Personal Judgement, Values and Consumer Behaviour

The service sector plays a major part in Bangladesh economy. Firms now constantly look for new ways to differentiate their services and offers to achieve competitive advantage. Measuring service quality and customer satisfaction is a means to determine a service firm’s deficiencies as well as to decide on the course of its improvement. While this approach has become ubiquitous amongst firms, firms continue to search for other means to gain differential advantages. Building more intimate relationships with customers has emerged as a key strategy towards this end.

Through an understanding of the values of the customers, firms may be able to determine how they make judgments about the quality of the services they receive and then redesign their service to maximise positive judgments. The services literature underscores the connection between quality management and relationship building. Clearly, the impetus behind developing measures of service quality is rooted in trying to understand the relationship that the customer perceives with the service provider. Quality measurement in different service sectors has tended to focus predominantly on attributes of the service provider such as reliability, responsiveness, empathy, etc.

Marketers know that personal values play an important role in buying decisions. For example, an individual who defines himself as someone who is concerned about the environment will probably buy a different car than someone whose primary goal in life is to have fun and to enjoy.

Dibley and Baker (2001) suggest that personal values determine, regulate, and modify relationships between individuals, organisations, institutions and societies. Personal values are often defined as beliefs and relatively stable cognitions that strongly impact emotions. Values are regarded as “enduring beliefs that a particular mode of behaviour or end-state of existence is preferable to opposite modes of behaviour or end-state” (Rokeach, 1973). According to Schwartz and Bilsky (1990), they can be conceptualised as cognitive representations of universal human requirements which include social interaction requirements and social institutional demands experienced by the individual. Although the possession of these values is universal, the importance attached to each one is likely to vary to some degree according to the culture that shaped the individual. Value systems represent the whole range of values that describe human beings.

Marketers have long acknowledged the importance of attitudes and attitude change in the study of marketing and consumer behaviour, but the role of values has received relatively little attention. Even though the marketing literature reflects an emerging interest in the topic, personal values have not been widely used to investigate the underlying dimensions of consumer behaviour. This is surprising considering the importance typically assigned to values by a wide variety of social observers and businessmen alike. While it seems that personal values have important implications for marketing practitioners and researchers, values and the ways in which they influence the behaviour of consumers who look at and choose brands, product classes, and product attributes is not clear. In order to investigate these relationships, it is necessary to operationally define what values are, and to indicate empirical methods available for examining the connection between personal values and consumer behaviour. The role of personal values as a standard or criterion for influencing evaluations or choices regarding persons, objects, and ideas suggest the relationship of values to behaviour.

Knowledge of consumer value orientations provides an efficient, measurable set of variables closely related to needs which expand the marketer’s knowledge beyond demographic and psychographic differences. If large market segments can be identified on the basis of value profiles, the marketing strategist could develop programmes which would maximally enhance the important values of consumers in each market segment. Business should be concerned with assessing changes in the size and composition of value segments and the implications of these changes for marketing.

In case of product planning, careful assessment of value orientations and emerging value trends will allow the identification of new product opportunities and the repositioning of existing products. Changing importance of global values such as pleasure, an exciting life, a comfortable life, and self-respect may very well signal the need for products having brand names, colours, and designs which enhance these important values in their use and consumption. The existence of value segments containing significant numbers of consumers suggests that products can be positioned by designing products with the attributes which are connected to the global values distinguishing that particular market segment.

In case of promotional strategy, since global and consumption values appear to be connected to the importance of product attributes and the appeal of different product classes, a promotional strategy designed to create and reinforce a preference by appealing to centrally held values may be highly effective. Thus, the promotional messages for a product or service could be developed to not only refer to the desirable attributes of the product but also to enhance these global and consumption values associated with the product attributes. Additionally, the appeal to closely held personal values might have the effect of making consumers even more aware of an attribute of a product which previously may not have been considered salient or of which an awareness may not have existed.

Over the past few years as the global economy has dipped into recessionary levels, consumers have been forced to make major adjustments in their purchase behaviours. Given the continued economic uncertainty and less discretionary income, consumers are reevaluating not only their spending but the true value of their purchases. For instance, the value of store brands continues to gain in the consumer’s eyes. Beyond this, consumers in general are becoming more experimental across brands and less brand loyal. This new value-conscious consumer behaviour is also reflected in how consumers view advertising as well as the shopping experience. They are increasingly sceptical of companies telling them “what they need,” and instead seek more control over decisions for themselves and their families. Keep in mind that this desire for an “experience” manifests itself in many aspects of consumer purchase behaviour. Consumers are motivated and take action through their goals. In order to reach their goals, they undergo some intellectual, emotional and behavioural processes. These lifelong activities become a part of life and create style of shopping when the consumer determines the way that provides the best satisfaction.

Decision-making style is defined as the emotional and cognitive tendencies which have permanent and constant effects on consumer’s purchasing decision. This style is effective on the consumer’s all kinds of product and service preferences. Consumers are divided into groups according to their decision-making style, for example, consumers who expect information, excellence, novelty or modernism, or the consumers who are sensitive to price or aware of high quality and brand, the consumers who are habitual or have brand loyalty or confused.

Values are centrally held cognitive elements which stimulate motivation for behavioural response. They exist in an interconnected, hierarchical structure in which global values are related and connected to generalise consumption-related values which are, in turn, similarly associated with product attributes. Learning describes changes in an individual’s behaviour arising from experience. Through acting and learning, people acquire their beliefs and attitudes. These in turn influence their buying behaviour. A belief is a descriptive thought that a person has about something. Marketers are interested in the beliefs that people formulate about specific products and services. If some of the beliefs are wrong and prevent purchase, the marketer will want to launch a campaign to correct them.

People have attitudes regarding religion, politics, clothes, music, food, and almost everything else. An attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. Attitudes put people into a frame of mind of liking or disliking things, moving toward or away from them. Today’s consumers are rethinking values based on new measures and beliefs. While monetary cost will always be a factor consumers are increasingly evaluating the real value of products as they expect more return on their personal investment. Corporate social responsibility, sustainability, functionality and fortification are just a few of the differentiating factors which may boost the consumer’s perceived value. Understanding how these value differentials affect consumers purchase decisions is increasingly important in today’s uncertain economy.

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The Role of Marketing in Banking Industry

It is said that the banking sector mirrors the larger economy – its linkages to all sectors make it a proxy for what is happening in the economy as a whole. Indeed, the Bangladesh banking sector today has the same sense of excitement and opportunity that is evident in the Bangladesh economy. The fundamental structural changes in the recent years have taught us many lessons. A combination of developments arising from technological advancements and a liberalised marketplace – disintermediation, blurring of traditional roles and boundaries, emphasis on shareholder value-creation – has led to a transformation of the banking sector. The banking industry in Bangladesh has become more and more developed and is functioning progressively. Customers have more opportunities for selection of more suitable places to buy and use banking services and satisfy all their demands. But at the same time, they have also become more fastidious and expect higher standards from banks, such as more friendliness in service styles, more effectiveness in solving all their complaints, or more modernisation when it comes to equipment and tools. Here the terms ‘Marketing’ and ‘Banking’ blend together inextricably.

Marketing has lately entered the banking industry not in the form of marketing concept, but in the forms of advertising and promotion concept. It has been realised that marketing transcends advertising and friendliness. Earlier, it was recognised that personal selling was not necessary. The bankers even eliminated the word ‘selling’ and they called the function of customer-contact ‘business development function’. But gradually they have begun to realise that marketing is a lot more than smiling and friendly tellers.

As far as the evolution of bank-marketing is concerned, the bankers have now come out of the ivory towers and reached out to the masses. A large number of deposit and loan schemes are now being developed according to the requirements of different sections of society as per the national priorities in Bangladesh.

A personalised service-oriented industry: Banking is a personalised service-oriented industry. The marketing approach involves anticipating, identifying, reciprocating (through designing and delivering customer-oriented service), and satisfying the customer’s needs and wants effectively, efficiently, and profitably. To bring satisfaction to customers, banks have had to improve their service quality to keep their old customers and attract more new and potential ones.

Service quality can be defined as the difference between customers’ expectations of service performance prior to the service encounter and their perceptions of the service received (Asubonteng et al., 1996). Quality service for banks has a positive effect on the bottom-line performance of a bank and, thereby, on the competitive advantages that could be gained from an improvement in the quality of the service offered, so that the perceived service exceeds the service level desired by customers. Nowadays, with increased competition, service quality has become a popular area of academic investigation and has been recognised as a key factor in keeping the competitive advantage and sustaining satisfying relationship with customers.

A customer’s long-term relationship can be empirically represented by following a sequence that includes trust, which influences relational commitment, which in turn influences customer loyalty. Trust depends on confidence in another partner. The importance of trust in banks lies in its contribution to the strengthening of interpersonal relationship. For instance, regarding service failure in banks, trusting the banker may allow the costumer to believe that poor product quality was a simple error that will not be repeated or which will be addressed.

Commitment is defined as an enduring desire to maintain a valued relationship [Moorman, Deshpande, and Zaltman, 1993]. Commitment to the bankers suggests that the customer has an investment in the relationship.

Customer loyalty is a behavioural and attitudinal predisposition to stay with the seller in the long-term [Oliver, 1999].

All three ensure a successful customer service and banks will keep their strong customer-centric orientation image to the customers, which will help banks in further development. Customer satisfaction represents a modern approach for quality in enterprises and organisations and serves the development of a truly customer-focused management and culture.

Service delivery: Service is all about expectations. When it comes to products, people expect a good quality product based on the price they are willing to pay for it. When it comes to service, expectations can get a little fuzzy. When a customer begins a relationship with you, he or she already has a specific set of expectations. These expectations are based on their perceptions of you, your company and your industry. They are formed through past personal experience, and the experience of others with whom the customer interacts.

In case of the banking industry, customer retention plays the critical role in customer service. Customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in today’s ever-increasing banking competitive environment. The key factors influencing customers’ satisfaction and ensuring customer retention of a bank include the range of services, rates, fees and prices charged. It is apparent that superior service alone is not sufficient to satisfy customers. Prices are essential, if not more important than service and relationship quality.

There are compelling arguments for bank management to carefully consider the factors that might increase customer retention rates in Bangladesh. Unless a bank can extend its product quality beyond the core service with additional and potential service features and value, it is unlikely to gain a sustainable competitive advantage. Thus, the most likely way to both retain customers and improve profitability is by adding value via a strategy of differentiation while increasing margins through higher prices. Today’s customers do not just buy core quality products or services; they also buy a variety of added value or benefits. This forces the service providers such as banks to adopt a market-orientation approach that identifies consumer needs, and designs new products and redesigns current ones.

Quality of personnel: In businesses where the underlying products have become commodity-like, quality of service depends heavily on the quality of their personnel. This is well documented in a study by Leeds (1992), who documented that approximately 40 per cent of customers switched banks because of what they considered to be poor service. Indeed, customer satisfaction has for many years been perceived as a key to determine why customers leave or stay with an organisation. Organisations, especially banks, need to know how to keep their customers, even if they appear to be satisfied.

Launching new schemes with advertisements attracts new depositors. However, what ultimately sustains the process of generation of new deposits and continues the acceleration of deposit mobilisation is the quality of customer service as perceived by clients. Banks’ performance in different banking services like withdrawal of cash, collection of cheques, quality and adequacy of infrastructural facilities available to customers, attitudes of bank employees towards customers, promptness, and general attitude have to be analysed and evaluated before strategy formulation.

Services under one roof: Innovation and renovation are the keys to success in service marketing including banks. The provision of all the financial services under one roof is the concept of modern banking. The banks are now not just the clearing houses, but are the best marketable places too. Foreign banks have realised this fact long ago and they have been providing the best services as per the requirement of their customers. In line with them, state-owned and local private banks are advancing ahead in Bangladesh. The competitive scenario has made banks to provide customised products and services. Customers have many options today.

In today’s banking, the role of information desk has become very important. Customers may require some assistance in various transactions, in which the help desk should be able to provide services promptly with dignity and honour.

Human resources: In the context of Bangladesh, banks have to understand the changing needs of customers, their aspirations and expectations to create value. Banks should also have a strong customer-tied management system. To manage growth and continuity in business, human resources play an important role. The new-generation private sector banks and foreign banks enjoy a lead in this regard when compared to state-owned and old generation private sector banks in Bangladesh. Banks may follow a feedback system to know the customers’ expectations for improving the level of customer satisfaction to the maximum level.

There is a need for professionalism and market-oriented banking in our country. Market-oriented banking will require a new culture: a disciplined, professional, and committed manpower; employees trained for specialised services; specialised branches; strong marketing organisation in different banks; aggressive selling; meeting new customers’ expectations; and cost-effective and efficient services for gaining customer satisfaction and loyalty. Banks should remember that, it is so tough to make a customer enter a bank, but it is a fraction of second for a customer to move from one bank to another. Competition is increasing at a regular basis and customers are enjoying it. The more the competition, the better the services banks need to provide for business retention.

E-learning and the benchmark Bangladesh has created

“Pola ta re diya gelam apner kachhe. Haddi amar ar chamra apner.” [My child from now on will be under your supervision. Bones are mine and the rest is yours.] Once upon a time in Bangladesh, our parents used to shoulder responsibilities of his/her sons/daughters to the teachers in these particular approaches. Recently approaches may have changed either in line with the changes in education systems or changes of approaches in other developed or developing countries but the scenario has not changed enough. Students are advancing and to step in line with them, parents are following the advanced path and initiating modern strategies with the help of technologies. Recent blessings are internet and its advancement in education sector. May be I’m wrong but still our parents are afraid of internet and the use of modern inventions.

But one thing must not be forgotten that each and every action has an opposite and equal reaction and the verdict goes with modern technologies as well such as internet. I must confess that the age i.e. 12-18 is not an ideal age for a boy/girl to enter into the world where one can ruin his/her life forever and diminish the dream of parents but one thing I have to say which I have learnt from different finance course instructors during my undergraduation tenure is “No risk, no gain.” And if parents could realise it, then I believe that the days are not so far when our upcoming generation will not be afraid of taking part in any competition where the champions of other developed countries will be participating.

In a longitudinal study spanning 4 years at Deakin University Palmer and Bray (2001) found that “Student computer usage was rising… Student access to the Internet was rising …Student usage of the Internet was rising … The proportion of students with access to the Internet at home was rising … Student usage of email was rising.” Then why we, the proud mass crowd of Bangladesh, will step behind. The government has already initiated e-learning as their target is to digitalise the country within 2021 but the real scenario is completely unexpected. And the government itself will be afraid of knowing that how alarmingly our parents or instructors are welcoming e-learning. I’ve worked in the field with a view to initiating e-learning in several schools in Dhaka City and elsewhere and it is a matter of surprise that parents are keen to purchase a burger or pastry to his/her child which costs Tk 100 but they are not showing their interest to purchase a software which will help their child to step ahead with the help of e-learning.

The phenomenon of globalisation has transformed world trade, communications and economic structure in the 21st century and consequently, the complexion of higher education sector too has undergone a sea change in the last two decades. Although higher education, science and technology have always been international endeavours, of late, they have acquired new dimensions and features. Internationally, a majority of the institutions offering higher education is making strenuous efforts to revise its academic orientations and the course delivery strategies in the light of the interplay of these global changes and emerging challenges.

E-learning, one of the tools emerged from information technology, has been integrated in many educational programmes. The rapidity with which children and young people are gaining access to online, convergent, mobile and networked media is unprecedented in the history of technological innovation. Recently, information technology has been viewed as a solution to educational institutions’ cost and quality problems. Information technology in teaching and learning has created a need to transform how students learn by using more modern, efficient, and effective alternative such as e-learning. E-learning has started to make way into developing countries and is believed to have huge potential for the government of Bangladesh struggling to meet a growing demand for education while facing an escalating shortage of teachers. It is seen as a tool for raising the number of students who have access to higher education, especially marginalised groups in rural areas, by being a cheaper and more flexible alternative. Challenges are however plentiful; in many developing countries like Bangladesh, there is a lack of vital e-learning components such as computers, electricity and skills and the active, participative student that is required for interactive learning is also very rare in countries where the tradition is to teach in a more didactic manner.

E-learning can be viewed as the delivery of course content via electronic media, such as Internet, Intranets, Extranets, satellite broadcast, audio/video tape, interactive TV, and CD-ROM. It is one of the new learning trends that challenge the traditional “bucket theory” or the banking concept of education. The banking concept of education assumes that the instructor owns the knowledge and deposits it into the passive students who attend the class. And by this way the whole process goes on.

In this context, online learning or e-learning mode has emerged as a major higher education option before the global student community in general. Higher education institutions operating in countries like the US, UK, Australia, New Zealand, European Union (EU) and various other developed countries are making efforts to re-adjust in the light of the contemporary challenges and Bangladesh is no exception to this inevitable transformation. While advanced countries responded to these pressures of globalisation rather more successfully with their vast resources, Bangladesh is still in the process of designing strategies to re-adjust to the dynamic phase of global reforms in the higher education sector.

E-learning itself is a term that is complex, and that attracts a degree of controversy and disagreement. In developed countries, sophisticated computers and telecommunications are on the verge of reshaping the mission, objectives, content, and processes of schooling. In line with that, e-learning has emerged as one of the fastest moving trends in education today. Now ICT education incorporates the use of the computer, its peripherals and internet services within the student learning process and the teacher delivery process. Computer usage in schools has made many positive impacts and developments into learning. However the acceptance of ICT by schools, as with the current emergence of online learning has been slow. However, in reference to Computer Based Learning (CBL), it can be said that monitoring teacher and student attitudes is significant for structural usage, acceptance and success.

I have discussed a lot regarding e-learning. But now it is high time to realise what e-learning practices are? Activities that are distinctly different from real world learning practices for example special interest e-groups; subscription and access to e-journals; access to databases of information on research; digital archiving and access to those archives; access to institutional repositories; email exchanges with supervisors and fellow students; bulletin board access; online browsing and searching formal access to resources, reading lists etc. and completion of assignments using a virtual learning environment; and anytime/anywhere access to information and exchange. Learning is never an entirely passive activity in the real world or via e-learning.

Even the most instrumental of learning activities requires some accommodation of existing learning patterns and configurations to new learning. In e-learning, because the learner is often isolated physically from other learners in the network, he or she has to make an extra effort to contribute to the e-learning community. Learning is never a simple ‘read-off’ from the tissue of connections made by others; it requires some engagement and contribution. Even though some e-learners may contribute little, and simply feed off the contributions of others; but it still takes some awareness and engagement to benefit, even from such a seemingly parasitical position. Now it’s time to explore social informatics. Essentially, social informatics is an interdisciplinary body of theory that includes consideration of the design, uses and affordances of information and communication technologies, particularly in social, institutional and cultural contexts.

It is interested in the ways in which new information and communication technologies change the patterns and potentialities of social interaction. Borrowing from sociology, social interaction is conceived in terms of strong and weak ties and their initiation, maintenance and development. Information and communication technologies, and the online and offline communities that are made possible as a result, are seen to enable the maintenance of weaker ties and the possible strengthening of strong ties, partly through the increase in communication that takes place. This increase to a new dimension of social interaction makes for more than just a re-purposed version of offline learning. It creates a larger, more complex space for interaction, with multiple modes of communication, greater distances of potential interaction, and compressed/enhanced synchronous and asynchronous means of communication.

I must have to admit that e-learning is distinctively different from conventional face-to-face learning, or solitary learning by an individual in a library or a monastic cell. The digitisation of text makes for easier and more rapid transduction; the availability of an extended community of learners, with the teacher taking his/her place alongside learners, extends the possibilities of learning. When applied to e-learning, the freedom of the individual is clear. Within the confines of the course or programme and its requirements, the individual learner has the freedom to define his or her network of learning. Because the learner moves in and out of the electronic environment of learning, even in so called ‘100% online’ learning programmes, he or she builds a web of discourses and patterns for learning that becomes distinctive. E-learning, then, transforms the nature of learning for the contemporary learner; it does more than ‘enhance’ an existing state of affairs, and much more than provide a re-situated version of conventional learning. It creates a web of networked communities that in themselves are generative of learning, but in combination and association, provide a richer, more extensive opportunity for learning.

Engagement in e-learning makes for a different kind of learning. In conventional learning and scholarship, there is an authoritative, hierarchical power system at work. The teacher acts as mediator for the student between the body of knowledge, as enshrined in books, journals and other forms of print. Knowledge is seen to exist, to be added to by research, and to be guarded by editors of journals who, among others, protect and preserve the discourses of induction into that community. In e-learning, however, the canonical texts are themselves committed to digital format and thus become at once more malleable, and more open to critique that has the same status as the original text.

A digital electronic text can more easily be broken up, annotated, re-aligned, and incorporated as part of a dialectic or at least dialogical exchange. The digital spectrum of access and use is evident not only internationally, but also within societies. Access is distinguished from use in that it is one thing to have access to a networked computer, and another to use that privilege to good and full effect. But we know that many people in society, more specifically in Bangladesh, do not have access to a computer, and if they do, may not have access to fast broadband connectivity. There is thus a spectrum of access which means that some learners will be relatively disadvantaged. Such disadvantage may not affect the quality of learning, but it will most certainly affect the type of learning and the range of resources those are available.

Access is an issue of systemic economic inequality. Use is more a matter of individual engagement with the possibilities and affordances of new software and connectivity, and tends to manifest itself generationally rather than socio-economically. Successful preparation for online learning is not significantly different from classroom preparation. As with any new concept, however, it is important for an instructor to communicate how existing practices integrate with a new concept. High dropout rates are not a function of the online learning environment – they are a function of poor course design, lack of instructor familiarity of the environment, and learner preparation. Preparing learners to learn online is perhaps the greatest skill that e-learning can offer. In an era of lifelong learning, skills for acquiring knowledge play a greater role in success than do knowledge concepts.

For a country like Bangladesh where the government and even several social bodies are concerned with implementing e-learning, for them I think that in the preliminary stage, it is important to understand all challenges. Because e-learning most often is being transferred from the developed world we need to know not only what challenges that are already found and to some extent met in the developed countries, there is also a need to understand which additional challenges, if any, there may be in developing countries.

The most frequently mentioned challenges concern issues relating to the course given. Concerns are raised about the content of the course, the activities undertaken during the course, the support functions provided, and the delivery mode of the course. The first issue identified here is the curriculum which stipulates much of the course actions and content. There are discussions on the need to develop new curriculum specifically designed for an e-learning setting; thereby showing awareness that e-learning is different from traditional class-room based teaching. The choice of pedagogical model is also found to have effects on learning. There are discussions on which pedagogical methods are appropriate for e-learning and many discussions concern a shift from a more instructor-centred approach to a learner-oriented approach where the students take ownership of their learning.

Besides, the characteristics of the individual student, and in some cases the teacher, are much researched in developed countries, less so in developing ones. Student motivation is a factor and it must be signified deeply. Highly motivated students perform well in most cases whereas non-motivated students tend to drop out. The relation between motivation and other e-learning factors is rarely elaborated; the reasons for success or failure in the studies are simply referred to as personal motivation or lack of motivation. Technological challenges cannot be over looked. The use of ICT for distance education evidently makes access to the technology an enabling or disabling factor and in developing countries like Bangladesh, the issue of access is often discussed in terms of availability of so called tele-centres and internet cafes. Finally there is the issue of localisation; to what extent the technology and software should be adapted in order to fit local culture and languages. Localisation in this case is about embedding cultural and religious values and aesthetics into the design of the technology and software.

Let me point out some good things about e-learning at a glance:

* E-learning may result in cost savings.

* E-courses can be monitored more easily than the traditional classrooms.

* On-line learners can make use of the electronic mail to establish communication with faculty members.

* The advantages of student-centred teaching approach which provides round the clock accessibility to course materials and providing just-in-time methods to assess and evaluate students’ progress.

* Majority of the e-learners have stated that they never resort to any kind of malpractice and further reiterate that they always comply with the course requirements. This undoubtedly ensures the much-needed quality of the e-learning and also the commitment of the e-learners paving way for successful functioning of the concept of e-learning.

* Designing for learning explores the design of learning activities and programmers to make effective use of e-learning systems. Understanding my learning explores learner participation in and experience of e-learning, taking into account activities such as planning and reflection that cut across individual programmes, as well as participation in learning tasks and assessments.

* Learning is seen as internalising the representational and communicative means of the subject of discourse.

Development of educational systems and methods are driven by practical, political and technological agenda. These pressures cannot be ignored but need to be balanced by appropriate consideration of knowledge of methods and theories that enable education to meet its needs. A classification into researching effectiveness, representation, and knowledge sharing offers a way to progress many of the problems identified in the fields of organisation, technology and pedagogy in education. It helps the development of a roadmap by facilitating both the identification of dependencies in the communication of concepts within the roadmap by use of these simple vocabularies – effectiveness, representation, and knowledge sharing, to enable simple overviews to be generated.

I have attempted to argue that e-learning changes the nature of learning in a number of significant ways. If we accept the premise that learning is socially situated, and those e-communities are different from conventional learning communities in classrooms in schools and elsewhere, then it follows that e-learning is different from conventional learning. Crucially, e-learning extends the horizons of learning in space, resource and time. The notion of transactional distance is important to understanding how e-learning is different from conventional face-to-face learning. Such extension requires more from the learner in that he/she has to make selections from the possible available resources, as well as decide how and when to engage in the e-learning community.

The nature of knowledge itself is affected by digital technology, particularly in the levelling out of the relationship between existing knowledge, the teacher and the student. Rather than a hierarchical conception of knowledge, e-learning and its technologies promote a flatter, more democratic, more potentially dialogical relationship between the learner and knowledge. Furthermore, knowledge is seen to be in a state of perpetual development. Last but not the least, any new theory of e-learning needs to bear in mind that just as learning was always subject to a spectrum of access and use, according to socio-economic, geographic, cognitive and motivational factors, so too e-learning is actually stretching the spectrum of access and thus use still further.




NGOs must consider their capacity to manage microfinance programmes

NON-governmental organisations (NGOs) must consider their capacity to manage microfinance programmes. The widespread poverty, with all the problems that come with it, is the greatest challenge of our time. Traditional aid has not helped in solving the problems. One kind of development activity, which promotes financial sustainability for the individual as well as for society, is micro finance (MF). But even micro finance institutions or MFIs, are often dependent on financial support.

Have microcredit programmes generated positive results for the poor and poor women in particular? While answering this particular question, we should say that numerous studies and evaluations have demonstrated a rise in incomes and other indicators of standard of living from microcredit programs. A large number of these programmes have focused on supporting women, who bear the brunt of poverty and have been left out of most poverty reduction programmes in the past. Under many programmes, women make up as many as 90 per cent of borrowers. Lending to women is also assumed to result in a greater multiplier effect because women pass on the benefits to children, through increased spending on the household, education and nutrition.

In many cases, microcredit has contributed to changes in attitude about women’s contribution to, and role in, economic and social development. Specifically, microcredit has resulted in increased recognition of women’s productive role. Earning our own money allows us to do what we want with it. It also brings us ‘izzat’ honour or respect because the money proves our contribution. Otherwise, we work like animals, we are never given credit for our contribution and even our own men say that we do not work. When we have our own money we are no longer ‘mohtaj’ (dependent to the point of being at the other person’s mercy. The word is often used for the physically disabled).” (The quotation here is from a Pakistani entrepreneur, in Nighat Said Khan, 1984).

Whether or not they are poor, women may take advantage of their newfound financial independence to assert themselves, stand up to abusive spouses or serve as role models in the community.

Another burning question is that why do not the poorest women and men participate in microcredit programs? There are several reasons why the poor do not participate in microcredit programmes. The leading cause is self-exclusion. The poorest, especially the poorest women, often lack confidence, skills, and market contacts. They consider themselves unable to repay debt. This may be particularly relevant to women, who may have limited control over the revenues used for repayment. Some analysts refer to the poorest as “debt-averse.” One might also say they have more to lose if their investment doesn’t pan out. Some women do not join due to social sanctions which restrict their mobility (Hashemi in Wood and Sharif, 1997).

Even where targeting is highly effective, self-selection appears to be the leading reason why the ultra-poor are excluded from microcredit programmes.

Studies on women’s control of credit in Bangladesh indicate that most women borrowers have only partial control over loans, or have relinquished all control to male members of the family. Moreover, women with greater control over loans tend to be those engaged in traditional home-based activities (Goetz and Gupta, 1994). The majority of microcredit is used to finance livelihood (survival) activities such as trading (e.g., vegetable vending) and food processing (e.g., paddy husking). These activities are more opportunistic than entrepreneurial and carry a lower risk of generating negative results (such as increased indebtedness, increased vulnerability).

However, returns on labour tend to be low, and possibilities to expand income beyond marginal increases (i.e. in the medium and long term) are minimal. Survival activities offer only limited potential for significant and sustained increases in income. There is a qualitative difference in the “entrepreneurial” businesses.

All economies rely upon the financial intermediary function to transfer resources from savers to investors. In market economies, this function is performed by commercial banks and the capital markets. The poor would borrow relatively small amounts, and the processing and supervision of lending to them would consume administrative costs that would be disproportionate to the amount of lending. The absence of commercial banks has led to non-conventional forms of lending. The recent prominence given to microcredit owes much to the success of a relatively few microcredit programmes and their increasing scale. The Grameen Bank of Bangladesh, the most prominent of the successes, now reaches over 2.0 million people, with cumulative lending of about $2.1 billion. Similar successful examples are known in Latin America (e.g., Banco Solidario in Bolivia) and less so in Africa (the Kenya Rural Enterprise Programme is a good example). Progress has also been recorded in several transition economies, mixed in some cases. Such institutions have not only achieved a degree of success, but they have also managed to attract donor support and press attention.

Pioneered by Grameen Bank, micro-credit has proved to be an exceptionally effective tool for poverty alleviation and approach to development. The Grameen Bank model of credit delivery to the rural poor – especially women – has proved that the poor can lift themselves out of poverty through their own efforts and industry provided they are given access to capital. By 2006, nearly 80 per cent of poor households have taken part in micro-credit programmes, and a majority of those have improved their economic condition. The micro-finance sector is set to push boundaries further with the development of micro-insurance schemes.

Developing countries could benefit by instituting similar comprehensive programmes, eventually involving the private sector and, where applicable, efficient NGOs. The United Nations could provide more robust technical assistance programmes in that direction. A crucial part of any future effort should be to strengthen the administrative structures of existing microcredit institutions proliferate. It is possible that economies of scale are important in micro lending. Dynamic leadership and paid management staff are probably crucial. The provision of information on available services to the poor is particularly essential. This is not at present the case, even in some advanced developing countries. Information on services for the poor is rarely made readily available.

Microcredit, however, is not a panacea. Realising its limitations, some organisations have already begun to develop new programmes and approaches to reach those presently excluded by microcredit programmes. In some areas, another way to increase the incomes of the poor and promote gender equity is to support labour movements where the poor, and poor women in particular, are involved in new economic sectors. Due to liberalised trade and rapid economic growth in many Asian economies, low-paying employment and piece-rate work in and around free trade zones is increasing rapidly, often with mixed consequences, especially for women. In many contexts, organising women to bargain for fair wages, benefits and working conditions is an appropriate intervention to fight poverty and promote gender equity.

Finally, it is important to acknowledge that microcredit may not be the appropriate intervention in all cases. If very few programs have actually helped the poorest of the poor, is this due to program failure, or because credit is not always the most appropriate approach to supporting the efforts of the poor? As one researcher noted, microfinance institutions’ apparent “failure” to reach the poor may not be a failure at all, “but rather, a realisation that microcredit is not the way out of poverty for all the poor.” (Zaman1997, 253).

Re-shaping corporate governance: A momentous responsibility for government

COPYRIGHT, interestingly, is often interpreted as a right to copy by Bangladeshis. Let me elaborate. Most Dhallywood movies are in effect Bollywood hits remade, with a mother or sister character added to indigenize the same. Scrape them a little, compare them a bit or even give them a cursory glance, and you would know instantly what I mean. This is not restricted to the world of cinema. In fact, most of our well researched, extensively debated and heavily studied’ reports of some of the high-power committees appointed by our government are not original works. Bluntly put, they are adopted, or adapted, from reports on the same subject already published in other countries, mostly the Western ones.

By now one can safely argue that there is a complete grammar, a well-defined code, for adopting such committee reports in Bangladesh. This practice of somehow willingly becoming a carbon copy or rubber stamp of others has been our Achilles’ heel since Independence. This has only been accentuated in the post-liberalisation era. No wonder, in the past fifteen years, for every report of the government that has gone on to shape and de-shape the economic policy formulations of Bangladesh one can readily trace its origins to an authentic source abroad. The capital adequacy norms, the competition law and the accounting standards belong to this genre.

The concept of ‘Corporate Governance’ is an innovative idea in the current business perspective which is the after-effect of de-shapes of economic policy. It is such an idea that has traditionally been associated with the “principal-agent” or “agency” problem. A “principal-agent” relationship arises when the person who owns a firm is not the same as the person who manages or controls it. Consequently, while we proceeded to ‘adopt’ the idea we failed to internally debate the various models that would be suitable to the Bangladesh business environment. Neither did we bother to observe the external debate world over on the various models of corporate governance.

Like most things in life, issues arising in the field of corporate governance boil down to a set of questions about relationships. For all the current debate about whether ‘corporate governance’ refers solely to matters affecting the structure and composition of boards of directors or a broader range of issues relating to the framework within which corporate policy is made and articulated, there is no escaping the fact that we are discussing a series of arrangements contrived by and for human beings. When it comes to the nature, form and functions of a corporation, nothing is given. Everything is a matter of choice. All is open to criticism and justification. As such, there is a critical ethical dimension to the debate – which, inevitably, forces us to consider the nature, quality and extent of the underlying relationships on which the corporation is founded.

Indeed, this is in line with the definition of corporate governance offered by Monks and Minow (1995, p. 1). In answering the question, “what is corporate governance?”, they reply; “It is the relationship among various participants in determining the direction and performance of corporations”. This may seem to be a fairly obvious point to labour. However, most of the discussion about corporate governance seems to ignore the implications of this simple observation. Specifically, advocates of various regimes for corporate governance are silent about an absolutely fundamental question; namely, “What (if anything) is the basic nature of humanity?”

Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation is directed, administered or controlled. It is a multi-faceted subject. An important theme of corporate governance is to ensure the accountability of certain individuals in an organisation through mechanisms that try to reduce or eliminate the principal-agent problem. A related but separate thread of discussions focuses on the impact of a corporate governance system in economic efficiency, with a strong emphasis shareholders’ welfare. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management, and the board of directors. Other stakeholders include labour (employees), customers, creditors (e.g., banks, bond holders), suppliers, regulators, and the community at large.

Nevertheless “corporate governance”, despite some feeble attempts from various quarters, remains an ambiguous and often misunderstood phrase. For quite some time it was confined only to corporate management. That is not so. It is something much broader, for it must include a fair, efficient and transparent administration and strive to meet certain well defined, written objectives. Corporate governance must go well beyond law. The quantity, quality and frequency of financial and managerial disclosure, the degree and extent to which the Board of Director (BOD) exercise their trustee responsibilities (largely an ethical commitment), and the commitment to run a transparent organisation — these should be constantly evolving due to interplay of many factors and the roles played by the more progressive/responsible elements within the corporate sector.

The role of corporate by and large has been understood in terms of a commercial business paradigm of thinking that focuses purely on economic parameters of success. As corporates have been regarded as institutions that cater to the market demand by providing products and services, and have the onus for creating wealth and jobs, their market position has traditionally been a function of financial performance and profitability. However, over the past few years, as a consequence of rising globalization and pressing ecological issues, the perception of the role of corporate in the broader societal context within which it operates, has been altered. But legitimacy is the thing which comes when Corporate Governance is discussed. To talk of education (as opposed to indoctrination) is to allow room for consideration of the interests of those being educated. Thus, in this environment, there will be a legitimate expectation that adherence to best practice in corporate governance will be of benefit to each of the parties bound into the relevant relationships.

These benefits may be of two types. Some will be ‘intrinsic’ benefits – such as when things are done for their own sake. These might include reforms in relations between stakeholders based on respect for the inherent dignity of persons. For example, board functions designed to ensure that accounts are ‘true and fair’ (compelling concepts despite their official demise), would just as likely be based on a belief that lying and deceit are an affront to the dignity of persons, as a desire to ensure technical accuracy as a way of securing market approval or avoiding punishment.

Then there are ‘extrinsic’ benefits — goods that flow from an action and which are external to the deed. For example, returning a lost wallet in order to secure a financial reward is to act in order to receive an extrinsic benefit. As indicated above, a decision to determine the quality of annual accounts according to the likelihood of earning praise from the market or regulator would be to act in the expectation of extrinsic benefits. In such circumstances, all manner of wrongs can be committed by otherwise decent people who have suspended their judgments in deference to the authorities.

Today, about 300 multinationals control 25% of the world’s assets. Bangladeshi companies currently comprise only a fraction of this number. However, with our economy coming of age, more and more of them will lay claim to this elite list. While this is truly a matter of great pride, we must remember that there rests an equally momentous responsibility on us to give back to the society that has nurtured our growth. Today, most companies contribute to society by means of well-defined corporate citizenship initiatives executed by their not-for-profit trusts and foundations. However, I believe it is important for corporations to look beyond charity and redefine the act of ‘giving back’. Corporations must look at cultivating and encouraging social entrepreneurship in society with the same degree of focus and energy that keeps profitable businesses running. What are we to make of this discussion? As a first point, it should be noted that it is extremely unlikely that any explicit view of human nature is informing the process of developing policies that provide the framework within which corporate governance occurs.

Such a view persists — even in circumstances where the initiative has been launched with the best and most positive of intentions. Turning around such perceptions is a major challenge, not just for companies but also for the whole community. We cannot afford to have developments, designed to foster best practice, being labeled in predominantly negative terms.

This is no more so than in the field of ethics. The grounds for serious concern already lie in the frequency with which the topic of ‘ethics’ is linked to programmes of fraud prevention and control. While it is true that a healthy, ethical culture will reduce the incidence of fraud and also lower the costs of compliance, it is a grave error to think that this necessitates the type of specific link that is currently in vogue in all too many organisations.

A proper concern about ethics is of importance for far more pressing reasons. Not least of these is the fact that a decision to include the ethical dimension, as an explicit element in the daily management environment, is a commitment to ensure that the organisation is equipped to handle new issues arising in a rapidly changing world. How might this be done? One suggestion is to amend the Corporations Law so that courts can take into account the extent to which corporations have instituted best practice in corporate governance (in its broad construction) when sentencing those that have been found guilty of an offence. Companies are still held accountable for their actions. However, the Govt. recognises that even, with the best intentions, things can go wrong. In these cases due weight is given to the effort made by the corporation. As such, the community sees the responsibility is properly apportioned, while shareholders and other stakeholders with a financial interest in the company are ‘rewarded’ for their efforts aimed at preventing wrong-doing. Under such a scheme, bodies like the Securities & Exchange Commission (SEC), National Board of Revenue (NBR), Finance Ministry, Planning Commission and other respective regulatory bodies are responsible for monitoring and investigating breaches of the regulations and would continue to recommend prosecutions. Self-regulatory organisations would then be responsible for providing support services to companies inclined to engage in best practice in this area. The final leg of the tripod would be the auditing firms which would be required to conduct independent audits of each company’s framework for compliance. Unlike normal financial or risk audit, the necessary audit would have to take into account measures designed to strengthen the ethical culture of the organisation.

Those blessed with a sharp eye for an apparent contradiction may be ready to pounce on this latest turn in this argument. It could be objected that a legislative response, such as that proposed above, would reinforce a tendency for organisations to shape their behaviour in response to external stimuli. After all, is there much difference between engaging in compliant behaviour through fear of punishment and the alternative, of engaging in positive behaviour in hope of a reduced punishment – if something should go wrong? However, the force of the objection can be nullified by being clear about that which is to be specified as best practice in corporate governance. It should be stressed that participation in these arrangements would be entirely voluntary. Companies feeling sufficiently confident about the efficacy of their own programmes could choose not to be audited. This would generate a saving in expenditure but at the price of taking on extra risk if something should go wrong.

Govt. can take a legislative solution that is specifically designed to encourage a form of education such that companies will naturally come to avoid some or all of the excessive behaviour that occurs in lightly regulated markets when largely populated by selfish egoists. Should the government consider adopting such a recommendation, it would be combining a concern for the ethics of the market place with that of promoting economic hygiene. As in public health campaigns, prevention would be better than cure. Needless to say, a great number of practical souls will be wondering about the detail of a programme designed to deliver the kind of results that I envisage. Those of a more skeptical bent may even doubt that such a programme can be devised.

The thing needed in today’s conditions is an organisation that can efficiently and effectively govern itself with a fair measure of self-regulation in which individuals take personal responsibility for applying the corporation’s ‘ethical compass’. This then allows flexible responses to changing conditions – but with well-defined cultural boundaries based on a clearly articulated ethical framework that is consistently applied across every part of the organisation. Beyond this, it is highly undesirable that an ethical culture be built on negative sentiment – such as the need to have a defense should the issue of criminal responsibility ever arise. The thing needed is a positive commitment to a set of core values and principles that help the organisation to answer the questions, “Who are we? What do we stand for?”

Unfortunately, the task of creating such a culture is not a matter of applying a ‘quick fix’. However, there is no mystery to be found in the process for developing a robust ethical environment in corporations. Indeed, there is a growing range of people able to offer practical assistance based on extensive experience. Of course, it is possible to motivate people with ‘fear of the lash’. However, it is only unhealthy cultures that tend to emerge from such conditions. The real prize is to be had by those who offer the promise of a positive workplace in which people can make meaning as they pursue that part of their life based around work.

Yet, this idea of corporate governance was celebrated as the most original idea in our reforms process by finance professionals, chartered accountants and the company secretaries. In the process we never debated it origins, potency or efficacy in the Bangladeshi context. Sadly, the very idea was marketed as ‘professional opportunities’ by various professional bodies. It would thus be difficult even to point out three genuine differences between the committee report that went on to prescribe the code for corporate governance in Bangladesh and the original report on corporate governance in the United States (the Cadbury Report).

Branding is for the brand

The term “Brand” is a hot topic in the present-day business world, and the entrepreneurs are introducing it following the footsteps of organisations those have already been successful at it. But how do we define a brand, why is it so important, and how to implement it?

Just think of Rickshaw or Shutli Kabab (a food item containing boiled beef or mutton) or Cox’s Bazar. If you hear these three particular names and then combine these three names, you find – Bangladesh. This is called branding or simply brand. Rickshaw, Shutli Kabab and Cox’s Bazar – these are familiar with us, but when you ask any outsider, he may recall only one name – Bangladesh. Think about the correlation – three individual brands create an identity which is once again a brand. From advertising gurus touting the importance of establishing a powerful and consistent brand image to the search engine optimisation (SEO) gods educating the masses about how branding can affect their SEO campaign , it is clear that branding carries more weight than ever before.

Some people think brand is a logo, a company colour, consumer advertising or promotion. It is all of those things, but the overarching question is: why is branding or why is branding important or why do the consumers look for brands?

Branding is what occurs when you make a heartfelt connection with your customer. The brand simplifies the ability to distinguish products from amongst a wide range of offerings. In a crowded marketplace it gets more and more difficult to differentiate the products or services offered. The brand allows a positive demarcation of the competitors’ offerings. A strong brand also allows the transfer of the brand to new products or services. This allows organisations to offer new services and products – an opportunity for increased revenues. An organisation having a strong brand is better protected from crisis and from the impact of competitors. In times of trouble and crisis they also provide a certain bonus amongst customers. So mistakes and market fluctuations do not have much impact on sales for organisations with a strong brand. A strong brand enables an organisation to build customer loyalty as they trust the brand and its quality. This is the phenomenon of the brand ‘religion’ where the value of the brand becomes so high in the mind of the consumer that he will always stay loyal to it, regardless of fluctuating results or momentary crisis. Consumers are prepared to pay a higher price for products and services offered as a brand. Indeed, a strong brand presents a proof of competence for the customers. It suggests quality and bestows image and prestige to its buyers.

The most discerning businesses with the biggest return of income are those which recognise branding as invaluable and choose to spend a large proportion of their budget on not just initial, but ongoing branding. For those unaware technically, branding is simply the mix of symbols, logos, names, keywords and designs that a product makes use of to differentiate its worth over another. However, worthwhile branding is not as straightforward as this notion infers and in-house branding, to be successful, takes copious amounts of research, money and expertise to get it right. For many, ‘branding’ is just one method of distinguishing one product from another with the same purpose and branding is seen as a simple, necessary omnipresent aspect of advertising.

Branding at times may be a sweet success or a bitter experience. In 1985, the Coca-Cola Company made one of the most famous brand blunders in history. Arch-rival Pepsi was gaining market share. Pepsi had positioned itself as the “young” brand and proclaimed it the best tasting cola. Meanwhile, Coke’s market share had dwindled to an all-time low. Coke needed to take action. In blind taste tests, a sweeter version of the company’s flagship drink actually outperformed Coke and Pepsi. In a spasm of logic, the world’s number one brand rolled out the reformulated New Coke. What the company did not understand, of course, was that Coke was not about taste at all. In fact, the brand is built on people’s emotional attachment to something iconic and eternal. In the minds of loyal customers, “New” Coke was no longer Coke at all. Instead, it had become something unauthentic, not “The Real Thing” of their childhood. New Coke was such a colossal failure that in less than three months it was yanked from shelves and replaced with the reassuring familiar taste of Coke Classic.

Not every brand is a success. Some simply grow old and tired. Others collapse from moral decay. And many brands never achieve success because they can not compete in a crowded marketplace.

A clear brand determines all future marketing activities. Brand management as a management task can be practically defined as finding strategies to build and to cultivate a brand in order to achieve competitive advantages. A vibrant brand determines marketing activities and, therefore, represents an important instrument to influence and control the market. Brand management, as an organisation task, can be practically defined as finding the right strategies to build and cultivate a brand to achieve competitive advantages. The main objective in brand management is to achieve a strong position within the mindset of customers and generate confidence. A first impression can be the make-or-break moment. When customers think about buying, they want your company to be at the top of their list and be a part of their solution.

On the question of brand ownership, companies should make their employees like living brand ambassadors. If they are enthusiastic about the brand, the consumers will be, too. But if the employees are not satisfied with the company where they are working, how will the product or the service create strong position in the minds of the consumers. Brand awareness by employees is essential to establishing a strong brand image. With the ever-increasing importance of mobile and social media, it is essential for the employees to have a concise idea of the brand’s message to customers. If the brand image is not made consistent across all mediums, the company risks service failure and the loss of potential clients.

Nothing runs on automatic for too long. That is why the world’s great brands – Nike, Apple, Harley Davidson, Dyson, and Facebook, to name a few – went through a process of “reinventing” their brands. What they really were doing was refuelling their “lost” drive – their misdirected purpose, and reclaiming ownership of what had been theirs to begin with. Keeping a brand alive involves a consistent and continuous assessment of the marketplace – the same type of assessment that was done when any enterprise first came into existence.

In order to make your company stronger and more valuable, do not just pay lip service to your brand, become a brand ambassador, and over the time you and your company will be the company that you envisioned when you first initiated brand development. Entrepreneurs must believe that branding is for brand. We are living in an era when products are struggling themselves, or, in other words, the marketing executives are struggling with the products to position these as a brand in the market. But it is the consumers who make strong brand value of a product, or just throw it away from the market. In fact, it is the company executives who are liable for the failure of brand value positioning.