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«Published Annually Vol. 6, No. 1 ISBN 978-0-979-7593-3-8 CONFERENCE PROCEEDINGS Sawyer School of Business, Suffolk University, Boston, Massachusetts ...»

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6. Joy of seeing a happy customer Conference papers © Knowledge Globalization Institute, Pune, India, 2012 Mary Parker Follet‟ s definition categorizes people in two sets. One set of people are in commanding position and there is another set which is being directed. The implicit assumption is that there is a dominant group of people who are using technology and other resources to meet the needs of customers to earn profit. This also created a set of people in marketing who wanted to dominate the market and in turn the consumer. They manipulated their needs using advertisements and other promotional means.

The Ethical Action Theory goes beyond the X-Y theory of Douglas McGregor proposed in his 1960 book 'The Human Side of Enterprise'. The approach proposed is not a motivational theory but proposes a vision for the disciple of management.

The “Ethical Action Theory of Organization” looks at the scheme of management differently. This theory encompasses all the above concepts and defines management as “a series of ethical actions done by people, using technology and resources, to achieve a state of joy and happiness in the minds of both, producers and customers.” The new definition of management brings all stakeholders and consumers on one side. There are no dominant people on either side. Everyone is working for maximizing the joy and happiness. Resources and technologies are tools for the fulfilment of joy.

–  –  –

Analytical Support A research was conducted to understand human response in organizations with special reference to Indian context. The research concept was based on the theoretical work done by Dr S K Chakraborty, which provided a normative framework of Gunas (Sattwic, Rajasic and Tamasic) in his book Human Response in Organizations.

This paper uses the same questionnaire to validate the “Ethical Action Theory” of organizations. Using these frameworks, the current study tries to redefine the management using ethical action as the benchmark of organizational behavior in formulating and implementing strategies.

The data collected through questionnaires were analyzed using multivariate statistical techniques. These variables were chosen on the basis of previous research on Guna composition which was used in analyzing the behavior of people in organizations. The factor analysis of these variables gave insights into the minds of people working in organizations. Table 1 gives the significant factors extracted after the factor analysis of these variables.

INSERT TABLE 1 HERE

The factors show the collective response of people working in the organizations. It indicates that people working in the organizations believe in Dharma (Ethical Action). They love to enjoy their work and are looking for joy and happiness in their lives - not only at work place but also outside the workplace. They are responsible, result oriented, ethical in approach and are motivated.

The questionnaire also had questions which were framed to get the views on the key words in the new definition of management. Table 2 indicates the net agreement of respondents on the critical words included in the definition.

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Devasthali GV (1959), Mimamsa, Booksellers Publishing Co., Mumbai Modh Sadhana (2004), Understanding Human Response in Organizations, PhD Dissertation, Rani Durgavati University, Jabalpur Conference papers © Knowledge Globalization Institute, Pune, India, 2012 Chakraborty S K (1985), Human Response in Organization, The Standard Literature Co., Kolkata.

We need to ask questions. Will redefining management help in imparting right values to management students? Will redefining management help in formulating and implementing strategies and processes of organizations?

We know that the purpose of education is to initiate and stabilise new and functional attitudes and values in individuals for mutual co-operation and understanding so that they learn and respect society‟ s values and act accordingly. Educational institutes have a vital role in imparting ethical and social values in the young mind so that strategies and processes initiated by these future leaders create sustainable environment for coming generations. Though the subject of ethics has a global appeal, if not embedded in the basic education, would have no impact on the way business is being done.

The process of evolution of an individual from student to a professional consists of:

1. Inner directed thinking:

- to evaluate and balance himself in the working environment.

2. Decision-making:

- day to day problem solving and outward projection.

3. Implementing - based on inner evaluation and day to day experiences he projects an outward personality.

Students, when they join any organisation, are influenced by new organisational settings. If the values are not imparted to them and are not shaped by proper education prevailing environments will shape them. Most of the curricula in professional and management institutes attempt to address the middle part to give a student the knowledge to pursue a particular profession.

The new definition of management provides a framework to management students to integrate ethical action, joy of working, and joy of delivering happiness to their customers as a business strategy.





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In India the term Microfinance is used in many different context, it can sometimes be oversimplified and viewed in a skewed or narrow perspective. At its core, microfinance can be viewed as an innovative segment of the banking sector, primarily credit, to the poor bridging the gap that commercial banking has not been able to fulfill.

Microfinance itself was conceived with a different purpose than just providing the poor with access to capital. Microfinance and Microcredit do not provide consumers with loans to simply increase their consumption; instead, they provide loans for the specific purpose of creating self-employment for the poor, thereby enabling the poor to build their own microenterprises and move themselves out of poverty.

In short, microfinance is an income producing tool rather than a consumption aid. Through microfinance, we have witnessed that poor individuals, when given the opportunity to start their own business, can provide for themselves and their family with basic necessities and also generate sustainable income. If they can maintain that income, it can lead to improve living standards and for some a means to escape poverty, if individuals achieve economic freedom, it can lead to a series of improvementsimproving the well being of families, communities and society at large.

Key Words: Microfinance, Microenterprises, Credit, Eradicate Poverty, Capital

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Today micro finance programs and institutions have become increasingly important components of strategies to reduce poverty or promote micro and small enterprise development The Task Force on Supportive Policy and Regulatory Framework for Micro Finance has defined it as under: “Provision of thrift, credit and other financial services and products for very small amounts to the poor in rural, semi-urban or urban areas for enables them to raise their income levels and improve living standards”. Micro finance is a participative model that can address the needs of the poor especially women members. It envisages the empowerment of the members by promoting their saving habits and extending bank loans to them.

Microfinance, according to Otero (1999, p.8) is “the provision of financial services to low-income poor and very poor selfemployed people”. These financial services according to Ledgerwood (1999) generally include savings and credit but can also include other financial services such as insurance and Payment services. Schreiner and Colombet (2001, p.339) define microfinance as “the attempt to improve access to small deposits and small loans for poor households neglected by banks.” Micro finance is recognized and accepted as one of the new development paradigms for alleviating poverty through social and economic empowerment of the poor with special emphasis on empowering women.

Origin of Micro Finance

The origin of Micro finance or micro credit can be traced to the 1976 when Mohammed Yunus set up the Grameen Bank experiment on the outskirts of Chittagong University Campus as an experiment. Grameen we mean ‘rural or village’ in Bangladesh language. These Grameen banks provide loans to the poor who do not have anything to put up for collateral.

Grameen banks are the largest rural financial institution in Bangladesh. Their lending guidelines and procedures are mainly for women, 97% are women. In terms of clients, Grameen Bank is doing very well. There are two main delivery channels for

Conference papers © Knowledge Globalization Institute, Pune, India, 2012

microfinance services. The first one is SHG (Self Help Group)-Bank Linkage Channel (SBLC), which was developed from field experiments in the early 1990s by NABARD (National Bank for Agricultural and Rural Development). NABARD was established in 1982 to promote equitable rural prosperity through credit and other initiatives. The second channel is Micro Finance Institution (MFI). The first MFI in India was set up in 1974, but the momentum was achieved only during the 1990s.. Initially the formal financial institutions were reluctant to be involved with the MFIs, and social entrepreneurship was also in short supply. In recent years banks and other institutions, helped by supportive public policies, have become more aware of the commercial viability of the micro finance services. Innovative partnership models have been developed between the banks and the MFIs.

These have increased availability of funding to the sector and have subsequently enabled MFIs to increase their scale of operations and outreach.

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Some important features of micro finance are as follows:

a) Micro finance is a tool for empowerment of the poorest women.

b) Micro finance is essentially for promoting self-employment; the opportunity of wage employment is limited in developing countries – not increases the productivity of employment in the informal sector of the economy.

c) Micro finance is not just a financing system, but a tool for social change, especially for women.

d) Micro credit is aimed at the poorest, micro finance lending technology needs to mimic the informal lenders rather than formal sector lending.

–  –  –

The profile of micro finance in India at present can be traced out in terms of Poverty it is estimated that 350 million people live Below Poverty Line. The

Following are some components of micro finance:

a) This translates to approximately 75 million households.

b) Annual credit demand by the poor in the country is estimated to be about Rs 60,000 crores.

c) A cumulative disbursement under all micro finance programmes is only about Rs. 5000 crores.

d) Total outstanding of all micro finance initiative in India estimated to be Rs. 1600 crores.

e) Only about 5% of rural poor have access to micro finance.

f) Though a cumulative of about 20 million families have accepted accessed.

g) While 10% lending to weaker sections is required for commercial banks, they neither have the network for lending and supervision on a larger scale or the confidence to offer term loan to big micro finance institutions.

h) The non poor comprise of 29% of the outreach.

Micro finance aims at assisting communities of the economically excluded to achieve greater levels of asset creation and income security at the household and community level. Access to financial services and the subsequent transfer of financial resources to poor women enable them to become economic agents of change. Women become economically self-reliant, contribute directly to the well being of their families, play a more active role in decision making and are able to confront systematic gender inequalities. Access to credit has long been considered a major poverty alleviation strategy in India. Micro credit has given women in India an opportunity to become agents of change. Poor women, who are in the forefront micro credit movement in the country use small loans to jump start a long chain of economic activity. Micro finance is accessing financial services in an informally formal route, in a flexible, responsive and sensitive manner which otherwise would not have been possible for the formal system for proving such services because of factors like high transaction cost emanating from the low scale of operation, high turnover o clients, frequency of transaction etc. (Vijay Mahajan and G. Nagasri, 1999). Microfinance and Self Help Group (SHG) must be evolved to see that SHGs do not charge high rates of interest from their clients and improve access to those who cannot sign by making their use through thumb impression. A major gap in the services provided by the sector is that due to regulatory restrictions, savings products have not been offered until now. Financial inclusion should involve both savings and credit products. The provision of savings products will enable MFIs to offer a more complete suite of products to low income groups.

There is disproportionate reliance on group lending. The MFIs in particular need to shift from group to individual-based lending.

This will require focus on development of appraisal skills and more modern management information systems.

There is scope for substantially improving the quality and efficiency of service delivery by the organizations providing micro finance services. Transaction costs, defined as lending costs exclusive of cost of funds and default costs, currently contribute significantly to the high interest rates charged to the borrowers while relatively small size of loans and high frequency of transactions are inherent in micro finance, the challenge is to nonetheless lower transaction costs substantially.

The impact of microfinance on poverty



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