Journal of Cross-functional Business Research

(JCBR)

Inaugural Edition (Fall 2017)

Knowgen Education Services Pvt Ltd 3C Rafi Ahmed Kidwai Rd

Kolkata 700013

ii

EDITORIAL BOARD

Co Editors : Rajib Kumar & Suvendu Narayan Roy

Editorial Assistant : Soham Roy

Honorary Subject Editors

HR &IR : Dr. Rana Bandopadhyay & Mr. Indranil Banerjee

Marketing : Dr. Rajdeep Bakshi

Finance and Economics : Prof Imon Ghosh

Mass Communication and Public Relations : Mr. Biswajit Matilal

Systems & Operations : Dr. S N Roy

Journal of Cross-functional Business Research (JCBR) is a quarterly publication of Knowgen Education

Services Pvt Ltd. Views expressed in the journal by the authors do not necessarily purport to constitute an

official position of JCBR or Knowgen Education Services Pvt Ltd.

Journal of Cross-functional Business Research (JCBR)

Inaugural Edition (Fall 2017)

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iii

Editorial

Dear Readers

In today's global competitive business environment, segregated functional disposition is a thing of past. For

realizing the fullest potential of the organization and its resources, cross functional approach is the key to

sustainability. Further, the increased diversity of stakeholders and lessening of the margin of tolerance makes it

imperative to take decisions with a holistic perspective.

The above widely recognized precept has been at the core of our modest effort. There are quality publications in

the circuit which focus on different functional areas; however, there is seemingly a wide gap in terms of

endeavouring to comprehend and respond to industry issues from a cross functional perspective, leave along

dimension.

However, the comprehension and responses from such a dimension is but THE most viable proposition and

further it is only vide such a treatment of industry issues that we may be able to realize the fullest potential of

leveraging the academia-industry relationship.

Nevertheless, JCBR recognizes the challenges in such exploration. Industry practitioners tend to be deliberately

non-committal towards exploring the linkages between their functional dispositions with those of peers for

assorted reasons: ranging from facing contentions of “interference” to the fear of being assignedadditional

responsibilities by superiors. However, needless to emphasize, an attempt at comprehending the same would

do a world of good to them, fellow functional practitioners and ofcourse the organization as a whole.

In this inaugural edition of JCBR we have taken a small step with the support of a diverse and passionate panel of

contributors:

Academician Anupriyo Mallick explores the evolving field of industrial social work, examining in the process, the

challenges and opportunities of social workers in industrial establishments. His paper would do justice to the

cause of ever expanding stakeholder circuit.

Consultant, author, teacher and co-editor of JCBR, Suvendu Narayan Roy in his paper underscores the

relationship between HR and Marketing functions in the FMCG sector and how the relationship can be suitably

leveraged for organizational profitability.

A budding young author Soham Roy writes on the HRM-CRM interface. He analyses how the efficiency of the

interface of human resource management and customer relationship management could be enhanced for

greater organizational & industrial benefit.

Sudipta Kumar Pal, aHospitality educator and PhD scholar attempts to provide sincere insights into the largely

uncharted area of online channels for distribution of accommodation products in the hotel industry.

An Australia educated new age entrepreneur Debasish Sinha probes how lack of exposure of low-end Public

sector employees to practical settings have led to severe challenges. In this context he analyses the gaps in the

Indian education system underscoring the failure to equip the young people with appropriate skills in the

backdrop of the HR function's role.

Please send us your feedback at knowgeneducation@gmail.com

Happy Reading!

Rajib Kumar

Co-editor

iv

Contents

Page No.

Emerging scope of social work profession in Indian industrial setting 1

Dr. Anupriyo Mallick

HR and Marketing interface in Indian FMCG industry 9

Suvendu Narayan Roy

Human Resource Management and Customer Relationship 15

Management interface

Soham Roy

Discourse on the engagement of lower segment employees and 21

Indian education system

Debasish Sinha

A review on evaluation of portfolio of online distribution channels 26

across mid-market hotels

Sudipta Kumar Pal

v

HR and Marketing Interface in Indian FMCG Industry

Suvendu Narayan Roy

Financial Consultant & Author

Director, Watzmore e Services Pvt. Ltd

Co-editor : JCBR

Abstract

This article is about the HR-Marketing interface in FMCG industry in India. In this article, it is shown how HR and Marketing

collaborate and co-ordinate with each others for improving corporate revenue. The different aspects of HR-Marketing

interface have been highlighted while making up the diametrical article. In addition, effective recommendations have been

developed with the objective of improving HR-Marketing interface in Indian FMCG industry.

Key Words: FMCG, HR, Marketing, Business.

INTRODUCTION

Human Resources and Marketing aren't as separate

as we might think. A company needs to attract

potential clients or customers to achieve decent sales

numbers. However, acquiring top talents interested in

your company is critical for achieving long term

objectives and obtaining and hold larger market

share. Whenever you're trying to convince people to

help you, whether you're after their dollars or their

working hours, you need to position and market your

proposition so it looks attractive.

FMCG industry in India has been growing because of

its intensive concentration on the aggressive sales

and marketing policy. In the age of modern business

environment, it has become necessary for every

company to lay emphasis on the development of HR-

Marketing interface. Through developing HR-

Marketing interface, the organisational productivity

can be ensured thereby resulting in ensuring steady

growth in revenue generation. FMCG industry in India

possesses the great level of potentiality in terms of

revenue generation and business profitability. Indian

FMCG companies, like Dabur, Marico, Nestle, Procter

& Gamble and Colgate-Palmolive have been focusing

on the effective sales and marketing growth strategy

with the objective of improving sales performance. As

a result of this FMCG sector has emerged as the

fastest developing industry in India. This sector plays

an important role in boosting and accelerating GDP

growth in India. However, the organisations

belonging to this FMCG sector have witnessed the

trend of growth and financial profitability due to the

prevalent interface between HR and Marketing

functions.

Brief Overview of FMCG industry in India

For illustrating the matter of HR-Marketing interface,

it can be said that HR plays an important role with

respect to the employer branding in FMCG sectors.

FMCG companies in India, such as HUL gives intensive

focus on the maintenance of brand of employers. The

brand of employers can be maintained if a company

can attract and retain best talents. For ensuring

employee branding in FMCG industr y, the

organisations have been giving utmost level of

importance to the innovation, such as Procter &

Gamble (Bharucha, 2016). Companies like Heinz,

Procter & Gamble, and HUL have been giving

importance to hiring right people for the right

positions. In this way, the organisations have been

able to improve the efficiency of sales force. Some of

the companies, such as NESTLE, Dabur, Marico

usually rely upon the third parties (Recruitment

Consultancy Service Providers) for acquiring best

manpower or talents. Due to the effective and

aggressive marketing strategy, the organisations of

FMCG industry have been able to generate the

approximation of 50 billion US dollars in the year

2016. The growth has been so much significant that it

has been expected that in the year 2020, the FMCG

industry will be able to generate more than 100

billion US dollars.

vi

Vol 1 | Issue 1 Journal of Cross-functional Business Research

120

103.7

100

80

60

40

20

0 2007

2008 2009 2010 2011 2012 2013 2015 2016*

2020*

Figure: Trend of Growth in Indian FMCG Industry

Different aspects of HR-Marketing Interface in

Indian FMCG industry

Of late, a new trend in HR-Marketing interface has

been evident in Indian FMCG industry. Both of the

functions have been playing important role in

keeping the organisational activities in sync with

organisational strategic objectives. HR and Marketing

both play prominent role in maximising overall

organisational productivity through adopting

effective initiatives. Some of the aspects of HR-

Marketing interface can be highlighted with special

reference to the Indian FMCG industry.

Keeping up with change

Keeping up with changing process can be considered

as one of the most prominent aspects with respect to

the HR-Marketing interface. The FMCG companies in

India believe in the idea of being evolved with the

prevalent changing nature in business environment.

Most of the CEOs and Marketing Heads of FMCG

companies believe that long-term growth ought to

be given top most priority for improving the business

performance. Long-term demand can also be

considered as a significant factor in FMCG market in

India. For ensuring the improvement in business

performance, the FMCG organisations have been

focusing on the design and creation of new products

with the objective of capturing the attention of

consumers (Comyn, 2014). In this way, the FMCG

organisations have been giving focus on holding

their market share in the industry so that their growth

trend can be maintained. The implementation of

change process in the organisation can be made

possible through effective coordination between HR

and Marketing functions.

Workers Management

The FMCG organisations in India have been facing

few challenges, such as management of knowledge

workers. In FMCG industry, different kinds of people

can be found who do not give serious thought in

abiding by the management's principles with respect

to the traditional group. The HR functions have been

focusing on the development of the sense of

commitment in sales force so that it can contribute to

the development of organisation in terms of financial

profitability. The HR functions in FMCG industry have

been giving focus on building up effective training

44.9 47.3 49.0

34.8 36.8

30.2

17.8 21.3

24.2

Revenu

e in

bill

ion

U.S

. d

olla

rs

vii

HR and Marketingh Inerface in Indian FMCG Industry Vol 1 | Issue 1

and development programs so that efficient sales

force can be developed for improving business

performance. The trained and efficient sales force can

help in implementing marketing mix strategy for

improving revenue generation and business

profitability. The effective career management has

been proved as utilitarian for creating the motivated

sales force in the FMCG organisations. The CEOs of

the FMCG organisations have been giving intensive

focus for creating attractive career opportunities for

improving the overall productivity of the

organisations (Esfahani et al. 2013). Setting

challenging sales targets for the sales executives, line

managers and area managers has been proved as

utilitarian in the context of improving sales

performance. In Marico, both marketers and HR

people play an important role in the management of

workers. The marketing managers are supposed to

manage their team leaders and team leaders are

supposed to manage their executives. In this way, the

overall efficiency of the organisational workforce can

be maintained. On the other hand, the marketing

managers and team leaders can go to HR people in

case they feel that they are not able to manage their

subordinates in a proper manner. The executives can

also put their queries before managers in case they

feel demotivated. In this way, both HR and Marketing

functions' role can be considered as significant in the

context of workers' management.

Creation and Development of Brand Image

The creation of brand image and Unique Selling

Proposition has become a matter of necessity in the

context of modern business management. FMCG

companies like Nestle have been giving intensive

focus on building up favourable corporate image in

the industry with the objective of improving goodwill

in market. For improving brand image, FMCG

organisations have been giving focus on the

adoption of differentiation strategy so that effective

and strong line of defence can be created against the

rivals. HR and Marketing functions associated with

FMCG industry have been giving sincere efforts in

improving corporate brand image in the industry. For

this purpose, the marketers have been giving efforts

in developing products as per the specifications of

customers. On the other hand, the HR professionals

have been giving utmost level of importance to

interests of sales force through devising

communication and reward strategies. HR function

plays significant role in creating corporate brand by

bringing about effective changes in organisational

culture, philosophy and approach (Kaufmann, 2014).

HR function is no more considered as a mere tool for

ensuring talent flow in the organisations. It has

become an important factor with respect to

corporate branding. The HR function focuses on

creating brand image through ensuring employment

ethics in the organisations. On the other hand,

marketing function focuses on the development of

corporate image and brand value in the eyes of

customers through public relation and promotional

activities. However, the marketers will not be able to

play prominent role in contributing to the

development of organisations if they do not engage

themselves in promotional activities (Sondhi &

Chawla, 2017). In this way, both HR and Marketing

functions play important role in developing brand

image for FMCG organisations in India.

Application of Marketing Approaches with respect

to Organisational Development

Of late, the HR functions in the FMCG organisations

have been giving focus on the application of

marketing tools and approaches for ensuring

organisational development. It has been seen that

marketers intend to create Unique Selling

Proposition for the products while promoting the

same. In the same way, the HR functions in FMCG

organisations have shown sincere efforts in creating

value for the consumers, i.e. Internal Customers. The

HR and Marketing functions in FMCG organisations

ensures that the organisational activities can be

productive. The HR personnel in FMCG organisations

lay emphasis on listening to the queries of internal

customers so that utmost level of their satisfaction

can be ensured. In addition, the HR functions in

Indian FMCG organisations have been laying

emphasis on retention of its sales force through the

adoption of a variety of initiatives, such as lowering

acquisition costs of employees, reduction in attrition

rate, improvement in employee engagement and

maximisation of overall organisational productivity

(Kukreja, Soni & Kohli, 2015). In this way, HR functions

in Indian FMCG companies ensure organisational

development as well as productivity.

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

Service Quality and Customer Satisfaction

The development of service quality with the objective

of improving customer satisfaction level is no more

the sole responsibility of marketers. HR also plays

significant role in building up customer friendly

culture. Through the optimal utilisation of different

initiatives, the HR functions in FMCG industry have

been giving sincere efforts in improving business

performance. The HR functions in Indian FMCG

industry make effective utilisation of different HR

tools for improving long-term relationship with the

consumers, such as evaluation programs,

recruitment, selection, training & development

(Singh, 2015). The FMCG organisations' HR functions

provide all kinds of facilities related to technical

support facilities to the sales and marketing

personnel so that they can maintain long-lasting

relationship with the consumers. In addition, HR

functions in Indian FMCG organisations deal with

customers' queries in an effective manner. The

promotion of customer satisfaction has also been

included in the list of roles and responsibilities of HR

personnel in FMCG industry. In this way, HR plays a

significant role in bringing up improvement in

corporate revenue. While conducting analysis in 800

stores associated with Sears, it has been found out

that with 5% improvement in the attitude of

employees, 1.3% increment in customer satisfaction

can be ensured thereby resulting in raising corporate

revenue half-percentage point (Kumar, 2014). HR

plays a significant role in training and developing

sales force in such a way, that the marketers and sales

personnel are able to channelise their traits and

qualities while developing long-term relationship

with the consumers. It has been seen that the

customers, in case they are not satisfied with the

quality of service, directly make a call to the

customers in order to get their queries resolved. In

this way, the organisations in FMCG industry have laid

e mph a s is on th e H R -Ma rke tin g e ffe c tive

collaboration and co-ordination for maximising

organisational productivity.

Business Behaviour and Strategy

Marketing and HR both plays important role in

influencing business behaviour as well as strategy for

improving business performance. In accordance with

the opinion of Jack Welch, HR personnel play the role

of pastors and parents in organisations. However, in

FMCG organisations of India, HR people are not given

much authority except few of them. Despite this fact,

the role of HR cannot be denied when it comes to the

matter of mapping out business strategy for ensuring

the maximisation of business productivity as well as

corporate revenue generation. The business

managers and HR managers in FMCG organisations

co-operate and co-ordinate with each other while

mapping out business strategy (Sarkar, Kundu &

Chaudhuri, 2016). In case of mapping out training and

development strategy, both of the functions show the

positive attitude of collaboration and co-ordination.

In addition, both of the functions play significant role

in communicating the strategic objectives to the

workers associated with FMCG organisations, such as

Procter & Gamble.

Creation of Collaborative Culture in Organisation

In recent years, many surveys have confirmed how

difficult it is to create collaboration between the

marketing and sales relationship. For example,

marketers in FMCG companies consider that

salespeople are too focused on clients' interests. On

the other hand, sales people find that the offers and

promotional plans designed by marketers do not

meet customers' needs (Kaufmann, 2014). In general,

sales people complain that marketers do not listen to

their queries and they lack the sense of empathy

while dealing with the queries made by sales people.

The marketers put pressure on the sales people for

achieving monthly and yearly sales target. However,

the fact is that marketers are out of touch with reality

prevalent in competitive market. On the other hand,

marketers consider sales people too willing to grant

price reduction, too tactical, not strategic enough,

and too focused on short term issues. Such

recriminations are aggravated when positions are

functional (i.e., there are few bridges between

functions), and evaluation, promotion, and

compensation systems are not transparent. HR plays

an important role in ensuring the non-occurrence of

such recriminations.

Bonds of trust and collaboration between marketing

and sales groups support quality relationships,

increased interactions, and mutual enrichment. In

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HR and Marketingh Inerface in Indian FMCG Industry Vol 1 | Issue 1

addition, shared understanding contributes to a

c om m on v is ion of in te rn a l a n d e x te rn a l

environments. These factors are considered precious

for organising social capital. In addition, they put

positive impact on the performance of firms, which

have vested interests in developing them between

marketing and sales teams. To encourage these

attitudes, companies utilise effective tools at their

disposal, such as respect for equity in decision-

making and resource allocation processes as well as

h u m a n r e s o u r c e p o l i c i e s ( i n p a r t i c u l a r,

compensation). HR plays prominent role in

implementing these tools for maximising business

productivity. In FMCG organisations in India, the HR

functions have been giving intensive focus in creating

collaboration between sales people and marketers.

Leadership

In Indian FMCG organisations, such as Nestle and

HUL, the HR and Marketing functions take active part

in the development of leadership strategy with the

objective of improving organisational productivity.

Both of the functions work with each other with

effective emphasis on collaboration and co-

ordination so that so that effective solutions can be

found out for ensuring employee satisfaction (Sarkar,

Kundu & Chaudhuri, 2016). In FMCG organisations,

the role of HR cannot be denied when it comes to the

matter of developing leadership. The organisations

like Procter & Gamble and Nestle have been giving

diametrical focus on the development of leadership

qualities amongst the people associated with

marketing activities.

Recommendations

For improving HR-Marketing interface in FMCG,

organisations, some recommendations can be

developed. They are as follows:

The FMCG organisations should focus on the

creation and development of such environment

that can be able to support leadership quality

development amongst the people associated

with marketing. For developing leadership

qualities amongst the marketing people, the

HR departments of FMCG organisations should

focus on the introduction of leadership

development programs.

The FMCG organisations should focus on the

implementation of democratic and participative

style of leadership so that the employees can be

able to participate in the decision-making

process. In this way, the employees' satisfaction

will be ensured. For this, HR functions of FMCG

organisations should play important role in

implementing change management system.

The FMCG organisations' HR functions should

focus on the implementation of 360 degree

performance appraisal system so that the

performance can be monitored in an effective

manner. For implementing, 360 degree

performance appraisal system, the effective

collaboration between HR and Marketing

functions is necessary.

The FMCG organisations can be recommended

to appoint change agent so that the cross-

functional capabilities can be developed along

with the implementation of organisational

change and development system.

Conclusion

Through the effective implementation of above

mentioned recommendations, the FMCG industry in

India will be developed in terms of financial

profitability as well as business development. The

organisations of FMCG industry will be able to

develop their cross-functional capabilities through

th e e f f e c ti v e i m p l e m e n ta ti o n of c h a n g e

management. Through the development of effective

cross functional capabilities, the FMCG organisations

will be able to develop their organisational

productivity level.

Even the small business owners can develop business

with the help of combined forces of customer focus

and strong employee focus. Just they need to

understand the linkage between these managerial

perspectives. Only then they are likely to gain a

competitive advantage, improve customer

satisfaction and improve the firm's financial

performance

References

1. Bharucha, J. (2016). Cadbury Vs Nestle: A Study of The

Chocolate War. International Journal of Research in

Social Sciences, 6(9), 609-620.

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

2. Comyn, P. (2014). Linking employment services, skills

development & labor market needs: Issues for India.

Indian Journal of Industrial Relations, 49(3), 378-389.

3. Esfahani, A. N., Amirosadat, S. N., Rahimi, H. R., &

Marandi, M. H. (2013). Investigating relationship

between internal marketing and job satisfaction with

using structural equation modeling. International

journal of academic research in economics and

management sciences, 2(3), 1.

4. Kaufmann, H. R. (Ed.). (2014). Handbook of Research on

Consumerism in Business and Marketing: Concepts

and Practices: Concepts and Practices. Pennsylvania: IGI

Global.

5. Kukreja, B. K., Soni, K., & Kohli, K. (2015). Current market

trends and regulatory aspects of herbal antioxidants

and natural dietary supplements: A boon for health and

treatment of diseases. World J. Pharm. Pharm. Sci, 4(10),

2373-2406.

6. Kumar, A. (2014). An Exploratory Research of Consumer

Decision Making Styles of Indian Poor for Fast Moving

Consumer Goods. Asian Journal of Research in Business

Economics and Management, 4(8), 105.

7. Sarkar, D. N., Kundu, K., & Chaudhuri, H. R. (2016).

Conceptual Expansion of the Discipline of Rural

Marketing: An Objective Analysis. Vision, 20(3), 169-

183.

8. Sarkar, D. N., Kundu, K., & Chaudhuri, H. R. (2016).

Constructing a conceptual model of purchase

behaviour of village shopkeepers–a study of small rural

retailers in Eastern India. Journal of Retailing and

Consumer Services, 28, 1-16.

9. Singh, S. (2015). The Impact of Marketing Variables on

Business Performance: An Analysis of FMCG, Consumer

Durables and Textile Industries. IUP Journal of Business

Strategy, 12(2), 54.

10. Sondhi, N., & Chawla, D. (2017). Segmenting and

Profiling the Chocolate Consumer: An Emerging

Market Perspective. Journal of Food Products

Marketing, 23(2), 123-143.

The author can be reached at roysuvendunarayan@gmail.com

xi

Human Resource Management and Customer Relationship Management Interface

Soham Roy

Content Writer & Skills Trainer

Abstract

As the name of the title of the study implies, two variables have been selected while writing this article- CRM or Customer

Relationship Management and HRM or Human Resource Management. In this study, sincere efforts have been made in

analysing the different aspects of the HRM-CRM interface. Initially, light has been shed on describing the overview of the

customer relationship management and human resource management. In addition to that, the emphasis has been laid

upon giving an analytical description on the interrelationship between human resource management and customer

relationship management. The theoretical underpinnings of both the variables have been described in a brief manner. The

role of leadership has been discussed in the context of the customer relationship management. Furthermore, light has been

shed on the discourse pertinent to the use of technology for increasing the efficiency of human resource management and

customer relationship management. A brief analysis has also been given on the interface of HRM and CRM with reference

to a case study of a non-profit organisation. The recommendations have also been made for increasing the efficiency of the

interface of human resource management and customer relationship management. While analysing the entire study from

different perspectives, the authentic journals and books written by prominent scholars have been utilised with the

objective of making the entire article informative.

Key Words: Management, Business, CRM, Employees.

Introduction

There was a time when Human Resource

Management was regarded as the function which

only takes care of the recruitment part of the business

entities. However, things have been changed in a

drastic manner and with the changing time, the scope

of Human Resource Management has been

expanding. Roles and responsibilities of human

resource personnel are not limited to recruitment and

downsizing anymore (Alfes et al. 2013). Human

resource professionals are surmised to take care of

the consumers too. In this way, a new trend has been

set. It has been seen many times that the consumers

contact with the human resource manager in case

they have no other option but to do it whenever they

feel dissatisfied with the consumer services. It is the

responsibility of the human resource department to

ensure that the efficacy of the customer support

service does not get hampered. For that reason, it

focuses on acquiring the potential talents who can

play an important role in managing the customers.

The employee training programs are developed in

such a way that it can train the management trainees

in getting insight into the customer demands.

Furthermore, it has been seen that the human

resource department in most of the business

corporations has been focusing on the utilisation of

the CRM technologies with the objective of

managing the most valuable asset of the

organisation, that is, human resource. It is essential to

have a brief understanding on both the variables that

are, customer relationship management and human

resource management in the context of the modern

business scenario. In addition to that, I will also focus

on illustrating the pattern of the interface between

human resource management and customer

relationship management with special reference to

their relevance in modern context. The role of

strategic leadership will also be highlighted in this

regard.

Customer Relationship Management

The business revenue generation cannot be ensured

without the prevalence of efficacy in the customer

relationship management (Schmitt, 2010). Hence,

every company must ensure that the customers can

be served in a proper manner. If the customers are

served in a proper manner, the existing customers will

be retained. The retained customers will bring more

customers through recommendations. It will ensure

the steady growth of revenue generation of the

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

organisations. With the help of effective Customer

Relationship Management, the managers can make

reduction in the customer response times in an

efficient manner thereby resulting in making the

business operations and customer support efficient

(Armstrong & Taylor, 2014). In addition to that, the

Customer Relationship Management is utilitarian in

spotting the best amongst the customer through

effective utilisation of the cost-effective CRM

technologies. Most of the business corporations have

been focussing on developing the capacities of the

state-of-the-art internet facilities, with the help of

which, the business corporations can make effective

analysis of the needs and wants of the customers. It

will be utilitarian in making the analysis of the nature

of the market demand based upon the segmentation

of the customers.

Human Resource Management

Human resource management is not regarded as a

“hire and fire” function anymore. It has become more

than that. The chief role of human resource

management function is to ensure that the concept of

maximisation of employee performance can literally

become a reality. The performance of the employees

can be subject to maximisation with the adoption of

effective training program and employee retention

policy (Batt & Colvin, 2011). However, the

materialisation of the employee retention concept

can be made possible through the formation of

effective compensation policy thereby resulting in

ensuring the development of the framework of

intrinsic and extrinsic rewards. Furthermore, the HR

function is surmised to ensure that the people

associated with the business corporations can

possess the knowledge on the use of sophisticated

technologies for managing the relationship with the

customers.

The Way CRM Influences HRM

As averred by Buller & McEvoy (2012), the one of the

chief roles played by HR function is to make sure that

the goodwill of the business organisations is to be

maintained in the corporate world. It results in

increasing the brand value of the business

organisations. However, the brand value of the

companies cannot be increased without the existence

of the efficacy in the customer support and marketing

function. Without the utmost level commitment of

the marketing function in promoting customer

relationship management, the human resource

function is unable to ensure the maximisation of

stakeholders (Tooksoon, 2011). For example, if the

marketing function is unable to generate business

revenue through customer retention policy, the

stakeholders will lose their faith in the management

of the company. Consequently, the goodwill of the

company will be affected thereby resulting in

affecting the profitability of the company

(Osterwalder & Pigneur, 2010). The HR functions may

provide training within the specific framework.

However, it is up to the employees when it comes to

the matter of implementation of the received

training. Nowadays, most of the HR functions have

been putting the focus on the utilisation of CRM

technologies for ensuring that the marketing related

activities can be productive in terms of financial

profitability and long-term relationship with the end

users (Lin, Chen & Kuan-Shun Chiu, 2010).

The Way HRM Influences CRM

HR function of a business corporation is of great value

in terms of contributions it makes towards building

up an integrated corporate culture where the idea of

reinforcement of customer satisfaction is the ultimate

words to be spoken of. However, the members of the

organisation cannot make the contribution towards

building up effective customer satisfaction driven

corporate culture if their interests are not protected.

Here the HR function will have to play the prominent

role in maximising the satisfaction of the employees

for they are internal customers who are making the

contribution towards the generation of the business

revenue which is utilitarian in thriving the business in

the market. As commented by Chuang & Liao (2010),

the HR function should play an important role in

taking up balanced approach when it comes to the

matter of protecting the interests of the business

corporations consisting their employees and

customers. This can be done if the employees are able

to maintain work-life balance. The role of HRM is not

limited to providing the employees with job training

be it in the form of on-the-job and off-the-job

(Trkman, 2010). The training programs are surmised

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Human Resource Management and Customer Relationship Management Interface Vol 1 | Issue 1

to be developed in such a way that the employees

under the training can have understanding of the way

of stress management while performing the task

related activities. Most of the business corporations

have been putting their diametrical focus on

retaining the star performers. Simultaneously, they

are giving sincere efforts in developing potential

talent pool by coordinating with the HR function in an

efficient manner. Hence, it can be said that the loyalty

of the customers can be developed by laying

emphasis on developing the pattern of the loyalty of

the employees (Lee, Lee & Wu, 2010).

Theoretical Underpinnings of CRM

While making effective implementation of the

Customer Relationship Management process, it is

important to lay emphasis on meeting certain criteria.

The first and foremost thing to be done is to engage

in the process of collecting data pertinent to the

customers through optimum utilisation of the

computerised database (Demil & Lecocq, 2010).

Once the customers are targeted based upon the

profitability criteria, effectual marketing mixtures are

to be devised for the purpose of establishing effective

communication with the customer thereby resulting

in establishing the base of relationship marketing.

The entire process needs to be put under effective

control and monitoring process for generating better

results.

The whole concept of implementation of Customer

Relationship Management is based upon three

dimensions. The information technology related

dimension consists of some of the factors such as

knowledge management, different sorts of CRM

related apps, e-markets etc. This dimension can be

utilised for identifying the customers based upon the

criteria pertinent to the profitability of the business

corporations. Social dimension includes internal as

well as the external stakeholders (Fan & Ku, 2010). It is

important to lay emphasis on increasing the

effectiveness of the relationship marketing through

establishing effective communication with the

customers and employees. In this way, the interaction

with the customers can be increased. In addition to

that, the interpersonal relationship with the

employees can be improved resulting in the creation

of highly motivated workforce. Intellectual

dimensions consists of strategic planning, leadership,

business models etc. With the help of these elements,

the organisations can be led to the path of

profitability in terms of business revenue generation.

While discussing the theoretical underpinnings of

Customer Relationship Management, it is important

to shed light on making discourse on Swift's model.

Swift's Model has shed light on some of the aspects of

Customer Relationship Management, such as

discovery of knowledge, devising marketing

planning, making frequent interaction with the

consumers, analysis of the data related to the

consumers etc (Kumar, 2010).

The role of Seven Aspects of marketing mix cannot be

denied in the context of Customer Relationship

Management. The new customers can be attracted

through effective utilisation of promotional strategy.

Moreover, the existing customers can be retained

through making improvement in the business

process by making the customer experience

exceptional and fantastic (Guchait & Cho, 2010).

Theoretical underpinnings of HRM

Some of the aspects of the theoretical underpinnings

of Human Resource Management can be highlighted

for getting insight into the role of human resource

personnel in context of organisational behavior.

Human resource management is all about

performance management and monitoring so that

the employees can give their best for increasing the

level of profitability in terms of business revenue

generation and growth of market share (Guest, 2011).

In addition to that, HRM plays the prominent role in

engaging the employees in their task-related

activities through creation of enthusiasm in their role.

In this way, HRM plays the prominent role in

employee engagement. Furthermore, the role of

HRM cannot be denied in the context of employee

motivation. The emphasis is on the creation of highly

motivated workforce by most of the business

organisations thereby resulting in increasing the level

of overall organisational productivity.

The Role of Leadership

It requires committed leadership for adoption of

effective solutions related to CRM. Without the

existence of committed leadership, no sign of

improvement can be conspicuous in the

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

maximisation of the customer satisfaction. With the

help of customer focused leadership, the business

organisations can resort to adoption of effective

approaches for increasing financial profitability of the

organisations by increasing the level of the customer

satisfaction. The prominent organisations in the

corporate world have been focussing on installation

of “walk the talk” behavior for implementing the

effective CRM solutions (Keramati, Mehrabi & Mojir,

2010). The leaders of the organisations ought to lead

the team in such a way that every member of the team

can be motivated to developing their leadership

capabilities and it will motivate them to play the

prominent role in thriving the business and

improving market performance of the business

organisations through maximisation of satisfaction of

the end-users. It has been found by the American

Management Association that intensive emphasis on

coaching can bring better results in terms of revenue

generation and growth of market share (Gummesson,

Lusch & Vargo, 2010). Hence, with the help of HRM

function, the effectiveness of the leadership coaching

must be increased.

The use of technology in the context of HRM and

CRM

Most of the business organisations have been

focusing on the utilisation of interactive technologies

for growing the business in terms of the higher level

of market share and revenue generation. The

business organisations are putting their diametrical

focus on the use of email, collaborative chat, and

telephony, VoIP or Voice over Internet Protocol etc.

with the purpose of making the customer

communication and relationship marketing effectual

and productive (Harzing & Pinnington, 2010).

On the other hand, the HR personnel of the business

organisations have been focussing diametrically on

the utilisation of technologies in each and every stage

of the selection of employees of the organisations.

For recruiting people, it is using different sorts of e-

recruitment portals. However, most of the

organisations are assigning this task of recruiting

people to the third party organisations or recruitment

consultants as they do not have time to put effort into

lengthy recruitment process (Keller, Parameswaran &

Jacob, 2011). They have other functions like strategy

and administration to take care of. Even for

monitoring the performance of the employees, the

computerised performance monitoring tools are

used. For training and development also, the

utilisation of technologies is conspicuous.

Brief illustration of a case study in the light of

HRM-CRM Interface

The Arc of Dauphin and Lebanon Countries is one of

the non-profit organisations which provides support

to all people with developmental and intellectual

disabilities so that they can live their lives with dignity

and respect (arcofdc.org, 2016). It has been using

Microsoft Dynamics CRM Business Solutions with the

help of which, they have been serving approximately

800 clients. In addition to that, Individual Education

Plans have been utilised for making improvement in

the pattern of relationship with the members.

Furthermore, the organisation has been able to

shorten its response time in the context of granting

applications to its members. With the help of the

effective software system, the organisation has been

able to resort to effective management of its

members. In this way, the productivity of the

members of the organisation has been improved with

radical modification. The capabilities of the customer

service function have been improved in the context of

tracking the activities of the clients. The employees

have been able to perform their task-related activities

in a smarter way thereby resulting in increasing the

productivity through the centralised database.

Recommendations

Some of the recommendations can be made for

making improvement in the interface between

Human Resource Management and Customer

Relationship Management. They are as follows:

It is recommended for human resource function to

take an active role in maximising the customer

satisfaction by collaborating with the marketing

function.

It is recommended to put the diametrical focus

on the utilisation of information technology

for analysing the demand of the market based

upon which the specific group of customers

can be targeted.

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Human Resource Management and Customer Relationship Management Interface Vol 1 | Issue 1

It is recommended for the human resource

personnel to lay emphasis on the use of different

kinds of software such as talentpool, zoho

people, IBM Kenexa etc.

It is recommended for the human resource

function to develop effective training programs

with the help of which the business

organisations can enable the employees in

playing important role in maximising the

customer satisfaction. The training should be

given in both of the method- on-the-job and off-

the-job.

The leadership development programs are to be

developed for developing the leadership

qualities amongst the trainees.

The marketing mix strategy is to be made

effective and business profit oriented.

The emphasis should be laid upon the retention of

existing customers rather than the attraction of

new customers with the help of the effective

service quality.

The collaboration should be developed between

different organisational functions for serving the

customers in a better manner by improving the

quality of the service. In short, sincere efforts

should be made for increasing the effectiveness

of t h e o r g a n i s a t i o n a l i n t e r- d e p a r t m e

n t a l collaboration and human resource

function is surmised to play the prominent

role in materialising this idea.

It is recommended to conduct a survey

throughout the organisations so that it can be

known which leadership style can be proved as

utilitarian in increasing the effectiveness of the

customer relationship management.

Conclusion

In this whole study, the sincere efforts have been

made in illustrating the different aspects of the HRM-

CRM interface. While analysing the different aspects

of HRM-CRM interface, efforts have been made in

illustrating the different theoretical underpinnings.

Furth more, the interrelationship between HRM and

CRM has been illustrated with the help of different

academic sources.

References

1. Alfes, K., Shantz, A. D., Truss, C., & Soane, E. C. (2013).

The link between perceived human resource

management practices, engagement and employee

behaviour: a moderated mediation model. The

i n te r n a ti o n a l j o u r n a l of h u m a n re s o u rc e

management, 24(2), 330-351.

2. Armstrong, M., & Taylor, S. (2014). Armstrong's

handbook of human resource management practice.

Kogan Page Publishers.

3. Batt, R., & Colvin, A. J. (2011). An employment systems

approach to turnover: Human resources practices,

quits, dismissals, and performance. Academy of

management Journal, 54(4), 695-717.

4. Buller, P. F., & McEvoy, G. M. (2012). Strategy, human

resource management and performance: Sharpening

line of sight. Human resource management review,

22(1), 43-56.

5. Chuang, C. H., & Liao, H. U. I. (2010). Strategic human

resource management in service context: Taking care

of business by taking care of employees and

customers. Personnel Psychology, 63(1), 153-196.

6. Demil, B., & Lecocq, X. (2010). Business model

evolution: in search of dynamic consistency. Long

range planning, 43(2), 227-246.

7. Fan, Y. W., & Ku, E. (2010). Customer focus, service

process fit and customer relationship management

profitability: the effect of knowledge sharing. The

Service Industries Journal, 30(2), 203-223.

8. Guchait, P., & Cho, S. (2010). The impact of human

resource management practices on intention to leave

of employees in the service industry in India: the

mediating role of organizational commitment. The

International Journal of Human Resource

Management, 21(8), 1228-1247.

9. Guest, D. E. (2011). Human resource management and

performance: still searching for some answers.

Human Resource Management Journal, 21(1), 3-13.

10. Gummesson, E., Lusch, R. F., & Vargo, S. L. (2010).

Transitioning from service management to service-

dominant logic: Observations and recommendations.

International Journal of Quality and Service Sciences,

2(1), 8-22.

11. Harzing, A. W., & Pinnington, A. (Eds.). (2010).

International human resource management. Sage.

12. Keller, K. L., Parameswaran, M. G., & Jacob, I. (2011).

Strategic brand management: Building, measuring,

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

and managing brand equity. Pearson Education India.

13. Keramati, A., Mehrabi, H., & Mojir, N. (2010). A

process-oriented perspective on customer

relationship management and organizational

performance: An empirical investigation. Industrial

Marketing Management, 39(7), 1170-1185.

14. K u m a r, V. ( 2 0 1 0 ) . C u s to m e r re l a ti o n s h i p

management. John Wiley & Sons, Ltd.

15. Lee, F. H., Lee, T. Z., & Wu, W. Y. (2010). The relationship

between human resource management practices,

business strategy and firm performance: evidence

from steel industry in Taiwan. The International

journal of human resource management, 21(9), 1351-

1372.

16. Lin, R. J., Chen, R. H., & Kuan-Shun Chiu, K. (2010).

Customer relationship management and innovation

capability: an empirical study. Industrial Management

& Data Systems, 110(1), 111-133.

17. Osterwalder, A., & Pigneur, Y. (2010). Business model

generation: a handbook for visionaries, game

changers, and challengers. John Wiley & Sons.

18. Schmitt, B. H. (2010). Customer experience

management: A revolutionar y approach to

connecting with your customers. John Wiley & Sons.

19. Services. (2016). The Arc of Dauphin County.

R e t r i e v e d 6 N o v e m b e r 2 0 1 6 , f r o m

http://arcofdc.org/services/

20. Tooksoon, H. M. P. (2011). Conceptual framework on

the relationship between human resource

management practices, job satisfaction, and turnover.

Journal of Economics and Behavioral Studies, 2(2), 41-

49.

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business process management. International journal

of information management, 30(2), 125-134.

The author can be reached at roysoham87@gmail.com

xvii

Discourse on The Engagement of Lower Segment Employees and Indian Education System

Debasish Sinha

Founder - Insysd Corporation Pvt. Ltd.

Author & Analyst

Abstract

In this paper, efforts have been made in highlighting how the lower segment employees in Government and Private sector

have been suffering due to lack of practical exposure to the real life situations. This paper also shows how the Indian

education system has ignored the importance of introducing skill development programs in the curriculum with special

emphasis on its consequences. Apt examples have been cited while highlighting different aspects of the mindsets of

employees belonging to lower segment. HR related issues have also been highlighted while making up this article. This

article shows how the unemployment problem has become rampant issue in developing countries like India for the lack of

developed skills amongst the lower segment employees. Through this article the recommended strategies has been

developed for improving the productivity of the organisations in private and public sector through ensuring the loyalty of

lower segment employees.

Key Words: Education System, Skills, Unemployment, Lower Segment.

Introduction

Of late, Forbes magazine has made prediction that

after 150 years the economy of India will surpass that

of the United Kingdom. It has also been predicted by

other prominent magazines and scholars that India

will surpass United Kingdom by 2020 in terms of

economic development and prosperity (Shah, 2016).

It will not be an exaggeration in averring that this

prediction made by prominent magazines and

scholars is quite dramatic and interesting. After the

occurrence of Brexit in the 21st century, the dramatic

changes have been brought about in the calculated

economical prediction of scholars with respect to the

economic growth and development of India. Since

the economic reform in 1991, India has been able to

emerge as a growing economic power with the

introduction of several initiatives and existence of its

young potential manpower.

Indian education system

The education system was structured in such a way

that it does not help the young generation in

developing entrepreneurial qualities and risk taking

mindset. Indian education system has always been

focused on generating salaried employees. They are

later transformed into the machine with no existence

of creativity and entrepreneurial qualities as well as

aptitude. Hence, it can be said that the Indian

education system, despite being able to generate

young people with educated mindset and culture,

does not encourage in producing people with

independent mind and risk-taking ability (Sadiqe,

2014). The parents usually do not encourage their

children in taking the risk of starting their own

ventures thereby resulting in creating the hindrance

in the way of the development of entrepreneurial

qualities amongst the young people. Therefore,

directly and indirectly the education system of India

and the society itself can be held responsible for

creating the illusion in the young generation's mind

that grabbing Government's jobs can be the sole way

of earning handsome amount of money and respect

in society as job security is associated with them (Vij &

Sharma, 2014). Even the Government has been put

under intensive pressure for generating jobs for the

large number of candidates. However, it is imperative

to consider whether the Government will be able to

control the situation when need for resources and

enough funds to provide jobs will be arising. If the

Government shows inability in providing salaries to

the employees, the people's trust on the Government

will wither away. The Government will lose its

credibility before the younger generation. It can

result in discouraging the society to educate their

next generations. As a result, the value of education

will be decreased.

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

Due to the acceleration of development in the field of

medical science and technology over the time period,

the life expectancy of human being has been

increased since the past century. It has helped in

reducing the mortality rate of children thereby

resulting in the sudden increase of the world

population. It directly and indirectly enforced the

society and government to explore the unexplored

land and resources. This initiative has increased the

pollution level thereby resulting in increasing the

possibility of the occurrence of global warming. The

global warming is considered as a one of the biggest

issues at this moment worldwide. The developing

countries have been trying to control the fossil fuel

burning to reduce the pollution and global warming

(Haski-Leventhal, 2013). However, the developed

countries do not show willingness in sharing their

technologies, which they have already developed to

avoid fossil fuel burning. It implies political

unpreparedness of the developed countries and all

global originations associated with the preservation

of environmental balance.

Unmatched skills and unmatched degree

production in India and unemployment

Due to the existence of traditional education system,

a lot of educated people have been suffering in every

part of the India. It is because the traditional Indian

education system prefers to ensure the deliverance of

theoretical knowledge to the learners rather than

laying emphasis on practical exposure to the real life

situations. Recently, when I asked one of my cousins

after the completion of his MBA from an Indian

University to write a business plan, the most

astonishing reply came to me “What is Business

Plan?” That reply surprised me a lot. In another

incident, when I was on my first job, I had seen fellow

new employees being scared of their new manager.

He was shouting at them as if they are his slaves. I was

surprised seeing his attitude. On one side, I was

surprised to see how the fresher MBAs were talking

without being confident and on the other side, I have

experienced how the manager was literally shouting.

In the presentable word, I would rather say they were

literally being bullied by the manager. Due to the

power and authority, the manager forgot manners

and the new employees were not enlightened about

the real management. They simply passed the exams

by memorizing the management theories and

models. As a result, they never get exposure to the

real life management. Therefore, it will not be an

exaggeration in averring that the Indian education

system has been failed in fulfilling the need of

learners. As a result, the employees fail to generate

profits for the organizations due to the lack of

exposure to the real life business situations. In this

context, it can be said that it does not take an MBA

degree for managing the business in a successful

manner. It requires real life exposure to the

competitive business environment be it external or

internal and knowledge for ensuring the effective

business management.

Due to the lack of willingness for ensuring skill

development of learners, the unemployment in India

has become rampant (Cowan, 2017). The

organizations do not prefer to consider the score

cards of job applicants during hiring process. They

prefer skills over the academic scores. Unfortunately

in our education system, the academic score has been

given utmost importance. It has been seen that

despite being able to score high marks in

examinations, a person fails to be a great performer in

the organization. It occurs due to the lack of

developed skills and training. The lack of skills can

create hindrance in acquiring job opportunities. It

may lead to the unemployment. Hence, it will not be

difficult to conclude that the unemployment problem

has become rampant in India due to the

Government's procrastination in the context of

developing skills along with knowledge. The co-

existence of skill and knowledge is necessary for

ensuring the overall development of a person. A

person cannot stay in job for longer period if he/she

does not utilize his/her skills for contributing to the

development of organization in terms of financial

profitability and business development.

Lower segment employees and their mindsets

Apart from the government employees, no other

employees belonging to lower segment were

secured. For this, only the government job seems

lucrative for any low educated citizen. Even in the

government class, 4 employees were deprived

financially by the class 1 and class 2 types of

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Discourse on The Engagement of Lower Segment Employees and Indian Education System Vol 1 | Issue 1

employees. It has been done by taking the advantage

of the low level of education possessed by the class 4

employees.

One of such example one Smt Saraswati Pal DRAW

was engaged in the office of DRDA (Dhalai) during

1999 by ADAM & Collector cum P.D. DRDA (Dhalai)

but she was paid Rs.500.00/- per month though she

was entitled to get RS 1680.00/- per month according

to finance department approved wages for draws of

that time. The subsequent PD with approval of the

Governing Body of DRDA allowed the legitimate

entitlement of her wages Rs.1680.00/- per month.

But the Government blocked the promotion of the

officer to IAS 2007 of MT cadre charging that the

increase of wages from RS 500/- to RS 1680/- was

illegal though in enquiry the charge was not proved.

Again one Jamuna Das DRW appeared for

Madhyamik Examination in 1999 with due permission

from the BDO Amarpur under different plea her

promotion was denied though she cleared her

Madhyamik Examination in 1999 until 2017 when the

then BDO clarified that her prayer was genuine one.

These kinds of things occur for the insensitive

attitude of officers in handling such issues or for their

ignorance in the subject matter while dealing with

them. She has been given promotion very recently.

Things happened for insensitive attitude officers

handling such issues or for their ignorance in the

subject matter dealing with.

The situation of the class 4 employees clearly shows

how the low-level employees are ignored even in the

government sectors, though Government jobs are

always regarded as lucrative because of job security.

On the other hand, the low-level employees working

in private sector do not have job security and they are

totally dependent on the mercy of the originations'

owners or the superiors associated with the

originations (Bhuvanaiah & Raya, 2015). On account

of that, the job satisfaction of the lower segment

employees has always been less for which the

frequency of leaving the job in lower segment

employees has always been higher than any other

segment of the employees in the hierarchy

(timesofindia.indiatimes.com, 2016). The unmatched

skills and unmatched degree production in India have

been contributing to making unemployment issues

in India rampant.

HR management Issues with Lower segment

employees

Even the HR management hardly focuses on any

managerial decisions covering the lower segment of

the employees. Most of the job satisfaction and

employee motivation related decisions are made for

the white collar employees. The blue collar

employees always face the discrimination and are

forced to work beyond their physical limitations. The

HR managers and management face challenges while

ensuring the retention of blue-collar employees

thereby resulting in hampering the organizational

productivity (Bhattacharya, 2015). That is why it has

become imperative for the management to ensure

that the employee can be retained and attrition rate

can be controlled. However, it cannot be denied that

the employee retention can be ensured only when

the management will be giving serious thoughts in

motivating employees through providing them

monetary and non-monetary rewards in a proper

manner.

Strategy to engage and retain the lower segment

employees

According to the human tendencies, employees think

of leaving the job in every 3 to 4 months. So, if HR

management is able to ensure employee

engagement in a positive manner, employees shall be

able to show utmost level of loyalty towards

organizations. In addition, they can be loyal towards

the employers for a longer period, which can result in

the employee retention in the organizations.

Few steps can be taken by the HR management to

engage the employee positively and make them loyal

for ensuring employee retention for a longer period.

1. Introducing better incentive system for lower

segment employees’

2. Awarding them in every 3 months considering

their last 3 months performance level.

3. Not depriving the lower segment employees of

their rewards while providing them with

incentives.

4. Giving the lower segment employees better

allowances for their house rents.

5. Introducing better feedback system for them.

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

6. Ensuring better communication in between the

higher level employees.

7. Giving enough respect and importance to them

and make them feel they are important as well for

the organizational growth.

8. Allocating the lower segment employees with

responsibilities and empowering them while

d e v i s i n g d e c i s i o n - m a k i n g p r o c e s s i n

organisations.

9. Training the higher level employees to behave

well and developing their interpersonal skill so

that they do not behave poorly with lower

segment employees.

10. Making the lower segment employees feel secure

in their jobs and motivating them to perform

better while performing their job related

responsibilities.

It has always been observed that when the

employees feel secured and their needs and

requirements are taken care of, then employees can

be transformed into loyal employees. It has also been

obser ved that employees don't leave the

organization, they leave the manager or their

immediate superior (Lipman, 2015). It can be rectified

by introducing better training and development

system for developing interpersonal skills amongst

the higher level employees so that they can

communicate with their subordinates through

gaining understanding on their issues.

Psychological effect on the employees

When the organizations provide a better incentive

scheme in every 3 months, the employees do not

think of leaving their present companies because of

the better compensation package. On the other

hand, when the superiors treat the subordinates with

respect and good behavior, it makes a direct impact

on the lower segment employees (Ali, 2013). If they

are allocated with the right role and responsibilities,

they will get the feeling of being important with

respect to their tasks and positions. As a result, they

will be motivated to perform their task related

activities. It will make them feel important and will

bring the sense of loyalty amongst the employees

who are mostly ignored in the private organizations

including the government bodies.

Conclusion

The loyal employees will always be beneficiary for the

organizations, as they know their responsibilities

towards the organizations. They work for the

organizations which also look after its employees as

valuable assets. It will directly impact on the financial

growth of the organizations. The experienced

employees' performance always makes the

difference compared to that of new arrivals and

unskilled employees.

References

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pullers in urban centres: A case study of Uttar Pradesh,

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3. Bhuvanaiah, T., & Raya, R. P. (2015). Mechanism of

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Journal of Finance and Management, 6(4), 375-378.

8. Shah, A. (2016). India's Economy Surpasses That Of

Great Britain. Retrieved 19 June 2017, from

https://www.forbes.com/sites/realspin/2016/12/16/i

n d i a s - e c o n o m y - s u r p a s s e s - t h a t- o f- g r e a t-

britain/#4d55574139eb.

9. The Times of India.(2016). BTechs and MBAs in UP line

up for sweepers' jobs. Retrieved 19 June 2017, from

http://timesofindia.indiatimes.com/city/lucknow/B Te

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c h s -a n d -M B A s -i n -U P -l i n e -u p -fo r-s w e e p e r s -

jobs/articleshow/55884377.cms.

10. Vij, P., & Sharma, M. (2014). The effect of human capital

management practices on employee positive

behavioural outcomes. International Journal of

Management Practice, 7(3), 204-221.

The author can be reached at info@debasishsinha.in

Humour Quotes

(On a serious note, business can be quite funny!)

The best executive is the one who has sense enough to pick good men to do what he wants done, and self-

restraint to keep from meddling with them while they do it.

– Theodore Roosevelt

The problem with the rat race is that even if you win, you're still a rat.

– Lilly Tomlin

People often say that motivation doesn't last. Well, neither does bathing – that's why we recommend it

daily.

– Zig Ziglar

First rule of leadership: everything is your fault.

– A Bug's Life

Always drink upstream from the herd.

– Will Rogers

Delegating work works, provided the one delegating works, too.

– Robert Half

I suppose leadership at one time meant muscles; but today it means getting along with people.

– Mohandas K. Ghandi

xxii

A Review on Evaluation of Portfolio of Online Distribution Channels across Mid-Market Hotels

Sudipta Kumar Pal

Assistant Professor (Hotel Management)

Guru Nanak Institute of Hotel Management, Kolkata

Abstract

Purpose - The purpose of this study is to provide an insight on current trend of research in the area of online channels for

distribution of accommodation products across mid-market hotels from the hoteliers' perspective and to suggest future

research avenues.

Design/methodology/approach - The study was based upon analysis of 12relevant research papers published in peer-

reviewed international tourism-hospitalityjournalsduring the period of 2004 - 2015. The selected papers were critically

reviewed to update on ongoing researches on the area and to point out significant research gaps that indicated further

research scope.

Findings - Online hotel booking is steadily growing since the inception of internet and its adaptation for distributing

accommodation products by the lodging industry across the globe. Numerous studies have been undertaken to determine

the performance of online distribution channels (ODCs), as the choice of channels is critical for mid-market hotels in order

to secure reservations and revenue. These hotels need to constitute a portfolio of ODCs to sustain and counter

competition.

Research limitations/implications - The findings can be generalized only to the population of selected research papers

for the mentioned time period and not to the larger universe. However, the study identifies various understudied areas for

further research in terms of customers' perspective, market segments, research methods etc.

Practical implications - The study sought to outline the existing strategies for managing distribution through online

channels and subsequently to identify the areas of due attention. It may, therefore, provide new ideas to hospitality

marketing managers and recommendations to academia for future research.

Originality/value - This study is one of the few attempts to provide a comprehensive review of research papers on

evaluation of ODCs published in the past 12 years, indicating areas for further exploration.

Key Words: Social Work, Industry, Personnel, Management, Labour, HR.

Paper type: Literature review

INTRODUCTION

The recent socio-economic and technical

developments have changed the way hotels

distribute their products. Until the emergence of

internet, hotels used to depend upon Central

Reservation System (CRS), Global Distribution System

(GDS) and traditional intermediaries (e.g. tour

operator and travel agent) for distributing

accommodation inventory. With the onset of

internet, online booking started rising in 1990s, as the

hotels gradually started distributing rooms over

internet channels, too. In due course of time and

advancement of internet technology, hotels realized

the potent benefits of ODCs and began distributing

larger inventory through online mode. ODCs are cost

effective, while they provide global exposure to the

participating hotels, irrespective of their size and

location. ODC services are provided by specialized

i n t e r m e d i a r i e s , k n o w n a s O n l i n e Tr a v e l

Agents/Aggregators (OTAs). They tie-up with many

hotels, situated at the same or distant location, and

put their accommodation products on sale (besides

many other retail travel-tourism products) on their

websites, for the online customers to choose form a

wide variety of options. As the consumer behavior is

gradually shifting from conventional to online mode,

the importance of OTAs, therefore, to the hotel

industry is incremental and this fact has been well

established by different research studies . On the

other hand, it is crucial for any hotel to identify and to

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A Review on Evaluation of Portfolio of Online Distribution Channels across Mid-Market Hotels Vol 1 | Issue 1

determine the extent to which it should use the

services of OTAs for the purpose of online distribution

of its accommodation products, because the choice

of ODCs will have a direct effect on its revenue

generation'. ODCs open the global market to the

hotel, but often at a high operational cost; higher

than any other conventional distribution channel .

Hence, it becomes necessary for the hotel to offer

higher rate category on such channels to cover up the

high operational cost of the channel. This

phenomenon often results in rate disparity across

ODCs used by the same hotel, including its own

website and further creates rate confusion among its

online customers '. This clearly indicates the necessity

of judicious selection of distribution channel

partners, which will support achieving overall

revenue objective of the organization.The total

number of channels to be used to ensure revenue

maximization is also subjected to systematic

evaluation of each available channel for its suitability

'. Hence, a hotel is supposed to use the services of

limited number of and carefully selected combination

of OTAs, and this pool of ODCs constitutes the

Portfolio of Online Distribution Channels (PODC) of

that hotel. The recent trend shows most hotels are

maintaining such portfolio in order to sustain

marketing-competition along with a good control

over inventory and rates and for many hotels,PODC is

the key to revenue success. The degree of

dependency on its PODC for a hotel generally

depends upon the distribution options available to

the hotel; more alternatives reduce dependency and

fewer alternatives make PODC inevitable for the

hotel. Dependency on PODC, therefore, is the

maximum in budget hotels, moderate in mid-market

hotels and minimum in luxury hotels sector.

This literature review confirms that though significant

research studies have been undertaken to establish

methods of evaluating individual distribution

channel's performance across a variety of hotels ';

research study on evaluating the aggregate effect of

ODCs as PODC on the hotel's performance in terms of

reservation and revenue generation is yet to be

undertaken.

Review of Literature

Online reservation of hotel rooms is on the rise. The

modern distribution and development trends of

hotel industry was studied and found that, the use of

modern technology was one of the most important

factors of dynamic changes in the modern hotel

industry and the largest user group of modern

technologies was the young travellers (Generation Y

or Millennials, born between 1980 and 2000). The

authors also estimated that, during 2013, more than

one fifth of room-nights had been generated through

online bookings, where as, it was only 1 in every 12

reservations in 2002 . Through the study, quantitative

and qualitative expansion of hotel groups were found

to be characterised primarily by creating new brands,

within existing corporate groups, thus covering all

market segments. This phenomenon called for

adaptation of suitable PODC by hotelsfor their newly

created brands to outreach the target market in order

to fetch due revenue.

The evolution of electronic distribution and its effects

on hotels and intermediaries were closely examined

by and found that, the rise of internet-based room

reservations put hoteliers with a strategic challenge

of controlling their distribution, while also working

with intermediaries that can help to sell rooms.

According to the authors, online intermediaries

eventually captured about half of the room bookings,

while hotel groups' websites controlled the other half.

The study revealed that, there were a number of

bookings made via call to travel agents, while

information search and rate comparison done online.

About 20 percent of customers, who looked at the

group's website, ended up calling the Central

Reservation Office (CRO) to make bookings. But this

scenario is rapidly changing and recent studies have

found substantial growth in number of online room

reservations. The study also found that, the hotel

industry was always a preferred source of revenue for

the intermediaries and the rapid development of

internet technologies equipped them to reap more

revenue from this sector. As the dependencies upon

online intermediaries increased, intermediaries came

up as competitors to the service providers. To

counteract intermediaries' attempts to control

distribution channels, hotel groups promoted and

enhanced their own websites, attracting more web

traffic than that of their ODC partners. The study,

therefore, brought out the necessity of careful

selection of online distributors to keep control over

inventory and rates.

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

Kracht and Wang (2010) examined the evolution and

transformation of tourism distribution channels,

focusing on the role the Internet played in such a

process. Their study established that, tourism

distribution channels attracted tremendous amount

of attention in the last decade for their important role

in the tourism industry. Specifically, distribution

channels served as a part of the marketing mix that

made the products available to consumers, linking

between suppliers and consumers. The study also

revealed, the advancement of Information and

Communication Technology (ICT) could not reduce

the number of intermediaries in the distribution

channels, rather resulted in a compounding array of

intermediaries and the structure of the tourism

industry took the form of a complex global network.

This evolution and transformation of tourism

distribution channels, facilitated by ICT, created a

more complex industry structure along with

increased competition for distribution participants

and greater choice for the consumers. The same had

an impact on the complexity of the purchasing

process as it leveraged online customers with the

capability of comparison shopping, without any

human interaction. Hence, the authors expressed

their concerns about building customer loyalty and

protection of brand value of the ser vice

providersasreaching to the distributor's site often

routed through web search engine. Thus, the study

again reinforced the necessity of further research

towards the direction of online distribution practices

in the hotel industry.

Gazzoli, Kim and Palakurthi (2008) found that, the

internet had significantly changed the way hotels

distributed and priced their products. The

authorsfound the online intermediaries very

successful due to their ability to adopt newer and

smarter business practices and often due to poor

management and application of hotels' online

pricing strategies.Another major reason for these e-

intermediaries' success was their ability to provide

cheaper room rates than the hotel brand's websites

or their reservation offices. The success of online

intermediaries caused financial problems for hotel

chains since online travel agencies had offered better

prices than the hotel brand websites, further creating

pricing disparities across different channels of

distribution. Price disparities among the distribution

channels altered the buying behavior of online

consumers to shopping around for better deals.

According to the authors, this might lead to brand

and rate erosion, if rate parity and rate integrity of

inventory is not assured by the brand itself. The study

also found that, the international hotels lacked more

in maintaining rate parity and delivering the “best

rate guarantee” promise, in comparison to their

counterparts in the country. These globalized

companies should project a consistent brand image

worldwide by providing almost equal rates across

online channels and preferably lower price on their

own website than third party sites and thereby

ensuring customer loyalty.

The research study conducted by Dutta and

Manaktola (2009) tried to outline the present

practices in managing online distribution for tourism

growth in India. The study discussed about the

practices currently employed by the mid-segment

hotels for the distribution of their services and sought

to explain how they could use this as a tool for

working towards sustainable growth. The paper

highlighted the elements which should be

incorporated in brand websites so as to effectively

distribute inventory by making it easily accessible to

the tourists looking for accommodation. This would

reduce involvement of intermediaries and result in

sustainable low-cost economic growth with

paperless transaction. As about 73 percent of

travellers used internet search engines prior to

making bookings and 76.6 percent of those searching

were done by using a broad generic term, marketers

needed to add key words in order to secure a higher

ranking from generic searches. The study further

supported the need for improvement of website

functionality to facilitate online purchase with secure

payment methods alongside up to date details on

prices, special offers and discounts, as all of these

were considered necessary to increase web traffic

towards the site. It was, therefore, understood from

the study that, though using a balanced combination

of ODCs was the need of the time, upgrading hotel's

own website alone could fetch many benefits.

O’connor and Murphy (2008) investigated hotels'

yield management practices across multiple

electronic distribution channels to find out whether

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A Review on Evaluation of Portfolio of Online Distribution Channels across Mid-Market Hotels Vol 1 | Issue 1

up-market hotels used three following yield

management practices:

1. Varying room rates with market demand

2. Varying participation in Internet channels with

market demand

3. Differentiating rates on Internet channels in times

of high demand

Their investigation found that, less than one fourth of

the hotels surveyed used the most basic yield

management technique - vary price in response to

market demand, indicating more professional

management of pricing than in the others. Variables,

such as brand membership, hotel size or star rating,

failed to explain the reason behind not practicing

yield management for the rest of the hotels under

study. Varying participation in internet channels in

accordance with market demand was not in practice

partially due to contractual agreement with the

online intermediaries, restricting hotels from closing

them off during high demand. Differential pricing on

third-party channels to compensate for the higher

cost of distribution and equalize net contribution was

also low, used by about 10 percent of the hotels.The

study identified the set of yield management

strategies regarding online distribution used in the

hotel industry, but reserved opinions about profiling

of ODCs and use of PODC for the success of revenue

management strategies. This opens the way towards

further research on the same.

Christodoulidou et al (2006) investigated the existing

challenges of electronic distribution channels

commonly faced by hotel operators and tried to find

out their solutions. They found, to achieve their goal

of distributing their rooms more effectively required

knowledge and selection of a variety of distribution

channels. One challenge was determining the

combinations of distribution channels and relative

number of hotel rooms to be offered for sale through

each channel. The hotel's channel management

strategy was found to be the key in determining the

outlets for room inventory. Hotel revenue managers

knew that the cost of selling a room through one

channel, such as a consolidator, is different from the

cost of selling through the front desk, the hotel's

website, or through a third party Internet site. The

ability to manage and selectively use a multitude of

channels was the focus of hotel managers, who

concentrated on how to best select and work with

third party intermediaries and channels instead of

attempting to eliminate them. The study evidently

identified the challenges as control of channels in

respect to rate parity and inventory, customer loyalty

and Customer Relationship Management (CRM) and

recommended that, future research should also

examine the importance of distribution channels

from the consumer's perspective. While managing

hotel distribution channels was purely a business

operation; consumer's opinions must be valued

because the choice of a distribution channel should

reflect the needs and wants of hotel guests.

O’Connor tried to establish an evaluation

methodology for hotel electronic channels of

distribution, with both economic and non-economic

approach. They found that, electronic channels

played an increasingly important role in hotel

distribution, with most companies utilizing a

portfolio of channels to reach the customer in an

effective manner. However channels could not simply

be added ad infinitum as they emerge; system

complexity, technical factors and the management

overhead associated with using multiple channels

mean that choices must be made between alternative

solutions. Hotel distribution channels had mainly two

separate yet interrelated functions;

1. To provide consumers with information to help

them in their purchase decision

2. To facilitate the purchase decision and the

purchase itself

One of the key enablers in distributing information

and making the reservations process more

convenient was found to be the ICT. However, hotel

electronic distribution systems were in a state of

transition as a result of technological advancements,

dis-intermediation, re-intermediation and a shift in

the balance of power among suppliers, buyers and

intermediaries. Distribution costs were on rise due to

the increasing number of intermediaries involved in

the hotel distribution process, and the complex

technological infrastructure needed to support

distribution to a growing spectrum of potential

channels. The decision as to which channel(s) to use

became increasingly complex, and hotel managers

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Vol 1 | Issue 1 Journal of Cross-functional Business Research

had little guidance to help them determine which

best match their needs. Technical and operational

issues were found important, but financial aspects

(particularly those on the revenue side of the

equation) were found to be more important in the

adoption evaluation decision, suggesting that it was

the channel's actual performance in practice that

should be the key determinant so as to whether to

continue to use it. These findings clearly laid the

background for a clear understanding of interrelation

between distribution channels and revenue models

of the hotels and encouraged research studies

towards this vertical.

Dabas and Manaktola (2007) set-up a study to

evaluate current room inventory distribution

strategies of mid-segment hotels in India and to

identify the influencing factors for the managerial

decisions in selecting electronic distribution channel

for their properties. Based on data collected from five

mid-segment hotels in National Capital Region of

India (NCR), the study tried to validate the following

four propositions, mentioned in its methodology:

Proposition-1

Mid-segment hotels in the national capital region

of India rely on traditional channels for room

inventory distribution.

Proposition-2

Electronic distribution through travel portals is

perceived to be expensive and not suitable for

mid-segment hotels.

Proposition-3

There is a scope to optimize RevPAR (Revenue Per

Available Room) of mid-segment hotels provided

contemporary distribution channels are used.

Proposition-4

There is an existing evidence of adequate

knowledge amongst managers of mid-segment

hotels regarding distribution the inventory over

the electronic channels.

After analyzing the data collected through structured

interview from mangers of the participating hotels,

the first three propositions stood supported, leaving

the fourth proposition not supported. The study

significantly concluded that, the mid-segment hotels

in India were not confident about using a mix of

distribution channels, including online channels for

distributing room inventory. This happened due to

lack of awareness about the subject and electronic

distribution through travel portals was perceived to

be expensive and not suitable for mid-segment

hotels. The study reconfirmed findings of the FHRAI

Report 2014, wherein the RevPAR of five star hotels

was found as 2.67 times more than that of three-four

star hotels in the same region during the study. This

wide gap of RevPAR between these two categories of

hotels could be reduced provided mid-segment

hotels started targeting new market segments and

distributing their inventories through all possible

channels, including online channels. Thus the study

pointed out that, the necessity of distribution

through online channels was not only restricted to

upmarket and larger group of hotels, but equally

fruitful for mid-segment hotels.

Leung, Xue and Bai (2015) commented that,

researches on internet marketing started to appear

since 1990 and drawn increasing attention since

2000. More academic researchers were increasingly

seeking to understand new technologies, explained

new phenomena, discussed updated applications

and forecasted future developments brought by the

internet. An evidence of this trend was the increasing

number of research articles on internet marketing in

the hospitality and tourism journals. According to the

authors, about half of the online marketing articles

(46.5 percent) were devoted to studying consumer

behavior, whereas the articles on marketing function

through distribution channels constituted only 3.9

percent. During the period of 2008-2013, plenty of

new topics emerged and turned out to be the hot

topics in the areas such as, experience, trust/loyalty,

e - W O M / s a t i s f a c t i o n / c o m p l a i n t , d e c i s i o n -

making/purchase intention, social media marketing,

search engine marketing, online branding/image,

pricing issues, distribution channel and marketing

effectiveness. In this period, hospitality and tourism

businesses strove for a deeper understanding of their

online customers. Businesses were interested in

knowing the reason behind customers making online

purchases, what factors affected their online

experience and their loyalty and what triggered their

purchase intention. During this period, research focus

was not only on the customer side but also on the

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A Review on Evaluation of Portfolio of Online Distribution Channels across Mid-Market Hotels Vol 1 | Issue 1

business side. The authors also suggested that,

internet marketing research might combine

information technology and social psychology

theories with communication theories to develop

ground-breaking models for scientific inquiries.

Conclusion

It is highlighted from the literature review that, more

and more hotel guests are preferring online mode

over other available modes of reservation around the

globe. It has been possible due to multi-dimensional

development of ICT and its easy access to a greater

number of online visitors and potential guests. Hotels

must concentrate on online distribution strategies to

reap benefit out of it. Significance of online

distribution of room inventory has been well studied

and accepted, but management and strategic

application of the same in the industry is still not

satisfactory. It is mostly due to lack of technical know-

how of the subject and failure to recognize its latent

potential. Still many hotels have started distributing

their inventories through online channels, as it gives

them global exposure and better positioning, but

often at a high operational cost. Cost of distributing

inventories on each online channel is not the same,

neither the benefits they bring for the hotel. The

degree of dependency on online channels for

distribution also varies according to the target market

of the hotel. This calls for the necessity of selecting

only profitable ODCs integrated with the revenue

management model of the organization. In order to

meet revenue management objectives, it is of utmost

importance for a hotel to carefully evaluate the

performance of each available channel before

accepting its services. Researchers have established

methods for evaluating ODCs and hotel managers

can use them for prioritizing the choice of their

distribution needs. As a hotel can use only limited

number of channels, only the highly profitable

channels must be chosen. These chosen ODCs will

figure-out the PODC of the hotel. The challenge,

therefore, is the process to construct the PODC, which

is capable of generating the highest possible

reservation and revenue for the hotel. Some research

studies have been conducted in Europe and America

to evaluate and to determine the performance of

individual distribution channel for hotels, but

constituting PODC for hotels is yet to be attempted.

Similar studies have been undertaken in India, too,

where generalizations are moot points due to use of

small sample size for the studies. Taken as a whole, it

appears that, a holistic study to determine the

process of constituting PODCfor mid-market hotels

and to compare their performance in terms of

reservation and revenue generationis necessary in

order to understand its suitability for industrial

application.

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The author can be reached at golden.fizz@gmail.com