Volume 5 Number 1 (April - September 2005)

  Sources of Small and Medium Enterprises Excellent Business Performance in a Service Oriented Economy
Koji Tanabe, Chihiro Watanabe

Under the paradigm shift from an industrial economy to a service oriented economy that emerged in the 1990s, while Japan has been experiencing the “lost decade,” certain manufacturing industries as electrical machinery and automobile have been maintaining their strong competitiveness. Not only larger enterprises but also certain small and medium enterprises (SMEs) have been making a significant contribution to this competitiveness. Compared with larger enterprises, SMEs incorporate comparative disadvantage in capital, human resources, information and technology. Despite this disadvantage, the dramatic advancement of information technology (IT) has been making SMEs position more advantageous in terms of organizational flexibility, efficiency and subsequent qualified services management. Consequently, quite a few SMEs have been demonstrating excellent business performance through efficient and effective technological innovation. Such excellent performance can be attributed to their business strategy aiming at maximizing the benefits of tie-ups with external institutes for assimilating external knowledge to improve their service value. This paper attempts to identify the sources of such success. First, on the basis of an empirical analysis of the electrical machinery firms in Japan, attempts to demonstrate that effective R&D is essential for SMEs to maintain excellent business performance and that the R&D activities in outstanding SMEs are more efficient than larger enterprises. Secondly it identifies, identifies the sources that enable SMEs achieve better performance than larger enterprises in a service oriented economy. Third, based on the case analyses of three Japanese SMEs that achieved excellent business performance in the late 1990s, the strategies of linking them with user enterprises, universities and government for technology monitoring and capability development are suggested.

  The Capacity Utilization of an Airline and its Impact on Cost
Danish A. Hashim

In the present business environment, many airlines in the world are facing financial problems due to their poor capacity utilization resulting from the lack of demand. In view of uncertainty about future demand, it is not easy for airlines to adjust their capacity accordingly. The present paper makes an attempt to address this problem by making a case study of the state-owned Indian Airlines, which is suffering financially since long mainly due to poor capacity utilization. By considering a time period between 1964-65 and 1999-00 and by applying a translog variable cost function, the capacity utilization and its impact on unit cost has been estimated with respect to two alternative measures of potential output: (i) where short-run average cost is minimum, and (ii) where short-run and long-run average cost curves are tangent. From the findings of the study it is concluded that an airline may benefit financially by ensuring utilization of capacity in accordance with short-run requirement even if capacity adjustment from long-run perspective is difficult.

  Structural Equation Modeling of Factors that Influence Consumer Internet Purchase Intentions of Services
David Njite, H.G. Parsa

The objective of this study is to investigate factors that influence Internet purchasing. A model to explain the influence of different factors is developed based on the Theory of Reasoned Action and empirically tested through a survey. Respondents indicated that subjective norms and trust have no significant influence on purchase intentions. This contradicts documented literature but could be attributed to the fact that, as demographics change and access to the Internet increases, consumer perception and factors that influence intentions to purchase on the Internet change too. This study is focused on college going respondents because it was felt that they would provide valuable information because of their future of e-commerce. The objective of this study is to investigate factors that influence Internet purchasing. A model to explain the influence of different factors is developed based on the Theory of Reasoned Action and empirically tested through a survey. Respondents indicated that subjective norms and trust have no significant influence on purchase intentions.

  Service Quality: Revisiting the Two Factors Theory
Nimit Chowdhary, Monika Prakash

The present paper is based on the findings of the ongoing Ajmer Experiments. Ajmer Experiments are quasi-experiments that inquire into the consumer evaluation of service quality. The paper presents the two factors’ theory of the author. The paper suggests that a more detailed approach is required wherein each factor needs to be considered independently and not as an aggregate dimension. The paper reports evidence to support two-factor theory for services that was discarded by earlier researchers. The paper argues to differentiate between the factors and the outcome of performance along these factors. The study describes the two factors as ‘vantage factors’ and ‘qualifying factors’. Marketers need to be selective in that certain factors behave as vantage factors while others as qualifying factors. The two are different in nature and require a differential treatment. The paper also analyses the nature and behavior of these two types of factors. Managerial implications of these factors are also dealt with in this paper.

  Correlates of Service Quality in Banks: An Empirical Investigation
Mushtaq A. Bhat

In search of competitive advantage, business organizations are placing more focus on service quality. Research has shown that high service quality contributes significantly to profitability and productivity. In addition, knowledge of the costs and benefits of retaining consumers relative to attracting new ones draws company’s foremost attention to looking after present customers, responding to their needs and problems and developing long term relationships. Interest in the measurement of service quality is, thus, understandably high. An attempt has been made in the present paper to study service quality in banks and its variation across demographic variables. The study offers suggestions to make overall service quality in banks more effective and efficient. The results of the study lead us to the conclusion that service quality of foreign banks is comparatively much better than that of Indian banks and there are service quality variations across demographic variables.

  An Analytical study of the Teaching Methods at affiliated B – Schools in Hyderabad and Secunderabad
T.D.Babu, Dr.G.Jayabal

In the present era a lot of focus is on wider accessibility of higher education in management and a need continuing relevance of courses and quality assurance. The world of business is changing very fast. From a predominance of owner – management enterprises, we are witnessing a steady shift towards a professional management. This has resulted in the demand for management graduates with analytical, interactive, interpersonal, conceptual and managerial skills. But today’s management education in the country is increasingly criticized. B – Schools need to re-examine the role they are performing. At present there is a need to develop indices of quality in management education. There is a need to study the teaching methods followed and required to give the quality output. For this purpose this study is conducted based on the survey of teaching methods practiced at affiliated B – Schools in Hyderabad and Secunderabad.

  Soft Policy Instruments for Inducing Industrial Innovation in a Service-oriented Economy: a Comparative Analysis of the Vision System and University System  Koji Tanabe, Chihiro Watanabe

Under the new paradigm characterized by a shift from an industrial economy to a service-oriented economy that emerged in the 1990s the role of soft policy instruments as Japan’s vision system inducing industrial innovation has become crucial. However, it has not functioned as effectively in a service-oriented economy as it did in an industrial economy in identifying and providing future direction, instilling confidence and developing general consensus to induce vigorous R&D investment by industry. Contrary to this, the university system has played a significant role in the United States in stimulating innovative leadingedge activities in a way that is similar to Japan’s vision system in the 1980s. These observations suggest that the vision system and university system share a similar function in inducing innovation, with the former being compatible with an industrial economy and the latter corresponding to a service-oriented economy. Both provide future direction for innovation and develop general consensus. However, while the vision system identifies future direction by utilizing in advance foresight and developing general consensus, the university system provides mobile foresight. In other words, it functions and achieves consensus not in advance but in a self-propagating way. While the vision system corresponds to the nature formation mechanism for manufacturing technology, university system corresponds to the similar process in information technology (IT) that leads a service-oriented economy. In addition, this can be attributed to the US government’s policy for promoting university-industry partnership and this policy functions well in activating the IT nature formation mechanism by stimulating resonance with relevant institutional innovation systems. This paper, on the basis of a comparative empirical analysis of the role of the vision system and university system in Japan and the United States, attempts to demonstrate the above hypothetical view with respect to the use of the vision system and university system as soft policy instruments corresponding to an industrial economy and a service-oriented economy.

  Metamorphasis of Marketing Financial Services in India
Krishna Chaitanya V.

The Financial Service industry in India has grown tremendously particularly after eighties. Number of new services and products like credit cards, ATMs, consumer finance, mutual funds, dematerialization, factoring, securitization, credit rating, leasing, investment banking, forfeiting, have become a norm since then. The driving forces behind this development are liberalization, economic reforms and deregulations, economic changes and rapid developments in capital markets. All these factors provided a greater freedom to private sector to become more competitive, productive, effective and efficient. The customers have become more demanding and prefer innovative products and quality services at faster speed from the companies. This has made the job of financial service company much tougher and challenging, as they need to understand the customers changing needs, offer new products and services and most importantly they have to promote these.

Therefore in the present day context it has become even more important to learn the application of marketing theories of product, providing service quality, distribution and planning for a customer oriented marketing strategy.

The paper discusses about

i. Understanding the meaning, nature and scope of financial services activities in India.

ii. Studying the features of financial services and financial products

iii. To frame a marketing strategy on how to attain service quality and focus on effective distribution.

iv. To study the key drivers of change in financial service industry.


  Seamless Enterprise Computing Using Enterprise Application Integration (Eai)
Nilanjan Banerjee, Ashish Chordia, Prabina Rajib

Enterprise computing has undergone a remarkable evolution in recent past. Emphasis on easy availability of data to customers and efficient management of applications within an enterprise has lead to the need of integrating and automating applications within the corporate environment. This paper describes a dynamic approach towards business integration that has of late gained ground. It is called Enterprise Application Integration (EAI). EAI is a cost efficient method of integrating existing applications within an enterprise and adding new technologies to the mix. We first discuss the various aspects of enterprise computing and the need for business integration. An overview of various technologies related to EAI is provided. A comparison with other approaches like B2B and customer integration is also provided.

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