your investment in stock market into cash then you can do that very easily. Flexibility: Investing in stock market is very flexible like the market has ups and downs in prices at every trade session, price of stock market moves with the rapidity and flexibility of this market.

Regulatory Framework: Stock Market works under some regulatory framework to protect and safeguard all its investors. For example: In Sri Lanka the Securities and Exchange Commission (SEC) works as a Regulatory Framework Body to safeguard all investors. Maximum Returns: According to the long term perspective it is found that Investing in Stock Market gives maximum returns. For example:

Business Taste: Well, According to me it is the best benefits of investing in stock market you can ever have, here from Business Taste I mean that when a person trades or invest in stock market everything is here works like a business a modern style business. Sole Proprietorship: If you invest in stock market then you are starting your own business where your investment is your capital, like the more your trade is in profit the more your business grows and you are the only person to run this business that is why investing in stock market is your sole proprietorship business.

While in the midst of important transformation to an industrialized economy, its traditional stronghold in the service industry is growing with simultaneous speed. The change in the mindset of the investor’s leads to change in the trend of investment ways. The investor’s sentiment may either be optimistic or pessimistic. The people sentiment and socio culture sentiment are complimentary to each other. Any change in social change lead to a substantial change in the investor’s behavior similarly any change in the investors’ sentiment leads to a substantial change for social culture environment.

At presently telecommunication, bank and industry and food & beverage sectors are very popular one in the capital market and several advantages on investing shares even in the Batticaloa district still there is so many traditional ways are following by the people on investment. Here share investment way is infancy investment way. It should be encourage due to globalization and survive in future change.

Therefore, I have intended to study the influence of social and psychological factors on implement in share Market in Batticaloa District.

  1. PROBLEM STATEMENT

The Sri Lankan share market continues to shine as one of the best performing ones. According to Bloomberg news service in 2009.CSE is one of the most modern stock exchange in South Asia a fully automated trading platform and market capitalization of over US$ 23 billion, it has been one of the best performing stock market in the world, with average daily turnover US$ 18 million. http://kenangasl.com/why-sri-lanka/colombo-stock-exchange-cse/

Batticaloa is one of the districts in Sri Lanka, Still now Stock Exchange did not located in Eastern Province. There are huge amount of lands, higher education institutes, big amount of population who are knowledgeable and so many financial institutions.

If the stock exchange will be establish in Batticaloa district, that gives great investment opportunity to public and it will lead to economic development.

Therefore this present study aims to find out the influence of psychological and socio culture environment to establish the stock market in Batticaloa district.

  1. RESEARCH QUESTIONS
  2. What is the degree of psychological characteristic of potential investors in stock exchange?
  3. To what extent the socio culture environment is favorable to implement in the stock exchange?

4.OBJECTIVES OF THE STUDY

  1. To find out the degree of psychological characteristic to implement in Stock Exchange.
  2. To evaluate the level of favorable of Socio Culture environment to implement in stock exchange.
  3. SCOPE OF THE STUDY

This research is possible to study level influence of psychological and Socio culture factors to implement the share market, based on gender, education, ethnic group, designation, monthly income level, and investors’ behavior of particular people who are living in Batticalo district.

Therefore the researchers have scope of this study to the Batticaloa district and also selected 100 people which use in proportionate stratified random sample size in Divisional Secretariat Divisions in Batticaloa district to carry out this research study.

 

 

  1. LITERATURE REVIEW

Psychological Characteristic

Investors are normally assumed to make their financial decisions rationally according to classical economic theories but some novice investors make unsuitable investment decisions based on irrational exuberance (Ricciardi, 2008).

The investor sentiment is primarily based on investor’s psychology. Individual expectation, Individual optimism, individual ability and individual confidence are the four major psychological components of investor sentiments. On other words the investors sentiments are run by individual expectation, individual optimism, individual ability and individual confidence (R.Jayaraman,Dr.G.Vasanthi.M.S.Ramaratnam, JBM&SSR 2014)

Psychological factors operating within individual partly determine people’s general behavior and thus influence their behavior as consumer. Primary psychological influence their behavior as consumer are perception, motives, learning, attitudes and personality and self concept. Even though these psychological factors operate internally, they are also very much affected by social factors outside the individual. (Pride M Ferrell .O. C, 2006)

Emotional development of children and is part of developmental psychology, the study of changes in behavior that occur through the life span. Cognitive psychology deals with how the human mind receives and interprets impressions and ideas. Social psychological looks at how the actions of others influence the behavior of an individual.

(http:/www.medterms.com/script/main/art.asp/articlekey)

The persons buying choices are also influenced by four major psychological factors motivation, perception, learning, and beliefs and attitudes. (Philip Kottel, 2005)

Consumer attitudes are composite of a consumer’s beliefs about feelings ,about behavioral intentions towards some “object “ – within the context of marketing , usually a brand, product category, or retail store. These components are viewed together since they are highly interdependent and together represent forces that influence how the consumers will react to the object.

 Consumer attitude are considered by many marketers to be accurate predictors of consumer behavior, making the study of attitude formation and change an important topic. Attitudes are learned tendencies to perceive and act in a consistent way toward a given objective or idea, such as a product, services, brand, company, store or spoke person. This definition emphasizes the impact on attitude of several of other concepts.

The attitude is a person’s enduring favorable or unfavorable evaluation, emotional feeling, and action tendencies toward some object or idea. People have attitudes towards almost everything: religion, politics, clothing, music and foods. Attitudes put people into a frame of mind: liking and disliking an objects, moving towards or away from it (Phillip Kottler

Socio Culture Environment

According to Kottler views culture factors exert the broadest and deepest influences on consumer behavior. Culture, subculture and social class, reference group, family and social roles and particularly important in buying behavior.

  1. METHODOLOGIES

Sample of the Study

 

The total population for the study was in Batticaloa district people. There are 100 people were  selected who are resident of Divisional Secretariat division in Batticaloa District (100%) as sample by using stratified random sampling method.

Data Collection Method

In considering objectives it was a cross – sectional one in the time horizon because data were collected in a one single time from the respondents but the unit of analysis was the people of the selected area in the Batticaloa district.

The questionnaire is a structure technique for data collection. The primary data were collected through questionnaires and interviews from the respondents. The questionnaire developed based on three parts, namely research information, personal information and investor’s behavior. In this research questionnaire is closed ended. In general closed questions are considered as more efficient and reliable than open ended questions. In the research one of the ordinal measures called “Likert’s five points rating scale” is used to require respondents to order their answers.

  1. Methods of Data Analysis

Data Presentation and Analysis

The data were analyzed by using univariate analysis and bivariate analysis techniques. In this case, the unit of analysis was individual person of selected area in Batticaloa district.

Method of Data Evaluation

Each variable is given a scale from 1-5 to show the extent of agreement, based on responses, univariate measures were calculated for each of variables. The mean value is lying in the range of 1-5. The range is explore the particular result of this study the range between 1 and 0.25 is express the low level influence for this study. The range between 2.5 and 3.5 is assumed moderate level influence on this study. The range above 3.5 to 5 is considered high level influence on this study. This decision rule is used to measure the level of influence. It shown in the table.

  1. Implication and conclusion

Psychological characteristic of people on Share Market operations in Batticaloa district.

Psychological Characteristic variable with three dimension including self motivation, perception and attitude are evaluated the influence of Psychological Characteristic of people on the share market operations in Batticaloa. We test through univariate analysis and bivariate analysis techniques. This outcome express the mean value is 3.4733 and standard deviation is 0.4524. It is shown in the table 3

If we want to invest in share market we should wish on the activities. That desire depends on our mind likewise involvement on share market operations also leads by our mind. The society should be support to run the business.

The first objective is obtained through the psychological characteristic variable. It is moderate level supportive on this study.

Extent of Social Cultural Environment Supportive to Invest on Share Market Operations.

Socio Culture variable with three dimensions are knowledge on share market, stock brokers support and cultural support. Those dimensions help to identify the influence of socio culture environment. We test through univariate analysis and bivariate analysis techniques. This outcome express the mean value is 3.1733 and standard deviation is 0.23915.

The second objective is obtained through the socio culture factors. It is moderate level supportive on this study.

Overall Result

 

Eventually when we observe the influence factors for an establishment of the stock exchange in Batticaloa district. Table 4   clearly discloses that influence factors are moderate level to establish the stock exchange in Batticaloa district.

  1. CONCLUTION AND RECOMMENTATION

To examine two variable of research we have used six dimensions. All research variables have been measured due to the nature of measurement and research objectives have been investigated with using of mean and standard deviation that summarized in Tables.

It is commonly believed that the investment decision of the investors is driven by the sentiment of investors. Investor’s psychological characteristic and socio culture trends were carefully indentified with the help of existing review of literature. The study has revealed that image factor has appeared as the most influence factor in determining investors decision making. Similarly individual optimism has become the key factor in influencing the sentiment of the investors.

In Batticaloa district there are many educational institutes those are higher education as university, college of education, teacher’s training college, international school and vocational training center even it is distant from share investment, there are low level of awareness and lack of stock brokers firm and information center on this type of investment. In any type of education should change the people and their society. These institutions can be change through subject of finance and investment. We can revolve the people’s investment pattern through provide psychological training as skill, attitude and knowledge development. This step change social culture environment due to most of them are more believe on educated people so if we change the educational society’s investment pattern other type of society also change into share market. Those are possible; the stock exchange will be established in Batticaloa district because visible services are more invited by the people. Based on this type of investment way some are known well some are unknown therefore, we assume this is a childhood investment way  in Batticaoloa, We state without building we cannot run the business perfectly based on our research.

Finally this study convey people are mostly involved all type of investment even experientially traditional investment is well known by the people than share investment because inadequate resources and deepest knowledge on this field. Psychological and socio cultural motivational factors are motivated the people to invest in share market so implementation is necessary one in Batticaloa district.

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