Sbs Jabr Vol5
Sbs Jabr Vol5
Sbs Jabr Vol5
Business Research
September 2017
Volume 5
Table of Contents
Comparative Study of Employee Engagement in M/S. Penam Laboratories Ltd.
and M/S. Shree Nath Life Sciences Pvt. Ltd. in the Pharmaceutical Sector
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3
Comparative Study of Employee Engagement
in M/S. Penam Laboratories Ltd. and M/S.
Shree Nath Life Sciences Pvt. Ltd. in the
Pharmaceutical Sector
by
Gargi Sandilya, Ph.D. and Shubham Gupta
Abstract
This research was conducted to understand the mind set of employees in the pharmaceutical industry in
India with special focus on M/s. Penam Laboratories Ltd. and M/s. Shree Nath Life Sciences Pvt. Ltd.
(SNLS). In addition, the study also aimed to uncover the reasons behind the high voluntary turnover rate
in both companies. The key elements of employee engagement considered in this study are organizational
structure, leadership style, evaluation and appraisals, internal communication, creativity stimulants and
job satisfaction. After a review of existing literature in this area, the researchers arrived at a definition
of employee engagement that has been followed throughout the study. The researchers then framed
the research questions and hypotheses for the study. Primary data was collected through surveys using
convenience sampling and secondary data was collected from the company websites and other sources listed
in the references. The collected data was tabulated and analysed using SPSS. Statistical analyses included
basic descriptive statistics, Cronbach’s alpha for reliability measure and t-test for comparison of means
of the two groups. The results of the study indicate that employees of Shree Nath Life Sciences are more
engaged than those of Penam Laboratories.
Key words: Employee engagement, Employee turnover, Performance, Comparative study, Pharmaceutical
industry, India
Introduction
Employee engagement has become a concern to tive world, each and every organization desires to
organizations in the Volatile, Uncertain, Complex gain competitive advantage over others and em-
and Ambiguous (VUCA - in short) world today. It ployee engagement is the best technique to achieve
has been the key focus for both business academic that advantage (Rashid, Asad, & Ashraf, 2011). By
researchers and entrepreneurs (Larkin, 2009). Hu- involving the employees in organizational activi-
man resources (henceforth referred to as HR in this ties, HR managers motivate them to contribute to
paper) form a key aspect of organizations and the the business and productivity while simultaneously
HR department is concerned with making the best increasing their sense of wellbeing (Swarnalatha
use of all of its manpower resources. Employee & Sureshkrishna, 2013). Organizations around the
engagement plays an important role in maximiz- globe are measuring engagement levels of employ-
ing the organization’s assets – the HR in order to ees in order to improve productivity and profitabil-
gain competitive advantage in the marketplace ity of the organization.
(Heaney, 2010). Organizations that understand and
implement employee engagement strategies can Organizations today, need workers who are
accomplish more than their competitors who are dynamic, creative, willing to contribute and fulfil
unable to positively engage with their employees all the objectives of the organization. In return,
(Kumar & Swetha, 2011). In this global competi- the organization must provide incentives to their
workers such as flexibility, more interesting work
4
and a suitable business environment. When an the employees will keep them motivated and
organization fails to provide such benefits to their skilled in their work. If the organizations do not
employees, they tend to leave, increasing attrition use it, it will be diminished. Therefore, to develop
rates and consequently talent acquisition costs. engagement among employees, human resource
managers should create a positive relationship
Relationship Between Employee Engagement
among employees, and also encourage clear,
and Organizational Performance
honest and reliable communication within the
organization (Garber, 2007). Development of
Southard (2009) has pointed out that each and
meaningful relationships among employees
every organization requires engaged employees
and effective internal communication engages
who are full of energy and enthusiasm and are
the employees towards the work and finally
willing to exceed the expectations of the employer.
increases productivity, retention and profit for the
When the employee is engaged and motivated,
organization (Zajkowska, 2012).
he/she can work more efficiently, resulting
in good production and development of the
An Introduction to M/s. Penam Laboratories
organization (Bhatla, 2011). In the current market
Ltd. - Company 1
situation, employee engagement is considered
a key driver for organizations, since it impacts
Penam Laboratories Limited was founded in
employee retention, loyalty and productivity.
1989, according to their website, and is one of the
Employee engagement plays an important role
renowned manufacturers of the Beta Lactam group
in increasing the morale of employees. It is
of Antibiotic Bulk Drugs, Active Pharmaceutical
perceived as the responsibility of HR managers
Ingredients (APIs) and Formulation in India. The
and senior management to foster satisfaction
plant is located in Dharuhera, Haryana, 60 km
among employees and make them engaged.
from Delhi on NH-8, Jaipur Highway.
Engaged employees are motivated to contribute
their knowledge, skills and abilities to help their
APIs and the Intermediates manufacturing
organization succeed (Saradha & Patrick, 2011).
facility use glass lined reactors and SS-316
A workplace with engaged employees encourages
reactors with a capacity of over 150,000 litres.
commitment, energy and productivity from all
Specialized areas of synthesis include: low
those involved and ultimately helps to improve
temperature handling up to -85° C and high
organizational performance (Sreekanth & Aryasri,
temperature synthesis up to +300° C; large scale
2012).
chlorination facility; and capability of converting
large acids into acid chlorides using different
Actively disengaged employees are almost
chlorinating agents.
three times less sincere towards their work in
comparison with those who are engaged. An
One of the successes of this company is the
engaged employee puts significantly more effort
development of manufacturing technologies
and enthusiasm into their work, demonstrating that
for a few high value agro-chemicals and key
they care for the future of the organization (Mani,
pharmaceutical intermediates.
2011).
Quality Control
Saradha and Patrick (2011) have pointed
out that employee engagement activities
Facilities have fully independent Quality
significantly improve the overall performance of
Control departments with sophisticated equipment
an organization, which is the ultimate objective
such as HPLC (high performance liquid
of every organization, resulting in increased
chromatography) and GC (gas chromatography) to
profits, better quality goods and services and
ensure conformance to stringent quality standards.
improved customer satisfaction with optimum
Well-qualified and experienced chemists carry out
resource utilization. According to Garber (2007)
testing of raw materials and finished goods.
engagement is just like a muscle that continuously
requires exercise to grow and develop. Engaging
5
Products Offered The technology adopted by the company is
proven. The company has appointed sufficient
Penam Laboratories is into the manufacturing numbers of technical staff to carry out their
of APIs. Products offered by them include operations.
Amoxicillin Trihydrate, Ampicillin Trihydrate,
Ampicillin Anhydrous, Cloxacillin Sodium, Products Offered
Dicloxacillin Sodium, Flucloxacillin Sodium,
Flucloxacillin Magnesium and Oxacillin Sodium. Shree Nath Life Sciences Pvt. Ltd. is into
The company also manufactures Intermediates manufacturing chemical intermediates and APIs.
6-APA, CMIC Chloride, DICMIC Chloride, Under chemical intermediates the company offers
FCMIC Chloride and PMIC Chloride. Acetoxy Ethyl Bromide (AEB), Para Nitro Benzyl
Bromide (PNBBR), Para Nitro Benzyl Alcohol
An Introduction to Shree Nath Life Sciences (PNBA), Para Nitrobezaldehyde (PNBDA), MBT,
Pvt. Ltd. (SNLS) - Company 2 Sodium Bromide (NaBr), Hydro Bromic Acid
(Hbr), Sulphuric Acid (H2SO4). Under APIs, the
M/s. Shree Nath Life Sciences Private Limited company offers Cefixime Trihydrate, Cefpodoxime
is a private, limited company founded on 11 Proxetil, Cefdinir and Cefuroxime Axetill.
November 2004. The company website states
that they manufacture various APIs (bulk drugs) The Pharmaceutical Market
and chemicals. The plant is located in the RIICO
Industrial Area, Sotanala, Tehsil Behror, District, The five largest markets for the pharmaceuticals
Alwar, Rajasthan, which is approximately 130 km around the world as specified by Swanson (2015)
from Delhi. are:
6
No. 2: Japan, total pharmaceutical sales in 2013: revenues) (Indian Brand Equity Foundation, 2017).
$94 billion. Driven by the needs of a rapidly aging
population, the world’s third-largest economy is Problem Statement
the world’s second-largest pharmaceutical market.
Highly efficient drug reviews facilitate the rapid In the business environment employee
entry of new products into Japan. engagement is emerging as an area of concern
and therefore, an important area for research.
No. 1: U.S., total pharmaceutical sales in 2013: Organizations of today are concentrating on
$339.7 billion. The average annual expenditure by employee engagement as an effective human
the U.S. on the medication per person is around asset strategy to gain competitive advantage.
$1000, which is almost double the amount which The pharmaceutical industry is both a capital
is spent by countries like Canada, Germany and and labour intensive industry and provides
Australia. employment to all categories of workers. Educated
and skilled workers are required to run machinery
Indian Pharmaceutical Market properly and maintain the documents. On the other
hand, unskilled and uneducated labour is also
While India does not appear in the world’s top required for the posts of helper and other similar
5 list, the Indian pharmaceuticals market is the work. It is important that all of these people work
third largest in terms of volume and thirteenth as a team for the success of the organization.
largest in terms of value, according to a report by Hence, employee engagement is essential for
Equity Master (2016). India is the largest provider effective utilization of human resources in this
of generic drugs globally with the Indian generics segment. According to Saks (2006) there is a
accounting for 20 per cent of global exports scarcity of literature on employee engagement
in terms of volume. Of late, consolidation has in the academic community and he suggests that
become an important characteristic of the Indian the concept of employee engagement needs to
pharmaceutical market as the industry is highly be expanded. The term employee engagement
fragmented. and its importance has been discussed by several
researchers (Heaney, 2010; Kahn, 1990; Saks,
The Indian pharmaceuticals market increased at 2006; Southard, 2009). All the researchers have
a compound annual growth rate (CAGR) of 17.46 suggested that organizations should pay more
per cent during 2005-16 with the market increasing attention to the aspect of employee engagement.
from US $6 billion in 2005 to US $36.7 billion An individual’s intention to leave the organization
in 2016 and is expected to expand at a CAGR of is generally regarded as an important measure
15.92 per cent to US $55 billion by 2020 (Indian of how they feel about their work as well as the
Brand Equity Foundation, 2017). organization (Kular, Gatenby, Rees, Soane, &
Truss, 2008).
Market Size in India
Indigenous research in the area of employee
The Indian pharmaceutical industry, which engagement is still sparse in India, more so with
is expected to grow over 15 per cent per annum regard to the pharmaceutical industry. Having
between 2015 and 2020, will outperform the global uncovered this as a gap in the existing literature,
pharmaceutical industry, which is set to grow at an the authors decided to delve into the subject and
annual rate of five per cent during the same period! study the level of employee engagement in two of
The market is expected to grow to US $55 billion the organizations in this sector in India.
by 2020, thereby emerging as the sixth largest
pharmaceutical market globally by absolute size, Research Questions
as stated by Mr. Arun Singh, Indian Ambassador
to the United States of America. Branded generics While pondering these factors – the objective
dominate the pharmaceuticals market, constituting of an organization to make profits, and to
nearly 80 per cent of market share (in terms of make its employees work to their potential-
7
the authors decided to study and compare the employees’ perception of leadership between
level of employee engagement in two chemical M/s. Penam Laboratories and M/s. Shree Nath
manufacturing plants in the pharmaceutical sector Life Sciences Pvt. Ltd.
in India. The objective was to learn about the • HO3 -There is no significant difference in
best way to increase employee engagement in the employees’ perception of evaluation
the chosen sector. With this purpose in mind the and appraisals process between M/s. Penam
following research questions were formulated: Laboratories and M/s. Shree Nath Life
Sciences Pvt. Ltd.
1. What is the level of employee engagement in • HA3 - There is a significant difference in the
the two chosen manufacturing units? employees’ perception of evaluation and
appraisals process between M/s. Penam
2. What could be some factors contributing to
Laboratories and M/s. Shree Nath Life
better levels of employee engagement in the
Sciences Pvt. Ltd.
pharmaceutical industry?
• HO4 -There is no significant difference
in the employees’ perception of internal
Research Objective communication between M/s. Penam
Laboratories and M/s. Shree Nath Life
In order to answer the previously mentioned Sciences Pvt. Ltd.
research questions the following research • HA4 - There is a significant difference in
objectives were framed: the employees’ perception of internal
communication between M/s. Penam
• To identify the level of employee Laboratories and M/s. Shree Nath Life
engagement in M/s. Penam Laboratories Sciences Pvt. Ltd.
and M/s. Shree Nath Life Sciences • HO5 -There is no significant difference in the
• To identify the difference between the employees’ perception of creativity stimulants
levels of employee engagement in M/s. available in the workplace between M/s.
Penam Laboratories and M/s. Shree Nath Penam Laboratories and M/s. Shree Nath Life
Life Sciences Sciences Pvt. Ltd.
• To identify possible factors that lead to • HA5 - There is a significant difference in the
higher levels of employee engagement at employees’ perception of creativity stimulants
M/s. Penam Laboratories and M/s. Shree available in the workplace between M/s.
Nath Life Sciences Penam Laboratories and M/s. Shree Nath Life
Sciences Pvt. Ltd.
Hypotheses of Study • HO6 -There is no significant difference in the
employees’ perception of job satisfaction
Based on the research objectives the following between M/s. Penam Laboratories and M/s.
null and alternate hypotheses were formulated for Shree Nath Life Sciences Pvt. Ltd.
carrying forward the study: • HA6 - There is a significant difference in the
employees’ perception of job satisfaction
between M/s. Penam Laboratories and M/s.
• HO1- There is no significant difference in Shree Nath Life Sciences Pvt. Ltd.
the employees’ perception of organizational
structure between M/s. Penam Laboratories Literature Review
and M/s. Shree Nath Life Sciences Pvt. Ltd.
• HA1 - There is a significant difference in the
Definition and Concept of Employee
employees’ perception of organizational
Engagement
structure between M/s. Penam Laboratories
and M/s. Shree Nath Life Sciences Pvt. Ltd.
• HO2 -There is no significant difference in the Employee engagement has attracted a lot
employees’ perception of leadership between of attention among numerous human resource
M/s. Penam Laboratories and M/s. Shree Nath specialists, business people and academic
Life Sciences Pvt. Ltd. researchers across the globe. Despite the
• HA2 - There is a significant difference in the widespread interest it has garnered, the absence of
8
a universal definition of employee engagement is process. While Swarnalatha and Sureshkrishna,
still an area of concern (Albrecht, 2010). Diverse (2013) say that employee engagement is the extent
researchers define ‘employee engagement’ in to which employees think, feel and act in ways
different ways as outlined in this section. that represent high levels of involvement to their
organization.
Kahn (1990) was the first academic researcher
to use term ‘employee engagement’ and define it as According to Chandhok and Bhavet (2014),
the level and value of the employees’ commitment engagement is about passion, commitment and the
and involvement towards their organization. willingness to devote oneself and expand one’s
According to Mortimer (as cited in CIPD, 2009) discretionary efforts to contribute towards achieving
‘employee engagement’ is a combination of the goals and objectives of the organization as a
commitment to the organization and its values whole.
along with a willingness to help their colleagues.
Importance of Employee Engagement
Employee engagement is a two-path handle
between employees and an association where the Employee engagement is critical for smooth
association endeavours to draw in employees who working and survival of a business. The
consequently encounter a level of engagement to organizations which neglect their employees’
the business (Haid & Sims 2008). engagement can’t get an upper hand.
Aswathappa (2005) said that to achieve the
In his study, Saks (2006) defines ‘employee organizational objectives and goals employees need
engagement’ as the extent to which an individual to develop their technical, managerial, behavioural
is attentive and absorbed in his/her role of knowledge, skills and abilities. And engagement
performance. It is the positive feeling that acts like a tool to motivate and help employees to
employees have towards their jobs and also the develop these skills.
motivation and effort that they put into it. One of
the major tools used for the successful functioning According to Konard (2006) with the help of
and constant improvement in organizational engagement employees can express themselves
performance is employee engagement. It helps the physically and emotionally to their organization.
workers to connect with colleagues, managers and Dicke, Holwerda, and Kontakos (2007) have
top management. highlighted that an organization can increase the
efficiency and commitment of its employees with
Bakkar and Scheufeli (2008), in their review the help of employee engagement. This is important
of literature, have delineated three existing to achieve organizational goals. Bhatla (2011) has
approaches to employee engagement. Firstly, it is connected engagement with a psychological state
conceived of as a set of motivating resources from and shares that it is all about having a psychological
the supervisors and colleagues, and opportunities commitment towards the assigned task, which
for growth in the organization. Secondly, it is is clearly reflected in his/her dedication towards
conceived of in terms of employee commitment the work. An engaged employee is emotionally
and their behaviour outside of their defined role. connected to the organization in achieving its goals
The third approach defines employee engagement and objectives and works to achieve them utilizing
independent of job resources and organizational their best ability/potential. Engaged employees
outcomes, as a work related state of wellbeing. are happier with their occupation and are more
Cook (2008) has said that employee engagement dedicated to their organization. They are very
is the responsibility of the top management to energetic during work and they perform their work
encourage and engage the employees towards their with full energy. Engaged employees make their full
job. efforts to make an organization successful. They are
motivated enough to contribute their knowledge,
According to Swarnalatha and Prasanna, (2012) skills and abilities so that the organization can
employee engagement is a continuous learning achieve new heights.
9
Employees who have higher levels of Swarnalatha and Sureshkrishna (2013) reported
satisfaction are less likely to quit their jobs, their that employee engagement is essential to
absenteeism rate is much lower than other workers, organizational success. They further describe that
they are also less willing to opt for other jobs employee engagement and job satisfaction play an
and they remain present in their job. This helps important role in the development of the morale of
in saving money for the organization like costs employees.
involved in the new hiring process, as well as the
selection and recruitment process. The cost of Factors Influencing Employee Engagement
training new employees is also saved as existing
employees would be more knowledgeable (Smith, A review of the literature by Ruyle, Eichinger and
1992). De Meuse (2009) identified the following eleven
main factors affecting employee engagement:
Kang (2014) has claimed that engaged
employees create a favourable business 1. Strategic Alignment refers to guiding
environment and strengthen the organization’s employees to work to achieve
competitive advantage. Therefore it is a organizational goals and objectives.
challenging task for HR managers to create 2. Trust in Senior Leadership -Employees
and maintain a healthy work environment that prefer to believe, trust and follow the senior
motivates the employees in their work and enables leaders of the company.
placement of the right employee in right job 3. Immediate Manager Working Relationship
(person/ job fit). - good quality management leaves a
positive impact on the performance of and
relation among employees.
In Biro’s opinion (2014) employee engagement
4. Peer Culture - effective peer relationships
is centre stage in HR. Engaged employees are not
lead to highly engaged, productive
motivated by money, status or power but by shared
employees and this also helps in increasing
values, trust, mission and purpose. They are more the organizational performance.
committed to the organization and work to achieve 5. Personal Influence - employees feel free to
better business outcomes and aim at superior tell or do things in different and innovative
customer satisfaction. ways. And they know that their efforts will
be recognized.
According to Aon Hewitt (2013) employees 6. Nature of my Career - Company provides
are important assets of every organization employees a variety of opportunities to
and their engagement works as a catalyst for grow, develop and achieve their goals. This
smooth functioning of the organization. Ariani also helps employees to find meaningful
(2013) has stated that employee engagement is paths that will inspire them.
positively related with organizational performance. 7. Career Support - providing employees
Engaged employees are likely to perform extra with the opportunity to develop through
role behaviours perhaps because they are able assignments or key jobs.
to accomplish goals and to perform their tasks 8. Nature of the Job - In this, challenging jobs
efficiently. The author adds that employee are designed for the employees and this is
engagement helps organizations improve or done to enhance the skills, qualifications
maintain their competitive advantage because an and experience of employees.
engaged employee experiences a higher level of 9. Development Opportunities - providing
connectivity with their organization. An engaged employees not only with formal learning
employee experiences lesser anxiety and stress programs but also with the opportunity to
practice their newly acquired skills and
related ailments, hence, lesser absenteeism and
knowledge on the job under the watchful
turnover.
eye of the experienced seniors and also the
opportunity to learn from others outside
formal learning programs.
10. Employee Recognition - is the
10
acknowledgement of an individual level. This is very alarming as the development
or team’s behaviour, effort and of leaders results in a committed and engaged
accomplishments that support the workforce (Phelps & Brossoit, 2007).
organization’s goals and values.
11. Pay Fairness - this motivates employees Finally, organizations require solid frameworks
to perform more efficiently as the pay is and systems that help and encourage engagement.
directly linked to their performance. Examples of frameworks and systems are
promotion, employing, acknowledgment,
Employee Engagement in the Manufacturing performance management, pay, training and career
Industry development. All these frameworks together
highlight the area in which the organization needs
Employees, leaders, organizational systems to focus the most in terms of engagement. An
and strategies are three sources of influence for unstable foundation makes building engagement a
change in today’s manufacturing organizations. very difficult job. Ultimately, it has to begin with
Manufacturing organizations hoping to drive the senior management understanding the need and
engagement must tap into employees’ passion, importance of developing an engaged workforce
commitment and identification with the (Phelps & Brossoit, 2007).
organization. This is achieved by hiring the right
person for the right post. Right job fit is achieved Impact of Employee Engagment on
by effectively identifying employees’ talents while Organizational Performance
making the selection, placement and promotion
decisions. Research has repeatedly proved that According to Kang (2014) engaged employees
when the right person is in right job the chances strengthen the organization’s competitive
of that person staying in the organization are very advantage and generate a favourable business
high (Phelps & Brossoit, 2007). environment. Ariani (2013) has stated that
organizational performance and employee
Leadership is the second engagement driver. engagement are positively related with each other.
Quality of leadership directly affects the work Engaged employees are likely to perform extra role
environment of the organization. Employee behaviours because they are able to perform their
engagement is impacted by the leader’s behaviour. tasks efficiently and accomplish goals. Employee
A cross-sectional Belgian study revealed that engagement helps employers improve or maintain
perceived transformational leadership indirectly their competitive advantage because engaged
and positively influenced employee vigour, employees experience a high level of connectivity
dedication, and absorption. The opposite was with their organization.
observed for perceived directive leadership.
Engaged leaders know that their part is just not Aon Hewitt (2013) highlighted that assessing
to take responsibility for the decisions but they the level of employee engagement can help create
also need to act like proactive mentors (Phelps & procedures to improve employee efficiency to
Brossoit, 2007). further help the organization in a positive way.
The role of leader is very important in the Krishnaveni and Ramkumar (2006) tried to
manufacturing industry. Goals and strategies determine and analyse the relationship and impact
of an organization can be achieved only with of Human Resource Development (HRD) climate
the help of highly engaged teams and front on motivational need satisfaction (Role) of the
line leaders play a crucial role in building such individuals in the organizations. Five companies
teams. According to the report released by the (more than two decades old) were selected from
Development Dimensions International (DDI) different sectors. The sample for the study were
and Manufacturing Performance Institute (MPI), the mid-level managers of various departments.
around 20 percent of organizations have no The questions related to HRD climate and
plans for the development of their leaders at any motivational need satisfaction were included in the
questionnaires and circulated among the managers.
11
Results indicated that HRD climate has an impact expectation of the employers. They also
on satisfaction level and the motivational need treat company’s goals and objectives as their
of the employees which results in the better personal goals and objectives and they always
performance of the organization. work to achieve them.
Levels of Employee Engagement
Employee Engagement Approaches
Engaged Employees - One of the key components
of organizational improvement are the engaged Employee engagement approaches are
employees. This workforce drives the association categorized into two sections. Approaches for
in a positive direction. They consolidate their own new employees come under the first section and
goals with the targets of the association. They not approaches for all employees come under the
only play out their roles but also play an important second section.
role in achieving the organizational goals and
objectives. 1. For New Employees - It is the responsibility of
HR managers to introduce best practices in the
Engaged employees perform with energy, drive recruitment and selection stage. Recruitment
development and advance their association through of the right person and giving them a
their execution. realistic job according to the area of interest
of that employee is the key (Swarnalatha
Not Engaged employees are more interested in & Prasanna, 2012). A clear induction and
their personal goals and objectives, for them the orientation program should be organized for
organization’s goals are secondary. They do not the new employees so that they can do their
show energy and enthusiasm in their work (Reilly, work easily. It helps the new employees to
2014). They do not work on building relationships interact with the employees already working
with colleagues or managers. in the organization and enables them to learn
acceptable behaviour within the organization
Actively Disengaged Employees neither perform (Khan, 2013). In addition, the HR department
their tasks properly nor complete their work in a of the organization should organize
timely manner. Their contribution to the success development programs.
of an organization is almost negligible. They are 2. For all Employees - According to Bhatla (2011)
unhappy at work and take the organization in a beyond initial recruitment and induction,
negative direction causing the organization to employee engagement activities can be broken
suffer (Vazirani, 2007). into a number of groups - communications
activities within the organization, proper
Characteristics of Engaged Employees reward schemes for excellent performance,
activities to build the culture of the
Given below are the characteristics of engaged organization, team building activities and
employees proposed by Robinson, Perryman, and leadership development activities.
Hayday (2004).
1. Engaged employees are emotionally attached Research Gap
with the organization and their job. They are
emotionally attached because they have trust in The term employee engagement was first
the employers of the organization. used by the corporate world and later it gained
2. Engaged employees always work with their significance in the academic field as well.
full commitment and they even help in creating Considerable literature on employee engagement
a healthy working environment by respecting comes from practitioner literature and research by
the other employees of the organization. They consulting firms (Albrecht, 2010).
even help their colleagues to perform the work
efficiently. After reviewing various books, articles,
3. Engaged employees perform beyond the journals, magazines, project reports, governmental
12
and institutional reports, newsletters, newspapers outperform the competition, and encourage others
and Ph.D. theses related to employee engagement, to perform well. A good leader acts like the
the researchers discovered that most of the work backbone of any business as they work towards the
done on employee engagement is related to betterment of organization and of the employees.
need, significance and importance of employee Good leadership skills help the organization
engagement for an organization and its role in to retain their talented staff (Parker, Wall &
the success of the organizations. Some studies Cordery, 2001 as cited in Handbook of Employee
have also tried to probe the relationship between Engagement, Albrecht, 2010).
employee engagement and organizational
citizenship behaviour, job satisfaction, Evaluation and Appraisals
organizational commitment, leadership, and
organizational communication. However, the The evaluation process of an employee’s
majority of the literature on the subject is from work behaviour consists of comparing it with the
the Western part of the world. While there is a standards laid down by the management. Results
growing body of indigenous research, that in the are evaluated to provide proper feedback to the
area of pharmaceutical manufacturing is rare. The employee so that they can improve; this is known
current study therefore attempts to bridge this gap as evaluation and appraisal.
in research by comparing the level of employee
engagement in two organizations in India. Performance appraisals act like a medium
through which only the organization judges
Based on the review of existing literature, which employee to promote and who needs
employee engagement has been defined in the more training. Research by Gupta and Kumar
current study in relation to six dimensions – (2012) throws light on how perceived justice in
Organizational Structure, Leadership, Evaluation the appraisal process influences the employees’
and Appraisals, Internal Communication, engagement and motivation.
Creativity Stimulants and Job Satisfaction.
Internal Communication
Organizational Structure
Internal communication could refer to the
Activities like task allocation, coordination and information shared with employees and the
supervision are directed towards the achievement provision of opportunities for the employees
of organizational aims. All these activities are to in turn share their opinion about important
defined under organizational structure. It can matters (Welch & Jackson, 2007). A good internal
also be considered as the viewing glass through communication process helps to improve employee
which one can see their organization and its satisfaction.
environment. If the all above mentioned activities
are formulated and implemented as per plan Creativity Stimulants
then it will have a positive impact on employee
engagement, as proper functioning of these A company’s success can be ensured by
activities leads to increase in performance of inventing and designing products and services;
organization and increase in the happiness level of this power is known as creativity. According
employees (Parker, Wall & Cordery, 2001 as cited to French scientist, Poincare, invention means
in Handbook of Employee Engagement, Albrecht, creating something useful rather than combining
2010). two products and producing something useless.
Employee engagement is rooted in formal and
Leadership informal activities of the organization where
creativity is also an important aspect (Schohat &
Leadership is the capacity of an organization’s Vigoda-Gadot, 2010).
administration to set and accomplish testing
objectives, make quick and definitive moves,
13
Job Satisfaction Tabulation and Statistical Analysis of Data
A feeling of fulfilment or enjoyment that a Quantitative data gathered from the primary
person derives from their job is considered job sources was analysed and evaluated to find
satisfaction. Macey and Schneider (2008) propose the level of employee satisfaction in the two
that the state of engagement of an employee is a companies. A master sheet using Microsoft excel
complex combination of constructs such as job was prepared for recording and scoring all the
satisfaction, organizational commitment, job responses which were observed from each of
involvement and empowerment. the items in the questionnaire. After doing the
basic descriptive statistics of mean and standard
In the above section the researchers have deviation, independent samples t-test was
discussed the review of available literature in the applied to the data to find out how significant the
area of employee engagement. The review has difference in means of the two groups was. The
been presented under different headers beginning analysis was done using SPSS 16 Software. The
with the definition of employee engagement, its results were then interpreted to draw conclusions
importance as a concept, factors that influence and find the employees’ level of engagement in the
level of engagement among employees, employee organizations.
engagement in the manufacturing sector and
the impact of the same on organizational Questionnaire for the Study
performance. In addition, the characteristics
and various types of employee engagement are
Objectives of the study were kept in mind
also discussed along with different approaches
while preparing the questionnaire. The Likert
for employee engagement. This review also
scale is widely used as a rating scale to quantify
introduces the six dimensions of the employee
engagement conceptualised for the current study the qualitative data. In this respondents express
- organizational structure, leadership, evaluation the degree of agreement and disagreement on
and appraisals, internal communication, creativity the questions asked (Ammo & Friedman, 2002;
stimulants and job satisfaction. Bortholomew, 2006). The responses for this
questionnaire were also on a five-point Likert scale
Research Methodology and each statement had five options to answer.
Research methodology serves as the The respondents were told to tick the relevant
backbone of a research study. The current field based on the agreement and disagreement
study is quantitative in nature. According to scale. The scale options are strongly agree (5),
Creswell (1994) quantitative research is a type agree (4), neither agree nor disagree (3), disagree
of research that is explaining phenomena by (2) and strongly disagree (1).
collecting numerical data that are analysed using
mathematically based methods (statistics in The questionnaire comprised of questions
particular). pertaining to:
14
Validity of Research Instrument
RELIABILITY STATISTICS
Validity is defined as whether or not the test
measures what it claims to measure (Sekaran, CRONBACH’S NUMBER OF ITEMS
2006). Face validity is considered as basic and ALPHA
very minimum index of content validity (Sekaran,
2006). For the present study Face validity and 0.7 51
Content validity have been conducted in order to
test validity of the questionnaire. Table 1. Showing the results of reliability test
Pilot Testing (Face Validity) The Cronbach’s alpha value for data of the
current study was 0.7, a value that makes this
Conducting a pilot test before the actual instrument reliable. It means that the results of the
research study helps ensure the instrument used for questionnaire are satisfactory and reliable.
the study is valid and reliable. After the completion
of the questionnaire a small sample of 12 The Sample
respondents was used to conduct the pilot test and
check the accuracy of the questionnaire. Positive
The sample for the current study included 60
results from the pilot test reassured the researchers
males (30 each from both organizations – Penam
to continue the study with the same questionnaire.
and Shree Nath Life Science) who completed the
Content Validity given questionnaires.
After the pilot test, the same instrument was COMPANY 1 (Penam)
shared with management experts and human
Number Of Respondents
resource practitioners for their expert views. Age Work
Experts suggested elimination of a few questions Range Experience
N = 30
either because they were repetitive or irrelevant to
the present study. Many questions were reframed Male Female
for ease of understanding. Content validity 30 - 60
4 - 30 Years
Years
ensures that the measure includes an adequate and 30 -
representative set of items that tap the concept
(Sekaran, 2006). Table 2. Showing the sample details of Penam
Reliability COMPANY 2 (SNLS)
15
Limiatations to Methodology
16
Hypothesis Testing Company 2
Figure 4 demonstrates that 38% of employees
HO1 - There is no significant difference in the agree with the statements on leadership while 28%
employees’ perception of organizational structure of employees disagree. This shows that a majority
between M/s. Penam Laboratories and M/s. Shree of the employees are satisfied with the leadership
Nath Life Sciences Pvt. Ltd. style followed in the organization.
Company 1
Figure 5 illustrates that 64.7% employees disagree
with the statements on evaluation and appraisals
while 14% of employees agree with them. This Figure 6. Employees’ perception on evaluation and
shows that majority of employees are dissatisfied appraisals of SNLS.
with the company’s evaluation and appraisal
process.
Std. Std. Error
Company N Mean Deviation Mean
18
As seen in Table 8, the mean value of evaluation with them. This depicts that a majority of the
and appraisal shows that the employees of employees are satisfied with the established
company 2 (SNLS) are happier with their internal communication channels.
organization’s appraisal and evaluation process.
Hypothesis Testing
Internal Communication
Company 1
Figure 7 shows that 63.7% of employees
agree with the statements asked on interna
communication and 16.3% of employees disagree
19
Std. for the success of an organization. Results
Std. Error indicate that while SNLS follows strictly vertical
Company N Mean Deviation Mean communication, which the employees are not very
happy with, Penam integrated both horizontal and
Internal 1 30 3.8033 0.6403 0.1169 vertical modes depending on the needs. This is
communi-
2 30 3.3067 0.45783 0.08359
appreciated by their employees.
cation
Creativity Stimulants
Table 10. Descriptive statistics for employees’
perception of internal communication Company 1
Figure 9 demonstrates that 68% of employees
As seen in Table 10, the mean value of internal disagree with the statements on creativity
communication shows that the employees of stimulants and 16.7% agree with them. This shows
Penam are happier than SNLS in this aspect. that a majority of employees are not satisfied
with the creativity stimulants provided in the
Hypothesis Testing organization.
20
Std. Std. skills are not fully utilised and that their work is
Company N Mean Deviation Error not adding value to the organization. This tends
Mean
to demotivate employees. On the other hand,
1
Creativity
30 2.1067 0.5003 0.09134 SNLS encourages them to come up with ideas
2 30 3.3333 0.57135 0.10431 and involves everyone, therefore, engaging the
employees more positively.
Table 12. Descriptive statistics for employees’
perception of creativity stimulants of companies. Job Satisfaction
21
However, both organizations need to work towards
Std.
Std. Error improving their practices so that their employee
Company N Mean Deviation Mean turnover ratio can be reduced.
22
policies must be unbiased so that all the employees These issues can be resolved by taking following
are treated equally. Proper feedback must be given steps:
to employees so that they can improve and work
more efficiently. Organizational policies must be unbiased so
that all the employees are treated equally.
Internal Communication Candidates must be offered jobs according to their
qualification and skills so that they can do justice
Employees of Penam are satisfied with the to their job. Management should invest in training
internal communication in the organization. and a development department for the employees
The employees of SNLS are not satisfied with so that employees get an opportunity to grow.
the internal communication in the organization.
Currently the company is following a vertical Conclusion
type of communication, which is not appreciated
by the employees so the company should follow This study proposes that the turnover rate in the
both types of communication. This will help the Indian pharmaceutical sector is high probably due
management to keep their employees satisfied and to the internal faults and policies of the companies.
happy. The study highlights the key elements of employee
engagement. When comparing the two companies,
Creativity Stimulants Penam and SNLS, the study revealed that for a
majority of the elements SNLS performed better
Penam employees are not satisfied with the than Penam. But this does not mean that policies
creativity stimulants at work. The skills and and the working style of the SNLS are the best
abilities of the employees are not fully utilized in because no establishment operates in perfect
the organization. To make the employees happy conditions and need for improvement is always
and satisfied Penam could take certain steps: there. This study also highlights the importance of
employee engagement and how it is beneficial for
They could interact with their employees on the society, family and organization in which they
a regular basis so that the employees can talk are working.
to them without hesitation. This will help the
employees to understand their roles in a better way. An improvement in voluntary employee
Assigning duties according to the education and turnover rate in any given industry will directly
skills of the employee will enhance satisfaction of affect the growth of the country’s manufacturing
the employees. sector as a whole. This in turn, directly correlates
to any country’s progress and growth. A growing
Job Satisfaction and prospering nation results in the growth and
higher living standards for its citizens.
Employees of SNLS are more satisfied with
their jobs as compared to employees of Penam. In conclusion, the researchers can reiterate that
The level of satisfaction is low because of the for overall growth and successful operations of
following reasons: any company, in this case, the two pharmaceutical
companies that constituted the sample, a workable
According to them all the employees are not balance is essential between organizational
treated equally in the organization, the nature structures, its leadership hierarchy and application
of the job was also not up to their qualification of authority, and regular performance evaluations
level and there are a lack of opportunities for the and directly correlated appraisals. These factors
employees in the organization to grow and learn. need to work in tandem with articulate internal
Penam must, therefore, work on these problems communication in the organization and regular
to increase employee engagement and reduce creative stimulants for the employees. When a
employee turnover. company successfully formulates and implements
policies in accordance with these factors, it directly
23
results in job satisfaction, which can reduce the
turnover rate. This will lead to better individual
performance, improved organization performance,
greater economic stability and stability in the
industry. This will also lead to stability in personal
spheres collectively for the human resources
involved
The Authors
Shubham Gupta
BBA Student, SBS Swiss Business School at
IILM Undergraduate Business School
3, Lodhi Road, New Delhi – 110003.
shubham.gupta.sbs17@iilm.e
24
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27
Trust as a Personal Characteristic for Lebanese
C-level Executives
By
Wael Zaraket, D. B. A.
Abstract
This paper examines the idea of trust as an individual trademark for Lebanese C-level executives in social
communication at the organizational level; the connection is considerably more relevant when it deals with
high managerial positions. Trust is an independently distinct build that is perceived by every individual at
the personal and at the managerial level. Trust is an imperative leadership trait to gain employee fidelity and
loyalty. This paper inspects the fidelity and loyalty of Lebanese C-level executives by concentrating on the
views of middle and top managers. The objective of this paper is to determine whether Lebanese C-level
managers are trusted by their middle and top managers. Quantitative analysis was utilized to identify the
level of trust through the Machiavellianism scale. The paper finds that middle and top managers highly trust
their C-level supervisors.
Introduction
This three-factor model of trust is increasingly
Research is still concentrated on studies of
considered a mean of trust and is commonly used
leadership behavior, qualities, and situational
in the theoretical literature (Caldwell & Hayes,
factors (Den Hartog & Verburg, 2004). Trust
2010). Referring to Mayer et al., (1995), being
is a value which ought to be acknowledged in
trustworthy means first, to have the capacity,
leadership (Lyman & Adler, 2011). Trust has to be
talents, capabilities, and features to inspire other
an integral part of leadership and should function
individuals or parties within a particular field;
as one of the basic skills needed in leaders. Trust
second, to have a genuine desire to do what’s best
should be considered an essential part of leadership
in the interest of others, aside from egocentric
and one of the necessary skills of leaders (Van den
personal gain motives; and third, to have the
Akker, Heres, Lasthuizen & Six, 2009).
honesty to abide by a set of values and codes
that are trusted or found acceptable. Scholars
Implementing this value in leadership requires
have started to study trust as a crucial component
that every member of the organization be a
for leadership effectiveness (Ciulla, 2004). This
trustworthy individual (Alhabshi & Ghazali,
paper plans to further add to this body of research
1994). Trust is defined as the reliability of the
by investigating trust as one of the personal
leader to match followers’ prospects (Phillips,
characteristics of the C-level executives through
1992). Trust illustrates the ability of the leader
the medium of Lebanese middle and top managers.
to deliver essential benefits to followers (Fry,
2003). Trust in organizational relationships has
Understanding Trust
a powerful theoretical basis. In this paper, the
researcher will discuss the connotation of trust, and
Trust is an independently distinct concept that is
what formulates a trustworthy behavior (Caldwell
understood by each individual at the personal level
& Hayes, 2010). According to Mayer, Davis and
and at the managerial level (Caldwell & Clapham,
Schoorman (1995), individuals who are found to
2003; McLain & Hackman, 1995).
be most trustworthy have a high score on the three-
factor model of trustworthiness (Colquitt, Scott, &
LePine, 2007).
28
Trust at the individual level has broadly been though in the theoretical literature trust is often
recognized as comprising aptitude, compassion, interchangeable with trustworthiness (Corritore,
and honesty (Savolainen & Häkkinen, 2011). Trust Kracher, & Wiedenbeck, 2003), one individual
is related to actual leader-member symmetrical trusts another when the second individual is
relationships and is concentrated on Brower, trustworthy (Gerson & Gerson, 2006). In a
Lester, Korsgaad and Dineen’s (2009) argument leadership framework, organizations require that
regarding the tendency of people to trust. The employees trust their leaders and conform to
author supports the idea that trust is not a anticipated comportments (Van den Akker, et al.,
tendency, an approach, or an aim, but a behavior 2009).
requiring the surrendering of authority (Hinchman,
2009). Additionally, the author also supports the This trust is comprehensive when leaders are
perspective that interpersonal trustworthiness is considered trustworthy; Yukl (1989) realized
based on the ability, compassion, and honesty that “trust may be measured at the strategic level
of the individual to be trusted and is thoroughly when leaders do the correct behavior, at the
linked to the behavior of a leader (Savolainen & organizational level when processes and decisions
Häkkinen, 2011). lead to correct results, and at the individual level
when leaders create connections based upon an
The link between a leader’s comportment established commitment to each person’s well-
and trust is fraught with personal insightful being” (p. 269).
subjects (Hollander, 1995), such as a follower’s
understanding of the implicit and explicit Mayer et al. (1995) considered aptitude as “that
components of the social contract and the values group of skills, competencies, and characteristics
that social contracts include (Caldwell & Dixon, that enable a party to have influence within some
2010). Barnett and Schubert (2002) acknowledged specific domain” (p.717). Other researchers
a functional relationship which borders the propose that aptitude is a measure of “competence”
leader-follower relationship as a sequence of (Kee & Knox, 1970), and “expertness” (Giffin,
psychological contracts that escalate to the extent 1967). Compassion is considered “the extent to
of a “covenantal relationship” (Hernandez, 2012). which a trustee is believed to want to do good to
Rousseau (1995) established the compound moral the trust aside from an egocentric profit motive”
insinuations of social contracts in organizational (Mayer et al., 1995, p. 718). Butler and Cantrell
relationships and illustrated that these social (1984) described trust as comprising a loyalty to
contracts are perceptively observed and the interests and well-being of another person.
individually understood (McInnis, 2012). Mayer et al. (1995) acknowledged honesty as “the
trustor’s perception that the trustee adheres to a
Therefore, the social contract is a personalized set of principles that the trustor finds acceptable”
understanding of the obligations owed by each (p. 719). Hosmer (1995) focused on the notion
leader – observed inside a symmetrical connection that trust was fundamentally morally based,
including the leader and every follower separately and recognized ten distinct moral perspectives
– and this will identify whether the leader is for evaluating trustworthy conduct and the
considered trustworthy (Hernandez, 2012). Pava implementation of duties required by those who
(2003) proposed that the covenantal leader is pursue trust – it is an acute mission for leaders in a
a moral agent who is observed as seeking the world where mistrust is progressively arising.
best welfare of each stakeholder while matching
this requirement within a wider organizational Mayer et al. (1995) highlighted that the
framework as well. Caldwell, Truong, Linh and tendency to trust differs among individuals and
Tuan (2011) proposed that the equilibrium of is dependent on the conduct of the individual
managerial and personal urgencies needed the to be trusted. Gill, Boies, Finegan and McNally
insight and conscious prudence of a moral agent (2005) directed two research projects to establish
who is intensely dedicated to every stakeholder the significance of aptitude, compassion, and
(de Plessis, Conely, & Hlongwane, 2007). Even honesty as antecedents of trust, and consequently
29
discovered that personal view, the simplicity or Second, how efficiently do the organizational leaders
vagueness of information, and the framework of a perform in competency areas, which are the pillars
position affect the trust decision. of accomplishment?
Das and Teng (2004) realized that the tendency It is imperative to recognize how leadership
to trust is not simply individually defined, but is skills in an organization coincide with the skills
a function of how a person recognizes the threats acknowledged as most significant for leaders in
related to the associations between parties, and is successful organizations (Rude, 2013). Detecting
a function of the conduct of persons who pursue leadership strengths and weaknesses allows
trustworthiness. In accordance with the description an organization to define how well individual
of interpersonal trust explained by Mayer et al. competences coincide with organizational
(1995) and the developing research about the requirements. In addition, it helps the organization
antecedents of trust associated with leadership to classify substantial differences which have to be
effectiveness, it was found that the relationships tackled through dedicated expansion and knowledge.
between the conduct of leaders and the influence of
conduct on insights about leaders’ trustworthiness Organizational Leaders have Significant
can enable clarification regarding how the Strengths
leaders’ conduct can cause increased interpersonal
commitment, which is an essential key to wealth The organizational leaders’ capability to make
creation (Caldwell, Hayes, Bernal & Karri, 2008). employees feel comfortable is the most appreciated
ability appraised by coworkers the researcher had
Organizational performance management in studied. Considering differences such as gender,
an institutional context is therefore the activities race, and ethnicity is an additional solid facet of an
of C-level executives in planning, applying, organizational leader (Petrie, 2011). Those leaders
revising, assessing and recording the success are perceived as quick to obtain new information;
of its procedures, platforms, and missions for they are creative and ready to do whatever is
its leadership trustworthiness (Green & Howe, needed to accomplish organizational goals. These
2011). To comprehend thoroughly the leadership results demonstrate that organizations have a set of
improvement tasks confronted by organizations, interpersonally expert, smart, and dedicated leaders
Center for Creative Leadership (CCL) directed as an influential asset on which to build loyalty and
research using its Benchmarks competency trust (Hanson, 2013).
framework (Petrie, 2011). Center for Creative
Leadership emphasized two significant lines of A Zaraket and Halawi (2015) study delineates
inquiry: the interrelated relation between organizational
commitment and organizational goals supported
First, which leadership aptitudes are considered most with the leader’s visions and objectives. The
imperative for accomplishment in an organization? primary focus points for leadership improvement
in an organization is to enhance the capability to
CCL Standards database identifies 16 key lead workers, to cope with change, and to involve
leadership abilities, as well as five derailment people in participative management. Leading
elements that can specify whether a manager’s workers successfully is seen as the supreme
career is suffering. While each of these abilities significant proficiency for organizational leaders,
is imperative to total leader effectiveness, even though it is ranked 15 amid the 16 proficiencies
some are considered more acute than others in related to leader success. Change management and
various businesses or divisions (Rude, 2013). participative management are similarly considered
Knowing which proficiencies are more relevant significant by more than half of the respondents, but
in the organization can assist agencies to create are in the lowest half of the leadership proficiencies
a leadership improvement policy that forms the related to effectiveness (Petrie, 2011).
capabilities required for better usefulness (Petrie,
2011).
30
Organizations similarly require strategies for reliability of .905 that was achieved for the scale.
presenting wide, cross-structural practices and The scale inter-correlations ranged from .873 to
prospects for knowledge. .898. All the inter-item inter-correlations were
highly significant (p < .001), except for the inter-
Weak functional (or departmental) orientation is correlation of items 1 and 7, which was at p = .05.
the most common cause for derailing managers in The high positive inter-correlations also suggests
organizations. Executives can inspire improvement that all the items in this scale had done what they
in leaders’ proficiency by creating chances for their were intended to do, that is, to measure leadership
subordinates and prospective leaders to stretch trustworthiness consistently.
beyond their own current capabilities (Bleak &
Fulmer, 2009). A variety of practices (diverse Participants
tasks, progressive interactions, classical teaching)
can organize talents and perceptions, and diminish Participants were middle and top level
the opportunity for derailment (Petrie, 2011). managers from the Lebanese banking sector, who
Followers were asked to offer their perceptions are referred to as managers throughout this paper,
regarding their leaders’ trustworthiness (the while C-level executives are referred to as leaders.
Machiavellian scale seems to be a fragile measure At the time of the research, the researcher had 500
for any facet of trust). managers from various Lebanese banks. Some
of these managers were positioned at branches
C-level executives from various Lebanese outside Lebanon, while others were either
banks were chosen for this study, as the Lebanese unavailable or unwilling to participate, and thus,
banking sector has a clear and well-established 400 were nominated bearing in mind the dispersed
hierarchy. Those executives were chosen because location of the chosen samples and the time frame
there has been no applied proper model of trust allocated for data collection.
in Lebanon except in the banking sector, in order
to provide a framework for leadership succession The questionnaires, together with a list of
that can improve the performance and survival of selected participants, were given to the HR
organizations and to offer additional justifications departments to distribute, and a total of 304
for leadership succession procedure and an questionnaires were returned. The survey
efficient management mechanism. Contextually, suggested a response rate of 68%, which is an
leadership is influenced by culture, structure, acceptable return for a survey in Lebanon.
society, and policies as well as by established
leadership (Korbonski, 1976). Therefore, the Results and Discussion
choice of banking executives is based on culture,
structure, collectiveness, and the policies which The following descriptive statistical analysis
are characterized by the absence of established was used to determine frequencies and percentages
leadership and managerial structure. of the respondents. This study used 400
questionnaires, targeting 400 participants, but only
Measurement 304 (68%) participants returned the questionnaires
within the given time; consisting of 46 Branch
Machiavellianism (Christie & Geis, 1970) is managers, 8 Department managers, and 250
a scale that asks participants to state their level Regional managers. Only these 304 surveys were
of agreement or disagreement to 20 statements valid for analysis. This set of data was intended to
on a seven-point scale ranging from ‘‘Strongly identify demographic variables of the sample and
disagree” to ‘‘Strongly agree.” In this paper, five examine the research results. Table 1 delineates the
questions regarding trustworthiness were found to demographical outline of the sample.
be relevant to the paper’s objectives. In order to
determine internal consistency of the items, five
items were loaded. A Cronbach’s alpha coefficient
shows a moderately high reliability of .862. For the
current paper, the Machiavellianism has an overall
31
Table 1. Gender Frequency and Percentage. Regarding location, the majority of the respondents
were in Beirut (93.75%), followed by Mount
Demographic Information Frequency Percentage Lebanon (5.6%), and Saida (0.65%). Table 3
of the respondents (%) shows location frequency and percentage.
Table 3. Location Frequency and Percentage.
Gender
Female 43 14 Location
Master 95 31.25
52 to 61 years 97 31.9
Baccalaureate 11 3.62
62 to 68 years 1 .32
Doctorate 4 1.32
Not reported 3 .98
32
Regarding field of interest, the majority of the Concerning years of service in the organization,
respondents were Business (55.6%), followed by there are three clusters. Most of the respondents
Economics (29.27%), Law (7.56%), Other (6.9%), have 8 years service and above (31.25%), while
and two respondents did not state their field of other respondents have 4 to 7 years service
interest. Table 5 shows field of interest frequency (30.6%). The third group of respondents has spent
and percentage. 1 to 3 years (28.29%) in the organization, and three
respondents (9.86%) did not report their service in
Table 5. Field of Interest Frequency and Percentage. the organization. Table 7 shows years of service in
Demographic Information Frequency Percentage the organization frequency and percentage.
of the respondents (%)
Table 7. Frequency and Percentage of Years of
Field of Interest Service in the Organization.
33
for Trust was examined using five items. The
Table 8 shows that the Trust dimension of the
basic inspection of the inter-item correlation
paper has a mean value with variety (5.62) on a
matrix discovered that trust was correlated with
7-point scale. This result shows that the leader
every other element in the scale. These items
gives the impression of having their own personal
were subjected to a CFA, the results of initial
characteristics and being faithful in achieving the
measurement model of trust which are provided in
organization’s goals. The result confirms that the
Figure 1. The fit indices suggest a mixed picture
leader has a reasonable aptitude to recommend
with regards to the adequacy of the fit elevated
and alter their personal characteristics when the
x2 and RMSEA. Examination of the loadings
individual cooperates with followers.
indicates that the standardized regression weight
Exploratory Factor Analysis (EFA) was very high, for the five items showed an
acceptable loading. Table 9 shows the Summary of
The main goal of factor analysis is to Measurement Findings (CFA) of Trust.
distinguish simple items (loadings > 0.30 on only
one factor) that are explainable, supposing that No, Items
Stand .Lod
Measurement model
those items are factorable. The Kaiser-Meyer- 1- My leader reacts only when it is ethically correct. .73
2- My leader is a dependable individual. .82
Olkin (KMO) measure of sampling adequacy 3- My leader is a direct individual. .81
examines whether the partial correlations 4- My leader is a truthful individual. .88
between variables are minor. The current paper 5- My leader believes in the respect for rule of law. .82
Achieved Fit Indices
demonstrates that the value of the Kaiser-Meyer-
Olkin (KMO) for Trust was (0.949), which means Chi-square Absolute fit index
Incremental
Parsimony fit index
fit index
that the value is high-quality. Bartlett’s test of
sphericity and KMO were used to define the Initial
Chi-square(x2) p-value
20.634 .001
DF
5
RMSEA
.088
GFI
.979
AGFI
.937
CFI
.988
appropriateness of factor analysis. If Bartlett’s Composite Construct Reliability .91
34
accordingly (e.g., my superior listens to what other
individuals say to him/her, and the leader usually
responds rapidly to messages like memos, phone
calls, and reports). This behavior is important in The Author
building relationships between leaders and
followers. In fact, one of the most significant Wael Zaraket, D.B.A.
skills to gain trust is the listening skill, as it
appears that followers acknowledge their leaders’ Assistant Professor
good listening skills. The followers strongly Faculty of Business & Economics
believe that their leaders have the required
American University of Science & Technology
technical skills, as well as the ability to convey
information clearly and effectively. Winning the Ashrafieh, Alfred Naccach Avenue
hearts and minds of followers validates that P.O. Box: 16-6452 Beirut 1100-2130, Lebanon
organizational leaders indeed build relationships,
demonstrate care and concern for employees’ well- wzaraket@aust.edu.lb
being, and share information (Abdullah, 1996).
35
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38
Marketing Development Strategy in Chinese
Companies Working
in the Medical Devices Industry
by
Bert Wolfs, Ph.D. and Bayan Konirbay, D.B.A Candidate
Abstract
This article describes the peculiarity and marketing strategy development for the quick growth of Chinese
companies working in the Medical Devices field in the international market. This strategy is analyzed
through the perspective of Chinese traditional values, particularly based on the work of Sun Tzu, The
Art of War, where the main strategy principles mentioned are moral virtue, foreknowledge, dispositions,
adaptability, and strategic advantage. The researchers use interviews with top and middle level managers of
several companies and their own experiences to describe the policy of marketing activities undertaken by
these Chinese companies in recent years.
Key words
Chinese culture, Strategic factors, Marketing development, International market, Medical devices, Chinese
companies
39
more than fifty years of history in the global initially employed. This was regarded as a very
marketplace (Xu, Huang, Yan & Li, 2009). small investment if we consider the medical device
sector. Today, the revenues of these companies
Strategy could be defined as the achievement have already exceeded $50 million USD per year.
of goals through the adaptation of limited In China, due to the high level of competition,
resources. A strategy itself is a type of pattern companies need to focus on improvement of
of activities an organization uses to develop in organizational structure. As Chinese enterprises
a certain environment (Kim & Hwang, 1992). start to turn their attention to strengthening their
According to Miller (1988) strategy is “a pattern ability to compete in the global economy, they
in a stream of decisions”. In the same way have a new challenge—developing international
Porter (1980) differentiated the strategy, like expertise. The Chinese-style of business, or
product development, market penetration, and its Chinese traditional characteristics of organizations
formulation on the corporate level, where the work or management styles are quite different from
of top managers is dedicated to transferring certain those used in the West (Bond, 1986). That is why
ideas into strategic business units. In order to fully this study is going to focus on some of them.
differentiate the strategy of Chinese companies,
the researchers offer to use market orientation and Chinese Strategic Culture
the mode of entry factors, with five basic strategic
factors of Chinese culture mentioned in the work It is very hard to define the meaning of
of Sun Tzu, The Art of War, such as moral virtue, strategic culture. According to Andrew Scobell,
foreknowledge, dispositions, adaptability and it is a “persistent system of values held in
strategic advantage (Griffith, 1963). common by the leaders or group of leaders of
a state concerning the use of military force”
It is very hard for China to create (1999). Strategic culture consists of common
a second Medtronic or Johnson & Johnson in beliefs, cultural assumptions, and behavior of
several years, but one still can still see the rapid individuals, based on shared experience and
development of companies like Mindray, Lepu, collective identification of a group’s relationship
Wego, Shinva, and Neusoft (Renstorm, 2008). (Delios & Henisz, 2003). Research by Nisbett
Mindray has more than 900 exclusive distributors (2003) provided evidence that social differences
in the domestic market and more than 5,000 between different cultures have an influence not
distributors on the world market with nearly 8,000 only on beliefs, but also on the way of thinking.
employees in total. It has set up 20 overseas sales Group organization, behavior of individuals
offices and sells in 140 countries (Zakreski, 2010). and the values of every person could be easily
China’s medical devices market is now the third differentiated according to the cultural origin of
largest in the world after the USA and Japan. The the person. Social organization directs attention to
demand is growing proportionally and with an certain aspects of reality at the expense of others
increasing number of newly opened small and (Chang & Xu, 2008; Price, 1996). What people
middle level hospitals—opportunities for new, pay attention to affects their beliefs about the
local, medical devices’ manufacturers are being functioning of the world and causality.
created.
For example, whereas Western civilization
Medical devices, as a business, need a is dominated by personal orientation, Chinese
substantial number of investments in the research culture emphasizes reciprocal social obligation and
and development area. They also require collective mindset. Chinese believe that people are
significant investment in clinical test reports as part of a collectivistic society and that the behavior
well as collaboration with the doctors and nurses of the individual should be guided by group
who are going to use and accept this equipment. expectations (JFCOM, 2010).
The most interesting point regarding Chinese
manufacturers is that the amount of the first The study of Dr. Johnston (1995) describes
investments, in most of the cases, was equal strategic culture in Chinese history and compares
to $200-500 thousand USD with 10-40 people it with emerging conditions of Chinese economy
40
in modern times. Nisbett (2003) stated that the strategy should be a key issue to define critical
cognitive way of thinking for Chinese combines success factors. The point of this article is to
two different questions and finds the truth for both describe the impact of culture on the strategic
of them. Chinese culture emphasizes only two preferences in international markets. Zhang (2002)
philosophical concepts which can describe the states that cultural realism could be described
culture: “the concept of change” and “the concept through the history of heroes of Chinese literature
of whole”. What is the most interesting is that where he compares mythological heroes with
both of these concepts must exist simultaneously. those who really existed in history. In his opinion
Nisbett (2003) creates three approaches: “the virtue and violence could be ideal instruments of
Principle of Change, which emphasizes the ancient Chinese strategists. In the case of modern
constantly changing nature of reality; the Principle times it could be interpreted as a strong spirit and
of Contradiction, which states that the constant a strong leader. Coming back to another great
state of change causes things to have contradictory book in Chinese literature, Sun Tzu, The Art of
characteristics such as new and old, or strong War (Griffith, 1963) execution of strategy should
and weak; and, the Principle of Relationship, be more fluid and respond very quickly according
which states that nothing exists in isolation and to the changing conditions of the whole strategic
that knowing something requires knowing its situation.
many relationships” (pp. 174-175). The Western
approach is directed to material goals and the The book describes the five elements.
world, in the perception of Western people, is
unchanging and concrete. The world for them Table 1. 5 components of Chinese culture
consists of individual parts which stand alone. The (Kaname, & Kuniyuki, 2010)
approach of Chinese philosophy regards the world
as a complex system where, everything is based on
the relationship between every part (Ahlstrom & (Moral virtue) The Chinese strategist relies on
Bruton, 2002). So Chinese thought is not always moral virtue to unite the masses and strengthen
the unity and resolve of the military toward a
very logical because from their perspective one Dao
common purpose. The idea of moral virtue comes
needs to shape and interact within the system in from the tradition of “Confucian moralism”
order to understand it, not just manage individual where a ruler gains the support of his people
parts. It is very interesting that in the study of through benevolent and virtuous conduct.
Johnston (1995) Western children grouped the
chicken and the cow in one category (animals)
while Chinese children group the cow and the (Foreknowledge) Emphasizes the importance
grass together—cows eat grass. If we will consider of knowledge and information in strategic
Zhi planning and decision making. As mentioned
the medical business we can find that Chinese above, the scope of this knowledge is broad
companies in the beginning actually didn’t copy and encompasses a holistic appreciation for the
one company’s product like Siemens or Phillips, larger strategic context of a problem or situation.
but combined all the advantages of different Foreknowledge includes understanding both
companies and adapted them to their respective subjective and objective conditions and how they
interact
products.
41
particular country. It is important to emphasize the
peculiarity of Chinese strategic factors during the
Bian (Adaptability), builds on the other elements
described above and involves the transformation development of new markets.
from one form or strategy to another in order to
adjust to changing conditions. Five Strategic Factors of Chinese culture
42
Table 2. List of interviewed managers Naton Medical Group, Shenzhen Comen Medical,
Shenzhen Edan Medical, Beijing Aeonmed,
Name Company Position Department Work Shenzhen Sonoscape) authors consolidated the
experience
five elements listed above into one system and
Director Chen Mindray Former International 1 years characterized the current situation of Chinese
Vice-President Development Department
companies according to the mode of entry and
International Sales 25 years market developing strategy (Lipson & Pemble,
Director Igen Landwind General
Manager
and Marketing Department
1996; Liu, 2004; Locket, 1988.).
Director Tang Irene/Naton Regional International Sales 10 years According to the research framework, in-depth
Sales Director and Marketing Department
discussions during interviews between the
Director Yang Sonoscape Regional International Sales 10 years
researchers of this study and top and middle level
Director and Marketing Department
managers, who have been regarded as experts and
Director Yang Aohua Vice-President International 17 years have specific understanding of the success factors
Sales Department
of Chinese companies, have shown great results.
Director Lu Mindray Middle-East International 10 years
Marketing
Supervisor
Marketing Department Moral Virtue
43
selling equipment, but participating in improving This could be the reason for a specific leadership
the healthcare system in every region of the world style in these companies. Moral virtue is a very
with the best resources. important point for top-level managers.
44
their managers to gather and utilize information Japan’s Fuji Company. Another important point
about certain regulations and benefits of foreign is that Chinese companies like Wandong (medical
trade; they are very adaptive to specific financial imaging equipment manufacturer), Landwind
procedures and cooperation models (Li, Gao & (laboratory and ultrasound equipment producer),
Wu, 2006). The majority of Chinese companies and Mindray, focused on the installation of demo
through Sinosure (National Chinese Insurance devices in new markets (in most of the cases
Company) can provide three to six months, with with an 80% discount) so they could create some
or without pre-payment, open account conditions, successful marketing situations and use them as
so the customers can pay invoices after three to six future references. For some bids with big volume
months after receipt of products. This could be a orders, they are willing to sell the products with
reason why they have been succeeding in African, zero profit or sometimes even with a negative
Latin American and Asian regions. The majority of profit to invade the market and create a network
Chinese companies are members of local Chinese of end-user hospitals (Moorman, Deshpand &
associations, like the German-Chinese Association Zaltman, 1993). In order to offer the best solutions,
or Mexican-Chinese Trade Union. According to Comen, Angel, Anke and Dirui established a
interviewed managers, the common culture and strategic alliance, so they could provide very
background of sales managers create condition adaptable and personally configured package
for them to establish personal relationships, solutions for turn-key projects with discount and
or “Guanxi”, with other managers through service support for every device from service
sharing exclusive information about market engineers of each company (Li, Poppo & Zhou,
perspective and situation. The result of building 2008). So, if one company gets the order, the other
those relationships has significant influence on three companies will provide full support. These
the certain projects, so if one Chinese company packages are offered for x-ray, laboratory, patient
entered the particular project, after a while, more monitors, patient support systems and medical
companies from China will use the same approach imaging systems.
in the future (Li et al., 2006).
In order to create an R&D advantage for the
Dispositions company, many Chinese companies began to
Sales are considered one of the most important establish R&D offices abroad (Li et al., 2008),
aspects of business. That is why Chinese such as Aeonmed with their American offices.
companies focus on the development of tender Beijing Aeonmed company opened an American
management. The majority of Chinese companies company and created a new brand, Oricare,
insist their employees spend more time in local in the US to position itself as an American
markets and communicate with end-users, so the manufacturer located in Quakertown, Pennsylvania
image of the product can be bettered by getting (Meng, 2014). Neusoft established a new IT
feedback from hospitals and doctors (Buckley department in medical devices and software sectors
et al., 2006) In 2016, Aohua (China’s biggest in cooperation with Northeastern University in
endoscopy equipment manufacturer), during China to promote and develop new products (Tan,
its development of the Russian market, used an 2011). Naton-Irene (a high-tech consumables
exclusive distributor sales strategy. However, after producer for orthopedics) created a platform for
two years they established a very good customer communication with orthopedic doctors from all
service network and started to sell equipment with over the world in order to have a very convenient
the lowest margin to second-level distributors. way to share their experiences and new protocols
Without controlling the profit of second-level in surgical operations. Therefore, the company
distributors, in one year their market share acquires lots of new ideas helpful in improving
increased two times (Martinsons & Davison, their products. Moreover, direct contact with
2006). At the same time, the company developed orthopedic doctor federations in different countries
a personal relationship with the Endoscopy helps them to create a good network of reliable
Surgeons Association and became the third biggest specialists, which they started to use when they
company on the market in four years, overtaking established a private hospital network company
45
focused on orthopedic surgical operations. On the sales, marketing, finance, production etc.). If any
international market, Naton-Irene company could problem or demand from the customer arises, they
not change the perception of the quality of Chinese can make changes to the product in a very short
equipment in biodegradable and bioactive implants period of time (Northouse, 2013). Due to the
market, so at the beginning of 2010, the Chinese increased speed of the processes in the company
company purchased the biggest and most popular in order to support every product department,
company on the market—Inion Oy of Finland Aeonmed (anesthesia and ICU ventilator
(Bloomberg, 2010). Thanks to this acquisition, manufacturer) put R&D, production and finance
the Chinese company was able to enter the responsibilities together according to product type.
international market, gaining an advantage among This means, for example, the anesthesia machines
competitors and very good product to sell in the department and ICU ventilator department work
Chinese domestic market. like different companies with their own budget
and revenue. In order to supply the specific
Coming back to Mindray, in order to increase needs of the doctors and make cooperation more
their competitive advantage, they became the convenient, Mindray and Yuyue (rehabilitation
first Chinese company representing Medical equipment producer) started to produce and supply
Devices listed in the Nasdaq (New York SE) in consumables for their own products. Therefore,
2006; due to the same reason, they purchased they have been able to sign long-term contracts
the American company Datascope Inc in 2008. directly with hospitals.
Then they acquired Shenke Medical, Hyssen
Electronics, Greenlander Information, and Another important point is that according to the
Tiandiren Biotech in 2010, and in 2012 Mindray particular situation in the market, they can work
purchased Dragonbio Surgical Implants and Optcla using distribution sales development, direct
Medical Instruments. Now, Mindray is represented government bids participation and direct sales
in four divisions covering 80% of the medical (Meng, 2014).
devices needed by hospitals. In 2011, in order
to get control of sales in the Australian market, When e-commerce started to grow in China,
Mindray purchased the oldest and only Australian medical device companies were among the first to
anesthesia manufacturer, ULCO. It then upgraded promote their products on the platform of Alibaba.
their sales line with their own products, and gained Issues with customer service were resolved
about 30% of market share in two years. In order through local service centers. Because the cost of
to control the market of high-tech consumables these centers was high, companies lowered costs
like the multi-gas analyzer and capnography through the strategic alliance platforms mentioned
modules used in respiratory care equipment, the previously. Currently, the e-commerce platform for
same company acquired Switzerland’s Artema medical devices is one of the most profitable.
company and become one of the main suppliers The work of Meng (2014) showed that in order
of consumables to their competitors (Frost & to be adaptive to the needs and perceptions of
Sullivan, 2007). customers, Chinese companies, with very short
Adaptability histories, started to use the strategy of cooperation
with the world’s biggest players. The best example
Chinese companies are very flexible and of this alliance is between Beijing Aeonmed and
adaptable; it is very easy for them to change the a German company with more than 100 hundred
structure of the company and product according years of anesthesia production experience. When
to a certain situation in the market. For Islamic- some parts of the product are assembled abroad,
oriented countries, many companies change the devices are produced under a different brand name
color of equipment to green - the most suitable and country of origin.
color in Islamic culture. In order to support sales
needs, Landwind created a strategy department Strategic Advantage
that gathers all the top-managers representing Chinese companies created strategic
every department (R&D, customer service, advantages by opening representative offices
46
near key customer businesses, so if any problems companies increase their level of experience and
or questions with the products or order arose, market promotion instruments. Deng Xiaoping,
customers only needed to knock on the nearby one of the leaders of the Chinese Communist Party
door. interpreted the whole Chinese philosophy in one
phrase, “It doesn’t matter if a cat is black or white,
In developing countries, increasing populations so long as it catches mice” (Moak & Lee, 2015).
pressure governments to adopt cost-cutting reforms The majority of companies are using the sales
in the healthcare sector and reduce the purchasing network and brand name of another company to
price of medical equipment while keeping the establish their own sales network and increase the
quality of the products. Chinese companies have production volume of their own products. Thanks
shown great results in this field. Since 2004, to this strategy, Chinese companies don’t need to
Mindray has set up about 20 overseas sales offices create big marketing departments.
with customer service support centers. This has
helped them understand local market demand and Conclusions
customer requirements. And this also provided
better local services, which increased brand Based on interviews with top and middle level
stability in the market (Tan, 2011). In order to managers, the researchers tried to express the key
gain the advantage in African and Middle-Eastern strategic points of traditional culture through the
markets, Neusoft and Yuyue companies opened marketing development. This paper describes the
a hub in Dubai where they can keep products, relationship between traditional points of great
spare parts and consumables; so in 72 hours they strategists mentioned in the book of Sun Tzu, The
can deliver a certain product in every part of Art of War and the particular approach of Chinese
Africa (Sigurdson, 2008). In looking at the sales companies during the development of international
strategy of Aeonmed, an observer will find that markets. The idea was to focus on certain cases
this company has been providing a communication and describe it from the point of view of managers
platform for the specialists and doctors who have who are working in these companies. Those
been using their equipment. The company created strategic points and approach have been compared
an international network among doctors who and analyzed together. Basically, the cultural
have been using their anesthesia machines. These background has more influence on societies than
local associations provided practice exchange individuals think. That could be one of the reasons
and knowledge sharing programs for doctors in why Chinese companies are more successful
different countries, mainly in China (Meng, 2014). in the global market than Indian or other Asian
companies.
What is interesting is that a lot of companies
in China working in medical devices are very
open to original equipment manufacturer (OEM)
cooperation. This is the type of cooperation where The Authors
one company produces parts or equipment with the
label of another company; it means that they are Bert Wolfs, Ph.D.
not really focused on the brand building process, Academic Dean, SBS Swiss Business
but on manufacturing scale. Chinese companies School
currently are the biggest OEM supplier in the Balz-Zimmermannstrasse, 34
world. Through use of OEM development strategy 8302 Kloten-Zurich, Switzerland
companies can avoid many of the expenses for dean@sbs.edu
promotion and marketing activities. Consequently,
they can afford high scale production, which will Bayan Konirbay
be helpful for reducing the cost of equipment D.B.A. Candidate, SBS Swiss Business
produced with their brand (Tan, 2011). School
47
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50
Comparative Study of Customer Preference with
Respect to Two Fashion Brands H&M versus
Forever 21
by
Anjali Singh, Ph.D. and Ms. Saachi Narang
Abstract
It is important to understand consumer preferences as this understanding could help companies in shaping
their product offering. This understanding gains even more importance when the product is a fashion brand
where preferences can change rapidly and the product is highly personal. Given that India is a key market
for several International brands, it is crucial to understand the consumer preferences in the Indian context.
Towards this objective the present study aims to; find out the preference level of consumers with respect to
the H&M and Forever 21 clothing brands in the Delhi/NCR(National Capital Region); to compare customer
preference with respect to factors such as quality and price of products, availability and convenience of
buying products, advertising, customer service, brand image, social media presence of products and social
status attached to the products of the brand.
The study finds that the difference is significant with respect to factors such as price, advertisements and
the convenience of buying, while there is no significant difference with respect to other factors. Price, brand
image, social status attached to the products are factors that have been ranked higher in preference.
51
most effective and prudent concomitant manner of sumer behaviour has witnessed immense changes
reaping the benefits (Gugnani & Brahma, 2014). in India. Previously, customers were more con-
cerned with the price and availability of products,
The Indian retail fashion market is marked by
but now customer preferences differ with respect
the presence of numerous domestic and foreign
to products and services (Rajput, Kesharwani &
players. As the Indian economy is witnessing a
Khanna, 2012a). In this background, the under-
higher degree of demographic dividend in com-
standing of the preference level of customers be-
parison to the world market, there are increasing
comes highly important for the two retail clothing
trends in the overall consumption within the In-
brands, H&M and Forever 21. So the present study
dian economy. This is also drawing the attention
is designed to find out the preference level of con-
of several good brands that do not currently have
sumers for H&M and Forever 21 brands. The study
a presence in India. Some domestic brands in the
also compares the preference level of consumers
Indian market are Allen Solly, Park Avenue, Peter
for both H&M and Forever 21 with respect to their
England, Flying Machine and Louis Philippe while
demographic factors (Rajput, Kesharwani & Khan-
some of the international brands are H&M, Forev-
na, 2012b).
er 21, Tommy Hilfiger, Mango, Gap and Aeropost-
ale. The changing dynamics in the fashion industry,
such as the fading of mass production, modified
Fast fashion is a business strategy which aims
structural features in the supply chain, demand for
to reduce the processes involved in the buying
lower cost, and flexibility in design, logistics, and
cycle and lead times for getting the latest fashion
distribution (Doyle, Moore & Morgan, 2016) have
products into stores, in order to satisfy consumer
resulted in companies reassessing their outlook.
demand at its peak (Barnes & Lea- Greenwood,
Some fashion retailers have adopted a “Quick Re-
2010). Even though clothing industry players are
sponse” concept (Franks, 2010). Such a strategy
enjoying high demands for their products (the sec-
can be characterized as gaining competitive advan-
tor is expected to grow with a compound annual
tages through reducing time gaps between design-
growth rate (CAGR) of 13% in the coming years)
ing and consumption on a seasonal basis. Based on
from all three types of consumers; men, women
the model of “Quick Response”, “fast fashion” has
and children, it has become equally challenging
been defined as “a business strategy that aims to
for the marketer to cater to the needs of customers.
shrink the processes involved in the buying cycle
The scenario becomes more important for foreign
and lead times for getting new fashion products
brands such as H&M and Forever 21 because these
into stores, in order to satisfy consumer demand
brands are operating in a different county which
at its peak” (Barnes & Lea-Greenwood, 2016, p.
presents its own challenges and it becomes diffi-
259). The business model of these retailers such
cult to understand the true expectations of custom-
as H&M, Benetton and Forever 21, is categorized
ers and serve them accordingly. Thus for brands
by three components: short production and dis-
like H&M and Forever 21, the true evaluation of
tribution lead times (quick response production
the preference level of customers and the factors
competences); highly fashionable product design
affecting such preference level has become highly
(improved product design competences); and
important.
reasonable prices for the middle market-between
This evaluation could help the decision mak- “Prada-Primark” segments (Cachon & Swinney,
ers of H&M and Forever 21 to make appropriate 2011).
choices related to products or services they are
Another important reason for the changing dy-
offering, their market strategies and overall value
namics of the fashion industry is the international-
delivery to the customers in order to attract more
ization process of fast fashion retailers (Bhardwaj
and more customers and finally enhance the bot-
& Fairhurst, 2010). The first step to the interna-
tom line of their firm.
tionalization of many fashion retailers is often
In India, H&M and Forever 21 are the major through their buying decisions, enabling modified
competitors in the high-end fashion retailing sector structural characteristics in the supply chain. One
and are holding strong positions in the fast-fashion leading debate is where to source products (do-
retail market. The domain of marketing and con- mestic versus offshore) and whether to manage the
process of end-to-end supply chain coordination
52
internally or to outsource part or all of the logistics Forever 21 has adopted an economic pricing
functions (Fernie & Perry, 2011). These challeng- policy. It caters to the needs of its esteemed cus-
es are especially important in a market like India tomers by supplying quality products at reasonable
where the concept of fashion brands is a recent phe- prices. The company’s success lies in its ability to
nomenon compared to the western world. challenge top design houses in the rapidly develop-
ing ready-to-wear trends while maintaining some
Overview of H&M and Forever 21 of the most competitive prices in the market with
more than 60% of its apparel being made in Asia
Hennes & Mauritz AB (also known as H&M) is a
(Forever 21, 2016).
fashion clothing-retail company which was founded
by Erling Persson in 1947, in Sweden. H&M offers The marketing strategies of Forever 21 include
fast-fashion clothing for all segments of customers; utilization of social media to create brand aware-
men, women, teenagers and children. The compa- ness through platforms like Instagram, Pinterest,
ny has a presence in 62 countries worldwide with Twitter, Facebook, Snapchat, and blogs. It has an
approximately 4000 stores. H&M took the route of active official website and a significant proportion
entering as a wholly-owned subsidiary in the Indian of its sales come from its website as it is able to
market. The company opened its first store in India reach a broader geography of consumers (Forever
on 2 October 2015 (H&M, 2016b). 21, 2016).
Factors that make H&M different from the rest Literature Review
of the players in the market are its responsible uti-
lization of natural resources, reducing consumption Fernandez (2009) tested the impact of brand on
of electricity in stores, collaborating with high-end customers and the findings revealed that customers
designers and celebrities, providing exclusive col- create an image of a clothing brand and give pref-
lections and offering garment recycling across the erence to those brands about which they hold posi-
globe (H&M, 2016a). tive opinions. The study also found that the role of
a peer group cannot be ignored during the process
For its product distribution channel the com- of selecting, developing opinions and making their
pany has followed the policy of direct purchase of purchase decision about any particular brand. The
raw materials from the suppliers and selling the role of advertising also helps to build the custom-
finished items directly to the retail outlets, with a ers’ awareness, knowledge and perception about
wide network for online sales. The products are the clothing brands, ultimately leading to prefer-
produced in nearly eight hundred factories that are ence towards specific clothing brands.
situated in Asia and Europe. The market strategies
of H&M include making customer’s aware of the In the context of developing countries, the study
latest fashionable company products through digital conducted by Khare and Rakesh (2010) investi-
platforms. It has its own YouTube channel where gated the brand consciousness of customers for
it introduces unique ad campaigns to engage with fashion brands. The main focus of this study was
customers and to promote the latest, and seasonal, to explore the factors which determine the custom-
products for particular and peak seasons (H&M, er preference for fashion clothing, the sample be-
2016a). ing college-going youth in an Indian context. The
findings showed that Indian college-going youth is
Forever 21 is an American fast-fashion retailer, brand conscious when it comes to selecting fashion
which was founded in 1984 by Do Won and Jin clothing, the brand of fashion clothes being their
Sook Chang in Highland Park, California. Accord- first priority. The research compared and found
ing to their website, they have a men’s wear line, that there is no significant difference between gen-
several women’s wear lines (including a plus-sized der preferences.
range), and girls’ clothing collections. Apart from
apparel, it sells accessories, footwear and beau- The study conducted by Verma and Tiwari
ty products. They sell through over 600 stores in (2011) compared preferences of customers towards
America, Asia, the Middle East, and the United Indian versus international brands. The researchers
Kingdom. Aditya Birla Fashion and Retail (AB- adopted the segmentation approach and studied
FRL) acquired the global clothing brand Forever 21 the role of customers falling in different categories
in the Indian market for 26 million USD in 2016. per their demographic profile and preference for
53
national and international brands. The results of product price, the responsiveness of the sales per-
the study show that Indian consumers in the higher son, the social status attached to the products, ease
income categories are more brand conscious than of product availability and ease of payment for
those falling in low income brackets, and buy more products and services.
international brands than Indian brands. Similarly,
a study by Jung and Sung (2008) investigated cus- The relationship between customer aware-
tomer preference towards international and nation- ness and customer preference was investigated
al branded apparel and found that customer prefer- by Thomas and Housden (2002) and Alamro and
ence towards international brands is highly linked Rowley (2011). Both these studies indicate that
to the level of a customer’s purchasing power the brand awareness serves as a key influencer on
while the role of other demographic variables such customer preference about products and services.
as gender, age, or education level is not significant. The higher the brand awareness the higher the
The results of the study also indicated that approx- preference of customers for the particular prod-
imately 58% of the respondents - college students uct and services. Additionally, the researchers
- preferred international brands of apparel over na- listed eleven factors which are key influencers of
tional brands. The study found that the higher the customer preference for products and services.
customer’s exposure to the media (print, electronic These factors are; awareness of customer, modes
and social media), the stronger the influence of of communication (advertisements in print, elec-
media on the customer preference towards cloth- tronic, social media, word-of- mouth publicity)
ing brands. Ismail, Masood and Mehmood (2012) related to products/services, price and quality of
explored factors affecting customer preference for products, brand personality, country of product/
global clothing brands in Pakistan and found that service origin, service quality of the organization,
customer preference was driven mainly by price goodwill and reputation of the organization, cus-
and quality of clothing brands. Gharleghi (2013) tomer’s satisfaction level and perceived risk levels.
also tried to document the factors to predict the Narang (2006) mentioned that due to the repetitive
consumer preferences for choosing fashion clothes nature of advertising in print, electronic and social
among Malaysian consumers. media, consumers are able to recall the brands and
various attributes associated with the products and
The factors responsible for predicting the cus- services.
tomer preference were perceived quality of clothes,
the sale and promotional strategies adopted by The individual’s attitude, perception, past and
brands, lifestyle of customers and the country of existing experiences and other personality related
origin of the clothing brands. factors significantly affect the buying behaviour of
consumers. The role of personality was examined
The study conducted by Mittal and Aggarwal by Albanese (1989) and clearly documented that
(2012) explored the role of customer preference the customer preference and consumer behaviour
and consumer behaviour and found that the cus- are largely driven by the personality of consum-
tomer’s individual characteristics such as physical ers while Sproles and Kendall (1986) established
strength, mental strength and emotional quotient the relationship between the consumer decision
played a very important role in affecting customer making process and the factors associated with the
preference and buying behaviour. Anderson, Fell, mental factors of individual consumers.
Smith, Handen and Gomon (2005) and Dölekoğ-
lu, Albayrak, Kara and Keskin (2008) have made Another study conducted by Kubendran and
attempts to investigate the factors responsible for Vanniarajan (2005) assessed the location (urban
customer preference towards products and ser- versus rural) of respondents and its impact on their
vices. The results indicated that customer prefer- preference and buying behaviour. In general, peo-
ences are largely sensitive to the various product ple in urban areas preferred to buy more branded
related tangible and intangible factors and the other products as that gave them an assurance of quality
demographic factors of the customers. The various and other product attributes along with a sense of
tangible factors associated with clothing products security. Rural consumers preferred to purchase
are the looks of the clothes, the quality of fabrics, more non-branded products as these are relatively
and the ambience of the stores while the other, in- cheaper yet provided adequate quality.
tangible features, associated with the apparel are
54
The literature survey highlights that the factors respect to H&M and Forever 21 in Delhi/NCR re-
important in determining consumer preferences are gion. These hypotheses are listed below:
quality, price, the availability of products, buying
convenience, advertisements, customer service, Hypotheses
brand image, social media and social status. There-
Based on the literature review the following set of
fore, these factors have been incorporated into the
hypotheses were developed for finding and com-
research study undertaken.
paring the preference level of consumers.
Research Problem
• Ho1: There is no significant difference in the
The role of customer preference has remained a preference of customers towards H&M versus
key area of concern for the marketer. The customer Forever 21 brands with respect to quality of
is central in the process of sales and marketing of products.
any products and services and the customer’s taste
• Ha1: There is a significant difference in the
and preferences can impact companies. Therefore,
preference of customers towards H&M versus
satisfying a customer’s need becomes the prime
Forever 21 brands with respect to quality of
goal for a marketer to work towards. Customer
products.
preference is primarily concerned with selecting
various alternatives available to the customer • Ho2: There is no significant difference in the
based on the expected value which they can derive preference of customers towards H&M ver-
in terms of fulfilment of their needs and desires sus Forever 21 brands with respect to price of
along with overall satisfaction. products.
In the modern fashion clothing industry, the two • Ha2: There is a significant difference in the
brands H&M and Forever 21 are close competi- preference of customers towards H&M ver-
tors. These two brands are looking to increasing sus Forever 21 brands with respect to price of
their sales level by satisfying their customers. In products.
this process, the following research questions relat-
ed to customer preference towards H&M and For- • Ho3: There is no significant difference in the
ever 21 brands are relevant to answer in the Delhi/ preference of customers towards H&M versus
NCR region; Forever 21 brands with respect to availability
of products.
What are the factors which influence the prefer-
ences of customers towards H&M and Forever 21 • Ha3: There is a significant difference in the
brands in Delhi/NCR region? preference of customers towards H&M versus
Forever 21 brands with respect to availability
Which of these factors influencing customer pref- of products.
erence towards these two brands H&M and Forev-
er 21 are ranked as more important, and why? • Ho4: There is no significant difference in the
preference of customers towards H&M versus
Objectives of the Study Forever 21 brands with respect to convenience
of buying of products.
The objectives of the study are;
• Ha4: There is a significant difference in the
1. to find out the factors which influence the pref-
preference of customers towards H&M versus
erence of customers towards H&M and Forev-
Forever 21 brands with respect to convenience
er 21 brands in Delhi/NCR region.
of buying of products.
2. to conduct a comparative analysis between the
• Ho5: There is no significant difference in the
preference level of consumers with respect to
preference of customers towards H&M versus
H&M and Forever 21.
Forever 21 brands in with respect to advertise-
With respect to the objectives listed above, ments.
the following hypotheses are formed to test and
• Ha5: There is a significant difference in the
compare the preference level of consumers with
preference of customers towards H&M versus
55
Forever 21 brands with respect to advertise- the preference level of consumers for H&M versus
ments. Forever 21 products in Delhi/NCR and treated the
same as proxy for a continuous variable of con-
• Ho6: There is no significant difference in the sumer’s preference. There is past evidence indicat-
preference of customers towards H&M versus ing that the same can be considered for generating
Forever 21 brands with respect to customer proxy of an attitudinal variable. The findings of
service. the study are based on the opinions expressed by
the respondents during the questionnaire survey so
• Ha6: There is a significant difference in the
there are changes of responses biasness in the find-
preference of customers towards H&M versus
ings. The data collection of a questionnaire survey
Forever 21 brands in with respect to customer
always carries some common errors i.e. hurried
service.
filling of the questionnaire, misunderstanding of
• Ho7: There is no significant difference in the the instrument/concept and the influence of others.
preference of customers towards H&M versus
Research Design -Methodology
Forever 21 brands with respect to brand image
in Delhi/NCR region. The study is based on the descriptive research de-
sign formed to meet the objectives of the study.
• Ha7: There is a significant difference in the
The selection of descriptive research design is in
preference of customers towards H&M versus
line with the studies conducted in the past in the
Forever 21 brands with respect to brand image.
area of consumer behaviour.
• H08: There is no significant difference in the
Design of the Research Instrument
preference of customers towards H&M versus
Forever 21 brands with respect to social media The researchers have developed a detailed
presence of the brand. questionnaire considering the role of all the factors
affecting the preference level of customers. These
• Ha8: There is significant difference in the pref-
factors were identified in the literature review of
erence of customers towards H&M versus
the study in both the Indian and global context and
Forever 21 brands with respect to social media
concluded that the factors such as quality, price,
presence of the brand.
availability, convenience of buying, advertisements
• H09: There is no significant difference in the made by marketer in print, electronic and social
preference of customers towards H&M versus media, customer service, brand image, social
Forever 21 brands with respect to social status media presence and social status attached to the
attached to the brand. products and services offered by the marketer play
a very important role in affecting the preference
• Ha9: There is significant difference in the pref- level of consumers. The rating scale of 1-5 was
erence of customers towards H&M versus selected for the study to assess the preference level
Forever 21 brands with respect to social status of consumers with respect to various factors af-
attached to the brand. fecting the same. A sample of 50 respondents was
selected as a sample for the study. The sample was
Limitations of the Study selected using convenient sampling method. The
The findings of the study are limited to the anal- fieldwork was executed in February 2017.
ysis of a sample size of 50 respondents selected Findings and Discussion
from the Delhi/NCR region on the basis of conve-
nient sampling. The results can’t be generalized for The paired sample t-test is used to compare the
the entire population of the study. As recommend- preference level of consumers with respect to qual-
ed by Central Limit Theorem, to get a better esti- ity, price, availability, convenience of buying, ad-
mation for the entire population from the sample, vertisements made by marketer (print or electron-
the sample size should be large. Considering the ic), customer service, brand image, social media
paucity of time, we selected convenient random presence and social status attached to the products
sampling methods for selecting the sample. We and services offered by the marketer of the prod-
have used both a rating and ranking scale to assess ucts offered by H&M versus Forever 21.
56
Profile of Respondents The mean rating of quality of H&M was 3.26
while the same was 3.10 in the case of Forever 21.
The demographic profiles of respondents select- The value of t-test statistics is 0.513 which is not
ed as the sample of the study are discussed in this statistically significant at 5% level of significance.
section. The number of male respondents was 16 Thus the null hypothesis of no statistical differ-
and female respondents numbered 34 out of a total ence in the preference of consumers with respect
of 50, the percentage being 32% and 68% respec- to quality of products for H&M versus Forever 21
tively. The number of respondents below the age brands will not be rejected and alternate hypothesis
of 35 was 20, or 40 % of the total size, while the of significant statistical differences will be reject-
remaining 60 % of the respondents, numbering 30, ed. The researchers can conclude that consumers
were above the age of 35 years. The distribution do not have different preference with respect to
of the sample across the education level was fairly quality of the two brands.
even with 26 % of the respondents being graduates,
36 post graduates and 38 % who were neither. The • Ho2: There is no significant difference in the
spread of the sample across NCR(National Capital preference of customers towards H&M ver-
Region) was even, with 28% of the respondents sus Forever 21 brands with respect to price of
from Gurgaon, 34% from Delhi and the remaining products.
38% from Ghaziabad. In terms of the household
income, a total of 22% respondents had a household The mean value of ratings received by both brands,
monthly income less than 50 thousand, another 32% H&M and Forever 21, with respect to their prices
respondents’ monthly income was between 50 thou- were 1.94 and 3.54 respectively. The value of t-test
sand and 100 thousand rupees while 28% respon- statistics is -6.946 which is statistically significant
dents had a monthly household income between 100 at 5% level of significance. Thus the null hypothe-
thousand to 500 thousand rupees. The percentage sis will be rejected and alternate hypothesis of sig-
of respondents having monthly household income nificant statistical differences will not be rejected.
above 500 thousand rupees was 18% in the selected Thus the study finds that the price of H&M versus
sample. Forever 21 has a significant difference in prefer-
ence among the end consumers.
Analysis of Responses
• Ho3: There is no significant difference in the
The respondents were also asked to rank the var- preference of customers towards H&M versus
ious factors of product quality, price, availability, Forever 21 brands with respect to availability
buying convenience, advertisements, customer ser- of products.
vice, brand image, social media and social status.
The mean value of ratings received by H&M and
Factors like social status associated with product, Forever 21 with respect to their availability of
buying convenience and brand image of the product products were 2.70 and 2.96 respectively. The val-
were ranked as important for the customers while ue of t-test statistics is -0.889 which is statistically
other factors like quality of products, availability significant at 5% level of significance. Thus the
of products, advertisements, customer service and null hypothesis of no statistical difference in the
social media were not ranked as important. (Table 1 preference of consumers with respect to availabil-
in Annexures) ity of products for H&M versus Forever 21 brands
will not be rejected and alternate hypothesis of sig-
Hypothesis Testing nificant statistical differences will be rejected. We
can conclude that there is no difference in consum-
To test the following hypothesis of comparing
er preferences regarding product availability.
the preference of consumers with respect to H&M
versus Forever 21 in Delhi/NCR region, paired sam- • Ho4: There is no significant difference in the
ple t-test statistics were pressed preference of customers towards H&M versus
into service. Forever 21 brands with respect to convenience
• Ho1: There is no significant difference in the of buying of products.
preference of customers towards H&M versus
Forever 21 brands with respect to quality of The mean value of ratings received were 3.24 by
products. H&M and 2.68 by Forever 21. The value of t-test
57
statistics is 2.112 which is statistically significant • Ho7: There is no significant difference in the
at 5% level of significance. Thus the null hypothe- preference of customers towards H&M versus
sis of no statistical difference in the preference of Forever 21 brands with respect to brand image
consumers with respect to convenience of buying in Delhi/NCR region.
of products for H&M versus Forever 21 brands
will be rejected and alternate hypothesis of sig- The mean rating of the brand image of H&M and
nificant statistical differences will not be rejected. Forever 21 were 3.08 and 3.00 respectively. The
The researchers can conclude that the H&M brand value of t-test statistics is 0.277 which is not statis-
has a higher preference for convenience of buying tically significant at 5% level of significance. Thus
of products from end consumers than Forever 21 the null hypothesis of no statistical difference in
brand. the preference of consumers with respect to brand
image of products for H&M versus Forever 21
• Ho5: There is no significant difference in the brands will not be rejected and alternate hypothesis
preference of customers towards H&M versus of significant statistical differences will be reject-
Forever 21 brands in with respect to advertise- ed.
ments.
The researchers can conclude that with respect to
The mean value of ratings of H&M and Forever 21 the brand image of Forever 21 versus H&M, there
were 2.48 and 3.36 respectively. From the table the is no difference in preference regarding brand im-
value of t-test statistics is -3.290 which is statisti- age among the end consumers.
cally significant at 5% level of significance. Thus
the null hypothesis of no statistical difference in • H08: There is no significant difference in the
the preference of consumers with respect to adver- preference of customers towards H&M versus
tisements of products for H&M versus Forever 21 Forever 21 brands with respect to social media
brands will be rejected and alternate hypothesis of presence of the brand.
significant statistical differences will not be reject-
The mean value of ratings received by both the
ed.
brands H&M and Forever 21 with respect to their
The mean value of advertisements is higher in the social media presence were 2.82 and 3.06 respec-
case of Forever 21 and lower in the H&M brand. tively. The value of t-test statistics is -0.735 which
The researchers can conclude that end consumers is statistically insignificant at 5% level of signif-
of Forever 21 have higher preference for advertise- icance. Thus the null hypothesis of no statistical
ments as compared to the H&M brand. difference in the preference of consumers with
respect to social media presence of products for
H&M versus Forever 21 brands will not be reject-
• Ho6: There is no significant difference in the ed and alternate hypothesis of significant statistical
preference of customers towards H&M versus differences will be rejected.
Forever 21 brands with respect to customer ser-
vice. The researchers’ conclusion is that consumers are
indifferent to both brands in terms of the prefer-
The mean rating of customer service of products of ence level of consumers with respect to the social
H&M was 2.88 and 2.92 for Forever 21. The value media presence.
of t-test statistics is -0.160 which is not statistically
insignificant at 5% level of significance Thus the • H09: There is no significant difference in the
null hypothesis of no statistical difference in the preference of customers towards H&M versus
preference of consumers with respect to customer Forever 21 brands with respect to social status
service of products for H&M versus Forever 21 attached to the brand.
brands will not be rejected and alternate hypothesis
The mean value of rating received by H&M was
of significant statistical differences will be rejected.
3.18 and 2.90 for Forever 21 with respect to their
Therefore the researchers can conclude that custom- social status. The value of t-test statistics is 0.938
ers do not find any difference in the level of cus- which is statistically insignificant at 5% level of
tomer service of products offered by H&M versus significance, thus the null hypothesis of no statisti-
Forever 21. cal difference in the preference of consumers with
58
respect to social status attached to the brand H&M
versus Forever 21 will not be rejected and alternate The Authors
hypothesis of significant statistical differences will
be rejected. Anjali Singh, Ph.D.
Marketing, IILM Institute for Higher
The researchers concluded that the preference level
of consumers with respect to the social status at- Education
tached to both brands are similar. 3, Lodhi Road. New Delhi -11003
anjali.singh@iilm.edu
Conclusion and Recommendations
Ms. S. Narang
Out of the nine factors identified from the literature BBA(Entrepreneurship)- stage 3
review and researched for this study, it is clearly saachi.narang.sbs17@iilm.edu
evident that for consumers in Delhi/NCR product
New Delhi
quality, price, availability, customer service and so-
cial media presence do not rank high. On the other
hand, they rank factors like convenience of buying,
social status attached to products and brand image
as higher for both brands. It would be worthwhile
to carry out further research on why quality as a
parameter does not rate high for the respondents
surveyed. It could be probable that brand image
which is rated highly could be indicative of quality
and therefore disregarded as a separate variable.
The study finds that with respect to the quality,
availability of products, customer service, brand
image, social media presence and social status
attached to the two brands, there is no significant
difference between the preference of customers
towards H&M and Forever 21. The difference is
significant between the two brands, H&M and
Forever 21, with respect to factors such as price,
advertisements made by the two brands and the
convenience of buying of the two brands. The
difference between the two brands with respect to
pricing is especially significant as the Indian con-
sumer is considered to be highly price conscious.
The price points of Forever 21 make it more af-
fordable and accessible to the Indian consumer and
the consumers are aware of the difference in the
price between the two brands. Further research can
also be carried out the difference in preferences
with respect to convenience of buying of the two
brands, given that both the brands occupy similar
retail space i.e malls and have an equally strong
online presence.
59
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61
Annexures
Questionnaire
Occupation:
Service Business Others
62
Q11. I find the products at Forever 21 to be priced appropriately.
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Q12. I find availability of products to be appropriate at Forever 21.
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Q13. I find it convenient to buy products at Forever 21.
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Q14. I find advertisements of products to be appropriate at Forever 21.
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Q15. I find customer service to be appropriate at Forever 21.
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Q16. I find the brand image of products to be appropriate for Forever 21.
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Q17 I find social media presence to be appropriate at Forever 21.
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Q18. I find social status attached to the brand be appropriate at Forever 21.
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Rank the following factors on a scale of 1-9 (1 highly preferred and 9 least preferred) while pur-
chasing the products.
Factor Ranking
19 Quality of products
20 Price of products
21 Availability of products
22 Convenience of buying of products.
23 Advertisements of products
24 Customer service of products
25 Brand image of products
26 Social Media presence of products
27 Social status attached to products
Table 1.
63
Cumulative Percent-
Factors age
( Rank 1+2+3)
Table 2 and 3
Paired Differences
95% Confi-
Mean dence Interval
Std.
of the Differ- Sig.
Error
ence
Mean t df (2-tailed)
Std.
Deviation Lower Upper
Pair 1 Preference with respect .160 2.207 .312 -.467 .787 .513 49 .611
to quality
Pair 2 Preference with respect
-1.600 1.629 .230 -2.063 -1.137 -6.946 49 .000
to price
Pair 3 Preference with respect -.260 2.068 .293 -.848 .328 -.889 49 .378
to availability.
Pair 4 Preference with respect .560 1.875 .265 .027 1.093 2.112 49 .040
to convenience
Pair 5 Preference with respect -.880 1.891 .267 -1.418 -.342 -3.290 49 .002
to advertisements.
Pair 6 Preference with respect -.040 1.772 .251 -.544 .464 -.160 49 .874
to customer service
64
Contact
Email: editor@sbs.edu
JABR Website: http://jabr.sbs.edu
www.sbs.edu