Showing papers in "Journal of Indian Business Research in 2014"

Frugal innovation: aligning theory, practice, and public policy

Abstract: Purpose – The paper aims to address two key gaps in the literature of frugal innovation. First, it disambiguates frugal innovations into its types, and into the various levels at which it happens. Second, it builds upon the theoretical foundations of resource-based view, new institutional economics, economics of location, and institutional theory to offer testable propositions on determinants of frugal innovations. Design/methodology/approach – This is a conceptual paper. The authors first systematically reviewed the extant literature on frugal innovation and related domains and categorized the existing understanding on the domain into various typologies of frugal innovation. The authors then justified why certain key theoretical lenses are tenable to understand the determinants of frugal innovation and then examined the conditions that enable such innovations. Findings – The paper has three key findings. First, frugal innovation comprises of a frugal mindset, a frugal process and a frugal outcome, which may be practiced distinctly. Second, frugal innovators are of three types: grassroots-level, domestic-enterprise level, and MNC-subsidiary level. Each has their distinctive incentives and styles of frugal innovation. Third, a frugal mindset is encouraged by a resource-scarce environments, weaker institutional intermediaries, and a higher tolerance for uncertainty. Frugal processes are espoused by poor property rights regime and a critical size of lead market; and frugal outcomes are influenced by the network-position of innovators, and the presence of critical lead-markets. Research limitations/implications – The propositions are though testable, but proxies need to be developed to measure the variables, such as a frugal mindset, and a frugal process. Further, the current view on various types and levels of frugal innovation is that of mutual exclusivity, whereas this may not always be the case. Hence, it might be useful to identify contingencies in which these distinctions fade away. Originality/value – The paper is valuable in two key aspects. First, it offers a much-needed theoretical underpinning to the phenomenon of frugal innovation, such that the phenomenon could be better understood and influenced. Second, it nuances the phenomenon by identifying distinct types of frugal innovators in terms of their motivation, institutional influences, and styles of innovation.

Internet banking adoption in India: Structural equation modeling approach

Abstract: Purpose – The purpose of this paper is to understand the factors influencing adoption of internet banking in urban India. Design/methodology/approach – A model has been proposed based on the technology acceptance model (TAM). The proposed model is referred to as extended TAM and is better suited to identify and quantify the important factors that influence adoption of internet banking technology in India. Primary data relating to the variables affecting technology adoption and demographic profile are collected using a questionnaire survey. Data were collected from 344 individuals who are either current/prospective internet banking users. Structural equation modeling was used to identify the important factors affecting internet banking technology adoption. Findings – The factors of perceived usefulness, perceived ease of use, social influence, awareness, quality of internet connection and computer self-efficacy are primary determinants of the attitude toward the use of internet banking in urban India. The ...

MNCs in India: focus on frugal innovation

Abstract: Purpose – Frugal innovation is a term that has been used to describe the low-cost products and services, as well as the systems and processes adopted by organizations to develop them. The purpose of this paper is to examine the experience of multi-national companies (MNCs) in India as they adopt the philosophy of frugal innovation to develop products that are high in technology but low in terms of cost to meet the requirements of the market conditions in India, and similar low-income economies. Design/methodology/approach – The case study methodology was adopted to understand the experiences of the Indian subsidiaries of two MNCs, Bosch India and 3M India. Data were acquired through interviews with key decision makers, documents, and publicly available information. Findings – The two MNCs have increased research and development (R&D) in India and adopted the philosophy of frugal innovation which combines high technology with low costs. Based on the analysis, some propositions are presented indicating that...

Analytics based decision making

Abstract: Purpose – This paper aims to trace the history, application areas and users of Classical Analytics and Big Data Analytics. Design/methodology/approach – The paper discusses different types of Classical and Big Data Analytical techniques and application areas from the early days to present day. Findings – Businesses can benefit from a deeper understanding of Classical and Big Data Analytics to make better and more informed decisions. Originality/value – This is a historical perspective from the early days of analytics to present day use of analytics.

Online privacy concerns and consumer reactions: insights for future strategies

Abstract: Purpose – The present study aims to identify and study the online privacy concerns, its explanatory variables and their affect on reactions and online purchasing behavior of Indian consumers. Globalization means that companies are setting manufacturing units where their cost dynamics are most attractive and then servicing the customers in different markets. Therefore, today, most of the globalized firms are using technology to overcome physical barriers with the customer. The value chains are being reorganized to come up with innovative strategies for sales, delivery and service channels. These strategies use Internet as a competitive tool, thereby providing marketers with a completely new landscape to work with. This channel means that now even the tangibles (products) are being sold on the basis of intangibles (services). In this landscape, the success of an online business depends on its capability to think globally and act locally. Sensitivity displayed by a company to effects of cultural nuances on a...

Rewards for failure: an explanation for anomalous executive remuneration

Abstract: Purpose – The present paper aims to question the rationale of paying a high remuneration to executives who are presiding over loss-making companies. The neoclassical wage model asserts that the remuneration of executive directors is positively related to their company’s financial performance. However, evidence suggests that executives can obtain a higher level of personal compensation regardless of how the company performs. Design/methodology/approach – The relationship between executive remuneration and performance for viable but loss-making Bombay Stock Exchange (BSE)-listed companies has been studied for 2009-2011. The paper examines the determinants of the level of executive remuneration as well as discerns the strength of the remuneration–performance relationship, both at the overall and across various board hierarchical levels, using the JM sensitivity and HL elasticity models. Findings – Results for univariate and multivariate analyses highlight that both the remuneration–performance sensitivity an...

Indian and US consumer purchase intentions of cloud computing services

Abstract: Purpose – The aim of this paper is to focus on consumer’s perceptions of ethical and innovative aspects of cloud computing services. Cloud computing is a technological innovation that more consumers are adopting because of its mobility and accessibility in storing data. While there has been an increased awareness of cloud computing by consumers, there is limited research about the factors influencing consumers to purchase cloud services. Design/methodology/approach – This study uses the technology acceptance model and the social cognitive theory as the theoretical frameworks to understand how perceived ease of use, perceived usefulness, ethical self-efficacy, innovation self-efficacy, performance expectancy and privacy impact purchase intention of cloud computing services. Research hypotheses are developed from the literature and tested by a survey questionnaire in India and the USA. Findings – The results of the analysis suggest that consumers in India and the USA are affected by similar factors when dec...

Loyalty intentions: Does the effect of commitment, credibility and awareness vary across consumers with low and high involvement?

Abstract: Purpose – This article aims to present a model linking loyalty intention, brand commitment, brand credibility and brand awareness. The model shows the mediating role of brand commitment and brand credibility on loyalty intention. The researchers also investigated the changes in the given model under high and low involvement conditions, explicitly considering involvement as between-subject differences rather than between-product differences. The change in customer loyalty intention under varying levels of product involvement is a highly debated topic among researchers. Design/methodology/approach – The model was tested on a sample of 318 executives who have bought and are using deodorants. The respondents had given responses for loyalty intentions, brand commitment, brand credibility, brand awareness and involvement towards the brand of deodorant that they use. Confirmatory factor analysis was used to validate the tool for measurement of constructs and multi-group structural equation modelling for testing the hypotheses and comparing the nested models. Findings – The difference between high and low involvement groups in the given model supports the hierarchy-of-effects view. We found that attitude precedes behaviour for highly involved individuals but followed a different hierarchy among the individuals with low involvement. Research limitations/implications – This research investigates the proposed model for a single product category and so the scope of generalisability is limited to the product selected. This research has considered behavioural intention rather than the behaviour in this study. Practical implications – The study demonstrates the differences in the hierarchy-of-effects among low/high involvement groups. Thus, the findings will have an impact on the approach of practitioners, as different strategies will have to be adopted for the enhancement of loyalty intentions based on the difference in perceived involvement of consumers. Originality/value – This paper shows the need to differently target consumers with different levels of perceived involvement, within the same product class and thus between-subject involvement can be used as a segmentation variable.

Comparing retail formats in an emerging market

Abstract: Purpose – This study aims to examine the importance of credit and low price guarantee (LPG) on consumer purchase intention across types of retail store formats in an emerging market context. Design/methodology/approach – A 2 (kirana/modern retail)×2 (high/low LPG)×2 (credit/no credit) experimental design was used for this study. A sample of 200 respondents was asked about their purchase intention for a newly introduced hypothetical toothpaste brand and six hypotheses were tested. Findings – Findings show that credit and level of LPG determine consumer's purchase intention across store formats. The presence of credit and high LPG increases the purchase intention; however, relatively importance of these two varies by type of store. The absence of credit at kirana store definitely reduces the buying intention, while same is not true for modern retail store, where level of LPG is more important than the credit. Interestingly, buyer is likely to discount high LPG for a month's credit offered by a kirana store....

Stylized patterns of implied volatility in India: a case study of NSE Nifty options

Abstract: Purpose – The aim of this study is to examine the “volatility smile” or/and “skew”, term structure and implied volatility surfaces based on those European options written in the standard and poor (S&P) Nifty equity index. The stochastic nature of implied volatility across strike price, time-to-expiration and moneyness violates the core assumption of the Black–Scholes option pricing model. Design/methodology/approach – The potential determinants of implied volatility are the degree of moneyness, time-to-expiration and the liquidity of the strikes. The empirical work has been expressed by means of a simple ordinary least squares (OLS) framework and presents the estimation results according to moneyness, time-to-expiration and liquidity of options. Findings – The options data give evidence of the existence of a classical U-shaped volatility smile for the Indian options market. Indeed, there is some evidence that the “volatility smirk” which pertains to 30-day options and also implied volatility remain higher...

Moderating role of perceived risk in credit card usage and experience link

Abstract: Purpose – The purpose of this paper is to present the exploratory research into the moderating influence of perceived risk on credit card usage and experience link and to know, among various types of risks, which risk is mostly perceived by credit card users. The study also investigates the dimensions of usage and service experience and their relative significance in credit card industry. Design/methodology/approach – The data were collected from 220 credit cardholders working in the various business and service units operating in Gandhi Nagar area of Jammu city. Findings – The study captures a clear and strong moderating effect of perceived risk on usage and service experience link. Time risk appeared to be the strongest moderator. Further, sense of security and confidence benefits emerged as the strongest predictors of usage and service experience, respectively. Research limitations/implications – The study is based on single financial service only, i.e. credit card. To generalise the results in financi...

Effects of competitive psychological climate, work-family conflict and role conflict on customer orientation: The case of call center employees in India

Abstract: Purpose – The purpose of this paper is to consider the impact of a competitive psychological climate on the levels of role conflict and work-family conflict in call center employees and their further impact on customer orientation. Design/methodology/approach – The conceptual model is developed through a review of literature and is then validated in the context of call center employees in India. A total of 281 responses were considered. The model is validated using a multi-group analysis in order to consider a possible influence of gender. Findings – The model is found to have a very good fit and four of the five hypothesized relationships are found to be significant. The study thus establishes the impact of a competitive psychological climate on the role conflict and work-life conflict in the case of service employees. Research limitations/implications – The study uses a self-reported measure of customer orientation as well as the sampling methodology is not random. These two aspects could limit the gene...

Default risk modelling using macroeconomic variables

Abstract: Purpose – This paper aims to find out significant macroeconomic variables, incorporated as sensitivity variables (macroeconomic sensitivities), affecting financial distress for a sample of listed Indian firms. Design/methodology/approach – The study uses a matched pair sample of defaulting and non-defaulting listed Indian firms. It uses two alternative statistical techniques, viz., logistic regression and multiple discriminant analysis. The macroeconomic sensitivities are estimated by regressing the monthly stock return of the individual firm on the monthly changes in each macroeconomic variable. Findings – Sensitivity to changes in the stock market (stock market sensitivity) and sensitivity to changes in inflation [Consumer Price Index (CPI) sensitivity] have a significant impact on the default probability of a firm. Stock market sensitivity has a significant positive relationship with the probability of default, and CPI sensitivity has a significant negative relationship with the probability of default....

An empirical investigation of repeat buying behavior of customers of two brands in India

Abstract: Purpose – The purpose of this paper is to attempt to test whether price and quality have any influence on customer repeat purchase probability. Managers should know the strategic determinants of repeat purchase probability to retain customers. Design/methodology/approach – Primary data were gathered on repeat purchase, price and quality via a survey of 400 customers of two brands in the Business-to-customer (B2C) sector. Then 380 × 4 data points to a logit model were fitted to estimate the effects of price and quality on customer repeat purchase probability. Findings – It was found that price, quality and price × quality influence customer repeat purchase probability substantially. Furthermore, the elasticities of repeat purchase probability to price and quality are quite high in both cases. Practical implications – Managers should use elasticities to determine how to allocate funds between price and quality to maximize repeat purchase probability. Originality/value – In view of the complexity of customer...

Effect of quarterly earnings announcement under different market conditions: An empirical study of companies constituting SENSEX

Abstract: Purpose – The main purpose of this research study is to investigate the impact of quarterly earnings announcements on stock price movement of the firms constituting the SENSEX under two different market conditions – booming followed by recessionary. Analysis of price effect of quarterly earnings announcements during the five-year period prior to trading suspension, which is also characterized by a booming market condition have been made. Similar analysis during the five-year period following the trading suspension and marked by recessionary market condition has also been carried out side by side. Design/methodology/approach – Event study methodology using daily returns and market model has been used for the purpose of analyzing the quarterly earnings announcement effects on the security prices of the firms. A sign test has also been used along with the event study. Findings – The study reveals that quarterly earnings announcement does not have statistically significant effect on stock returns during the b...

Managing dynamic business environments: India’s future automotive industry

Abstract: Purpose – This paper aims to examine from an information processing perspective how Delphi-based analyses can be used to overcome some challenges of dynamic business environments in emerging markets. Design/methodology/approach – Delphi-based, future-oriented approach utilizing scenario planning methodology based on real-time expert-panel data. Findings – Delphi-based analyses can indeed serve as an information processing aid to reduce uncertainty and equivocality in an emerging market. Originality/value – A multistage analysis approach integrating the political, economic, socio-cultural and technological-stakeholder framework to support and better structure managers’ information processing in an emerging market.