It is our pleasure to bring you the final issue of 2016, with its complement of articles and features.
Impulsive buying has become an economically relevant phenomenon in the retail world, with impulsive buying tendency widely acclaimed as its driver. Given the differences in the behaviour of consumers across cultures, and the fact that most scales for measuring impulsive buying tendency have been developed for use in the developed economies and use the English language, Professors Anant Jyoti Badgaiyan, Anshul Verma, and Saumya Dixit consider the possibility of developing an indigenous (using Hindi) and new impulsive buying tendency measurement scale. Their paper “Impulsive buying tendency: Measuring important relationships with a new perspective and an indigenous scale” discusses two studies they conducted to (i) develop a two factor 8-item Indian scale, to measure impulsive buying tendency; (ii) validate the scale by examining the association of impulsive buying tendency with self-control; impulsive buying tendency with the big five personality trait constructs of emotional stability, agreeableness, extraversion, conscientiousness, and openness to experience; and (iii) examine the relationship between impulsive buying tendency and impulsive buying behaviour. The study uses structural equation modelling (SEM), techniques and the two-factor, 8-item scale developed shows excellent reliability and validity scores. Further the SEM results indicate significant positive relationship between impulsive buying tendency and impulsive buying behaviour; an inversely significant relationship between impulsive buying tendency and self-control; and a significant relationship between impulsive buying tendency and the two personality constructs of conscientiousness and extraversion, that could be utilised for trait based classification and consumer profiling with wide potential applicability. The short 8-item scale developed in the study for impulsive buying tendency, the authors aver, is new, relatively less cumbersome and could acquire further support through validation in other cultures and countries.
Organisations are increasingly opting for the open innovation paradigm as compared to the closed innovation paradigm. However, research on open innovation has focussed on studying open innovation at the firm level, with individual-level factors receiving less attention. In their paper, “The link between organisational citizenship behaviours and open innovation: A case of Malaysian high-tech sector”, Professors M Muzamil Naqshbandi, Sharan Kaur Garib Singh, and Pin Ma study the effect of one such individual-level factor, organisational citizenship behaviours (OCBs), on open innovation, their study being a pioneering one in a non-Western context. The current literature highlights two main types of open innovation: in-bound innovation or purposive inflows of knowledge or technology, with firms establishing relationships with external firms so as to access their competencies, and out-bound open innovation or purposive outflows of knowledge or technology exploitation with firms searching for external players that have better fitting business models to exploit and commercialise a particular technology, than just depend on internal paths to market. The data for this empirical study was collected in 2012 from middle and top managers in Malaysian high-tech companies operating in aerospace, computers and office machinery, electronics and communication, and pharmaceuticals. Finally, 339 usable responses, from 133 firms, were used for data analysis. The study considered three dimensions of OCBs, these being sportsmanship, altruism and conscientiousness. The study shows that OCBs positively predict both in-bound and out-bound open innovation. It emerges that OCBs relate positively to out-bound open innovation in aggregate and in isolation. However, only sportsmanship was found to affect in-bound open innovation significantly, while altruism and conscientiousness did not relate to in-bound open innovation. Thus, OCBs relate to in-bound open innovation in aggregate only. This study recommends that managers should pay attention to increasing employees’ OCBs in order to facilitate open innovation in their organisations and conisder OCBs as an important individual level predictor of open innovation.
While foreign institutional investment (FII) flows to the Indian capital market, along with flows to other emerging economies such as Brazil, China and Korea, surged after the global financial crisis of 2008, the rapid increase in global liquidity and the large scale net portfolio flows to emerging countries raised serious concerns in the recipient countries about the adverse effects, which include inflationary pressure on consumer and asset prices, appreciation pressure on the exchange rate, and risk of financial instability. Experts believe that capital inflow in the form of FIIs is short lived, with sudden reversals potentially destabilising the recipient country’s financial market. SEBI notes the decline in domestic investments by home country corporations and individual investors since 2007-08. Against this background the paper “Foreign institutional investments in India: An empirical analysis of dynamic interactions with stock market return and volatility” by Professors Vaishali S. Dhingra, Shailesh Gandhi, and Hemantkumar P. Bulsara focusses on the questions: (1) Do foreign investors pursue feedback trading strategies? (2) Do FIIs adversely affect the performance of the Indian capital market in terms of volatility? (3) The effects of futures trading activities and gross trading activities (cash plus derivatives) of FIIs on the Indian capital market. Daily FII trading data consisting of 2121 observations during the period January 2004 to September 2012, compiled by SEBI, has been analysed using impulse response functions based on vector auto regression. Data related to FII trading activities are bifurcated into gross flows and futures flows. The gross flows of FIIs are categorised as inflow (FIII), outflow (FIIO) and net flow (FIIN); FII flows in futures market are categorised into futures buy (FIIFB), futures sell (FIIFS) and futures open interest (FIIFOI). The analysis uses Nifty index for computing Indian stock market return and its volatility. A strong relationship has been identified between FIIs and market returns, and FIIs and volatility of market returns. The results indicate that FIIs in India are “return chasers” or “feedback traders”. The FIIs exhibit positive feedback trading while investing in the Indian capital market. Their selling activities, irrespective of types of market, cash or futures, portrays them as negative feedback traders. The results support the fact that FIIs indulge in information dissemination and that daily returns possess explanations for FIIs, but the reverse is not true. Results also suggest that while FIIs do not cause any change in market returns, they affect volatility of Nifty returns, particularly their selling activities. These results call for preventive measures from stock market authority, especially for selling activities of FIIs at the time of crisis, when the outflow is more than the inflow. While foreign institutional investments have brought positive changes in the working of the Indian capital market, their tumultuous potential cannot go unheeded. The study provides policy makers with a chance to manage short term, non-debt creating flows to emerging economies in a pragmatic and improved manner, and keep FIIs in check.
Sales promotions that accompany a product have an influential role on consumer purchase. Besides providing quantifiable benefits, sales promotions provide non-quantifiable behavioural benefits namely, value expression, exploration, and entertainment. Professor Subhojit Banerjee, in the paper, “Moderating effect of peer group environment on consumer predisposition towards premium promotions: A study on young urban consumers in India”, seeks evidence on the moderating effect of peer-group environment on the preference of premium sales-promotion provided as a freebie, and investigates if different peer-group environments influence the choice of premium promotion, and whether a particular set of peer-group tilts the consumers’ choice of premium promotion towards a hedonic freebie. The study is based on the findings of a quasi-experimental design, 2x2x2 mixed-model (Hedonic vs. Utilitarian Promotion x Group A vs. Group B x Purchase Decision as Individuals vs. Group) where the peer-group influence was measured between two distinctive groups on the preference between a hedonic and a utilitarian freebie when bundled with a consumer durable or non-durable. To test the hypotheses, the peer group environment has been defined by residential status and academic pursuit, and a scale measuring the overall peer conformity of the group and the group cohesiveness with regard to a purchase situation was built. Six products -- three consumer durables and three consumables, were chosen as initial stimuli. The data collected has been analysed on the choice of freebie using multiple discriminant models and two-way analysis of variance (ANOVA). The authors conclude that the study has important implications for marketers targetting the “young market”. The study shows that residential parameters and career objectives of young consumers influence the peer-group environment which leads to an orientation that is favourable for a particular sales-promotion. The study also shows that the influence of higher interaction and common career aspirations goes beyond product-purchase behaviour.
India’s transition to a knowledge based economy requires a large pool of skilled workers that is indispensable for attracting industrial investment, including foreign direct investment. In the interview “Skill development in India” with Mr S. Ramadorai, Chairman, National Skill Development Agency & National Skill Development Corporation and former CEO, MD & Vice Chairman of Tata Consultancy Services, Professor S Nayana Tara and Mr. N S Sanath Kumar of IIM Bangalore, discuss the current situation in skill development and the challenges involved with the objective of scaling up concerted efforts to enhance skill development in India. The issues discussed with Mr. S Ramadorai include the role of industry; the coordinated action by the Government of India and the State Governments, and their efforts for integrated skill development; the use of CSR to mitigate fund shortage; the quality challenges in the area of skill development; the interface and role of the educational system in the country; the need for trainer training; the challenges of implementing skill development including Public-Private Partnership models; and the involvement of women in skill development.
This issue carries a book review by Ms. Jothsna Rajan, doctoral student at the Centre for Public Policy, IIM Bangalore, of “Leading futures: Global perspectives on educational leadership”, edited by Alma Harris and Michelle S Jones, Sage India, 2015.
This year, we transitioned to a new editorial platform EVISE which should enhance and simplify processes. We look forward to the IMR Doctoral Conference 2016-2017 scheduled on the 11th and 12th of January, 2017.
With best wishes to all of you for a happy and prosperous new year 2017,
Nagasimha Balakrishna Kanagal
Editor-in-Chief
IIMB Management Review
India
Email address: eic@iimb.ernet.in
