Green or eco-friendly products are products friendly to the environment and have a very little or nil impact on the environment. In the last few decades, the stricter rules and regulation and global pressure to mitigate and decrease the carbon emissions all over has encouraged the corporate to look into the issue of depleting natural resources and environmental diversity. These days, Green has become a password for companies to promote their products and services in the market. The study shows the consumers' perception about green or eco labelled products and their buying behaviour trends according to the availability or capability of the consumers. Obviously, an ethical business operation, production, and marketing of green products pursue a consumer to change his/ her buying decision and their perception about the products. Corporate may see this as an opportunity to enhance their brand value and make a competitive edge over their competitors. The respondents say about the gaps in innovation, research and development practices of government and corporate and how they eyewash consumers by the name of green and sustainable products/ services, especially in the developing and underdeveloped economies.
3. Business
Innovations
Dr. Ajit Dhar Dubey
Assistant Professor, Department of MBA,
The Oxford College of Engineering, Bangalore
RIP Research India Publications
B-2/84, Ground Floor, Rohini Sector-16, Delhi-110089, INDIA
5. Smriti Zubin Irani
Minister Human
Resource Development
Government of India
Date: 26/05/2015
Message
Innovation encompasses change, novelty, utility, differentiation, quality and
dynamism. It provides strategic sophistication, refreshing look on issues,
excellence in performance and better opportunities for standard and quality of
life.
Management Innovations not only reflect the emerging trends in the society and
environment but they provide guidance, meaning and newer directions too in the
various fields of technology, knowledge, culture, economy and society.
It gives me immense pleasure to see that this work on ‘Management Innovations’
is going to enthrall the scholars as well as practitioners by focusing new light on
different aspects of business and institutional management. It will also explore
the newer prospects and developments in management.
I express my sincere hope that this book will be successful in contributing to the
field as indicated above. I do congratulate the contributors and also its editor Dr.
Ajeet Dhar Dubey for the painstaking effort in bringing this volume to the fore.
Smriti Zubin Irani
6.
7. Editor-In-Chief
Dr. Ajit Dhar Dubey
Editorial Board
Prof. R.P. Singh University of Gorakhpur, India
Prof. Meena Sharma Dr. D. Y. Patil Vidyapeeth, Pune
Prof. Mahesh Gandhi University of Chicago, USA
Prof. Kamlesh Mehta National University, California
Prof. Gabrielle Adams London Business School, London
Prof. Patrick Barwise Harvard Business School, University of Harvard
Prof. Mintzberg Stanford University
Prof. Torrington University of California
Prof. Faulkner D University of Michigan
Prof. Gabriel Ogunmokun University of Southern Queensland, Australia
Prof. Shanthi Gopalakrishnan NJIT School of Management, USA
Prof. Rashid Deasi Curtin University, Australia
Prof. H.S. Kehal University of Western Sydney, Australia
Prof. Martin Reynolde Anglia Ruskin University, UK
Prof. Graham Curtis Anglia Ruskin University, UK
Prof. Maktoba Omar Napier University Business School, Scotland
Prof. Peter Cunningham Nelson Mandela Metropolitan University, South Africa
Prof. Sam N. Basu California State University, USA
Prof. Sonny Nwankwo University of East London, UK
Prof. Roubin T D Juwaheer University of Mauritius, Mauritius
8.
9. Acknowledgement
It gives me immense pleasure to express my deepest sense of gratitude and
heartiest thanks to Prof. R.P. Singh, & President, Department of Business
Administration and Professor, Department of Commerce, DDU Gorakhpur
University, Gorakhpur, Prof. Kamlesh Mehta, School of Business &
Management, National University, California, Prof. Gabrielle Adams, London
Business School, London, Prof. Patrick Barwise, Harvard Business School,
University of Harvard, Prof. Mintzberg, Stanford University, Prof. Torrington,
University of California and Prof. Faulkner D, University of Michigan, for their
invaluable guidance, constant encouragement and moral support for my edited
volume titled Business Innovations. In fact, without their help the present work
would never been accomplished in this form.
I am also grateful to my Seniors, Colleagues and Friends for being a continuous
motivator during editing of this book.
I wish to acknowledge my indebtedness to members of my family, specially my
grandmother Smt. Vidyawati Devi, grandfather Sri. Rama Nand Dhar Dubey,
mother Smt. Urmila Devi, father Sri. Ashok Dhar Dubey, Uncle Sri.Virendra
Dhar Dubey and Sri. Sangam Dhar Dubey who provided me facilities and
above all an affectionate environment to complete my work.
And above all I am immensely thankful to the Almighty.
Dr. Ajit Dhar Dubey
Editor-In-Chief
10.
11. Preface
The fast changing, volatile and dynamic business landscape is creating a new set
of environment for the companies and forcing the practitioners and researchers to
develop new insights to adopt the changes at a fast pace than earlier. This book is
an attempt to cover major aspects of Business Innovations.
This current book titled Business Innovations discusses, in its twenty articles, the
various emerging trends in Management and Commerce.
All the chapters contained in this book are application oriented and therefore will
provide useful guidance to the practitioners as much as they will do to
researchers.
Dr. Ajit Dhar Dubey
Editor-In-Chief
12.
13. Contents
Chapter No./Title/Authors Page
No.
Chapter 1
ORGANIZATIONAL INNOVATION IN THE COOPERATIVE
SOCIETIES OF FISH PRODUCTION CASE OF FISH PRODUCTION
COOPERATIVE SOCIETY "THE PATOLE"
1
José G. Vargas-Hernández
Chapter 2
INNOVATIONCAPACITYAS A FACTOR THAT AFFECTS THE
COMPETITIVENESS OF SOFTWARE INDUSTRY JALISCO
13
José G. Vargas-Hernández
Chapter 3
KNOWLEDGE MANAGEMENT AND ORGANIZATIONAL
PERFORMANCE IN PROFESSIONAL SERVICES FIRMS:
DEVELOPING A THEORETICALLY GROUNDED MODEL FOR
EMPIRICAL INVESTIGATION IN LAW FIRMS
37
Bhavit Kumar Tripathi
Chapter 4
CONSUMER ACCEPTANCE OF MOBILE PAYMENTS IN INDIA:
AN EXPLORATORY STUDY
43
Bhavit Kumar Tripathi
Chapter 5
AN ANALYSIS OF FINANCIAL INTEGRATION: NOW AND THEN 61
Debesh Bhowmik
Chapter 6
GREEN MARKETING: STRATEGIC STEP TOWARDS BUSINESS
EXCELLENCE
79
Bhavesh Jha
Chapter 7
IN SEARCH OF THE GREENER ATTITUDE: A PERCEPTUAL
STUDY ON ECO-FRIENDLY PRODUCTS
91
Dr. Priyanka Pegu Narah
14. Chapter No./Title/Authors Page
No.
Chapter 8
REFORMS IN INDIAN BANKING SECTOR: A BRIEF VIEW 105
M. Madegowda and Mr. Govindaraju N.S.
Chapter 9
THE IMPACT OF 5S QUALITY POLICIES AND PERFORMANCE IN
TEXTILE SPINNING INDUSTRIES
115
Dhesinghraja.J and Sendhil kumar.M
Chapter 10
THE NEW ECONOMIC GEOGRAPHY SYNTHESIS: AN INSIGHT
INTO THE INFORMAL SPATIAL CLUSTERS
127
Sri Sukanta Saha
Chapter 11
A STUDY ON FEMALE ATTRITION IN THE PRIVATE SECTOR
ORGANIZATIONS
135
Dr. Shruti Tripathi, Dr. Hiranmoy Roy and Dr. Arvind Kumar Jain
Chapter 12
MODELLING MOBILE PAYMENT CONTINUANCE USAGE 147
Mr. Viswanatha Reddy P, Dr. Padmavathy C and Ms. M Swapana
Chapter 13
ECONOMIC DEVELOPMENT AND STRUCTURAL
TRANSFORMATION IN INDIA: AN ECONOMETRIC
INVESTIGATION
157
Kalpana Sahoo
Chapter 14
OPTIMIZING INDUSTRIAL WASTE AS INDUSTRIAL RESOURCE
INVENTORY TOWARDS CLEANER ENVIRONMENT
167
Dr. Ashok G. Matani
15. Chapter 1
ORGANIZATIONAL INNOVATION IN THE
COOPERATIVE SOCIETIES OF FISH
PRODUCTION CASE OF FISH PRODUCTION
COOPERATIVE SOCIETY "THE PATOLE"
José G. Vargas-Hernández
M.C. Julieta Elizabeth Salazar Echeagaray,
M.C. Teresa Irina Salazar Echeagaray
University Center for Economic and Managerial Sciences,
University of Guadalajara
Periférico Norte 799 Edif. G201-7, Núcleo Universitario Los Belenes
Zapopan, Jalisco, 45100 México
Abstract
This article exposes a theoretical-methodology focus on innovation and analysis
of the El Patole Cooperative Society S.C. de R.L. de C.V. In which it is remark
that innovation in the productive process is important for the company to be
more competitive in the market. In order to assist El Patole to become even more
efficient in the volatile commercial activity in which the company develop and
continue to offer their products.
Keywords: Cooperative Movement, Productivity, Cooperative Society,
Innovation
Introduction
The context of the XXI century is constantly changing. Companies must adapt
not only to the quality demand from their customers but also to government
regulations and the implementation of more efficient ways of their products or
processes. There is an important sector for the Mexican economy and is fishing,
the main entities engaged in this sector are cooperatives. These organizations are
composed of groups of people who develop activities in order to benefit
themselves and society. Such is the case of the Cooperative Fish Production "The
Patole", Civil Society (S.C.) of Limited responsibility (R.L.) of Variable Capital
(C.V.) This company has worked for over thirty years in the market. Its main
product is the white shrimp. The cooperative members of The Patole are aware
that to be more competitive and efficient required implementing innovative
production processes. Therefore they have decided to change a system of
16. 2 Business Innovations
fisheries extend to one semi-intensive so as to be meet the above. The Patole
produce high quality shrimp and want to continue offering its products to market
any longer for that reason continuous dynamics to adapt to market changes and
in this case improve its production system.
Background
Rural families living in rural Piaxtla de Abajo (Lower Piaxtla) in the late 1970s
were facing a serious problem because the population increased and could not
survive in a dignified manner. Therefore the Cooperative Fish Production "The
Patole" SC de RL of CV was founded.The objective of the cooperative was to be
a source of employment for parents of rural families. On December 17, 1978
began operating the Patole and June 27, 1980 obtained its registration with the
relevant authorities.
The cooperative is authorized and has the permissions to catch oysters,
and shrimp flake products in the protected area known as the Plateau Cacaxtla.
The proper performance of the cooperative's Patole is supervised by the relevant
authorities that are the National Commission of Aquaculture and Fisheries
(CONAPESCA), the Secretariat of Environment and Natural Resources
(SEMARNAT) and the Secretariat of Agriculture, Livestock, Rural
Development, Fisheries and Food (SAGARPA).
The Patole is authorized to work in the estuarine system composed of
four estuaries called The Dead (Los Muertos), The Tazajal, Banderillas and The
Patole. The Tazajal is the most important because it has a direct communication
with the Pacific Ocean throughout the year and their geographical location which
is within the boundaries of the municipalities of San Ignacio Sinaloa and
Mazatlan. The Tazajal has an area of three hundred acres in rainy and fifty acres
at low tide. The four estuaries are called the fishing camp "Lomas del Mar
Piaxtla" San Ignacio, Sinaloa and where the partners met and work in any
cooperative working today.
The so-called Lomas del Mar Piaxtla fishing camp is located within the
boundaries of the municipalities of San Ignacio and Mazatlan, Sinaloa. To reach
the town of Mazatlan fifteenth international road is used because it is at thirty
miles from Mazatlan. The road that connects the town has thirty-six miles of
paved road and twelve kilometers of dirt. If you come from the state capital
Culiacan, it can transits the Maxipista, Lomas del Mar Piaxtla is at ten kilometers
of unpaved Culiacan and Mazatlan twenty kilometers by road from Maxipista
Culiacan to Mazatlan. The entity called The Patole presents an economic and
social importance to provide employment for workers benefits to the families of
these and the environment of the state of Sinaloa.
Problem delimitation
Consumers of this century have shown a trend towards greater demands on their
goods or services. Innovation continuously appears as synonymous with
17. Business Innovations 3
progress, technological development, job creation, improvement of living
conditions (ConfederaciónEmpresarial de Madrid de Madrid, 2003; Business
Confederation of Madrid in Madrid, 2003). The economic system in Mexico is
divided into sectors as exposed by Anda (1996: 157) the primary sector has been
assigned agriculture, forestry and fishing activities. The secondary sector
activities develop the mining and processing industries, and the tertiary sector of
services. The cooperatives are located in the primary sector hence its importance
in the Mexican economy. In the fisheries sector, the main producer of shrimp is
cooperative societies. According to the General Law of Cooperatives, a
cooperative is a form of social organization composed of individuals based on
common interests and the principles of solidarity, self-help and mutual aid, in
order to satisfy individual and collective needs, through carrying out economic
activities of production, distribution and consumption of goods and services
(Cámara de Diputados, 2009: 1. House of Representatives, 2009: 1). The
cooperative movement is important because it provides seafood to consumers
and likewise, provides employment for families who are engaged in the work.
Theoretical Background
In Mexico the business environment is highly competitive. As such may be
considered innovation as an element that helps to counteract the problems of
business environment. Innovation contributes to improve the activities of
companies (Maqueda, 2010). Companies that do not modernize their products or
services tend to be overcome by their competence and slowly lose their positions
in the fast changing and even more with existing customers who are very
demanding. There are two classifications of factors that influence the
implementation of innovation in a company, internal and external factors. The
first are when top management cooperates with departments and have highly
trained and motivated staff. Alike, the company has material and financial
resources protected by the legal framework attached to the staff working who
achieves the adequacy and adaptation of the organization to the environmental
change. External factors are the programs conducted by organizations supporting
organizations to implement innovation in their products or processes (Martinez,
2006).
Innovation in business management methods is the change that provides
access to the use and knowledge at its best resource it can have the company. It
serves of great support and empowerment to current organizational innovation in
organizational, commercial and financial area. Product innovation is when the
market is offered an improved or new product in order to improve the image and
quality of the counterparty to customers.
Process innovation is implemented in sectors such as breweries,
chemical and glass manufacturing in order to increase market efficiency
(Harvard, 2004). The innovation process is done by implementing a new way of
working in order to reduce costs and increase efficiency in the company (Lopez
18. 4 Business Innovations
et al., 2007). This innovation changes the way to perform the tasks in an
organization so that the organization is always in continuous adaptation to
improve and become more competitive in its sector (Lopez, 2014). The
characteristics of the Cooperative Society The Patole the force require the use of
this innovation.
Innovation is needed in business because it is a process of adaptation to
the changing business environment. Process innovation was implemented in the
Cooperative Society of Fish Production The Patole because it realizes
improvement in its production processes of shrimp aquaculture. This article
explains how the process and organizational innovation has benefited the
Cooperative Fish Production The Patole to remain competitive in the market of
crustaceans.
Contextual framework: Fish Production Cooperative Society the Patole, SC
of RL de C.V.
Companies principally engaged in the fishing sector are cooperative societies for
that reason they are an important part of the economy in Mexico. According to
the yearbook of The State of World Fisheries and Aquaculture 2014 the Food
and Agriculture Organization of the United Nations (FAO) reports that Mexico is
at number 16 of producing countries of marine species 1 467.790 tons in the
2012. It can be seen the global importance of fisheries to the United States of
Mexico. Also, it affects the national and state economy. The Cooperative Society
the Patole is this important sector and this fact lays its importance as a company.
At the beginning of the XXI Century on 27 November 2000 public a
decree declaring protected natural area wildlife in the region known as the
Plateau Cacaxtla. This region is located between the towns of San Ignacio and
Mazatlan in Sinaloa state. Cacaxtla Plateau consists of 50 hectares 862-31-25 in
this space the Lomas del Mar (Hills of the sea) Piaxtla fishing camp is located.
This decree influenced in which the cooperative had to modify its objects and
adapt to new environmental problems.
The specific objectives of Patole are:
A. Extending its facilities to conserve its products and offer the best quality
it can provide to its customers.
B. Increase the production efficiently.
In line with the objectives the mission of producing shrimp using
aquaculture of excellent quality for national, local and international markets,
seeking higher rates of return and better development of the resources of the
cooperative, appears particularly the human resources emphasizing the care of
natural resources sustainably. According to the cooperative mission, it presents a
vision of a developer of a productive activity in social and economic areas, with
19. Business Innovations 5
a competitive and efficient administration and proper management of resources
held by the Patole.
The objectives, vision and mission of Patole are in line with current
market requirements in terms of quality and optimal development of services or
goods. The cooperative has worked for over thirty years and plans to continue in
its efforts to offer its products with the best quality in the market for as long as
possible. Therefore, it has the need to innovate in its organizational and
production processes to be more efficient. The cooperative members have
understood the importance of implementing innovation in the production
processes in order to be more competitive in the market.
Since it began operating the Cooperative Fish Production "The Patole",
SC R. L. de C.V., the partners have committed their production of white shrimp
caring its humanresources, fishing, materials and environmental resources
according to circumstances that have lived. In the early 1980s it was awarded the
Patole financial support to continue its work. With permission of the federal
government, there were built“tapos” and control works of levels. Also, it was
provided technical advice and assistance to the Government of the State of
Sinaloa and to the Ministry of Environment and Natural Resources
(SEMARNAT). These works were completed on the year 1987.
After the elapsed time ISA informed to the cooperative society that had
not paid its entire agreement and unfortunately the plants dried. Yet the Patole
knowing the importance of environmental stewardship proceeded to transplant
button mangrove on the shores of its main estuary the Tazajal but had no
professional advice to do such work. With the installation of the pump and sump
under construction Patole had to register as a hazardous waste generating entity
in the general form (SEMARNAT-07-004) and the number of Environmental
Registry (PPPTX2501611) on 14 June 2005.
Once a week, the cooperative sent the variations of hydrological
parameters in 25DSE-00285/1101 and 25DSE-00284/1101 documents. To
support the care of marine turtle it was instituted a monitoring committee as
responsible for protecting and to predate the species. Continuous tours are dome
in the area when a turtle comes up to make the nest and place it elsewhere,
keeping track. It is cared for new nests and returns when hatching them. In recent
years, there have seen the birth of the species in captivity, then children living in
the village take them to the sea bear.
The efforts earned a result and the Environmental Impact Statement was
accepted on March 12, 2007. It proceeded to the execution of works and
activities that are explained below. The project consists of maintenance,
construction and operation of the project. This project was developed in four
stages of the regularization project, site preparation, construction, operation and
maintenance stage. The regulation of the project is when the project is presented
and meets the requirements of SEMARNAT.
20. 6 Business Innovations
Table No.1 Steps for building, operation and maintenance of the project
Environmental Impact Statement.
Step Activity
Regularization Plan Regularization SEMARNAT
Site layout Cleanliness property
Employment generation
Generation offal
Building Urbanization
Rehabilitation ponds
Rehabilitation gatehouse
Step operation and maintenance Employment generation
Solid waste generation
Source: Official Records of the SCPP The Patole. Job No. SG / 145 / 2.1.1 /
0117/07. Operative Rehabilitation Structure and Operation of the Farm "The
Patole" for Shrimp Farming Federal Delegation in Sinaloa, Subdelegation
Management for Environmental Protection and Natural Resources.
A. Disposal site.
1) Surveying. It consists of making the contour of the ground for a better
distribution of the required works.
2) Introduction of required equipment. Introducing necessary machinery for
cleaning, stroke and farm leveling is performed.
3) Cleaning and removing weeds. Proceeding to cut, uproot and remove
grass and weeds within the site.
B. Building.
1) Introduction of equipment and materials. This step is the introduction of
materials, machinery and equipment required for the function used.
2) Rehabilitation of ponds. There are three ponds used by society in its
work on land rehabilitated.
3) Rehabilitation of camp and guard houses. Floors and stucco are repaired;
areas are: kitchen, sanitary latrines and dining.
4) Cold room. With a capacity of 65 cubic meters is completed with the
exception of thermal door to be acquired as soon as possible.
5) Spillway. Is used for the excess of rain water and thought it away
through the screen which prevents the exit of the shrimp toward the sea
missing the product.
6) Canal filling. It is responsible for supplying seawater quality for
pumping.
7) Living Area mouth. It consists of concrete five gates and the channel is
covered with concrete. It is critical to service the front of the batteries
21. Business Innovations 7
and build batteries for placing condoms, whose function is to filter the
numerous predators of the product.
8) Construction of pumping carcamo. It is needed to build a lift station to
pump 40 inches in diameter and 120 HP engine.
Source: Official Records of the SCPP The Patole. Record No. SG / 145 / 2.1.1 /
0117/07. Operative Rehabilitation Structure and Operation of the Farm "The
Patole" for Shrimp Farming Federal Delegation in Sinaloa, Sub delegation
Management for Environmental Protection and Natural Resources.
C. Operation and maintenance.
It is when extensive shrimp farming is done in ponds. It consists of the following
activities:
1) Water supply. The Pacific Ocean´s water flows through the pouring
mouth and into the estuary of Tazajalto be distributed between the ponds
where shrimp are located.
2) Acclimation. The implemented protocol is required by the Centre for
Aquaculture Health of the State of Sinaloa (CESASIN) and the ISA. It is
used the necessary equipment to maintain the required acclimation by the
product parameters such as: pH, salinity, temperature and dissolved
oxygen. This stage lasts about a week and a day, time during which the
larvae grow to obtain the required size. Once the stage concludes, the
surviving product is analyzed and emptied from the acclimation tank to
the ponds.
3) Seeding. It is proceed to fill the ponds with seawater, where is planted
the surviving larvae from the previous operations. The estimate of
survival is 80%.
4) Fatting. The Patole makes an extensive cultivation for those reason
larvae exploit the beneficial algae that exist in ponds. Once the correct
development of larvae is observed, they are provided the required
balanced feed your needs.
5) Replacement of water. The renewal of tidal water is supplied through
pouring the Tazajal´s estuary.
These points that were mentioned are very important for innovation of
the cooperative’s production process because it steps up from using an extensive
aquaculture system to a semi-intensive aquaculture system. Previously The
Patole used very little technology and in some cases that might harm the
ecosystem of the Plateau Cacaxtla. Therefore the partners in the cooperative
observed the need to implement the innovation of semi-intensive farming. In
addition, an economic benefit is received because society becomes more
productive.
On the extensive process, the partners had to attract shrimp larvae from
sea to introduce them at the mouth of the estuary system. This derived in a
22. 8 Business Innovations
problem of high mortality of larvae and the difficulty of relying completely on
the tides and whether banks had shrimp they could enter the estuary. Instead the
innovation to the current semi-intensive system The Patole purchases from a
producer shrimp larvae and proceeds to sow and to care for them until they
developed in anacceptable size and weight. The partners seek to develop shrimp
to the largest size and weight as possible to obtain a higher utility.
Method
The method used to analyze the results of the investigation is to review the
various authors on the theory of innovation. Also, the descriptive analytical
method for the cooperative society The Patole is made. This research collects
literature, laws, books, decrees and official documents submitted for
environmental protection in the same way the data provided by the National
Commission of Aquaculture and Fisheries (CONAPESCA) were used.
The partners forming the Fish Production Cooperative "The
Patole”provides the information required for this investigation. They have good
attitude, availability and desire that studies are conducted for the benefit of their
jobs and business. Similarly, they facilitate access to official documents of the
cooperative society such as the charter, minutes of meetings of members and the
reports that have been issued to the appropriate authority.
Analysis of results
The findings of the investigation are set out below. The objectives to be achieved
in the environmental context were regarding the implementation of activities and
work on the project that was implemented in accordance with the work program.
These results are shown in table 2 below.
23. Business Innovations 9
Table # 2 Compliance procedure for the construction, operation and
maintenance of the draft Environmental Impact Statement.
Step Activity Observations
Regularization
Project
Regularization
SEMARNAT
It was fulfilled according to the
stipulated time
Site preparation Cleaning of
property
It is fulfilled according to the stipulated
time
Employment
generation
It is fulfilled according to the stipulated
time
Waste
generation
It is fulfilled according to the stipulated
time
Construction Urbanization It is fulfilled according to the stipulated
time
Pond
Rehabilitation
According to the stipulated time was
fulfilled only 66.66%. The slope is due
to lack of funds. The commitment is to
comply subject to the extent that counts
on that resource.
Rehabilitation of
gatehouses
According to the stipulated time, it was
fulfilled only the 50%. The slope is due
to lack of funding. The commitment is to
comply subject to the extent that counts
on that resource.
Operation and
maintenance
step.
Employment
generation
It was fulfilled according to the
stipulated time
Solid waste
generation
It was fulfilled according to the
stipulated time
Source: Official Records of the SCPP The Patole. Job No. SG / 145 / 2.1.1 /
0117/07. Operative Rehabilitation Structure and Operation of the Farm "The
Patole" for Shrimp Farming Federal Delegation in Sinaloa, Sub delegation
Management for Environmental Protection and Natural Resources.
The rehabilitation of Camp and gatehouse was fulfilled at 100%. The
cold room was fulfilled by 100%. The spillway was fulfilled to 100%. The filling
channel fulfilled by 100% and kept in continuous dredging. The living mouth
area had compliancein 50% because it was not yet repaired the front of the
batteries and had placed due to the lack of economic resources. The Patole agree
to conclude as soon as possible. Building of the lift station wasfulfilled 100%.
The operation and maintenance of the work at all stages has a
compliance rate of 100%, which are water supply, acclimatization, planting, fat,
water exchange, monitoring of water quality was taken, biometric sampling,
24. 10 Business Innovations
harvesting, maintenance of facilities and maintenance of machinery and
equipment. As it can be observed there are few steps that could not meet the
Patole. All these steps are in order to innovate in the production process of the
cooperative to get a better product and be more competitive in the market.
Final thoughts and recommendations
Businesses in Mexico and the world are at a crossroads in order to stay in the
taste of their customers in very competitive markets. Therefore, The Cooperative
should be constantly implementing improvements and innovations in its products
or production processes. This fact is not only in order to obtain higher profits but
also to protect the environment so that the company is socially responsible and
protect the ecosystem in which it operates.Derived from this, the partners in the
Fish Production Cooperative "The Patole", SC of RL de C.V. agree on the
dynamics that must adapt to changes to continue providing itss to consumers.
They also support studies that benefit and help implement innovations in
production processes of the Patole. The fact of having gone from a form of
extended semi-intensive cultivation was a needed drastic change.
This fact was required by the issue of environmental protection and to
increase the productivity of the cooperative. In the form of extended cultivation,
product mortality tended to be higher due to the fact there was no certainty on
shrimp health because it was subtracted from the Pacific Ocean. However, in the
case of semi-intensive farming larvae developed by specialists are healthy
because they are constantly monitored. The Patole meets innovation in their
production processes and ecosystem protection; partners continue to work for
their company competitiveness and to maintain its market presence.
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(2014). La innovación continua en el éxito empresarial. San José,
Costa Rica. Editorial Universidad Estatal a Distancia (UNED).
López, Mielgo, Nuria, Montes, Peón, José, Manuel, Vázquez,
Ordás, Camilo José. (2007). Cómo gestionar la innovación en las
pymes. La Coruña, España. Editorial Netbiblo.
Maqueda, Lafuente, Francisco, Javier. (2010). Marketing,
innovación y nuevos negocios. Madrid. España. ESIC Editorial.
Martínez, Villaverde, Lorena. (2006). Gestión del cambio y la
innovación en la empresa. Vigo, Pontevedra, España. Editorial
Ideas propias.
Organización para la Cooperación y el Desarrollo Económicos
(OCDE) y Oficina Europea de Estadística (EUROSTAT), editores
(2005). Manual de Oslo, Guía para la Recogida e interpretación
de datos sobre innovación.Madrid, España. Editorial OCDE,
EUROSTAT, Grupo Tragsa.
Pavón, Morote, Julián, Hidalgo, Nuchera, Antonio. (1997).
Gestión e innovación: un enfoque estratégico. Madrid, España.
Editorial Pirámide.
Rodríguez, Devis, Julio, Mario. (2005). La dinámica de la
innovación tecnológica. Modelo HIPER 666. Bogotá, Colombia.
Editorial Universidad Nacional de Colombia.
26.
27. Chapter 2
INNOVATIONCAPACITYAS A FACTOR THAT
AFFECTS THE COMPETITIVENESS OF
SOFTWARE INDUSTRY JALISCO
José G. Vargas-Hernández
M.C. Julieta Elizabeth Salazar Echeagaray,
M.C. Teresa Irina Salazar Echeagaray
University Center for Economic and Managerial Sciences,
University of Guadalajara
Periférico Norte 799 Edif. G201-7, Núcleo Universitario Los Belenes
Zapopan, Jalisco, 45100 México
Abstract
The aimof this workis to identify andanalyze anindex to measureinnovation
capacityofenterprises in thesoftware industry ofJalisco, based on a survey
ofthecompanies in theSoftwareCenterof the State, as well as
evaluatingtheinfluence that hasthe capacity for innovationon competitiveness,
seeking empirical evidence toanswer thequestion. The mainhypothesis forthis
researchis the ability to innovateis a factor thatpositively affectsthe
performanceof companies inthe software industry, which is reflected inthe
competitiveness ofsector. Themethods usedin this researchare
three:innovativenessindex (ICI), Linear Regression
ModelwithOLSandSoftComputingusingevolutionary algorithms: FUZZYCESAR,
the latter something very newwhich puts us inthe forefront of knowledgein
methodsit isstill.
Keywords:Competitiveness, software industry, innovation.
Resumen
El objetivo de este trabajo esdeterminar y analizar un índice que permita medir la
capacidad de innovación de las empresas de la industria del software de Jalisco,
partiendo de una encuesta realizada a la empresas que componen el Centro de
Software del Estado, además de evaluar la influencia que la capacidad de
innovación tiene sobre su competitividad, buscando la evidencia empírica que
permita dar respuesta a la pregunta formulada. La principal hipótesis que guiará
esta investigación es la capacidad de innovar es un factor que incide
positivamente en el desempeño de las empresas en la industria del software, lo
28. 14 Business Innovations
cual se ve reflejado en la competitividad del sector. Los métodos usados en esta
investigación son tres: Índice de capacidad de innovación (ICI), Modelo de
Regresión Lineal con Mínimos Cuadrados Ordinarios y Soft Computing
aplicando algoritmos evolutivos: FUZZY CESAR, siendo esta última algo muy
nuevo que nos sitúa en la frontera del conocimiento en cuanto a métodos se trata.
Palabras clave:
Competitividad, industria del software, innovación.
Introduction
The economic outlook is forcing companies to rethink their business, because the
complexity of the environment is causing a progressive decline of many business
models considered valid until recently. In some sectors, innovation has become
an essential survival factor. However, still for some companies, especially
smaller ones, innovation is synonymous with complexity and ignorance, leading
to a sense that is exclusive to large companies. The ability to innovate is a
resource of a company like its financial, trade and productive capacities and
should be managed in the same manner with the same importance.
TheSoftware Industry inMexicois relatively smalland of littlecommercial
development, based mainly on the production ofcustom software, standardized
software adaptationto the needsof users.This lack ofdevelopment of
productionofbasicsoftware, systems operating systems and applications, is
expressed in the structureof national accountsofMexico, whichhas not a
sectionthat allowssociallyaccountthe magnitudeof domestic productionof
suchsoftware (Mochi, 2006).
Problem delimitation
The technological advancesthat have occurredin recentyears havegeneratedand
promotedmanyevents andseries of processes thatmany havedefined asa new
productiveindustrialrevolution (Dabat, 2002). TheseeventsmentionedMochi
(2006), are related tothe emergence of anewstageof capitalistproduction, whichis
characterized by theincreasing importanceof technological innovationand
knowledge as amajor factorin generatingvalue, a context of
economicglobalization.
In this context, this research aims to analyzethe competitiveness of
thesoftware industryof Jaliscodepending on thecapacity for innovation.It is
intended todeterminean index ofinnovation capacityto analyzeand discuss the
applicationof this indicatorto a sample of44 companiesof the State ofJaliscoas
partof the Software Center (2012). Moreover, this research is interested in
evaluatingwhether firmswith greater capacityto innovatehaveoutperformedthe
market, which is reflected inthe sector's competitiveness.In this scenario, the
information andcommunication technologies (ICTs) have become very
important.Thisis related tothe development andincreased useof
29. Business Innovations 15
multifunctionaltechnology:Software.This has generateda major industry, whose
keyfields aresoftware engineeringand informatic services (SIIS), which have a
complex structureand require a greatcapacity for innovation.
The software industryinMexicoandJaliscois going througha stageof
maturity, which manifests itself inan increasein recent years.In addition, to
thegeneration of activepublic policies thatareaimedat
encouragingentrepreneurshipand developmentof existing businesses, the
promotionof technology andinfrastructure (Secretaria de Economía, 2012).
AsMochi (2006) argues, opportunities and challengesposed to consolidatethe
software industry, make clear theneed to convene, in order to exploitthe
advantages offered bythis sector, for insertion intothe international economy, and
developmentof different sectorsof the national economy.
It is important toalso considerthat Jaliscobeingthe leading producer
ofembedded softwarein the country, then it can be said that, as noted by
theOECDtoMexico, is stillcompeting innicheswith low value added (OECD
2006), low innovation (Rodríguez 2010)and littleexpertise.Hence theissues that
this research intends toaddress, which part ofsome work andinternational sources
out of which it is possible todraw a number ofelementsto determine anindex to
measuretheinnovativeness ofa representative group ofthe software industryin
Jaliscoinorder to studythisas afactor affectingperformancecompanies in the
sector, reflected on competitiveness.
Research question
Does theability to innovateis afactor affectingthe performance ofcompanies in
thesoftware industryJalisco, making the sectorcompetitive?
Justification of research
Due to the increasing international competition and the integration of
technological advances, companies have had to adapt to technological changes in
order to compete in the market. Likewise, they require efficient and adequate
resources and therefore create capabilities as relevant to recognize the potential
of innovation and adapt to the needs of companies, allowing them to differentiate
themselves from their rivals and becoming more competitive. It is contradictory
that despite the importance and rapid growth of the software industry worldwide,
there is relatively little scholarship on the topic, although there is a lot of work
studying forms of competence, the dynamics of innovation among others, in
branches such as automotive, chemistry, computing, but few that do the same in
the industry (Mochi, 2006) software.
Research hypothesis
To define theassumptions on whichresearchwill be addressed, then
thevariablesare described.
30. 16 Business Innovations
A. Definition ofvariables
Independent variable (X0): X0=Ability to innovate
Dependent variable: (Y0): Y0=Competitiveness of thesoftware industryJalisco.
Table1: Overview ofresearch variables
VARIABLES DESCRIPTION INDICATORS
X0 Innovationcapacity X1: Innovation Capacity Index (ICI)
Y0 Competitiveness Y1: Sales
Source: Ownelaboration.
B. General hypothesis
H0: X0 Y0
H0: The ability to innovate is one factor that positively affects the
performance of companies in the software industry, which is reflected in the
sector's competitiveness.Whereas Innovation Capacity Index is composed of
three factors as described in Table 2 below:
Table 2: Factors of independent variable
VARIABL
ES
DESCRIPCIÓ
N
INDICADORES DIMENSIONES
X0 Innovationcapa
city
X1:InnovationCapacity
Index
XF1:Capacity
development
XF2: Product
innovation
XF3:Knowledgecircul
ation
Source: Own elaboration base on Yoguel y Boscherini (1996).
Three secondary hypotheses are also proposed:
C. Secondary hypotheses
H1:XF1 Y1
H2:XF2 Y1
H3:XF3 Y1
1) H1: The ability to innovate in terms of capacity positively affects sales.
31. Business Innovations 17
2) H2: The ability to innovate in terms of product innovation positively
affects sales.
3) H3: The ability to innovate in terms of knowledge circulation positively
affects sales.
Research objectives
Raisedin the directions described above, the objectives are described below.
A. Generalpurpose
To analyzethe competitiveness of thesoftware industryJaliscodepending on
theinnovativeness ofthe companiesthat comprise it.
Scope
Thisresearch is a descriptivetype, which intends to describethe behaviorof sales,
depending on theinnovativeness ofsoftware companiesJaliscoduring
thelastperiodfor which ithas been usedsecondary sources.
Research methods
A. Descriptionof the investigation
According tothe objectives, the methodologicalprocedure proposedis aimed
atdeterminingan index ofinnovation capacityto assess thesituation of the
sectortaking a sample of44 companies. Subsequently, it is analyzedas an
independentvariable ina modelthat seeks to finditsrelation to sales, using for
thisthree methods:
1) Innovation Capacity Index (ICI)
2) Regression econometric.
3) Fuzzy logic and evolutionary algorithms.
To determine the Index of Capacity for Innovation (ICI), factors
differentiating between those associated with the development of skills, the
innovative product and circulation of knowledge, some primary sources were
used by an instrument applied to 44 companies Software Center of Jalisco, see
Annex A.
B. Type of research
Following the methodology of Hernández, Fernández&Bapista (2003), there are
exploratory descriptive, correlational and explanatory studies.
This research is a descriptive with a quantitative approach because data
is collected or components on different indicators that measure the ability to
innovate and their impact on competitiveness and performance of companies that
make up the sector to be studied. To explain the behavior of the sector, it is
considered the sales of the last period. The descriptive research seeks to specify
properties, characteristics and important features of any phenomenon to be
32. 18 Business Innovations
analyzed (Hernandez et al., 2003, p. 119). Descriptive studies measure more
independently rather concepts or variables to which they relate and focus on
measure as accurately as possible (Hernandez et al, 2003).Also, the study has a
quantitative approach, since it is necessary to analyze the results and to use the
proposed methods.
C. Research design
Through research, it will be obtained the necessary and required information to
accept or reject the hypothesis. This research is non-experimental, transactional
and of a descriptive type. It is not experimental also because the
variablescannotbe manipulated and data gathering will be obtained from primary
sources. Since in a non-experimental study builds no situation but existing
situations are observed not intentionally provoked (Hernandez et al.,
2003).Descriptive transactional designs aim to investigate the incidence and
values that are manifested one or more variables within the quantitative
approach. The procedure is to measure or locate a group of people, objects,
situations, contexts, and phenomena in a variable or concept and provide a
description (Hernandez et al., 2003).
The methods to be used in this research are described.
a) Index innovativeness
To test the hypotheses, it will apply the proposed Yoguel and Boscherini (1996)
model, with a total of three factors of the innovation capacity index:
a. Capacity building
b. Innovative product
c. Circulation of knowledge
Getting information through a detailed survey of enterprises of Software
Center and a wide range of internal and external factorshas contributed to the
research.
b) Multiple regression analysis
The technique of multiple regression analysis is more suitable for a ceteris
paribus analysis because it allows explicit control many other factors that affect
the dependent variable. This is important both to test economic theories as to
evaluate the effects of a policy when it is necessary to rely on non-experimental
data. Because multiple regression models can accept several explanatory
variables that may be correlated, can be expected to infer causality in cases
where the simple regression could not give good results (Wooldridge, 2009).
33. Business Innovations 19
Hypothetical model
With the assumptions and the revised theory it was posed a hypothetical model to
be validated in this chapter. So it is important to consider the composition of the
variables under analysis that it was developed:
a. Dependent variable: Competitiveness
b. Independent variable: Innovation Capacity
The indicators of both variables are:
a. Competitiveness sales
b. Capacity for innovation: Innovation Capacity Index
It is very important to note that the Innovation Capacity Index is composed of
three factors:
a. Capacity building
b. Innovative product
c. Circulation of knowledge
Out of these factors, the following hypothetical model is developed,
where it can be seen graphically in Figure 1 the relationship between the
variables and hypotheses:
Figure1: Hyphoteticalmodelproposal
Source: Authors.
E. Operationalization of variables
Depending on the hypothetical model described, with the purpose to meet the
objectives and contrasting hypotheses, then the operationalization of variables,
34. 20 Business Innovations
which is the starting point to use the methodology proposed research, is
presented in table 3:
1) Independent variable:The variableusedin this study asdescribedin
Table 3is theabilitytoinnovatein the sector, a variable that ismeasured by
an indexof innovative capacity, which depends on threefactors (Capacity
Development, Product Innovationand CirculationofKnowledge)
thatwereoperationalizedas shownin Table 3. Data obtained fromthe
surveyapplied to the sample, basicallycoveringeight questionsto be
describedlater, all thisforthe rate ofinnovation capacity of thesector.
Table 3: Operationalizing variables
VARIABL
ES
DESCRIPTI
ON
INDICAT
ORS
DIMENSIONS OPERACIONALIzZ
ATION
X0 Abilitytoinno
vate
X1:
Innovation
Capacity
Index (ICI)
XF1:Capacitybuil
ding
Capacity
Quality
Linking
Development
XF2:Productinnov
ation
Productdevelopment
Modifications
Tecnologicalconversion
XF3:Circulation
of knowledge
Sharing Training
Y0 Competitiven
ess
Y1: Sales Y1: Sales Annual sales
Source: Authors.
2) Dependent variable: The data obtained in the survey competitiveness
applied to the sample basically encompass a question that relates to the
sales recorded last period. This indicator of competitiveness and
performance of the sector is key to analyze the influence of the Capacity
to Innovate on them.
Methodological instrument
The methodological instrument used for this research is a survey that is part of
the research project of Francisco Raul Leonel de Cervantes Orozco of the Master
of Business and Economic Studies through support from Institute Jalisciencieof
Information Technology (IJALTI) in collaboration with the IDIT SMEs. It was
applied during the first half of 2012 to 44 of 52 companies that make up the
Software Center of the central state of Jalisco.
35. Business Innovations 21
The survey consists of ten sections:
1) Data respondent
2) Company Information
3) Information of company founder
4) Type of business
5) Park services where it is located
6) The company in the Cluster Software
7) Learning Activities Company
8) Innovation
9) Quality
10) Interactions with other local associations
It is therefore very important to clarify that for purposes of this research,
it is based on this instrument and the information gathered. Thus, it could be said
that it is working with secondary sources.
1) Innovation capacity index
As part of the research design and to fulfill the objectives and validate the
hypotheses, the first section of the methodology is to estimate an index for
obtaining a proxy value of the ability to innovate. The applied model was
proposed by YoguelG, et al. (1996). This model was described in the theoretical
framework in detail. To apply the model, it was revised and selected information
obtained in the database that was used for research. The questions used to
measure the variables of the factors that make up the index of ability to innovate,
are described below and will have the same assigned weights proposed by
Yoguel G, et al. (1996).
Table 4: Weights assigned to factors that make ICI
No.
questio
n
Question Variable Weigh
t
SKILLS DEVELOPMENT 0.77
23 Evaluatethe importanceofgovernmental
andpublic factors forbusiness locationin
thecluster[training and research
programs]
Training 0.25
34 Do you haveanyquality certification? Quality 0.25
23 Evaluatethe importanceofgovernmental
andpublic of factors forbusiness
locationin thecluster[Linking with
universitiesand research centers]
Bonding 0.2
7 Weightofproject leaders Development 0.07
36. 22 Business Innovations
INNOVATIVE PRODUCT 0.08
28 InnovationProduct/Service[Development
of new products/services]
Productdevelopment 0.027
28 Innovation of product / service
[Amendments product design / existing
services]
Modifications 0.027
28 Innovation of product / service
[Conversion technology products /
services (versions for new platforms)]
ConversionTechnolog
y
0.027
KNOWLEDGE CIRCULATION 0.15
37 Did you do anyofthe following activities
withothers in the industry?
[Sharetraining]
ShareTraining 0.15
Source: Author.
On Table 5, it is shown how the information obtained from the database
for purposes of the investigation will be treated. It is important to mention that to
implement the proposed model and to quantify the variables to be studied, an
adjustment was made to the responses.It passed from a Likert scale to binary, as
for the calculation in this research is not relevant, the intensity of the answers,
just the affirmation or denial of these.For example in question 23 of the
questionnaire it asks: "Assess the importance of governmental and public factors
for business location in the cluster (training and research programs)".
The possible answers are:
a) Very important
b) Important
c) Unimportant
d) Nothing important
e) No answer
As mentioned, the Likert scale for purposes of this investigation is
irrelevant. Therefore all those options that represent an affirmation, in this case
about the importance of factors of governmental and public for the location of
the company in the cluster, will be taken as a positive response. So the value of 1
is assigned as shown in Table 5 where 1 is assigned to the first three options:
Very Important, Important and Unimportant. Under the same criterion is
assigned a value of zero to the latter two options: Nothing important and
unresponsive, since for purposes of this investigation will be assumed as a denial
to the question.
37. Business Innovations 23
Table 5: Questions to assess skills development
SKILLS DEVELOPMENT
TRAINING
23. Evaluate the importance of governmental and public factors for business
location in the cluster [training and research programs]
VARIABLE ANSWER WEIGHT
Veryimportant 1 0.25
Important 1
Unimportant 1
Nothingimportant 0
No answer 0
QUALITY
34. Do you have any quality certification?
VARIABLE RESPUESTA PONDERACION
Yes 1 0.25
No 0
No answer 0
LINKING
23. Evaluate the importance of governmental and public factors for business
location in the cluster [Linking with universities and research centers].
VARIABLE RESPUESTA PONDERACION
Veryimportant 1 0.2
Important 1
Unimportant 1
Nothing important 0
No answer 0
7.Weight Project leaders
VARIABLE RESPONSE WEIGHTING
Yes 1 0.07
No 0
No answer 0
38. 24 Business Innovations
Table6: Questions to evaluate innovative product
INNOVATIVE PRODUCT
PRODUCT DEVELOPMENT
28. Poduct innovation / service [Development of new products / services]
VARIABLE RESPONSE WEIGHTING
Very important 1 0.03
Important 1
Unimportant 1
Nothingimportant 0
No answer 0
MODIFICATIONS
28.Innovation of product / service [Modifications of product development /
services already existing ]
VARIABLE RESPUESTA PONDERACION
Veryimportant 1 0.03
Important 1
Unimportant 1
Nothingimportant 0
No answer 0
TECNOLOGY CONVERSION
28. Producto innovation / service [Technology onversionof products / services
(versions for new plataforms)]
VARIABLE RESPUESTA PONDERACION
VeryImportant 1 0.03
Important 1
Unimportante 1
NothingImportant 0
No answer 0
Source: Author
Table 7: Questions to evaluate knowledge circulation
KNOWLEDGE CIRCULATION
SHARE TRAINING
37. Did you do anyofthe following activities withothers in the industry?
[Sharetraining]
VARIABLE RESPONSE WEIGHTING
Yes 1 0.15
No 0
No answer 0
Source: Author.
39. Business Innovations 25
For the other two dimensions, it was used the same described criteria, in
tables 6 and 7, it is observed the details of questions, responses and weighting
assigned. Witheverything described inthis sectioncan be appliedwhen calculating
theInnovationCapacity Index (ICI), using the following formula:
=
∑ ∗
∑
Where:
ICI=InnovationCapacity Index
= weighting assigned to each factor
fi=Factorscomponentsof theICI
It is veryimportant to mention thatwith this model, it is possible toobtain
an ICIfactorandfor the enterprise, whichfacilitates theanalysis.Thereforeone
should consider that:
= + +
Where:
=
= Development
=
=
2) Econometric model
Through multivariatelinear regression (MRLS) to explain the behaviorof sales,
endogenous variableor dependentvariable, (andshownwithVTAS) based on the
totalcapacity indexinnovation throughlinear dependence relation:
= ! + +
Being the termofdisturbance orerror.
The goal is toassign numericalvalues to theparameters ! . That is,
estimating the modelso thatthe fitted values ofthe endogenous variableresultas
close to theactually observedvaluesas possible, all with thepurposeof validating
theGeneralHypothesisraisedin the investigation.A model ofmultiple
linearregression (MRLM) is also raisedto explain the behaviorof sales,
endogenous variableor dependentvariable, (andshownwithVTAS) depending on
therate ofinnovation capacity ofthe factors to beanalyzed (Development capacity,
40. 26 Business Innovations
Product InnovationandKnowledgeCirculation) which togetherareequal to the
totalICI.
= ! + + + +
μbeingthe termofdisturbance orerror.
This modelis proposedin order totest thesecondary hypotheses
proposedon the research.
3) FuzzyCsar
Fuzzy-Csaris an evolutionarymethodofunsupervised learning, andaims to
uncoverinformation patterns of interestthat besides arereliable.Fuzzy-Csarisable
to work withouta priori information aboutthe relationships
betweenvariablesprocessing. Thus, the search processis not drivenbya
relationalreference structure (e.g. a model), andthis feature providesclear
benefitswhenFuzzyCaesarapplies tonew, unusual scenariosdecision, such
astheresearchtohave adatabaseof low quality (Orriolset. al, 2012). It was applied
the methodto the resultsof the composition ofICIshownin Table 8, obtaining
34rules that wereselected accordingtotheir level of confidencefilteringrules
thathaveutmost confidence, i.e.1.0 (or 100% )discarding the rest.
Thismeansthatthe rules havegreatquality.
4. Analysis of results
In this section it is also shown and discussed the results of the research tools used
for hypothesis testing.
A. Innovativeness Index
The ICI is a value between 0 and 1, which can be interpreted in percentage terms,
with the main assumption that 1 would mean to meet all the factors that
theoretically enhance the innovation capacity of an enterprise; conversely 0
would mean not having any element that encourages innovation capacity of the
company. In Table 8 below, the composition of the ICI sector is observed, being
the average value 0.53, indicating that companies representing the industry in
this investigation are in average levels of innovativeness.
41. Business Innovations 27
Table 8: Composition of Innovation Capacity Index
Source: Authors.
It is shown in Table 9, thatthe factor value training in skills development
is above average, i.e. 0.61, indicating that companies in the sector have a skill
level above the average regarded as ideal, i.e. that the company gives some
importance to training, which is reflected in the ability to innovate, as this is one
of the factors with greater weight given by the authors of the model, due to its
importance. Also the value of the quality factor obtained an ICI is well below
average with 0.20, which means that only 20% of companies have a quality
certification, showing the great potential for improvement in this aspect, since
the quality represents a very important factor to compete and find a good market
performance factor.
Table 9: Results of Innovation Capacity Index
ID ANNUAL
SALES
ICI
CAPABILITIES
DEVELOPMENT
ICI PRODUCT
INNOVATION
ICI
KNOWLEDGE
INNOVATION
ICI
TOTAL
1 $500, 001 a
$1, 000,
000
0.32 0.08 0.00 0.40
2 $1, 000,
001 a $5,
000, 000
0.07 0.08 0.00 0.15
3 $10, 000,
001 a $20,
000, 000
0.52 0.08 0.00 0.60
42. 28 Business Innovations
4 $500, 001 a
$1, 000,
000
0.32 0.08 0.15 0.55
5 $1, 000,
001 a $5,
000, 000
0.52 0.08 0.15 0.75
6 $500, 001 a
$1, 000,
000
0.52 0.08 0.00 0.60
7 Menos de
$500, 000
0.77 0.08 0.00 0.85
8 $10, 000,
001 a $20,
000, 000
0.07 0.08 0.15 0.30
9 $10, 000,
001 a $20,
000, 000
0.77 0.08 0.15 1.00
10 $20, 000,
001 a $40,
000, 000
0.77 0.08 0.15 1.00
11 $10, 000,
001 a $20,
000, 000
0.77 0.08 0.15 1.00
12 $10, 000,
001 a $20,
000, 000
0.32 0.08 0.15 0.55
13 $1, 000,
001 a $5,
000, 000
0.52 0.08 0.15 0.75
14 Menos de
$500, 000
0.07 0.00 0.00 0.07
15 $1, 000,
001 a $5,
000, 000
0.07 0.08 0.00 0.15
16 $1, 000,
001 a $5,
000, 000
0.07 0.08 0.00 0.15
17 $5, 000,
001 a $10,
000, 000
0.32 0.08 0.15 0.55
18 No sabe 0.52 0.08 0.15 0.75
19 $1, 000,
001 a $5,
000, 000
0.07 0.05 0.00 0.12
44. 30 Business Innovations
37 $500, 001 a
$1, 000,
000
0.07 0.08 0.15 0.30
38 $5, 000,
001 a $10,
000, 000
0.07 0.08 0.15 0.30
39 $1, 000,
001 a $5,
000, 000
0.52 0.08 0.00 0.60
40 $1, 000,
001 a $5,
000, 000
0.52 0.08 0.15 0.75
41 $1, 000,
001 a $5,
000, 000
0.57 0.08 0.00 0.65
42 $5, 000,
001 a $10,
000, 000
0.07 0.08 0.15 0.30
43 Más de
$40, 000,
000
0.77 0.08 0.15 1.00
44 No sabe 0.52 0.08 0.00 0.60
0.37 0.07 0.08 0.53
Source: Author.
The third factor in which consist the skills development is the linking
that refers to the importance of governmental and public factors for business
location in the Cluster referring to the links with universities and research
centers. The value obtained is 0.52, indicating that more than half of the
companies give importance to the cluster as this creates ties linking the company
with academia and research centers. Finally, among the factors that make up
skills development is development that refers to the number of employees
assigned to be project leaders, obtaining a value of 0.93 that is near perfect as
almost all companies have staff trained to lead projects.
B. Econometricmodel
Consistent withthe research questionsandhypotheses, an econometric model
ofcross-sectionalordinary least squares (OLS) was used to analyzethe incidence
ofICIand its componentssales of the lastperiod, the latter as an indicator
ofcompetitiveness.In Table 10, the results of the first regression performed are
observed, considering only the total ICI.
45. Business Innovations 31
Table 10: Results simple regression
Source: Authors.
The modelis simplifiedinthe following equation:
= 3.15 + 10.15 +
There is a positive relationshipbetweenICIand totalsalesfor the period, in
Annex Awhere it is observedevidenceof validityof the model. It is also
identifiedthat the modelsare not statistically significantbecause of the absenceof
control variablesare detailed, but for purposesofresearchandobjectives, it is
enough to seethe positive relationshipbetween thesevariables. So it can be
deduced thattheICIoverall is related to a positive impact onsales.In Table11,
themultiple regression modelbetween the componentsof the totalICIand sales,
where a positiverelationshipICIcapacity, circulationof knowledgeand salesis
observed, buta negative relationshipwithICIofinnovative productexplains
whymostcompanies have madea breakthrough inthe pastperiod, whichmeans they
arestill ina learning stagethathas not beencapitalizedat all, and it would be
interestingto trackthis behavior.
46. 32 Business Innovations
Table 11: Results of multiple regression
Source: Authors.
Fuzzy Csar
As part of the proposed methodology and to test the hypotheses, a relatively new
method in this type of research is applied: soft computing, the algorithm FUZZY
CSAR, the most interesting thing about this, is the processing of data, they do not
need comply with any predetermined structure, which makes it very useful for
working database of low quality, as in the case of the database that was used in
this research, as the instrument from which the information was obtained, it was
not designed for the purposes of this investigation.
This is one of the main problems that was detected when analyzing the
econometric regressions described in the previous section, since the lack of
control variables, the models are biased and not statistically significant.
The algorithm FUZZY CSAR was processed with the data of Table 11,
obtaining rules with different levels of trust and support. There were selected 34
filtering out those that had a maximum level of confidence. To precedethe
analysis of these rules, are considered only those that include all the variables
47. Business Innovations 33
studied in the research. Below in Table 12 are observed the rules that were
selected for analysis of the behavior of the variables.
Table 12: Rules FUZZY CSAR
N
O.
SALES ICI_DES_C
AP
ICI_CIR_C
ON
ICI_INN Suppo
rt
Tru
st
1 menos de 500, 000 Verysmall Tiny Tiny 0.014 1
2 menos de 500, 000 Verysmall Tiny Tiny 0.014 1
3 5, 000, 001 a 10, 000,
000
Verysmall Inmense Inmense 0.029 1
4 5, 000, 001 a 10, 000,
000
Tiny Tiny Tiny 0.023 1
5 5, 000, 001 a 10, 000,
000
Medium-
small
Inmense Inmense 0.021 1
6 1, 000, 001 a 5, 000,
000
Large Inmense Inmense 0.066 1
7 1, 000, 001 a 5, 000,
000
Large Tiny Inmense-
medium
0.052 1
8 1, 000, 001 a 5, 000,
000
Tiny Tiny Large 0.005 1
Source: Authors
To evaluatethe behavior of thevariables, they were assignedlabelswith
eightdifferent fuzzyvalues {Tiny, Very Small, Small, Medium-Small, Medium-
large, large, verylarge, Immense}. It is veryimportant to mentionthat
thealgorithm considersthe behavior of thevariablesas antecedentsand
consequents, which is very interesting because itallowsanalyzingtheir
behaviorfrom different perspectives.Following is the interpretation ofthe
rulestobe analyzed, considering thosethat besides havinghighexpectationshave
the greatestsupport. Itwas the lastfilter applied tothe results, leaving onlythe4
rulesof Table 12, rules 1, 2, 3and 6:
1) IfICICapacity Developmentis{VerySmall}
and{ICI_CirculationKnowledgeis {Tiny} andICI_InnovaciónProductis
{Tiny}->{Annual salesareless than 500, 000}
2) Ifannual sales are {less than 500, 000 andICICapacity developmentis
{very small} andICI_Knowledge Circulationis {Tiny}-
>andICI_InnovationProductis {Tiny}
3) Ifannual salesare {5, 000.001 to 10, 000, 000} and ICI_
CapacityDevelopment is{VerySmall} and ICI Product innovation
is{Immense} ICI_ Knowledge Circulation is{Immense}
48. 34 Business Innovations
4) Ifannual salesare {1, 000, 001 to 5, 000, 000}
andICICapacitydevelopment is {Large}->ICI Product innovation
is{Immense}ICI_KnowledgeCirculation} is {Immense}
These results it can be contrasted the hypotheses, since it is evident that
there is a direct and also positive relationship between the variables that make up
the ICI and total sales for the period, as it is observed that when ICI's are "Very
small "or" tiny "less sales and vice versa are recorded, so the hypotheses are
tested.
Conclusions
The existence of a positive association between the development of innovation
capacity of agents and sales reported last period (2011) of the same can be
confirmed from the panel of firms analyzed. From this, it became clear to make
and implement the proposed two methods, the econometric model and the
evolutionary algorithm. Also, it can be concluded that the sector has a Capacity
Index of 0.53 which means that about half this, having a great potential to
improve especially in terms of quality and circulation of knowledge at the time
when linked as it is where they had the lowest values to apply the model to
calculate the ICI values. Without this, innovation is not given; hence its ability to
innovate is low and the sector less competitive, to have a lower market
performance.
On the other hand, the second aspect is from the perspective of academic
contribution it intends to apply new methods for the treatment of data from low
quality sources, especially when not relying on primary sources such is the case
of this research. Where sofa was used, it was computed by evolutionary
computing algorithms to assess behavior variables supported by pure statistics
and obtaining interesting results.Among the major implications, the results may
be grounds for creating or modifying public policies that encourage innovation in
this type of technology-based sectors, as well as promoting the involvement of
industry, academia and government to achieve levels best competitiveness.
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Dabat, A. (2002). Globalización, capitalismo actual y nueva
configuración espacial del mundo. Citado en: Basave, J.,
Globalización y alternativas incluyentes para el siglo XXI.
México, Instituto de Investigaciones Económicas, UNAM, Porrúa.
Gujarati, D., 2003. Econometría, McGraw-Hill, México.
49. Business Innovations 35
Hamel, G &Prahalad C. (1994).Competing for the future.Harvard
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Handbook of Organizational Design.Oxford University Press.
Hernández, Fernández & Baptista. (2003). Metodología de la
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Mochi, P., (2006), La industria del software en México en el
contexto internacional y latinoamericano, México, UNAM.
OCDE. Organization for Economic Cooperation and
Development,. (2006). The IT Industry: Recent developments and
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Orriols, Martínez, Casillas& Nick, 2012, A soft-computing-based
method for the automatic discovery of fuzzy rules in databases:
Uses for academic research and management support in marketing,
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Rodríguez, O. A. (2010), La capacidad exportadora de las PYMES
de software en la ZMG, Tesis para obtener el grado de Maestro en
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Sancho, A. (2011), Association Rules, Universidad Ramon LLull
Wooldridge, J. (4ta Edicion), (2009), Introducción a la
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Yoguel G &Boscherini F. (1996), La capacidad innovativa y el
fortalecimiento de la competitividad de las firmas: el caso de las
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50.
51. Chapter 3
KNOWLEDGE MANAGEMENT AND
ORGANIZATIONAL PERFORMANCE IN
PROFESSIONAL SERVICES FIRMS:
DEVELOPING A THEORETICALLY
GROUNDED MODEL FOR EMPIRICAL
INVESTIGATION IN LAW FIRMS
Bhavit Kumar Tripathi
Alumnus of IIT Madras DoMs,
Founder & MD, SecuRite IP Trading & Services, Bangalore
Abstract
The issue that how organization factors form knowledge management and their
effect on organizational performance is being one of the most noteworthy
subjects for researchers. Despite the wide implementation of knowledge
management there is no standardized framework for measuring the performance
within Organizations. The purpose of this paper is to fill the gap and propose a
research framework that interconnects knowledge management enablers to
knowledge management and organizational performance especially for
professional service firms and in particular for law firms.
Key words: Knowledge Management, Professional Service Firms (PSFs), law
firm, KM enablers, and Organizational performance
Introduction
Knowledge management (KM) is a critical issue in professional services firms
(PSFs) (Palte 2011). KM has become a strategic success factor and differentiator
in PSFs (Hansen 1999). PSFs are seen as models for an increasingly knowledge-
based economy (Nordenflycht 2010). Professional service firm is any firm reliant
on a workforce with substantial expertise— that is, a definition equivalent to
knowledge-intensive firms or knowledge-based organizations (Nordenflycht,
2010). The central characteristic associated with professionals is their mastery of
a particular expertise or knowledge base. For professional service firms, such as
consultants, accountants, lawyers, architects, and engineers, knowledge is a
capacity to act (Schwartz 2006). Nordenflycht (2010) has identified three
distinctive characteristics in the professional service firm i.e. knowledge
52. 38 Business Innovations
intensity, low capital intensity and a professional workforce. For professional
firms the main assets are intellectual capital, not physical, and they have to seek
new ways to leverage their professional intellect.The core business of these firms
is to provide highly developed knowledge-based services grounded on the
existence of intellectual assets (Schwartz 2006).
Law firms are a good example of knowledge –intensive service
organizations (Swart and Kinnie 2003, Alvesson 2000), where it is predicted that
KM practices will impact organizational performance (Carrion et al, 2004).
There has been a significant surge in investment into knowledge management
within law firms (Disterer, 2005). Law firms, as part of the professional service
sector, are increasingly engaged in strategic thinking about business growth and
development. The management of partners, staff and their knowledge is critical
to the strategic development (Hunter 2002).
Literature Review
The main objective of Knowledge Management is to improve organizational
performance. Most of the researches in this area are conceptual, anecdotal,
survey-based, or case-oriented. Researchers have empirically examined the
relationship between KM and organizational performance. The direct and
indirect (through mediation or moderation) influences of KM on various
performance parameters have been studied in literature. Research work analyzing
the linkage between KM and organizational performance have either related one
specific KM process (like knowledge creation, utilization or sharing) or a
combination of KM processes to organizational performance (Lee and Choi
2003, Gold 2001).
Similarly, researchers also differ in the set of organizational performance
parameters they have considered for analyses like overall performance (Choi and
Lee 2003, Zheng 2010), innovation (Nicolas 2011), financial performance (Zack
2009), organizational effectiveness (Gold 2001, Mills & Smith 2011). In their
studies linking KM and organizational performance, researchers have
conceptualized KM using various measures like KM capability (Gold 2001,
Mills & Smith 2011), knowledge strategies (Choi and Lee, 2003) and KM
practices (Zack 2009).
Forstenlechner (2009) has empirically studied the impact of knowledge
management (KM) practices on the financial performance of a multinational law
firm and to refine the KM balance scorecard being used by the organization.
Law firm and Knowledge Management
The demand for KM in law firms is derived from the following four inter-related
areas: efficiency, new competition, poor communication and retirement.
According to Kay (2003), KM allows lawyers to be more effective and
productive lawyers who provide better service to their clients. While the
advantages of employing a KM program in a law firm are obvious but there are
53. Business Innovations 39
many barriers that a firm must overcome before a KM program can be
successfully implemented. The key barriers to knowledge management in law
firm are culture of individual practices, resistance to technology, lack of time,
inability to measure returns and incentive structure. Weiss (1999) has highlighted
the need for alignment of incentives and knowledge sharing.
Research Gap
Previous studies have examined the relationship among variables such as KM
enablers, process and firm performance (Lee and Choi 2003, Gold 2001, Zheng
2010). However, many empirical studies have not investigated the relationship of
people and KM strategy as enablers on firm performance through KM processes.
Most of the studies are conducted in manufacturing companies. There is a
scarcity of empirical studies in Professional Service Firms (PSFs) or Knowledge
intensive firms (KIFs). Researchers and theorists in the knowledge management
have struggled to identify organizational enablers that link knowledge processes
with firm performance.
Research Question and Objectives
The Key research question this study tries to address is “Does KM contribute to
professional service firms performance” and if so to what extent?
Proposed Theoretical Model and Propositions
An integrated research model to study the KM and organizational performance
through different sets of enablers has been developed. Suitable propositions are
developed based on the existing literature of KM enablers, Knowledge Process
and organizational performance.
Fig 2: Framework of study
54. 40 Business Innovations
Fig 3: Theoretical Research Model
Corporate culture not just defines the value of knowledge and explains
the advantage that knowledge creates for the organization (Long, 1997) it also
influences the efforts that the employee is willing to share and put into the
company. Therefore, being able to build a culture with easily accessible
knowledge is necessary for management during the implementation process of
knowledge management. Alavi and Leidner (2001) in their survey of the
application of knowledge management have shown that the majority of the
success of knowledge management in their experiences of knowledge sharing is
closely related to culture. Davenport et al. (1998) also point out the eight factors
that contribute to the success of knowledge management projects with many that
are related to corporate culture. Some scholars believe that the standard of
evaluating the success or failure of carrying out knowledge management is
through the measure of whether or not the organization has established a culture
of sharing (Skyrme and Amidon, 1997; Davenport et al., 1998; Ruggles, 1998;
Hauschild et al., 2001). Culture is important for facilitating sharing, learning, and
knowledge creation.
Discussion and Implications
The study will help Professional service firm (Law firm) to understand the
impacts that different enablers have on the KM successful implementation and
how the effectiveness of KM affects firm performance. The relations between the
constructs will help in taking better KM resources investment decisions. The
questionnaire developed can be used to assess the knowledge maturity of the law
firms.
55. Business Innovations 41
References
Alavi, M. and Leidner, D.E. (2001), “Knowledge management and
knowledge management systems: conceptual foundations and
research issues”, MIS Quarterly, Vol. 25 No. 1, pp. 107-36.
Alvesson, M. (2000), “ Social identity and the problem of loyalty
in knowledge – intensive companies”, Journal of Management
Studies, Vol.37 No.8, pp.1101-23.
Arthur Anderson and The American Productivity and Quality
Center (1996), The Knowledge Management Assessment Tool:
External Benchmarking Version, Arthur Anderson/APQC,
Chicago, IL.
Arthur Anderson Business Consulting (1999), Zukai Knowledge
Management, TOKYO Keizai, Inc., Tokyo.
Arthur, J. B., & Huntley, C. L. (2005), “Ramping up the
organizational learning curve: Assessing the impact of deliberate
learning on organizational performance under gain sharing”,
Academy of Management Journal, Vol. No. 48 No.6, pp.
1159−1170.
Bennett, R. and Gabriel, H. (1999), “Organizational factors and
knowledge management within large marketing departments: an
empirical study”, Journal of Knowledge Management, Vol. 3 No.
3, pp. 212-25
Bierly, P., & Chakrabarti, A. (1996), “Generic knowledge
strategies in the US pharmaceutical industry”, Strategic
Management Journal, Vol. 17 No.10, pp.123–135
Bose, R. (2004), “Knowledge management metrics”, Industrial
Management & Data Systems, Vol. 104 No. 6, pp. 457-68.
Cabrera, A., Collins, W. C., & Salgado, J. F. (2006),
“Determinants of individual engagement in knowledge sharing”,
International Journal of Human Resource Management, Vol. 17
No. 2, pp 245−264
Carrion, G., Galan Gonzales, J and Leal, A. (2004), “Identifying
key knowledge areas in professional services industry: a case
study”, Journal of knowledge management, Vol.8 No.6, pp.131-50
Chase, R.L. (1997), “The knowledge-based organization: an
international survey”, Journal of Knowledge Management, Vol. 1
No. 1, pp. 38-49.
56. 42 Business Innovations
Choi, B., & Lee, H. (2003), “An empirical investigation of KM
styles and their effect on corporate performance”, Information &
Management, Vol No.40 No.5, pp.403–417.
57. Chapter 4
CONSUMER ACCEPTANCE OF MOBILE
PAYMENTS IN INDIA: AN EXPLORATORY
STUDY
Bhavit Kumar Tripathi
Alumnus of IIT Madras DoMs,
Founder & MD, SecuRite IP Trading & Services, Bangalore
ABSRACT
India has a mobile penetration of over 80% which provides huge potential for
mobile payments. Although mobile payments appear to be the future of non-cash
payment mechanisms in India, customer acceptance of mobile payments is still
very low. A review of academic literature shows limited studies which can
explain a consumer’s intention to use mobile payments in India. In this study we
used UTAUT2, a unified model for consumer acceptance of technology with an
additional moderator to examine the acceptance of mobile payments in India. A
survey was conducted subsequently to collect quantitative data from young
adults of a premier educational Institution. PLS-SEM techniquewas employed for
final data analyses of a sample size of 257. The model had an explanatory power
of 50.4%. Our results showed that user acceptance of mobile payments does not
follow UTAUT2 exactly. Direct relationships were found to be very similar,
except for one loop: unlike UTAUT2, we found no significant impact of hedonic
motivation on intention to use. Further our results showed that Facilitating
conditions to Behavioral Intention relationship is moderated by level of
education. Most other moderating effect relationships were substantially
different from UTAUT2.
Keywords: Mobile payment (M-payment); Technology Acceptance; Unified
Theory of Acceptance and Use of Technology, M-commerce, consumer behavior,
PLS path modeling.
INTRODUCTION
Mobile payments or M-Payments refer to the payment services performed from
or via a mobile device. The four primary models for Mobile payments are
premium SMS, direct mobile billing, web based payments (including apps) and
contactless Near Field Communication (NFC). The first instance of Mobile
payments occurred in 1997 when Coca Cola introduced a limited number of
58. 44 Business Innovations
vending machines where a customer could make a mobile purchase. The
customer would send a text to the vending machine to setup payment and the
machine would then vend their product. Mobile banking first appeared in 1997,
introduced by the Merita Bank. It accepted text messages for making bank
account transactions.
Mobile commerce (M-Commerce) involves the sale of goods, services
and contents via wireless devices, without time or space limitations (Au and
Kauffman, 2008; Mallat, 2007). Mobile payment is an emerging and important
part of mobile commerce (Yang, 2012). Mobile payment is also one of the most
critical drivers for successful mobile commerce (Yang, 2012). As mobile
commerce increases in adoption, Mobile payment will continue to facilitate
secure electronic commercial transactions between organizationsand individuals
(OndrusandPigneur, 2006). Mobile Payments fall broadly into two categories;
payments for purchases and payments of bills/invoices (KarnouskosandFokus,
2004). In payments for purchases, Mobile payments compete with or
complement cash, checks, credit cardsand debit cards. In payments of
bills/invoices, Mobile payments typically provide access to account-based
payments, including money transfers, online banking payments or direct debit
assignments.In developing economies, the growth in M-Payments is being
largely driven by the huge population of unbanked consumers, who can get
access to payment services options through mobile devices. The development of
new mobile technologies increases day after day and creates important
opportunities for commerce.
LITERATURE REVIEW
Mobile payment refers to a payment for goods, services, and bills using a mobile
device with wireless and other communication technologies (Dahlberg, Mallat,
Ondrus, and Zmijewska, 2008).Some researchers have examined mobile
payment user behavior and have tried to identify the factors affecting user
acceptance of mobile payment technology. Since the beginning of this decade M-
Payment has received someattention from both academic researchers and
practitioners (Dahlberg et al. 2006). In particular, the mobile user’s intention to
use mobile payment is of considerable interest to researchers and practitioners,
because financial institutions, trusted third parties, payment service providers,
and supporting service providers can benefit greatly from enhanced
understanding of the key factors underlying mobile users’ intention (Dahlberg,
Mallat, and Öörni, 2003a; Dahlberg, Mallat, andÖörni, 2003b; Ondrus
andPigneur, 2006).
Some previous studies have focused on the consumer acceptanceofofM-
Payment. These studies have used TAM, IDT and UTAUT with suitable
extensions. Most of the studies are based primarily on the TAM, with additional
constructs adapted for the study of M-Payment such as security, cost, trust,
mobility, expressiveness, convenience, speed of transaction, use situation, social
59. Business Innovations 45
reference groups, facilitating conditions, the attractiveness ofalternatives,
privacy, system quality and technology anxiety (Kim, 2010). There are limited
studies with combination of IDT and TAM and UTAUT with the additional
constructs of perceived risk, user’s cost and use context. In their qualitative study
Mallat (2007) noted that relative advantage, compatibility, complexity, costs,
trust and perceived risk affect user adoption of mobile payment.
The UTAUT2 describes acceptance and use of new technology adoption
in a consumer context and it was tested in mobile Internet context.Besides the
concepts included in the original UTAUT model (Venkatesh et al., 2003),
UTAUT2 focuses on consumers as opposed to employees in an organization,
which includes three additional consumer related constructs: hedonic motivation,
price value and habit of consumers (Venkatesh et al., 2011). Moreover,
individual differences (age, gender and experience) were found to moderate the
relationship of the effects between these consumer factors, behavioral intention
and technology use. The fact that consumers can freely decide whether to adopt a
new technology has the consequence that the moderating factor voluntariness of
use is dropped in UTAUT2 (Venkatesh, Thong andXu, 2011). UTAUT2 tests
moderating effects of age, gender and experience on the relationship of
Facilitating conditions, Hedonic motivation, Price value and Habit on
Behavioural intention.Unlike UTAUT model, in UTAUT2 facilitating conditions
is hypothesized to have a direct effect on behavioral intention and actual usage
behavior.
RESEARCH MODEL AND HYPOTHESES DEVELOPMENT
Drawing on Venkatesh et al. (2012), we study the direct effects of facilitating
conditions, hedonic motivation, price value and habit on the behavioural
intention to use and the moderating effects of age, gender, experience on these
relationships. Following Igbaria (1989) and Lucas (1978), we use also education
level as an additional moderating variable, given the context of smart phone
usage for mobile payments.Fig. 1 provides a schematic representation of our
proposed model.
60. 46 Business Innovations
Fig. 1 Proposed Research Model
In the specific context of mobile payments, we expect that availability of
customer support; online tutorials etc. by the service provider would have a
positive influence on the behavioural intention to use the technology. However,
we expect that as in the case of UTAUT2, age, gender and education level will
also have significant moderating effects on the relationship. There has been
consistent evidence of relationships between users’ age and IT in the literature.
Older workers tend to resist change (Nickel, 1986) and are, therefore, expected to
perceive new IT as less useful, finding it more difficult to learn and use
unfamiliar technology (Gomez, 1986). Even if they are willing to adopt new IT,
older workers may be less able to appreciate or understand it. Further, attitude
towards technology has also been found vary with gender. As argued in
UTAUT2, men more than women are willing to spend more effort to overcome
constraints imposed by a new technology.
H1a: Facilitating conditions is positively related to behavioral intention to use
mobile payments.
H1b: Age, gender, experience and education level will moderate the effect of
facilitating conditions on behavioral intention, such that the effect will be
stronger among older women with less experience and having higher
education level.
We follow the arguments provided in UTAUT2 to suggest the direct
relationships of hedonic motivation, price value and habit on the behavioral
61. Business Innovations 47
intention to use. We also build our moderating hypotheses following the
arguments advanced in UTAUT2. Theories of habit formation suggest that
behavior is often affected by habits rather than intent. System experience should
also have an additional effect through habit formation. The longer that someone
has used a system, the more likely it will become a routine tool and users will not
need to assess its PU or PEOU each time they use it, i.e. use became habitual.
Increased education and experience should also empower the user, reducing the
effect of social norms on their behavior. The direction of the effect would depend
on whether subjective norms were favorable or unfavorable towards use of the
particular technology.
H2a: Hedonic motivation is positively related to behavioral intention to use
mobile payment.
H2b: Age, gender, and experience will moderate the effect of hedonic
motivation on behavioral intention such that the effect will be stronger
among younger men in early stages of experience with a technology.
H3a: Price value is positively related to behavioral intention to use mobile
payment.
H3b: Age and gender will moderate the effect of price value on behavioral
intention, such that the effect will be stronger among older women.
H4a: Habit is positively related to behavioral intention to use mobile payment.
H4b: Age, gender and experience will moderate the effect of habit on
behavioral intention such that the effect will stronger for older men with
high levels of experience with the technology
RESEARCH METHODOLOGY
Development of the Survey Instrument
We developed asurvey questionnaire suitable for the measurement of variables
included in the model. The scales used to measure the variables have been
adopted from previous research with established reliability and validity. Some of
the items were modified to contextualize them relevant to mobile payment
research. The constructs were measured using multiple item scales. In addition to
the four moderating variables, the research model includes seven independent
variables and one outcome variable.
62. 48 Business Innovations
Table 1: Measure Development
Construct Reference Items (scale 1-7 except
categorical variables)
Facilitating
Conditions
(FAC)
Venkatesh et al.,
(2003);Venkatesh et al.
(2012)
FAC01: I have the resources to
use mobile payments
FAC02: I have the knowledge
necessary to use mobile payments
FAC03: Mobile payments are
compatible with other
technologies I use.
FAC04: I can get help from
others when I have difficulties in
using mobile payments.
Hedonic
Motivation
(HED)
Venkatesh et al. (2012) HED01: Using mobile payments
is fun.
HED02:Using mobile payment is
enjoyable
HED03: Using mobile payments
is very entertaining.
Price (PRI) Venkatesh et al. (2012) PRV01: Mobile payments are
reasonably priced.
PRV02: Mobile payments are
good value for money.
PRV03:At the current price
mobile provides a good value.
Habit (HAB) Venkatesh et al. (2012) HAB01: The use of mobile
payments has become a habit for
me.
HAB02: I am addicted to mobile
payments.
HAB03: I must use mobile
payments.
HAB04: Using mobile payments
has become natural to me.
Behavioural
Intention (BHV)
Venkatesh et al., (2003);
Venkatesh et al. (2012)
BHV01: I intend to continue
using mobile payments in the
future.
BHV02: I will always try to use
mobile payment in my daily life
BHV03: I plan to continue to use
mobile payments frequently
63. Business Innovations 49
Age Venkatesh et al. (2012) Measured as categorical variable
with sub-groups as high or low.
Low (Age<= 25 )
High (Age> 25 )
Gender Venkatesh et al. (2012) Measured as categorical variable
as male and female.
1 (Gender: male)
2 (Gender: female)
Experience Venkatesh et al. (2012) Measured as categorical variable
and divided into sub groups as
high and low.
Low (experience <= 1 year )
High (experience> 1 year )
Education Level (Zmud, 1979; Igbaria,
1989; Lucas, 1978)
Measured as categorical variable
and divided into sub group as
high and low.
Low (Undergraduate in
engineering)
High (Master/Phd/Post doc
student in engineering, science,
social science or management)
Performance
Expectancy
(PER)
Venkatesh et al.,
(2003);Venkatesh et al.
(2012)
PER01: I feel mobile payment is
useful.
PER02: Mobile payments
improve my payment efficiency.
PER03:Mobile payments improve
my payment convenience
PER04:Mobile payments let me
make payments more quickly
Effort
Expectancy
(EFF)
Venkatesh et al.,
(2003);Venkatesh et al.
(2012)
EFF01: Skillfully using mobile
payments is easy for me.
EFF02: I find that mobile
payments are easy for me.
EFF03: Learning mobile
payments are easy for me.
EFF04:My interaction with
mobile payments is clear and
understandable.
64. 50 Business Innovations
Social Influence
(SOC)
Venkatesh et al.,
(2003);Venkatesh et al.
(2012)
SOC1:Those people that
influence my behavior think that I
should use mobile payments.
SOC2: Those people that are
important to me think that I
should use mobile payments.
SOC3: People whose opinions
that I value, prefer that I use
mobile payment.
Measures and their development are shown in Table 1. Each construct
was measured with multiple items on a seven point likert scale with 1-strongly
disagree to 7-strongly agree.The multiple phases of instrument development
resulted in the refinement and restructuring of the survey instrument, as well as
the establishment of the initial face validity and internal validity of the measures
(Nunnally, 1978).
The study used purposive sampling technique which is also known as
judgmental sampling.The target population in this research consisted of young
adults who use mobile phones for electronic payments. The sample frame
consisted of undergraduate and post graduate students of a premier Educational
Institute representing this population. University students were targeted for this
study because theyform a major user group of the mobile phones and mobile
networksand they may be more willing to accept mobile payments.The target
audience owns the mobile phones and also usesthem for mobile payments. To
ensure that the measured beliefs were based on direct behavioral experience with
the object, only responses from those who had previously used the mobile
payment were included in our analysis.
DATA ANALYSES
Data Preparation and Descriptive Statistics
We entered the 333 data points obtained from survey into a personal computer
and checked the data for missing data. Table 2 represents the descriptive
statistics. Approximately 27% of the responses were dropped due to missing
data. Finally, 257 responses were used for empirical analysis. With regard to
gender, the sample consists of 58% male and 41.2% female. In terms of age, the
majority of the respondents, 66%, are between the age group of 19-25 years.
With regard to education level 58.4% are undergraduates, 30.7% are graduates
and10.9% are postgraduates. A significant number of the respondents use mobile
payment 1-4 times per month and have 1-2 years of experience in mobile
payment use.
65. Business Innovations 51
Table 2: Descriptive statistics of respondents characteristics (N=257)
Attribute Total
Criteria Frequency Percentage
Gender Male 151 58.8
Female 106 41.2
Age <18 40 15.6
19-25 169 65.8
26-30 41 16
31-35 5 1.9
36-40 2 0.8
>40 0 0
Education level Undergraduate 150 58.4
Graduate 79 30.7
Postgraduate 28 10.9
Period-of mobile payment use <1 year 88 34.2
1-2 years 137 53.3
2-3 years 21 8.2
over 3 years 11 4.3
Mobile payment use frequency
per month
1-3 times 112 43.6
4-10 times 117 45.5
11-20 times 24 9.3
More than 21
times
4 1.6
Measurement model estimation involves confirmatory factor analysis
(CFA) and reports results of construct uni-dimensionality, validity and reliability.
Structural model identifies the relationship present among the latent variables.
Partial least squares structural equation modelling (PLS-SEM) was used in this
study to test the hypotheses. R-software package version 3.01 with plspm add on
package for PLS path modelling was used for CFA and path modeling. As the
sample size was relatively low (257), we used bootstrapping to scale up the
sample size to 1000 for significance testing (Hesterberg et al., 2006).
To evaluate the measurement model, we followed the procedures
outlined by Hair et al. (2011). Three types of validity tests were carried out to
validate the reflective constructs: internal consistency, convergent validity and
discriminant validity. Measurement model estimation involved confirmatory
factor analysis (CFA) and reported results of construct uni-dimensionality,
validity and reliability.The results for each construct with the number of manifest
variables (MVs)have been presented in Table 3. The value of Cronbach’s alpha
ranged from 0.713 to 0.884, which wereabove the acceptable value of 0.6 (Hair
et al., 2011).Statistical evidence for unidimensionality and convergent validity
66. 52 Business Innovations
were also checked through Dillon-Goldstein’s , Average Variance Extracted
(AVE), first and second Eigen values and factor loadings (Table 3). All Dillon-
Goldstein’s were found to be above 0.6 and the difference between first and
second eigen values exceeded 1 (Tenenhauset al., 2005), showing evidence for
convergent validity.
Table 3 Reliability and Validity Testing
MVs C.alphaDG.rho Eigen
1st
Eigen
2nd
Standard
loadings
AVE
Performance
Expectancy (PER)
4 0.832 0.889 2.67 0.636 0.867, 0.738,
0.866, 0.785
0.665
Effort expectancy
(EFF)
4 0.884 0.920 2.97 0.416 0.878, 0.895,
0.839, 0.832
0.742
Social Influence
(SOC)
3 0.684 0.826 1.84 0.654 0.891, 0.679,
0.732
0.592
Facilitating
conditions
(FAC)
4 0.847 0.900 2.78 0.642 0.750, 0.780,
0.797, 0.984
0.694
Hedonic Motivation
(HED)
3 0.686 0.828 1.85 0.699 0.838, 0.762,
0.725
0.604
Price value (PRV) 3 0.771 0.870 2.08 0.772 0.698, 0.836,
0.942
0.692
Habit (HAB) 4 0.747 0.842 2.29 0.742 0.774, 0.848,
0.724 0.665
0.57
Behavior Intention
(BHV)
3 0.713 0.839 1.91 0.561 0.807, 0.776,
0.807
0.689
Convergent validity was further tested using the Average Variance
Extracted (AVE) as shown in Table 3. The suggested cut off value of AVE is
0.50 or higher (Fornell and Lacker, 1981; Hair et al., 2011). For sufficient
discriminant validity, an indicator’s loadings and the square root of the AVE
should exceed the values of both horizontal and vertical correlation between
variables (Chin, 1998; Hair et al., 2011). The values along the diagonal indicate
that the square root of AVE exceed the off-diagonal correlations between the
constructs (Table 4) which provides some evidence of discriminant validity of
the measurement model.