Dec'18

The IUP Journal of Business Strategy

Focus

Leadership is a critical component for the success of businesses in both private and public enterprises. The first paper of this issue, "Getting the Best Out of Public Sector CEO: Ensuring Performance and Exit, the Right Way", by J P Dash, M Panda and Devinder Kumar, focuses on CEOs of public sector enterprises. According to the authors, CEOs in public sector undertakings are facing challenges such as complex business models, hyper competitive markets and heightened expectations from stakeholders. They are being asked to function with fewer resources. Although by comparison, private sector enterprises are more nimble and use fewer resources in creating shareholder value, it is the public sector organizations that create greater equity, address market failures and ensure inclusive growth. The Indian experiment with PSUs is a good example to illustrate this point. The study examines different performance management practices in the public sector of various countries and the current practices being followed in India. The paper suggests that good performers (CEOs) need to be rewarded adequately but the system should also create a framework where poor performers are ejected out of the system. The paper also makes an attempt to create an ecosystem in order to get the best out of the public sector CEOs through an appropriate framework of performance management, mentoring and professional development. Considering the importance of due processes in the public sector, this paper advocates adoption of Global Reporting Initiative (GRI) reporting standard and SA 8000 for measuring social impact.

Environmental protection is assuming greater importance in today's business context. Governments enact laws to ensure that environment is protected for the present and future generations. Each country has its own norms for environmental protection and India is no exception. Economic growth fueled by ignoring environment has serious negative consequences as can be seen from the challenges faced by advanced countries that face disasters such as deadly oil spills, smoke pollution, landslides and industrial effluents. A positive development is that the paradigm is slowly moving towards responsible business that cares for environmental protection. The second paper, "Environmental Performance and Influence of Select Variables on Environmental Disclosure of Major Industrial Units of Assam: An Empirical Study", by Baishali Dey and Nikhil Bhusan Dey, examines environmental performance in select industries in the State of Assam. It looks at the relationship between environmental disclosure and its influences on profitability, debt equity and liquidity. The sample unit for the study was select industries in Assam. The results of the study show that environmental performance of selected industries is still at a very nascent stage. Environmental disclosure norms too are not adhered to by these companies and scant importance is given to environmental accounting practices. The study sheds light on how an important aspect of environmental protection adherence is not being taken seriously. According to the authors, there is a need to create greater awareness among the stakeholders on the unintended and intended benefits of such practices.

Developing countries face resource crunch that has a direct impact on investments, especially in the much-needed infrastructure projects such as roads. Governments by themselves cannot create infra given the huge demand for financial resources. One of the ways of overcoming this problem is the PPP or Public Private Partnership Model in both developed and developing countries. According to the authors, the road sector in India is in bad shape and PPP appears to be the most preferred solution. Since the introduction of the PPP model, there had been an exponential growth of 69.43% in the length of national highways laid under the 9th Five Year Plan. However, this growth slipped in the 10th and 11th Plans. The paper, "Critical Success Factors of Public-Private Partnership for Road Sector Development in India: A Private Sector Perspective" by Vimlesh Prabhudesai and Nandkishor G Sarode, makes an attempt to investigate the conditions critical for the success of PPP in the road sector by analyzing a list of twenty-six critical factors. The analysis reveals that five factors are critical for the success of PPP, namely, financial viability, appropriate dispute resolution mechanism, favorable government policy measures, low interest rates and a sound toll revenue model. Given the paucity of research in this domain, the paper contributes to the literature in this niche area.

The last paper in this issue, "The Impact of Market Orientation on the Performance of MSMEs: A Cross-Sectional Analysis of Manufacturing and Service Firms in India", by Purva Kansal and John Bansal, investigates the influence of market orientation on the performance of Micro, Small and Medium Enterprises (MSMEs). Considering the critical role played by MSMEs in the economic development, especially in terms of job creation and boosting economic growth, the government has, over the years, launched and implemented a plethora of schemes and policies for this sector. According to the authors, MSMEs continue to suffer from critical challenges affecting their growth and even survival, particularly due to lack of availability of adequate and timely credit, high cost of credit, access to technology, lack of skilled manpower, lack of consumer awareness and infrastructure facilities, besides inadequate marketing support, lack of market research and lack of understanding of consumer behavior as well as market orientation. Past studies demonstrate a positive correlation between market orientation and financial performance. In this study, market orientation was measured in terms of marketing expenditure and sales was used as a measure of financial performance of a company. Data from 287 companies was analyzed for over a period of six years-2012-2017. The analysis revealed poor relationship, signaling that most companies did not actually invest in marketing orientation. This paper can be viewed as an addition to the body of literature in strategy, particularly the marketing orientation area in India.

-Venu Gopal Rao
Consulting Editor

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Article   Price (₹) Buy
Getting the Best Out of Public Sector CEO: Ensuring Performance and Exit, the Right Way
50
Environmental Performance and influence of Select Variables on Environmental Disclosure of Major Industrial Units of Assam: An Empirical Study
50
Critical Success Factors of Public-Private Partnership for Road Sector Development in India: A Private Sector Perspective
50
The Impact of Market Orientation on the Performance of MSMEs: A Cross-Sectional Analysis of Manufacturing and Service Firms in India
50
       
Contents : (Dec'18)

Getting the Best Out of Public Sector CEO: Ensuring Performance and Exit, the Right Way
J P Dash, M Panda and Devinder Kumar

Leadership in public sector is critical to good public governance for transforming India into a high growth and inclusive economy. Having made the best choice in selecting the CEO by eliminating type one error, the question arises as to how we address the risks arising from principal agent problem. This paper explores various country models for performance management, analyzes the current system, advocates for fixed tenure, mentoring and training and recommends performance metrics. A detailed examination of public sector MOU system is carried out with its promises and pitfalls. Considering the importance of due processes in public sector in addition to achieving results, this paper advocates adoption of GRI reporting standard and SA 8000 for measuring the social impact. The paper elucidates that the exit of CEO from the system needs equal attention, when he/she fails in either performance delivery or adherence to values. Finally, the paper recommends key ideas for change with some best practices for getting the best out of the CEO.


© 2018 IUP. All Rights Reserved.

Article Price : Rs.50

Environmental Performance and influence of Select Variables on Environmental Disclosure of Major Industrial Units of Assam: An Empirical Study
Baishali Dey and Nikhil Bhusan Dey

In the recent times, the issue of environmental protection and sustainable development has received increased attention all over the globe. Now, industries are also increasingly realizing their role in environmental protection and sustainable development. As in other parts of India, the growth of industries in Assam has also been guided by the necessity of increasing production. For protection of environment and sustainable development, different industries of Assam are committed to abide by the environmental norms and various conditions stipulated by the Government of India. This paper is an attempt to analyze the environmental protection performance by the major industrial units of Assam. It has been observed that out of the 25 sample companies under 10 industry groups in Assam, 21 (84%) companies disclosed their environmental information. However, almost all the sample companies disclosed some information on steps taken towards environmental protection. The study observed a very strong positive correlation between the size of firms and the level of corporate environmental disclosure among the major industries in Assam. The findings revealed that there is a need for proper guidelines and framework for environmental performance by the industries in Assam.


© 2018 IUP. All Rights Reserved.

Article Price : Rs.50

Critical Success Factors of Public-Private Partnership for Road Sector Development in India: A Private Sector Perspective
Vimlesh Prabhudesai and Nandkishor G Sarode

Developing countries and even some developed countries face financial constraints in building the country's infrastructure. Public-private partnership (PPP) appears to be an adequate mechanism for empowering both developing and developed countries to bring together the strengths of public and private sectors to build infrastructure projects. Given the state of affairs of India's transportation sector in general and road sector in particular, PPP may be one of the most preferred solutions. After the introduction of PPP, there was an exponential growth of 69.43% in the length of the National Highways in the 9th Five-Year Plan. But thereafter, the growth subsided—14.59% in the 10th Plan (2002-07) and 15.36% in the 11th Plan (2007-12). The number of projects awarded to PPP decreased sharply. This paper aims to investigate the factors critical to the success of PPP in the development of the road sector. The paper analyzes the views of one stakeholder—Private Developer (Concessionaire). The study is motivated by the country's inability to use PPP to the extent required in the development of the road sector. A questionnaire with a list of 26 critical success factors of PPP, identified through literature review and through discussions with experts, was administered among respondents experienced in development of road projects through PPP mode. The questionnaire was tested for its reliability using Cronbach's Alpha. The data was analyzed using relevant statistical tools. The top five factors identified were—sufficient financial viability, appropriate dispute resolution mechanism, favorable government policy measures, long-term low interest rate finance and suitable adjustment formula for toll revenue.


© 2018 IUP. All Rights Reserved.

Article Price : Rs.50

The Impact of Market Orientation on the Performance of MSMEs: A Cross-Sectional Analysis of Manufacturing and Service Firms in India
Purva Kansal and John Bansal

The current study is aimed at validating the past literature which states that increased market orientation has a positive impact on the performance of Micro, Small and Medium Enterprises (MSMEs). Preliminary statistical review indicated that the performance potential of the MSMEs has not been met in India. A review of the literature further indicated that one of the ways by which MSMEs could increase their performance was by increasing their market orientation. However, not much study has been done in India to see the relationship between market orientation and firm performance of MSMEs. The current study is planned to fill this gap via studying the relationship between market orientation and the performance of Indian MSMEs. Panel data was retrieved from the Prowess for a period of six years from 2012 to 2017, and the data was analyzed using EViews panel regression model with random effects model. There were three main findings of the study. First, the results of the study indicated that market orientation had a positive effect on business performance. Second, beta values indicated that the market orientation-performance relationship was stronger in manufacturing firms than in service firms. Third, a simple linear regression was performed for six years to check how beta value had changed over the years. The beta values increased gradually from 2012 to 2017 for both Manufacturing and Service Firms, indicating that Indian MSMEs understood the importance of market orientation and its implementation.


© 2018 IUP. All Rights Reserved.

Article Price : Rs.50

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