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Banking Development and Poverty1
CHAPTER 1: INTRODUCTION
1.1.
Overview
Poverty in Pakistan has almost always been a major macroeconomic issue and it has
attracted many scholars for their researches. In the recent years, there is a substantial body of
relationship between financial development and poverty reduction is established. And the
literature found is quite conclusive for poverty reduction in improving the banking sector. Some
former studies have given a certain threshold to this argument of economic development, while
others have studied the dynamics of poverty reduction. To study the banking sector development
for poverty reduction, a huge amount of data is used like cross-section data analysis (Yu
Ho&Odhiambo, 2011, p.103).
According to Uddin et al., 2013, p.406), the influence of improvement in finance sector
has ambiguous and uncertain results on poverty reduction in developing countries (Pradhan,
2010, p.114). While comparing poverty reduction with growth model, poverty reduction has
more leverage and significance in economic growth. The standpoint that economic progress can
lead to poverty reduction is not necessary. It implies that the economic growth result in
improving poor lives quality, but it does not.
1.2.
Problem Statement
Although there have been an extensive researches, studies and models that discussed the
impact of banking sector development on poverty reduction, but the results were not certain.
However, the topic needs modifications. The banking sector has been playing a vital role in
encouraging the economic growth which in turn leads to poverty reduction in Pakistan. Poverty

in Pakistan is one of the most researched areas after education and health. There are theories and
models to study the impact of baking sector development on Poverty reduction. In late 90s the
reforms of financial sector initiated which eventually developed a feasible and satisfactory
environment for poor and middle class had options in getting credits (Yu-Ho&Odhiambo, 2011,
p.105).
1.3.
Background of the Research

While examining the banking sector development, it is essential to understand the phases
of financial sector development. As financial sector development is an effective tool for economy
growth of a country. Many studies have provided that a well-functioning financial system that
allocates resources mobilizes savings and calculates risk management is a contribution to
economic progression. In addition to economic growth, the financial services are more in
demand for the financial advancement.
Some suggests an indirect bi-directional formal
relationship between economic growth and banking sector development. On the contrary, it is not
argued to that the financial development would have an impact on poverty reduction
(Inoune&Hamori, 2010, p.1).
Poverty reduction, on the contrary, has been the subject of many researchers area of
study. In Pakistan it has been a foremost and a major issue, as Pakistan is also included in the list
third world countries. It has been a serious problem as it affects the global economy as well.
Government of Pakistan has taken some robust initiatives to struggle with poverty and the
officials are concerned about the poverty reduction in Pakistan (Shafiq et al., 2012, p.366). Some
researchers have studied the impact of financial development on poverty reduction by applying

the autoregressive lag model (ARDL) for a longer period to control the variables like agricultural
growth, inflation and manufacturing (Inoue &Hamori, 2012; Ellahi, 2011; Uddin et al., 2013).
1.3.1. Significance of the Research

This research is significant is examining the financial deepening for poverty reduction.
There is an interrelation between banking sector development and poverty reduction that can by
analyzed. Other studies have been providing the relationship and impact of financial
development on poverty reduction, while this study specifically signifies the relationship of
banking sector development, which is a biggest component of financial development, with
poverty reduction (Khan et al., 2011). Furthermore, there is a significant effect of income
inequality on the poverty rate which is verified. Here, this research examines the relationship
between the banking sector development and poverty reduction. Growth is directly dependent on
the financial sector development and poverty depends on growth, here we check the direct
relationship of banking sector development with poverty reduction. For Banking sector, different
components are applied as variables, deposits money banks assets to GDP, central bank assets to
GDP, bank deposits and concentration (Khan et al., 2011). To reduce poverty, it is important to
improve banking sector development and increase financial development in Pakistan which
directly leads to economic growth. Financial sector contain the institutions in economy, retail,
formal and informal outlets, and wholesales that offer financial institutes (Khan et al., 2011,
p.59).

1.3.2. Objective of the Research
To study the relationship of financial development on economic growth
To study the significance of banking sector development on financial development
To study the relationship of financial development with poverty reduction
To study the interrelation of Banking sector development with poverty reduction
1.4.
Outline of the Research

Chapter 1 is the contextual background of the research led by aims and objectives of the
research, along with problem statement and significance. This chapter provides general
understanding of the subject, what the research was projected at, what evaluates the need of
research on the issue and how the research can be used as a source in future, etc.
Chapter 2 is a comprehensive review of the former literature and recent research on the
topic. The basic themes, models, theories and issues are discussed here coupled with essential
research findings to shed light on what is already known about the issue and what are the
portions to take up future research and investigation. This chapter also includes the conceptual
framework for the study which strongly emphasizes its base whereas the hypothesis has also
been created supported by literature review.
Chapter 3 is a research methodology i.e. research philosophy, research design, approach,
sampling techniques, type of investigation, data collection and analysis technique, etc. This
chapter moreover comprises the limitations, hypothesis and variables in the study. The chapter
broadens the generalizability of the study by offering a brief review of the research procedure
and by recognizing the limitations.

Chapter 4 is a data analysis including tabular and graphical representation of the data for
simplifying and understanding the research while discussing the results and its explanations as in
the literature review and hypothesis. Quantitative and qualitative analysis of the results have
been developed under this chapter to provide the reader with highlights of the research, its
findings and the significance of its findings.
Lastly, Chapter 5 concludes the research with sole findings and provides the
recommendations and suggestions for the research. This chapter is the core of the complete
research and sums up the main factors of the research.

CHAPTER 2: LITERATURE REVIEW
2.1.
Introduction
The relationship of Banking sector development and poverty reduction in Pakistan has an
extensive and inconclusive empirical and theoretical literature (Uddin et al., 2013, p.305).
Ahamada and Coulibaly (2011) instigated as how financial development is beneficial for
economic growth volatility. The impact of increasing the rate of volatility in emerging economies
is reducing the rate of poverty. Although the augment in economies increases the demand of
financial services but influences the financial growth. Furthermore, a recipient account might
make them reasonable for bank loan and hence it expands the credit market size (Sami, 2013,
p.503). Financial sector is an essential growth aspect and it plays role in the form of fast payment
services, improved remittance services and many other branches in several fields like business
that dwindle transaction cost and goods between household, hence it can help to promote
economic growth (Khan et al., 2011, p.60).
2.2.
Economic Growth
The increase of per capita gross domestic product (GDP) or other measurements of
aggregate income is referred as economic growth. To evaluate economic growth, the rate of
change in real GDP is calculated. Economic growth is only considered to be the production of
goods and services. Economic growth is both; positive and negative. Negative economic growth
is when the economy is shrinking. It is the economic recession or depression (Lewis, 2013, p.23).
Domestic resources are considered to be the significant component for economic growth
and reduce poverty. There are no second thoughts on the role that financial development and

banking sector are playing in improvement of economy. Consequently a well-functioning and
influential banking sector is effective on economic growth. According to (Shahbaz,
Afza&Shabbir, 2013, p.60), Pakistans financial sector has changed its dynamics after grasping
the importance of strong banking and effective financial markets. Economic growth is optimized
by financial development through mobilization and investment activities and this positive
relationship amongst financial development and economic growth reduces poverty through
growth improving impact.
As Shahbaz&Rehman (2013) research concludes that economic growth and poverty
reduction are present in Pakistan. The increase in financial development is because of the high
demand in financial services and it is said to have a demand-side impact. The utilization of
domestic resources is dynamic for economic growth through the financial development. Due to
low economy in Pakistan, Income inequality and poverty were elated in the decades of 1980s
and 1990s. Whereas; Pakistan is recorded to be have the second highest economic growth rate in
2005, in South Asia. According to Uddin, Kyophilavong&Sydee (2012, p. 306), financial
development has an indirect impact on the living standards of poor. According to World Bank
(2004), the average economic growth Pakistan made was 3% in 1980s and 1.2% in 1990s. The
sluggish growth steadied in the later 1990s that led to an increase in poverty incident.
2.3.
Financial Development
Financial sector development established because of an important mechanism as that is
beneficial for economic growth. The financial development has a crucial part to play with in
alleviation of poverty for developing countries like Pakistan (Ellahi, 2011). Financial
development is associated with the financial instability where poor are not benefitted from the

greater availability of credit. Many researches have outlined the direct relation of financial
growth with poverty while the indirect relationship with economic growth (Inoue &Hamori,
2010, p.1).
Financial development is a huge and multidimensional concept and consists of a
potentially significant phenomenon for a long-run economic growth. Numerous studies have
bolstered the interrelationship between financial advancement and poverty experimentally and
theoretically (Sami, 2013; Shahbaz&Rahman, 2013; Ellahi 2011). The empirical evidence
received from these studies varying from country to country, includes industry-level analysis,
each country analysis and broad cross-country comparison. It highlights that there is a vital role
that financial development is playing in economic growth. On the contrary, financial
development is essential and basic requirement for economic growth. Due to the implications
that are not accurate, it affects the other factors of socio-economic development in the economy
(Pradhan, 2010, p.115). By experimenting and evaluating, the financial institutes and exerting
corporate control can stimulate growth and increase the capital accumulation that would result in
ultimate poverty reduction (Khan et al., 2011, p.60).
The financial institutes are basically the organizations that are in-charge of investment,
savings, loans, assets, pensions, deposits, salaries etc. In Pakistan, the instances of which are
public/private sector banks, foreign banks, development financial institutes (DFIs), investment
banks, microfinance banks, specialized banks and Islamic banks (Ibrar, 2013).
2.4.
Banking Sector Development

The banking sector in Pakistan is continually emerging from sliding interest rate reign to
skin spreads while pressurizing profits. Alongside healthy transactions and increased non-

markup revenue has stabilized production. The divisions related pricing compared to KSE is
over-playing the fears of spreads. It has been noticed that the current development that provides
the perfect current interest rate ().
Pakistan has implemented successful financial reforms with the help of banking sector in
the last decade and the banking sector has gone through some experimental and fundamental
changes in three phases. The first reform was a World Bank initiative and supported by Banking
Sector Adjustment Loan (BSAL). The reforms are reported to have attained a complete new
environment for the banking sector.
More investment, more production and more production first increase the growth level
then decrease the poverty level; it is indirect impact of banking sector on poverty reduction
(Inuoe&Hamori, 2010, p.1). As Noman and Uddin (2011) investigated the casual nexus between
remittances, banking sector development and GDP in four South Asian of countries (Pakistan,
India, Bangladesh, and Sri Lanka) depending on individual country time series analysis and
studied that the banking sector Granger remittances inflow in Pakistan and India.
Banking sector development program is implemented in Pakistan on terms of 35-year
maturity. According to World Bank (2004), Pakistan has achieved progress in in banking sector
reform, after its own program launch in 1997. The overall program assessment and its findings
were effective in order to stabilize the macro economy while providing the essential financial
sector recovery. According to Imran & Khalil (2012, 568), apart from the conventional banking,
microfinance is another network with which the financial sector provide loans for low-level
businesses or to micro organizations that end up destroying firms growth.

2.5.
Poverty Reduction
Poverty is referred as the capacity to buy the product or services depending on
consumption and income on assets or material possessions. In 1990s poverty reduction and the
poorest have been the purpose of attraction at international summit according to Canadian
International Development Agency (CIDA). Reduction of poverty can be determined in order to
provide credit to businesses of financial intermediaries by creating more jobs through industry
growth (Imran & Khalil, 2012, p.568).
Pakistan has been a developing economy considering the poverty trends based on crosssectional datasets. Poverty dynamics can be classified as chronic poverty and transitory
(Arif&Farooq, 2011, p.1). According to Shafiq et al. (2012), Poverty has been the biggest of
issues in Pakistan. His study is about the relation between poverty alleviation and economic
growth where the time period of 1978 to 2010 was analyzed. His research suggested that there is
a negative impact on poverty but it contributes to poverty reduction in a long-run. There is a
close relationship between finance and growth and that nexus is contributing as an emerging
body that analyses the effects of financial development on both; poverty conditions and income
distribution. A few researches have explored the association between financial growth embedded
in poverty ratio using cross country data and private credit exist for more than 70 developing
countries. The findings resulted in negative association with the poverty ratio after optimizing
the income, inflation rate and the income share of top 10% (Inoue &Hamori, 2010, p.2).
2.6.
Relationship between Banking Sector development and Poverty Reduction

In the last decade, there are a number of researches that established an indirect nexus
between financial development and poverty with the help of government intervention.

Government intervention in order to advance financial policies especially credit market policies
that are in favor of appropriate on subsidized rates of interest, which implies that financial
liberation, needs to be adjusted. Because of the economic benefits, we can trickle down the to a
lesser income group and eventually reduce poverty (Khan et al., 2011, p.60).
The economic literature specializing in the casual nexus between the poverty reduction
and financial system establishes the belief that most of the researchers are actually worried about
poverty and so and so that they study the impact of financial development on poverty reduction.
The direct effect is essay to understand and study but the indirect change is not that easy to go
through for instance different channels might be affecting poverty reduction like credit, savings,
income inequality and insurance services (Dhrifi, 2014, p.1).
The relationship has been widely researched and discussed as there is a lot of discussion
available about the relationship of financial liberation and economic growth. According to the
literature, a robust relationship has been observed. It is also evident due to the financial policies;
countries with open financial policies have the potential to grow faster than that of restricted
financial policies (Munir, Chaudhry&Akhtar, 2013, p.227).
2.7.
Research Hypothesis
H1: Banking development has direct relation with poverty reduction
H2: There is long term equilibrium between banking sector development and poverty
reduction in Pakistan.

CHAPTER 3: METHODOLOGY
3.1.
Methods of Data Collection

In general there are two different types of data collection method i.e. (1) Primary Data
collection and (2) Secondary Data Collection. The primary data collection method is referred as
the collection of first-hand information which has not been collected before by any researcher or
publications. Some important tools for primary data collection are (a) Interviews, (b) Surveys, (c)
Focus group and (d) Observations. On the other hand, secondary data collection refers to that
information which has already been researched and is known as second hand information. Some
techniques of collecting secondary data collection are through research publications, research
papers, companys annual reports, economic survey reports and newsletters (Galvao et.al, 2013,
p. 307).
The current research has adapted secondary data collection method because of the nature
of the study being conducted. The data will be collected from World Bank and economic survey
website of Pakistan. The basic advantage of secondary data is that it allows the researcher in
collecting meaningful information which can be large thus providing authentic and reliable data
for carrying out the analysis.
3.2.
Sampling Technique
Time series is defined as an arrangement of data points, particularly involving successive
measurement developed through different time intervals. The time series analysis includes
different methods and processes for the purpose of examining time series data to get meaningful
statistical data and other attributes of the data. Moreover, time series forecasting is the utilization

of a specific model in order to assume future values that are dependent on previously observed
values. However, regression analysis is usually used to test different theories pertaining to the
fact that present values of independent time series has a direct impact on the present value of a
different time series. This is not known as time series analysis, as time series aims on comparing
single time series values and multiple dependent time series at various different points(Chavez
and Davison, 2012, p.111).
3.3.
Sample Size
The sample collected was from World Bank and Economic survey of Pakistan. Data was
collected annually from 1980-2010, thus having 30 observations in total.
3.4.
Statistical Technique
In a situation where the research variable in long term relation of interest are assumed
stationary, the usual practice is to de-trend the series and then to de-trend the series to a specific
model as autoregressive distributed lag (ARDL) or stationary distributed lag. The regressors may
incorporate lagged values pertaining to dependent variable and lagged and current values of
more than two explanatory variables. The ARDL model enables the researcher in measure the
effect due to the change in policy variable (Ritchie, 2013, p. 36).
3.5.
Research Model
The research model is based on Autoregressive Distributed Lag (ARDL) or Stationary
Distributed Lag. The equation for ARDL is:

p
i 1
i 1
i 1
i 1
LPOVt c1 1trend 1 LPOVt 1 2 LDCPt 1 i LPOVt i i LDCPt i u1t
LDCPt c 2 2 trend 1 LDCPt 1 2 LPOVt 1 i LDCPt i i LPOVt i u 2t
Where,
= First difference operator
LDCP= domestic credit to private sector

LPOV= poverty reduction
c1 ,c 2
= constant
1 , 2
= coefficient on trend term
1, 2
= coefficient on the lagged level of the dependent and independent variable
i
= coefficient on the lagged dependent variable
i
=coefficient on the lagged independent variable
u1 ,u 2
= error term
P = signifies the maximum lag length

CHAPTER FOUR: ANALYSIS AND DISCUSSION
4.1. Overview
Chapter four of this study comprises of analysis and findings from secondary data
collected. The data is collected from World Bank and economic survey website of Pakistan. The
researcher has utilized meaningful information for the purpose of research. The study aimed to
understand and evaluate the impact of banking sector development on poverty reduction.
4.2. Time Series Analysis

For the purpose of this research data from 1980-2010 was collected annually from World
Bank and Economic Survey of Pakistan. Data was analysed using statistical software E-views
that was used to test various variables. These tests were useful in forecasting future values based
on the past data. As research variable in long term relation are stationary, autoregressive
distributed lag (ARDL), model is used after de-trending of variables.
4.3. Output from Eviews
Null Hypothesis: PAK_PER has a unit root

Exogenous: Constant
Lag Length: 0 (Automatic - based on SIC, maxlag=5)
Augmented Dickey-Fuller test statistic

Test critical values: 1% level
5% level
10% level
*MacKinnon (1996) one-sided p-values.
t-Statistic
Prob.*
-0.534955
-3.737853
-2.991878
-2.635542
0.8675
Augmented Dickey-Fuller Test Equation

Dependent Variable: D(PAK_PER)
Method: Least Squares
Date: 04/17/14 Time: 16:30
Sample (adjusted): 1987 2010
Included observations: 24 after adjustments
Variable
Coefficient Std. Error
t-Statistic
PAK_PER(-1)
C
-0.038304 0.071603
20.97676 27.01839
-0.534955 0.5980
0.776388 0.4458
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
F-statistic
Prob(F-statistic)
0.012841
-0.032030
17.44119
6692.294
-101.6224
0.286177
0.598047
Null Hypothesis:
Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
Hannan-Quinn criter.
Durbin-Watson stat
Prob.
6.649167
17.16841
8.635202
8.733373
8.661247
2.515456
Ho: = 0
(I.e. the needs to be different to make it stationary)
Alternative Hypothesis:
H1: < 0
(I.e. the data is stationary and does not need to be differenced)
From the results of E-views regression analysis, it can be observed that null is coefficient
on PAK_PER (-1) is negative or approximately zero, which mean that there is a unit root.
Alternative hypothesis is less than zero, which means no unit root.

4.4. Interpretation 1
From the above table obtained from E-views, represent the results obtained from
augmented Dickey-Fuller Statistics. To test the hypothesis, level of significance = 0.05 is
considered. Results from Augmented Dickey Fuller Statistics are -0.5439, which is greater than
critical value -2.9918, at 5% level of significance. Therefore, we cannot reject the presence of
unit root, confirmed by approximate p-value for z (t) = 0.8675. To reject the null at 10 %,
p<=0.10 (test statistic should be less than -2.6355), to reject the null at 5% (test statistic should
be less than-2.9918) p<=0.05, and to reject the null at 1 %,( test statistic should be less than3.7378) p<=0.01.
Null Hypothesis: D(PAK_PER) has a unit root

Exogenous: Constant
Lag Length: 0 (Automatic - based on SIC, maxlag=5)
Augmented Dickey-Fuller test statistic

Test critical values: 1% level
5% level
10% level
t-Statistic
Prob.*
-6.399386
-3.752946
-2.998064
-2.638752
0.0000
t-Statistic
Prob.
*MacKinnon (1996) one-sided p-values.

Augmented Dickey-Fuller Test Equation
Dependent Variable: D(PAK_PER,2)
Method: Least Squares
Date: 04/17/14 Time: 16:30
Variable
Coefficient Std. Error

D(PAK_PER(-1))
C
-1.362859 0.212967
9.694089 3.862668
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
F-statistic
Prob(F-statistic)
0.661029
0.644887
16.79238
5921.667
-96.47070
40.95214
0.000002
Null Hypothesis:
-6.399386 0.0000
2.509687 0.0203
Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
Hannan-Quinn criter.
Durbin-Watson stat
-0.743043
28.17923
8.562669
8.661408
8.587502
1.909316
Ho: = 0
(I.e. the needs to be different to make it stationary)
Alternative Hypothesis:
H1: < 0
(I.e. the data is stationary and does not need to be differenced)
Hypothesis is tested using the results obtained from E-views regression analysis; it can be
observed that null is coefficient should be zero, which means that there is a unit root. Alternative
hypothesis is less than zero, which means no unit root.
4.5. Interpretation 2
From the above table obtained from E-views, represent the results obtained from
augmented Dickey-Fuller Statistics. To test the hypothesis, level of significance = 0.05 is
considered. Results from Augmented Dickey Fuller Statistics are -6.3993, which is lower than
critical value -2.9980, at 5% level of significance. Therefore, we cannot accept the presence of
unit root, confirmed by approximate p-value for z (t) = 0.000. To reject the null at 10 %,

p<=0.10 (test statistic should be less than -2.6387), to reject the null at 5% (test statistic should
be less than-2.9980) p<=0.05, and to reject the null at 1 %,( test statistic should be less than3.7529) p<=0.01.
Vector Autoregression Estimates
Date: 04/17/14 Time: 16:31
Standard errors in ( ) & t-statistics in [ ]
PAK_PER
PAK_BANK
PAK_PER(-1)
0.584032
(0.19862)
[ 2.94041]
0.012276
(0.02320)
[ 0.52924]
PAK_PER(-2)
0.370196
(0.20690)
[ 1.78922]
-0.009493
(0.02416)
[-0.39286]
PAK_BANK(-1)
5.036928
(1.83511)
[ 2.74475]
1.038300
(0.21431)
[ 4.84494]
PAK_BANK(-2)
-2.983277
(1.74801)
[-1.70667]
-0.512719
(0.20413)
[-2.51167]
-24.10537
(37.3688)
[-0.64507]
10.74400
(4.36397)
[ 2.46198]
R-squared
Adj. R-squared
Sum sq. resids
S.E. equation
F-statistic
Log likelihood
Akaike AIC
Schwarz SC
Mean dependent
S.D. dependent
0.924959
0.908283
4172.620
15.22538
55.46732
-92.44485
8.473465
8.720311
383.9813
50.27408
0.607259
0.519983
56.90537
1.778035
6.957925
-43.05338
4.178555
4.425402
25.01565
2.566327
Determinant resid covariance (dof 732.7634

adj.)
Determinant resid covariance
Log likelihood
Akaike information criterion
Schwarz criterion
448.8003
-135.4968
12.65190
13.14559
Considering the fact that longer lags were utilized in Dickey-Fuller regression, likelihood
of vector auto regression having longer lags is higher. The results obtained from auto regression
estimates, describes that the coefficients on st1 and f pt1 in both equations are statistically
significant at the 10% level and that the fit for the fp t equation is much better than the fit for the
st equation. Output obtained from E-views for auto regression estimates also mentions the
coefficient standard errors and t-statistics, summary also displays R-squared measures for each
equation (which are valid because each equation estimates are obtained from least square).
1. Introduction(300 words)
1.1 Scope of Report
1.2 Overview of Tesco Plc in UK
The company selected for this task is Tesco is the largest food retailers in the world with revenue
in excess of 54 billion in 2009 and employing over 470,000 people. They operate
approximately 4,331 stores in 14 countries around the world. The company operates primarily in
the USA, Europe and Asia and their Head Office is based in Hertfordshire, UK.
Market Share of Grocery Stores in UK
(Source: Statista, 2015).
The strategies that have been adopted by the company involve introducing the Club Cards and
applying customer centric approach for the purpose of attracting and retaining the customers.
1.3 Supermarket industry UK

A brief overview of the overall supermarket of UK
1.4 Key Requirements

It will define the scope of report through discussing main requirements of the below 3 tasks
2. Task A(1000)
2.1 Market Environment Analysis:
2.1.1 Micro Environment (Porters)
An analysis of the structure of the industry should be undertaken in order to find effective
sources of competitive advantage (Porter, 1985) i.e. Tesco is include threat of substitute products
and services, threat of entry of new competitors, intensity of competitive rivalry, bargaining
power of buyers, bargaining power of suppliers.
2.1.2 Macro Environment: (Pestle)
The macro environment for Tesco can be analyzed with the help of certain adequate tools such as
PESTLE analysis and Porters five forces .The PESTEL framework below analyses the dynamic and
unpredictable environment in which Tesco operates by identifying the forces that have the most impact on
Tescos performance:
Political:The politically growth of Tescos international business of country .

Environmental:Greener Living Scheme on environmental issues.
Social:Consumers attitude and behavior towards food.
Technological:advance technology Online retail shopping.
Legal:Product packaging Act.
Economical:Economic factors impact directly on the buying behavior of
customers.
2.2 Critical Success Factors for Tesco

These factors will be determined through the analysis conducted above.

3. Task B(1000)
3.1 Internal Analysis

3.1.1 Identification of Appropriate Tools
It will involve the selection of two or three tools related to Marketing objectives & strategy Generic
Strategies, Growth strategies, Competitive Strategies, Marketing mix Vision, Mission & Value
Proposition - Value chain analysis - KSF and CSF analysis, SWOT
3.1.2 Internal Analysis of Tesco

The most appropriate tools will be SWOT, Value Chain Analysis, Generic Strategies and the
discussion on the marketing mix, vision, and mission and value proposition of the company.
SWOT Analysis
Strengths:very strong brand name and financially powerful.
Weaknesses:high dependency on UK domestic market.
Opportunities:market extension and joint venture.
Threats:increasing the number of competitors like Sainsbury's, Marks & Spencer and
Morrisons, ASDA
Value Chain Analysis

Generic Strategies
Marketing mix Vision, Mission & Value Proposition
3.2 Resources and Capabilities Analysis of Tesco
4. Task C(700)
4.1 Defining Strategic Fit Analysis

It will involve the theory and definition of strategic fit analysis
4.2 Strategic Fit of Tesco (on the basis of SWOT)
It will be done on the basis of the information collected and evaluation done above.
5. Literature Sources(5 important)

6. References
Statista.(2015). Market share of grocery stores in Great Britain for the 12 weeks ending March
29, 2015.[Online]. Available at <http://www.statista.com/statistics/279900/grocery-market-sharein-the-united-kingdom-uk/> [Accessed on 13th July, 2015].
Task 1
1.1 Company Overview
The company selected for this assignment is Microsoft that is an American
multinational that is engaged in developing, licensing and supporting a range
of software products and services. The Company also designs and sells
hardware, and delivers online advertising to the customers.
1.2 Marketing Issue and its Implications
The marketing issue that the company faced was with the launch of its
product cellphone lamia windows phone or LumiaAnroid phone Both the
products were two different models and were aimed to target two different

market segments. Like all the other products of the company, its customers
were waiting for these products as well very excitedly
1.3 Market Analysis
1.3.1 STEEPLE Analysis
Social: Technology is on the boost all around the world and, therefore, all the companies
associated with it.
Technology: The Company is operating in an industry that is continuously changing and the
companys success in its industry is also highly depended upon the change
Economic: The Company is operating worldwide and, therefore, the economic situation all
around the world impacts the company.
Ethical: Like all other industries, the technological industry also needs to be ethical. The ratio of
cyber crime is increasing.
Political: There are effects of politics on technology companies especially those operating
globally.
Legal: The companies operating in the technology sector along with Microsoft had to face legal
issues at a time from the government or the competitors depending upon the situation.
.Environmental: Nowadays, the focus of all the companies operating in any industry is on the
environment.
1.3.2 Porters Five Forces
Buyers:Microsoft has had deals with almost every major PC company (buyers
in this instance) to include a copy of the latest Windows version as part of
the cost of a pre-built PC
Suppliers:Microsoft by outside suppliers are available from a large number of
firms.

Substitutes:Microsofts gaming division has a moderately high threat of substitute.
New Entrants:They have also been producing these systems long enough to
understand how to minimize their costs with the components they choose,
leaving little chance for cost advantage.
Competition:Microsoft Corporations (MSFT) primary competitors include some
of the most prominent technology companies in the industry. The list
includes well-known brands such as Apple (AAPL), Google (GOOG), SAP, IBM
(IBM) and Oracle (ORCL), among others. Because Microsoft is a diversified
corporation that offers many types of products and services, the company
faces stiff competition in several key areas of the technology sector.
SWOT Analysis
Strength:
1. Brand loyalty
2. Brand reputation
3. Easy to use software
4. Strong distribution channels
5. Robust financial performance
6. Acquisition of Skype
Weakness:
1. Poor acquisitions and investments

2. Dependence on hardware manufacturers
3. Criticism over security flaws
4. Mature PC markets
5. Slow to innovate
Opportunity:
1. Cloud based services
2. Mobile advertising
3. Mobile device industry
4. Growth through acquisitions
Threat:
1.Intense competition in software products
2.Changing consumer needs and habits
3.Open source projects
4.Potential lawsuits
1.3.4 McKinsey 7s
o Strategy: The main strategy adopted by the company is regarding product innovation
o Structure: The Company follows a flatter structure
o System: There are very well defined systems of the company

o Shared Values: The values of the overall organization have been communicated very
well
o Style: The leadership style at Apple is in transformational
o Staff: The employees are hired based on the organizational and cultural fit.
o Skills: The employees hired are basedupon the skills
Task 2
SMART Objectives
Improving awareness about the company's products.
The company needs to improve its market segmentation strategy.
Strategies for Company

installation, maintenance, training, and project management. Micro Strategies'
customers come from fields Micro Strategies doesn't think small when it comes to
optimizing your technology operations and always has a plan in mind. The company
provides a variety of information technology (IT) services such as consulting,
systems integration, network design, including telecommunications, life sciences,
health care, manufacturing, and financial services. The company's roster of
strategic partners includes IBM, Cisco, and Microsoft. Micro Strategies was founded
in 1983.
Cash Flows
This will be developed according to the strategies adopted and their budget
Chapter 1: Introduction
1.1 Introduction
The first chapter of the research facilitates researchers by providing fundamental details
regarding the present study. The chapter introduces the topic and issues on which the study is
based. For this reason, this chapter is symbolized as an introductory chapter which delineate the

significant features which the researcher aspires to undertake while accomplishing the following
research. In the context of the present study the researcher aspires to investigate the perceptions
possessed by parents and communities regarding the importance of English language in primary
and middle schools within the vicinity of Faisalabad, Pakistan. This particular study will serve as
a base for investigation of school development in Faisalabad, Pakistan because no prior study up
till now has attempted to explore the school-based issues. This particular research will be the first
study that inquires about the Perception of Parents and Communities about the importance of
English Language in Primary and Middle schools of Faisalabad, Pakistan. In order to achieve the
schema of the present study, this chapter amalgamates the research objectives, the scope of the
study and other important details which would enable the researcher to develop the fruitful study.
1.2 Context of the Study

Language is considered as one of the important instrument that plays a significant role in the
development of an individual. In the view of McCaleb (2013 pp. 70), the proficiency in terms of
language empowers an individual to establish effective communication. The clarity within
communication enables an individual to share the thoughts with other people residing within the
certain vicinity. According to Leung, Davison and Mohan (2014 pp. 456), language is correlated
with the culture of the person, along with this language refers to the tool which stimulates the
process of communication that ultimately leads towards the sharing of the ideas and thoughts. In
the view of Baquedano-Lopez, Alexander, and Hernandez (2013 pp. 149-182), the importance of
learning foreign languages in developing countries has increased with the passage of time; this is
because of the transformation of the world into global village. As mentioned by McCaleb (2013
pp. 70), English is one of such language which is used as a universal language, which is spoken
and understood across the globe. Therefore, it is believed that learning of foreign language is

stimulated with the help of class room support which enables the students to learn a certain
language in the context of its social relationship. In the view of Chen, Hua, Zhou, Tao, Lee, Ly
and Main (2014 pp. 189), the emergence of globalization has made the multilingual approach of
an individual mandatory, which ultimately leads an individual to become more competitive in the
fiercely competitive business world.
Learning the second language in class rooms allows an individual to communicate with the
fellow students and teachers, this intra-classroom interactions adds a substantial amount of value
in the development of confidence within the students (Evans and Cleghorn, 2014 pp. 01-19).
This means that interactive sessions conducted within the class rooms enable an individual to
incorporate the aspect of proficiency and fluency within the learned language. According to
McCaleb (2013 pp. 70), the management of the schools and colleges plays a significant role in
the success of such second language learning programs as it is their responsibility to encourage
students to the speak English language in the classrooms.
As mentioned by Leung, Davison and Mohan (2014 pp. 456), the environment in which an
individual resides also plays a significant role in making children learn a particular language; this
is because facilitative environment motivates an individual to speak second language rather than
the native language. In addition to this, the methods employed by the management of the schools
also plays an important role in making a child learn a particular language other than native
language. As mentioned by Pennycook (2014 pp. 45), the establishment of English medium
culture across the schools enables the management of the primary and middle schools to deploy
healthy working environment. Therefore, it can be analyzed that unplanned learning is better
than planned learning. As the unplanned learning encompasses the development of certain skills
without any conscious awareness of the learner, this unplanned learning facilitates the learner to

acquire certain skill without making an extra effort. As mentioned by Baquedano-Lopez,
Alexander, and Hernandez (2013 pp. 149-182), the development of an individual greatly depends
upon the ability possessed by a person regarding grasping of the particular knowledge. However,
the interest level of the learner works as a stimulator which inclines an individual towards certain
domain or subject.
As mentioned by Tollefson, and Tsui (2014 pp. 189-214), parents and societal beliefs also
influence the academic performance of a child. This motivation derived from parents adds a
substantial value in the development of confidence within the learner. The world is transforming
into the highly diversified region, therefore learning the second language has turned out to be one
of the necessities of the present day world. In the view of Pennycook (2014 pp. 45), parent
engagement within child academics allows the children to learn more effectively, as the creation
of facilitative environment at homes provides an additional opportunity for the students in a
context of learning. As stated by Engestrom (2014 pp. 67-96), the theory of learning represents
the framework which emphasizes the process through which certain knowledge is absorbed by
an individual. The behaviourism theory focuses on the learning carried forward by an individual
through observable behaviour. In the view of Simonson and Zvacek (2014 pp. 12), the
behaviourism approach of learning primarily beliefs that people learn more in a system in which
certain response is exerted by an individual upon some stimulus. As far as learning of the second
language is concerned the unplanned learning encompasses the behaviouristic approach. On the
other hand, the cognitive perspective represents that learning acquired by an individual refers to
the mental process which entails the involvement of individual perceptions, decision-making
ability along with the quality of memory. This theory reflects that the entire process of
communication and learning encompasses the neurological process in which the efficiency of

decoding the encoded message enhances the quality of learning. In the view of BaquedanoLopez, Alexander, and Hernandez (2013 pp. 149-182) the societal learning model represents that
maximum knowledge is acquired by an individual when learning takes place in small groups.
The social constructivism approach portrays that an individual is able to grasp maximum
knowledge when taught in groups. Therefore, through the analysis of the above-mentioned
discussion it is quite evident that perception of the parents and the community are significant in
making an individual to learn the second language effectively. In addition to this, the learning
models also represent various schools of thoughts regarding the acquisition and utilization of
knowledge by an individual. In the context of the present study the utilization of the abovementioned learning models would enable the researcher to extract maximum the insights
regarding the perceptions of parents and the society upon the adoption of English language
within the primary and middle schools.
1.3 Aim of the Research

According to Hair Jr, Wolfinbarger, Money, Samouel and Page (2015 pp. 123), the aim of the
research refers to the foundation of the study upon which the entire research is based upon. The
aim and objectives of provides delineate to the researcher regarding the areas of core
significance. The aim of the research plays a significant role in the successful development of the
business as it facilitates the researcher to highlight the areas of core importance. In a context of
the present study the researcher aspires to investigate the perceptions of the parents and the
society upon the adoption of the English language within primary and middle schools. Therefore,
the current study aspires to focus upon the importance of adopting English language within the
schooling systems and its impacts upon the progressive development of the students careers.
1.4 Objectives of Research

The objectives of the research enable the researcher to highlight various aspects of the study
which ultimately leads the researcher to accomplish successful completion of the research.
Moreover, the research objectives allow the researcher to develop a well-defined map of the
study which has to be employed by the researcher in order to complete the study successfully. As
far as the present research is concerned the research objectives are mentioned as under,
1.
To study the perspective of parents about the English Language skills development of
child
2.
To evaluate the perception of communities about the English Language skill development
of child
3.
To study the perceptions of parents and communities about the importance of the English
language culture for the primary and middle schools of Faisalabad, Pakistan
1.6 Questions of Study

As the present study aspires to articulate the impact of the perceptions possessed by parents and
society upon the adoption of English language within primary and middle schools the questions
of the research are mentioned in this section. The main research question for this dissertation is:
What is the Perception of Parents and Communities about importance of the English Language in
Primary and Middle Schools of Faisalabad?
The auxiliary research questions are:
1.
What is the role of parents in English Language development of the child?
2.
What is the role of communities in English Language development of the child?
3.How the nexus of parents and communities can improve the English language culture of the
primary and middle schools of Faisalabad specifically in D Ground, Motorway City, Millat town
and Nishatabad?
1.7 Scope of Study

The purpose of this research is to explore the perceptions of Parents and Communities about
importance of theEnglish Language in Primary and Middle schools. Therefore, this research
aspires to articulate the qualified command over languages which empower children with the
confidence to express their feelings and ideas to their parents, teachers, friends and community
members. Hence, this research will enable the policy makers to formulate such strategies which
empower them to develop a competitive academic system within the vicinity of Faisalabad.
1.8 Significance of the Study

As the present study aspires to articulate upon the perceptions of parents and the society
regarding the adoption of English language in primary and middle schools, this study is to
facilitate the academic policy makers of Pakistan to formulate such strategies that corresponds
with the cultural values of the people residing within the particular vicinity. In addition to this,
the current study will also contribute in the progressive development of schools in Pakistan as it
enables the management of the schools to implement effective change. Overall, this study would
contribute a substantial value in the progressive development of the s
In order to complete the study and to attain the aims of the research the dissertation comprises of
five chapters, therefore the outline of the present study is mentioned as under;
Chapter 1: Introduction: The first chapter of the research constitutes of the line of
action adopted by the researcher in order to accomplish the particular study. This includes the
research objectivesociety as a whole. Therefore, this research will contribute a substantial
amount of value within the field of academics within the vicinity of Faisalabad.
Chapter 2: Literature Review: The second chapter integrates the analysis, assessments
and the inspections of the work carried forward by the prior researchers in the specific field.
Chapter 3: Methodology: The third chapter of the research signifies the procedures and
process employed by the researcher which enables the researcher to satisfy the predefined goals
and objectives.
Chapter 4: Data Analysis: The chapter of data analysis entails the procedures adopted
by the researcher to analyze the gathered data. This chapter enables the researcher to compute
results acquired through the collected data.
Chapter 5: Conclusions and Recommendations: The final chapter of the research
includes the overall findings of the research. However, this chapter also includes the
recommendations proposed by the researcher in according to the findings accumulated through
data analysis.
1.10 Chapter Summary
The analysis of the entire chapter reveals that this study aspires to articulate upon the impacts of
the perceptions of the parents and the society regarding the adoption of English language within
primary and middle schools of Faisalabad. Furthermore, this chapter highlights the step by step
approach the employed by the researcher in order to accomplish this study. In addition to this, the
chapter also includes research objectives and questions which enables the researcher to develop
an organized study. However, the outline of the entire dissertation is also portrayed in this
chapter which highlights the line of action utilized by the researcher for the successful
completion of the study. In addition to this, the chapter also includes the background of the study
which enables the researcher to provide brief theoretical foundations regarding the chosen topic.
According to the research outline mentioned above, literature review chapter will be added after

completing the introduction section of the dissertation. The next chapter will explore the
theoretical and academic relevance of research objectives developed earlier through assessing
them under the light of past studies.
Chapter 2: Literature Review

2.1 Introduction
The literature review is second chapter in the process of a particular dissertation or research
project. The literature review involves analysis and evaluation of findings related to past research
studies. Therefore, this study has taken into account the concepts and theories that have included
in past studies to understand the between variable of study. The concept of parent involvement
has been thoroughly discussed in this literature review. Furthermore, there are different types of
parental perceptions regarding English language education that have been covered in this
chapter. It has been examined during process of literature review that community makes a major
contribution in children's efforts to learn English language. Additionally, this literature review
has highlighted the importance of English language in primary and middle schools. Moreover, it
has covered the significance to learn English language. Finally the perceptions and views of
parents and communities have been evaluated to acquire English language skills by children.
2.1 Parental Involvement

As described by Hafiz, Tehsin, Malik, Muhammad and Muhammad (2013 pp. 209-223), the
involvement of parents varies on the basis of culture of a particular society. It has been said that
the parental involvement fall into different categories that has major impact on performance and
development of their children. The expectations of parents from their children influence
performance of their children. The parental involvement involves a variety of activities such as to
support children in reading and writing. Furthermore, it includes motivating and encouraging
children to achieve their academic tasks without any dependency on others. The parents monitor
and supervise various activities of their children that includes in-house and outhouse tasks. The
parents teach their children to enhance their knowledge and skills on a wide range of subjects.
As stated by Jeynes (2007 pp. 82-110) the perception of parents regarding child education has
become an indispensible part in learning and development of child. It is examined in a research
study that positive relationship exists between the involvement of parents and children's
educational success. The relationship is found to possess highly strong during the years of
secondary school. It is evaluated in another research that parental involvement and children's
performance is inconsistent with each other. Parents perception is effective in creating an
environment for children at home as well as at school. The parental involvement is highly
associated to children achievement in terms of learning language. The involvement of parents
can be classified into different major categories; these are parents responsibilities in home
activities, parents responsibilities in academic tasks either direct or indirect.
As described by Driessen, Smit, and Sleegers (2005 pp. 509-532); Melhuish, Phan, Sylva,
Sammons, SirajBlatchford and Taggart, (2008 pp. 95-114), the involvement of parents has a
major role in the tasks of children in school. Therefore parents engage in the communication
with teachers to analyze performance of their children. Furthermore, they evaluate attendance of

regulatory of children in a school. The parents check academic reports of their children and
examine reason behind their good and bad performance. There are parents who are worried about
extracurricular activities of their children. According to the view of parents, extracurricular
activities play a major role in the learning of their children. The parents have become highly
active related to the performance of their children due to the high competition in schools.
2.2 Theories of Parental Involvement
As described by Green, Walker, Hoover-Dempsey and Sandler (2007 pp. 532), the Epsteins
theory of framework has described the involvement of parents in different areas. The framework
is beneficial in understanding and developing a relationship between parents and schools. The
parent involvement is divided into different categories that include parenting, volunteering,
communicating, Home learning, decision making, and community collaboration.
2.2.1 Parenting
As ascertained by Hill and Tyson (2009 pp. 740), the concept of parenting suggests creating a cooperation between parents and schools. It helps parents to gather information related to their
children in terms of their academic means. Furthermore, teachers also need to understand and
analyze the different aspects of children in terms of family life. The administration and teachers
has to ensure that parents get appropriate and accurate information with respect to their children
academic performance. Hence it leads towards the development of good behavior in children. It
helps to enhance confidence of children in a particular school. The co-operation between parents
and schools increase awareness and enables children to meet challenges. Additionally, the
development in the perception of parents facilitates in integrating innovative learning programs
that later expands the effectiveness of students performance.
2.2.2 Communicating

According to Griffin and Steen (2010 pp. 218-226), there are schools that have developed the
practice to arrange meetings and engage in extensive communication to parents with respect to
children educational development. The communication helps to resolve problems that create
hurdles in performance of children. The communication involves activities such as parentsteachers meeting, school conferences etc. Therefore parents get to know the weaknesses of
children that need to be focused to improve. The communication channels being used by the
schools should be improved as the existing era is known to be of advancements. Most of the
schools these days, focus on updating parents regarding childs progress through electronic
channels.
2.2.3 Volunteering
As stated by Epstein and Sanders (2006 pp. 81-120), the relation with families can be strong by
providing options or chances to parents to participate as volunteer in the events and activities of
school. Parents, who participate in school events becomes highly comfortable in communication
with children. The volunteer activities are more encouraged in primary schools as compared to
secondary schools. The volunteering has major contribution in the development of skills among
children. Parents are likely to appreciate efforts of children and teachers in volunteering type.
Additionally, teachers get able to identify children weakness and provide attention to get over
those hurdles. This monitoring practice contributes for the childs progress and performance. The
teachers are able to explore the practices that will help in reducing childs weaknesses. It is
essential for the schools to promote the volunteering practice among children because it will
benefit in increasing the students effectiveness and performance which motivate them to excel in
academics and education.
2.2.4 Home Learning

The parents involvements in the educational development of children highly occur at home. The
teachers need to identify about the learning of children that takes place at home strives to
capitalize upon it. The teachers are required to enhance understanding of parents in terms of c
their children academic curriculum. Furthermore, teachers need to aware children with respect to
practices and systems that are followed in children. This type of parents involvement enables to
reduce gap that exist between schools and families due to the different cultures. Therefore, it is
necessary that teachers provide detail to parents related to learning process and activities in
schools that help parents to positively contribute in educational growth of their children.
Moreover, the learning errands proposed for the students should be reviewed at home as well
since it helps in smoothing childrens concept regarding the tasks. For this concern, parents
perception requires to be increased as they are responsible for their childrens learning interest
and performance.
2.2.5 Decision Making
As explained by Domina (2005 pp. 33-249), the parents take major decision with respect to the
activities and education of children. The decisions are aim to enhance skills and performance of
their children. The benefits from this type of parental involvement are increased awareness in
families. Furthermore, it develops ownership and connection feelings between parents and
teachers. In addition, the perception of parents is also essential because they are the decision
makers of students educations. It is their responsibility to shape the educational strategies for
their children. The selection of an appropriate school helps in reducing the parental stress
regarding the decision making process of their childs progress.
2.2.6 Community Collaboration

According to Epstein (2005 pp. 151-170), teachers and parents put efforts to organize resources
that are supportive in the education of children. The co-operation among parents, teachers and
society has a major positive contribution in development and learning of children. There are high
learning opportunities for children by maintaining collaboration among community, families and
schools. The children increase their interaction with communication that enhances their social
skills.
2.3 Education and Its Importance
As described by Abdal, Khan, Azhar, Shahzad and Amir (2013 pp. 65); Memon (2007 pp. 47-55)
education is considered as one of the activities to interact and socialize with society. It is
examined as one of the obligation of families in a particular society. Education contributes in the
quality and growth of a specific economy and makes a positive contribution in the achievement
and career development of an individual person. It has been realized that success of an economy
is related to the level of education of society. The investment in education sector of Pakistan is
very adversely affects educational development of children. The education is one of factors that
are included in millennium development goals. The basic level of education in Pakistan is very
low that is not considered as good for a particular society.
As ascertained by Khalid and Khan (2006 pp. 305-322); Kazmi and Quran (2005 pp. 90-107),
there are various factors that affect the development and growth of children education in
provinces of Pakistan. The dropout or failure rate of children in the province of Baluchistan is
high because parents are not educated. Furthermore, there are inadequate facilities for children
in schools in the province of Baluchistan. Moreover, there is no training that has been provided
to teachers in terms of providing education to children. The traditions, values and customs of
community creates hurdle in education of children and the income of their children, therefore

they cannot facilitate education. The developing countries such as Pakistan, India, etc are
required to efficiently utilize resources that help to provide education in primary and secondary
schools. UNESCO has emphasized the importance of education in the development of children.
2.4 Importance of English Language
According to Ali, Ahmad, Manzoor and Naseer (2014 pp. 21-33), English language has become
necessary since the inception of English imperialism. The English language is officially spoken
in America, Australia, Indian sub-continent etc. The English language has become a common
platform of communication in the world. There are some countries that do not adopt English
language and are stick to their native language. The perception of English language significance
varies from country to country. The English language is identified and spoken in every corner of
the world that provides convenience to individuals during travelling in different countries
(Coleman, 2011 pp. 9-21; Norton, 2006 pp. 22-33). The trade agreements, newspaper, journal
articles are published in English language in various countries.
According to Hashwani (2008 pp. 20-24); Cummins, Bismilla, Chow, Cohen, Giampapa, Leoni
and Sastri (2005 pp. 38); Norton (2006 pp. 22-33), the English language is commonly used in
different and industries over the world. The English language helps an individual to stand and
compete in a society. English has become the international language for communication with
individuals and business. The English language has enabled a person to share and communicate
their ideas and opinions with others in a society. The English has become the compulsory subject
in higher education of Pakistan. Therefore, English language in necessary is primary as well as
secondary schools. It is identified in a research that opinions of parents, teachers and
communities are important with respect to the learning of English language in primary and
secondary schools.

2.5 Parents Perception Regarding English Learning of Child
According to Rowe, Ozcaalikan and Goldin-Meadow (2008 pp. 182-199), the parents
accelerates the learning and development of English language of a child. If the parents are well
educated then it helps their children to learn and adopt English language easily. In contrast to
this, if parents have low educational background then they cannot support their language in
education and English language learning. The literate parents need to identify level of learning of
their children. Therefore, it helps them to incorporate the skills of English language in their
children. The parents with low educational level can hand over this responsibility to teachers
and mentors to help their children in learning of English language. The parents need to
encourage their children to learn English language as it positively contributes in educational
development. The parents need to motivate their children with respect to the learning of English
language (Csizer and Kormos, 2009 pp. 98-119). Furthermore, parents need to aware with
respect to the performance of their children. It help parent to assess abilities of children with
respect to the learning of a particular skill.
As stated by August, Carlo, Dressler and Snow (2005 pp. 50-57), parents have to spend ample
time with children to adequately guide them in learning English language. The parents that
provide positive feedback to children in learning lead towards building confidence in them. The
parents have to keep realistic expectation from their children to enhance their language skills.
The parents need to emphasize or appreciate the efforts of their children that positively affect
perception of children to learn English language. The parents need to put efforts to enhance
vocabulary of children and helps them to understand its uses in different contexts. The
development of good interpersonal relations between parents and children positively helps to
learn English language. The parents make proper planning that consist of different to enable a

child to learn English language over time (Proctor, Carlo, August and Snow, 2005 pp. 246). The
opportunities need to be given to children by parents to learn English language independently as
well.
2.6 Perception of Communities in English Learning of Child
As explained by Janagarajah (2007 pp. 923-939), the community is defined as boundaries where
child and individual grow up; therefore it affects their learning process. The language that is used
in a particular community affects the process of English language learning of a child. The
communities consist of the relatives, friends, and other members of a society that has consistent
interaction with children. If English language in frequently used in particular society then if
affects development of a child. Every individual and child has a need to be associated with other
members; therefore they adopt rules and practice that is followed in a particular society.
Therefore, if English language is commonly used by members of community then it encourages
children to learn a particular language. The community is effective in enhancing motivational
level of students. If community discourages children efforts to learn English language then, they
will not be able to get proficiency in it. The community provides opportunities to children of real
world to learn any language or skills. The community helps to provide necessary tools to
children to be easily to easily learn an English language (Geva and YaghoubZadeh, 2006 pp. 3157). The members of society transfer their acquired information to children to build their skills in
English language.
As described by Nystrand (2006 pp. 392-412), the quality of learning English language is
dependent on the nature of interaction with society. The community helps children to make a
clear goal with regard to learning and development of English language. There are different types
of people who exist in a society and they play a different role in the learning of child. There are

some members that motivate and facilitate children to enhance their English language learning
skills. In contrast to this, there are individuals of community that negatively affects the growth
of a child to learn particular language skills. Therefore, it is considered as the responsibility of
parents to enhance their relations with members that help children in their learning and growth
(Wright, 2007 pp. 1-26). Furthermore, parents need to reduce interaction with those individuals
who discourage children to learn a skill.
2.7 Parents and Communities Perception regarding the Development English Language
Culture of the Primary and Middle Schools
As explained by Ambreen and Mohyuddin (2013 pp.140-147), the children of primary and
secondary schools have huge interaction with teachers as well as parents. Therefore, their
behavior and perception with respect to learning English language has a contribution in child's
development. The parents perception regarding English education motivated them to identify
and choose schools that encourage English language learning in primary and secondary schools.
The perception of parents regarding the development of English language culture in schools in
dependent on the important that is given by them. If parents that English language does not play
any significant role in children's life then it adversely affects children to learn this skill. On the
other hand, parents who are aware with respect to the importance and role of English language at
international level emphasize children to learn this skill.
The honesty and sincerity of principle and teachers are required to develop the culture to learn
English language in schools. If the schools take English language learning as unnecessary
activity then it negatively affects the learning of English language in schools. It is identified in
one research that communities and parents optimistic perceptions are vital for the educational
success of children (Munir and Ur Rehman, 2015 pp. 637-650). The parents and individuals of

society who provides help and support to children leads towers an easily adoption of English
language.
2.8 Research Gaps
The research gap examines areas that have not covered by past studies related to the parents and
communities perception about the importance of English language in primary and secondary
schools. The past research studies has developed an understanding with respect o parental role
and learning of English language by children. The past studies have identified the significance of
parents and communities perception about the importance of English language of a child but they
have not involved evaluation of a particular area or city. There are few studies in past that have
covered areas of with respect to the perception of parents and communities to understand to
develop skill of English language among children. Therefore, this study has been taken into
consideration to explore aspects with regard to parents and community perception in the growth
of skills among children.
2.9 Chapter Summary
The motivation as well as support of parents enables children to learn English language
frequently during their primary and secondary schools. There are different types or theories
related to parental involvement. The types of parental involvement that have been discussed in
this study are parenting, communicating, volunteering, home learning, decision making, and
community collaboration. The behavior and actions of members of community either make a
positive or negative contribution in learning of English language among children. The education
is considered as important because it positively contributes in achievements of children. The
education is important because it helps to enhance confidence among individuals. The education
has become like basic necessity to survive and live in a society. Furthermore, it is discussed in

literature that English language has also become an indispensible part of a particular individual
or society. The significance of English language is analyzed in a way that, it is used as a common
language over the world. It is evaluated that both parents and communities can encourage or
discourage children to learn a particular during the stages of primary and secondary schools. The
third chapter will determine the research methodology adopted for the completion of present
study.
Chapter 3: Research Methodology

3.1 Introduction
The third chapter of the research encompasses the process and procedures utilized by the
researcher while accomplishing the particular study. This chapter undertakes the philosophy,
approach and strategy along with data analysis procedures employed by the researcher in order to
satisfy the predefined objectives of the study. As the present study aspires to evaluate the
perceptions possessed by parents and the society regarding the adoption of English language in
primary and middle schools within the vicinity of Faisalabad the methodology of the current
research is mentioned as under
3.2 Research Philosophy
In context of the present study the researcher has utilized positivism as the research paradigm.
The reason behind using this philosophy for the study refers to the nature of the study which
reflects the study being quantitative. In addition to this, the positivism enabled the researcher to
relay the analysis of the gathered quantitative data on the basis of mathematical findings.
Therefore, the utilization of this philosophy empowers the researcher to develop such fruitful
study and satisfy the predefined objectives of the study. Saunders, Saunders, Lewis and Thornhill
(2011 pp. 5) stated that selection of an appropriate research philosophy represents the mindset of
the researcher while analyzing the gathered data. Thereby, using positivism philosophy permits
the researcher to analyze the data without any personal prejudices and biasness
3.3 Research Approach

As the present study aspires to evaluate the perceptions of parents and society regarding the
adoption of English language in primary and middle schools, the researcher has chosen inductive
approach as research approach for the present study. The inductive research approach facilitates
the researcher to focus upon the areas of core importance in reference to predefined research
objectives and questions. The theory formulated in this approach is based upon the analysis and
evaluations carried forward with the help of primary and secondary data. Saunders, Saunders,
Lewis and Thornhill (2011 pp. 5) justified that the adoption of the inductive research approach
enables the researcher to test the gathered data after the formulation of theory.
3.4 Research Design
In context of present study, the explanatory and descriptive research designs have been adopted
by the researcher, this is because both the research designs enabled the researcher to investigate
regarding the identified research problem in detail. Furthermore, the chosen research design also
facilitates the researcher by providing a multi dimensional picture relating to the issue as it also
undertakes the usage of secondary information. The study of Hair Jr, Wolfinbarger, Money,
Samouel and Page (2015 pp. 123) explained that the chosen research design empowers the
researcher to identify the effects of the variables chosen within a research.
3.5 Research Strategy
As far as the present research is concerned, survey strategy is used by the researcher in order to
gather the required data. As the present study aspires to investigate the perceptions possessed by
parents and society regarding the adoption of English language in primary and middle schools
the survey strategy requires the circulation of the questionnaires amongst the respondents of the
study. In addition to this, the survey strategy also empowered the researcher to analyze the
gathered data with an ease, as this strategy quantifies the responses gathered from the

respondents upon the established ranking scale. On the other hand, the adoption of other research
strategies would have made the present study more complex and time consuming. As expressed
by Bryman and Bell (2015 pp. 56) survey strategy refers to the time effective approach deployed
by the researcher in order to collect the data.
3.6 Sources of Data Collection

The source of data collection refers to all the resources through which the data has been extracted
by the researcher in order to satisfy the predefined goals and objectives of the study. In context of
present research development of this research undertook the data from the primary sources and
well as from the secondary sources. The secondary sources of data include all the information
collected from the books, journal articles and certain online sources. The secondary sources of
data entail the refined information processed by the prior researcher in the common domain. On
the other hand, the primary data utilized in this research is accumulated with the help of the
respondents of the study. The adoption of both the data sources enabled the researcher to get the
multi dimensional picture of the issue as the secondary data reflects the point of view possessed
by the prior researchers, whereas the primary data portrays the perceptions of the respondents.
According to Hair Jr, Wolfinbarger, Money, Samouel and Page (2015 pp. 123), the sources of
data collections adds a substantial value in reliability of the research, as it supports the research
with the opinions expressed by the previous researchers.
3.7 Data Collection Method
The data collection method plays a significant role in the progressive development of the
research. As the present study is concerned, the secondary data have been gathered with the help

of prior researches and books. However, the primary data is collected with the help of the
questionnaires comprising of close-ended structured questions. These questions were evaluated
on the basis of likert scale ranked from one being strongly agreed to five which demonstrates the
notion of strong disagreements. The utilization of questions for data collection enabled the
researcher to gather the data relevant to the present study.
3.8 Sample
The subset of the entire population is called the sample. In context of present study, the sample
size comprises of approximately 40 respondents from the population of such areas specifically
having two public primary and two public middle schools in the vicinity of Faisalabad Pakistan.
In addition to this, the sample constitutes of such individuals whose children are studying in the
chosen primary and middle schools. Those respondents involve the parents and communities as
they will give their perceptions regarding the current research issue. The estimated sample is
chosen with the help of non-probability sampling technique called convenience sampling as it
has enabled the researcher to collect data with an easy approach. Therefore, the names of the
schools and the area from where the population and by extension the sample is randomly derived
as follows.
1.
Government Girls Primary School in D Ground
2.
Government Boys Primary School motorway colony
3.
Government Boys Elementary School, Millat Town
4.
Government Girls Elementary School, Nishatabad
Ethical Considerations
Ethical considerations refer to the essential part of the study. It is mandatory for the researchers
to consider all the ethical concerns while accomplishing the research. There are three types of

ethical considerations which include autonomy, anonymity and confidentiality (Saunders,
Saunders, Lewis and Thornhill, 2011 pp. 5). Keeping their importance in mind, the researcher
has assured that none of the ethical values are desecrated. Therefore the secrecy of the private
information of the respondents along with the freedom of speech refers to the one of the concerns
assured by the researcher.
3.9 Data Analysis
After the collection of data, data analysis is carried forward by the researcher. In context of
present study, the researcher has utilized the statistical software called SPSS in order to evaluate
the responses gathered from the respondents. The adoption of the statistical instrument enabled
the researcher to pursue sound analysis of the accumulated results. It has involved the reliability
statistics and graphical representation of the data with the help of descriptive statistics. Hair Jr,
Wolfinbarger, Money, Samouel and Page (2015 pp. 123) stated that selection of an appropriate
data analyzing tool facilitates in extracting relevant research findings and results.
3.10 Chapter Summary
The analysis of the chapter reveals the entire methodology used by the researcher in order to
satisfy the predefined goals and objectives of the study. Initially, it has been observed that author
has adopted a systematic research methodology for the assortment of relevant research data and
information. It has been identified that the researcher has used positivism as the philosophy of
the research, whereas the inductive research approach has also been applied by the researcher.
Likewise, the author has implemented the survey strategy as the action plan and explanatory as
research design. In addition to this, questionnaires refer to the data collection instrument
formulated by the researcher whereas the analysis of the gathered is carried forward with the
help of SPSS. The upcoming section is named as data analysis chapter in which collected

information and data is analyzed and findings are interpreted. The next chapter will explore the
research results and findings.
Chapter 1: Introduction
1.1. The Area under Investigation

In this study the area under investigation is the analysis and evaluation of the effective
business management policies on the performance of the British Red Cross. British Red Cross is
a non-profitable organisation, which is highly recognised because of its swift disaster based
planning and controlling, disaster management and most importantly its management of the
overall organisational operations and functions (Council, 2012). Since the British Red Cross is a
non-profitable organisation, its major aim is to administer the workforce and budgeting in a
highly proficient manner in order to ensure that the organisation is capable of tackling disasters
in an effective manner.
It is essential for organisations like British Red Cross to design, develop, and implement
effective business management policies in order to ensure that the various functions like,
operations, finance and human resources are managed effectively (Singleton, 2012). This would
ensure competent performance of the business as a whole, since all departments will work in a
highly synchronised environment. With pre-defined policies all the departments will have predefined boundaries and goals and will work towards the achievement of those goals, which in
turn will result in enhancing the organisations performance (Bryson, 2011).
1.2. The Organisational Context

British Red Cross is among the leading charitableorganisation of United Kingdom. The
organisation works internationally and domestically and provides health and social care services
to the vulnerable individuals of the society with the aim of the building resilience. British Red
Cross has strong global presence, as it is part of the worlds largest humanitarian organisation,
the international Red Crescent and the international Red Cross movement, comprising of more
than 180 national societies (Hanlon, 2011). British Red Cross is a prominent and dynamic
member of the movement and it is strongly committed for strengthening the IFRC Secretariat,
with the aim of building the capacity of the various national societies included in the movement
and providing resilient support to the various projects, tasks and policies of ICRC (International
Committee of the Red Cross).
The 2010-2015 corporate strategy of British Red Cross supports the ICRC movement
with the aim of improving the effectiveness of the humanitarian response to natural disaster or
conflicts and wars. Along with that, it also aims towards the reduction of the risks of global
warming all over the world and providing care to the extremely vulnerable groups and
individuals of the society (Singleton, 2012). These aims are achieved through the provision
material and financial resources, along with human and technical expertise. Furthermore, the
British Red Cross also provides support while working in close coordination with other societies,
which in turn helps in shaping the movement strategy, along with humanitarian and policy
diplomacy (Christopher et.al, 2014).
In the international Red Crescent and the international Red Cross movement, the British
Red Cross is acknowledged as one of the leading National societies possessing the capacity,
experience and the technical expertise, which are essential for the effective management of a
disastrous situation (Waikayiet.al, 2012). British Red Cross is working on the development of its
regional as well as global response system in order to ensure pertinent response to the disastrous

situation. The aim is to establish a strong link between the disaster preparedness, disaster
response, and more importantly recovery efforts (Blaikie et.al, 2014). British Red Crosshas also
played a crucial role in the development of the resilience approach of the movement, which is
aimed towards the reduction of risks and taking precautionary measures before the disaster
strikes. This aim is achieved by British Red Cross through working in close coordination with
the National Societies and ensuring the successful delivery of the programs that strengthen the
resilience of the communities towards crises (Waikayiet.al, 2012).
British Red Cross provides technical support and funding in areas such as sanitation, first
aid, water and community based health, security and shelter, with a major focus over the
addressing of the fundamental causes of vulnerability to humanitarian crisis. As one of the active
participants of humanitarian policy field and leading player of the National Society in
International Humanitarian Law (IHL), British Red Cross plays a significant role in the
promotion, development and dissemination of IHL, both internationally and nationally (Carlos
et.al, 2014, p. 374). British Red Cross is dedicated towards the improvement of the environment
for the vulnerable groups and individuals residing within the society through the promotion of
the humanitarian principles and through influencing people with the help of an on-going
research, analysis and negotiation. British Red Cross also works as a humanitarian support for
the public authorities of United Kingdom under which it provides training, support and legal
advice to the national and the international stakeholders (Hanlon, 2011). The humanitarian
policiesand activities of the British Red Cross include development of civil military relations and
principles for the development of humanitarian resilience under disastrous circumstances.
1.3. Strategic Significance of the Area under Investigation

Strategic significance is the method of evaluating the importance of the particular part of
the plan, which is being implemented by the organisation for ensuring efficient management.
Figure 1: Strategic Significance for British Red Cross

Planning holds high strategic significance for a non-profit organisation like British Red
Cross. The importance of planning is high, specifically because, it enables the organisation to
develop effective plans for tackling with disastrous circumstances and taking precautionary
measures even before the disaster occurs (Bryson, 2011). British Red Cross has a well-developed
planning structure, through which they ensure that various operations and functions of the
organisations are performed in an appropriate manner to provide care to the vulnerable group of
the societies (Bryson, 2011).
British Red Cross understands the strategic significance of planning and they devised and
developed their strategies around the disaster, poverty and healthcare issues. At British Red
Cross, the organisational plans are developed by keeping the needs of the organisation and its
human resources under strict consideration. Thus, the plans of the British Red Cross works in
close coordination with their mission and vision (Waikayi et.al, 2012). The visions and mission
of British Red Cross involves working for the benefit of the humanity, ensuring their safety and

providing the vulnerable group of the society with an environment in which their basic needs are
addressed (Hanlon, 2011).
Like planning, programing also holds strategic significance for British Red Cross. For
non-profit organisations, programing is closely linked with mission and vision of the
organisation. It is essential that programing and planning works in close coordination within the
company (Head & Alford, 2013). British Red Cross has a strong hierarchy and they perform their
planning and programing activities based on teams. Thus, in order to ensure effective programing
and planning activities, possible clients are associated in the preliminary planning and
programing process (Obel, 2014). This helps in building the acquaintances for the fundraising
and donation programs. Programing is also significantly important for British Red Cross as it
adds value to the business management policy. It is a crucial method that serves as an essential
tool for the management of the various features of the organisation (Waikayi et.al, 2012).
Similarly, budgeting for various projects also holds strategic significance for British Red
Cross. Since the British Red Cross is a non-profit organisation, it is completely dependent on
donations by the public and the private sectors (Cunningham et.al, 2014). Furthermore, for nonprofit organisations, like British Red Cross, the budgeting engrossed within the crisis and the
charitable management activities can result in lifting the overall monitory resources of
theorganisation. Kazilinas(2011) concluded that the non-profit organisations like the British
Red Cross have proved to be proficient and successful in performing various societal activities;
thus, enabling them to generate financial resources in the form of fundraisers and charities.
Lastly, performance management and management control also plays a significant role in
the British Red Cross. Since the management is responsible for the measuring of the
performance of the organisation, its employees and take counter-measures forremedial actions
(Chenhall et.al, 2012), this ensures that the performance of the organisation remains in
coordination with its goals and objectives. Thus, the strategic significance of performance

management and management control is very high for an organisation like British Red Cross,
specifically because the overall performance of the organisation is dependent on it.
1.4. Research Questions and Objectives

A research question could simply be explained as the statement that is used for the
identification of the phenomenon that is to be studied. Appropriate answer to the research
question helps in addressing the research problem in an adequate manner (Creswell, 2013).
Following are the research questions, which are addressed by the researcher in this study:
What are the impacts of effective business management policies on performance of

British Red Cross?
What are the different methods through which British Red Cross Company can
implement its effective policies?
The objectives of the study are designed by the researcher for answering the research
questions. They emphasise on how the aims of the research are to be accomplished. Objectives
must be highly feasible and focused and appropriately address the overall outcomes of the
project (Creswell, 2013). Following are the objectives of this researcher study:
To identify the influences of effective business management policies on performance of

British Red Cross.
To determine the efficiency of the British Red Cross business management policies.
To assess and presentthe unconventional business management policies on the

performance of British Red Cross.

Chapter 2: Literature Review
2.1. Introduction
Business Policy characterises the degree or extent to which employees within
anorganisation can take decisions (Daft, 2015). It allows the lower management level to manage
the issues and problems without counselling top management level for making decisions each
time. Business procedures andpolicies are the rules created by a company to supervise its
activities (Daft, 2009).Head & Alford (2013) describes the boundaries of decision making, which
must be followed. Likewise, business policy manages the attainment of organisational resources,
which are essential for achieving organisational objectives. Business policies are the exploration
of the top management level responsibilities, the substantial issues influencing success and
achievement of the organisation and the decisions that may influence the organisation in longterm (Daft, 2015).
Regardless of the sector anorganisation operates in, i.e. public or private
sector,management of business policy is crucial and turning out to be the most significant factor
(Hitt et.al, 2012). An investigation led by The Economist's Intelligence Unit regarding 211 public
sector as well as private sectorcompanies found that 89 %of the government participants and 81
% of the private participants have experienced a negative effect due to the absence of effective
management of business policy (Hitt et.al, 2012).
2.2. Business Management Policy

Managing a business is an administrative approach, which is utilised to ensuresimple
managerial practices by means of building up different policies and strategies to handle the
uncertainconditions that will eventuallyoccur. Business management policies are the operative
guidelines that could be forwarded on with the intention to support the order, security, stability or
future objectives of both profit based and non-profitbasedorganisations. For example, acompany
may have management policies against hiring the relatives of existingemployees for higher level
position. Each time when the situationascends, the workers may make reference to the
management policies, rather than making their own decisions (Chenhall et.al, 2010).
In todays competitive business environment, the management policies of companies are
utilised as amanagement technique and procedure throughout the system or functions that
comprises of numerous users. Management policies of companies involves policy-based
administration and control of the enterprise, which controls the system, the application of the
defined policies and strategies forcontrolling and managing the access for the engagement of the
resources (McLean & Smits, 2012).
Management policies of multiple user companies actually includedeveloping procedures
for such activitiesso as to get accessibility to the document or delete particulardocument, the
exterior and foundations of single desktops users etc. There are different softwarepackages
available forautomation of a feworganisational processes. Overall, the way these software
packages perform are management policies of business, which are contributes towards the
products or services (Beautement et.al, 2009).
Business management policy serves as an efficient managerial approach, which is
integrated within the management, operational and the functional aspect of the organisation
(Wheelen&Hunger, 2011). These policies are the functioning rules that perform the task of
sustaining the direction, maintenance of operations, and continuity of processes within the
organisation. Today, the business management policies are employed by organisations as a

management technique and tool throughout the organisation (Wheelen& Hunger, 2011).
According to Tripathi&Agrawal (2014), the business management policies captivate policy
based management that is responsible for controlling the network, implementation of the
described policies for effective management and controlling the access for the employment of
resources.
Organisations, like British Red Cross, can enjoy various benefits through the successful
implementation of Business Management Policies, the benefits include:
Figure 2: Factors of Effective Business Management Policy
2.1.1. Employee Retention

Implementation of effective business management policies results in decreasing the
employee turnover rate for organisations (Ganesan, &Badrinath, 2012). With well-defined
policies and procedures in place, the employees work towards the achievement of vision of the
organisation. According to Shen et.al (2009), good organisations know the value of their human
resources and determine their management policies keeping the human resources under

consideration. Thus, they ensure that the human resources working within the organisation are
well aware of the organisations vision and mission (Swayne et.al, 2012). Since, employees are
well aware of their organisations vision and mission, they work in accordance with their defined
policies, which results in the successful achievement of the organisational goals in the longer run
(Swayne et.al, 2012).
2.1.2. Increased Competency
With adequate business management policies in place,organisations can develop training
and development program for the managers in order to ensure a high level of competency (De
Vos et.al, 2011). It is crucial for organisations to possess managers that are competent and
proficient, because they are the decisions makers of the organisations (Tripathi, &Agrawal,
2014). For organisations, like British Red Cross, it is essential to possess a team of highly
competent managers, because its NGO centres are located all around the world and they need to
ensure that the high level of quality, care and management of disastrous situation is guaranteed in
all the countries.
2.1.3. Training and Development

The organisations with strong business management policies in place are capable of
designing and developing various training and development programs for the employees at
various levels (Noe, 2014, p. 101).The organisations, like British Red Cross,emphasise over the
training and development programs for the non-managerial and the managerial employees. It is
essential to provide training to the non-managerial employees because they are the ones who
have to work in the field with the vulnerable population. Verma (2013) stated that it is crucial
that these employees are capable of identifying and addressing the needs of the individuals in an

adequate manner on humanitarian grounds. Additionally, training and development of managers
is also highly crucial, as managers are the ones responsible for making the strategic decisions
associated with the various functional operations of the organisation (Tripathi&Agrawal, 2014).
It is essential to develop the skills and expertise of the employees in the organisation as this helps
the organisation in attaining the strategic priorities of the society.
Senyucel (2009) explained that it is essential for the management of organisations to
manage their employees, volunteers and the fundraising and charity programs in an effective
manner. NGOsraise funds through various resources, which is possible due to the highly
motivated individuals working within the organisation, who are dedicated towards ensuring that
the organisation achieves a stable flow of financial remittances from various individuals,
government funds and organisations (Shen et.al, 2009). Currently, the overall fundraising
activities carried out by British Red Cross are adequate enough and have enabled the
organisation to provide healthcare services to people all over the world in an effective manner.
They are ensuring that the organisation fulfils the standards of the International Committee of the
Red Cross (ICRS) movement.
2.3. The Frame Work of Management

The management framework involves the British Red Cross management policy. It
additionally clarifies that the expectations of managers with respect to society (Daft, 2015).
Framework of the British Red Cross management practices and activities are required for the
effectiveand efficient organisational performance. It demonstrates the dedication of the British
Red Cross towards the development ofmanagers throughout the community. At last, it
encourages the senior management to take the responsibility asapositive role model for other
managers and employees as well (Daft, 2015).
2.4. Benefits of Successful Implementation of Business

Management Policies
Advantages of effective application of organisational management policies include:

More skilled managers and competent decision makers at each organisational level at
British Red Cross (David, 2010).

Improved abilities for achieving the strategically selected targets of the society.
Increased development improvement prospects and more accentuated training and
development opportunities for employees at management and non-management level.

Improved retention management and non-management level volunteers and employees.
Promotion of culture thatcomprises ofindividual as well asorganisational learning and
development (David, 2010).

Organisational management policies simply do notbenefit the management, but the
effective management framework implementation helpsin guaranteeing training and
development opportunities for everyone in order to achieve the improvement they
desirefor their occupation. Such opportunitiesexist in their personal development and
growth in the long-run (David, 2010).
Leaders of the British Red Cross mustappropriately manage their workers, volunteers,
philanthropy projects and donations, if they are to achieve the unique sense of individualism
(Snell et.al, 2015). The British Red Cross uses a combined method of funding that is desirable by
majority of the philanthropy projects. As indicated by the higher management levelmember of
the British Red Cross, they are satisfied with the charitable amount that they are able to generate
as revenue; however,the higher management level member additionally expressed that it entails
having a decent contract for a few elements of its work (Snell et.al,2015).
2.5. British Red Cross Business Management Policies

Numerous authors have elaborated on the importance of effective business management
policies for the organisation. British Red Cross has worldwide operations in various countries
and they are looking to expand even further; hence, it is necessary for them to have effective and
efficient business management policies(Hanlon, 2011). Even though, the organisation is not
involved in selling services and products for generating revenues, but the organisation certainly
requires proper management efforts to manage their large workforce and to tackle emergency
and disaster based situations like floods and hurricanes etc. Furthermore, the current global
economic situation creates a much stronger impact on non-governmental organisations like
British Red Cross (Singleton, 2012).
British Red Cross is a non-profit organisation that needs to have effective management
policies. The organisation needs to have maximum capacity in reaching out to all those issues
where there are problems(Hanlon, 2011). The experts have conducted very clear identification
that at present all those non-profit organisations, which deal in disaster management, must be
more dynamic and even active as well. This is especially the case for some very difficult regions
like Africa, where there is a need to be more dynamic in order to meet the needs of the citizens as
well (Waikayiet.al. 2012).
Up till now, British Red Cross has been able to expand itself as an association having an
effectual policy of business management in order to remain more dynamic and successful in their
disaster management activities globally (Singleton, 2012). It is certainly observed that British
Red Cross seems to consider the decentralised structure of the organisation with their offices and
divisions. This has helped them in maintaining proper business management policies for their
organisations (Hanlon, 2011). Though, a detailed review of the literature related to the business
management policies for British Red Cross will be conducted throughout the research study.
2.6. Management of Uncertain Conditions

The contemporary approach of management in all non-governmental organisations and
even profit oriented companies has changed significantly. Organisations are even working in
conditions where there are high probability and uncertainty and steps are taken in order to meet
the sudden situation(Dennis, 2009). There are several experts who have explained the concept of
risk management for conditions in which the organisations are now involved in uncertain
activities occurring in the external environment (Head & Alford, 2013).
2.7. Performance Management and Business Management

The significance of the performance management matters considerably for many
organisations. In the modern world, where both the profit-earning companies and more
specifically, non-profit companies are operating, performance management is certainly a vital
feature that is associated with risk management and advancement of information technology(Hitt
et.al, 2012). At present, most of the non-profit organisations actually consider their volunteers as
their assets and well-wishers as well. It is usually seen that the performance associated with the
volunteer is measured in several ways. According to Xavier (2013), the factors, such as
teamwork, dedication, production, communication mechanism and overall attitudes towards
welfare of the humanity,are associated with performance management and business management.
Such kind of contemporary exercises of management policy has completely changed the
management practices (Kaplan et.al, 2010).
The success of the non-profit companies is usually measured by both efficacy and
efficiency with which they are able to address the needs of different stakeholders. Even all the

profit oriented companies have acknowledge the fact that depending on financial measures only
is simply not enough for carrying out the performance measurement and management. However,
financial reports prove to be very useful in measuring the past performance and providing very
little amount of information on value creation in the long-run(Xavier, 2013). According to
McLean & Smits (2012), performance measurement for the non-profit companies is very much
extensive but is certainly not very much conclusive in totality. The main reason is that
organisations usually lacks the elegance and simplicity of financial measures like profitability or
returns for stakeholders, which profit making organisations normally use for making evaluation
of the performance (Xavier, 2013).
2.8. Significance of Planning for Non-Profit organisations

For every kind of welfare program that are there in the non-profit organisation, like the
British Red Cross, it started with the suitable level of planning. Planning is vital both the nonprofit companies and profit making organisations as well. For example, there was one incident
in which British Red Cross had strong high alert that the Hurricane Sandy is going to come and
hit and its consequences will be disastrous for many families. This is the reason why
organisation has started planning exact by starting with their welfare programs and management
policies in order to create donations and then generate charities as well (Rahim, 2015).
Moreover, the Hurricane Sandy program has been appropriately separate from the
mission, goals and overall vision of the organisation as well. There were large numbers of
volunteers who had earlier enrolled and were even offered training in order to help the societies

that were affected because of the natural disaster. The company was then able to manage large
number of volunteers (in thousands) in affective manner because of the effective management
policy of the organisation. The counteractive steps had been taken throughout during this
situation and large amount had been spent on the hurricane victims and after this welfare
program in order to remain successful in the future welfare programs as well (Senyucel, 2009).
In addition, budgeting had been planned by the Red Cross with the help of donations.
There was large amount collected in this regard and then were spent on several kind of subprograms below the program of Hurricane Study. Performance management programs had been
started by the management teams that belonged to Red Cross so that it can help in demonstrating
to both stakeholders and investors as well. It is vital in observing the managerial resemblance
that has occurred between the non-profit oriented and profit making companies (Podsiadlowski
et.al, 2013).
Furthermore, there are large number of differences among all the non-profit oriented and
profit making companies from revenue generation, target market, selling etc.; but in terms of the
internal management, there are usually similar kinds of management policy making decisions
that includes training, development, hiring, planning, decision making, measurement of both
performance and assessment. A non-profit oriented company usually has a very strong vision and
mission statement as well that assists in directing them for their projects and welfare programs
as well. British Red Cross has the main mission in serving the mankind and therefore they are
usually very active in participating in the charity programs. The managerial aspects of the nonprofit oriented companies usually have very little difference from other similar companies
(Lunenburg, 2010).

To start with, the vital support obtained from emergency assistance and organisations for
human service during and later than the disaster has been somehow vital for the organisations
since several years. The non-profit companies try to assist the individuals, society and the entire
country as well that have got affected from the natural disaster with the help of essential services
like medical assistance, food supplies, clothing etc. In the following paragraphs, all the vital
factors will be highlighted that is going to assist in conducting an insight of the managements
policy of the famous company, British Red Cross. Their vital business management policy
factors comprises of the following:
2.7.1. Morale and Motivation of the Staff

A positive morale and also the motivation of the volunteers along with the employees are
supposed to be vital intrinsic keenness of both volunteers and workers in order to enable
execution of the tasks at the workplace. The motivation and morale of the employees certainly
matters in all those situations where there is a need to work effectively during natural disasters
(Daft, 2009).
2.7.2. Hiring of the Volunteers

The recruitment policy usually provides strong reference towards hiring of new
volunteers for available vacancy in British Red Cross organisation. Though, at present, there is
an implementation of various kinds of methods for ensuring hiring of prospective candidates.
The problem is that not all of them are considered suitable for every non-profit company. This is
the reason why a non-profit company can work on assuming methods of recruitment in

considering need of the organisation through effective management policies (McLean & Smits,
2012).
2.7.3. Effective Management Framework

The effective and suitable management framework comprises of the management policy
of the British Red Cross. It is even useful in explaining about the managers expectations related
to the society. The framework of the British Red Cross management activities and tasks has the
need for the effectual performance of the organisation. It certainly shows the commitment level
of the British Red Cross for the developing managers all through the society. Finally, it will
prove very effective in providing motivation to the senior managers in having a constructive role
model for all other managerial staff working in the organisation (Daft, 2015).
2.9. Importance of Change Managementin Organisations

Change management plays a crucial role in the success of the organisation. Changes
within the organisation are usually initiated by the higher management and they are the ones
responsible for the successful integration of new set of policies and procedures within the
organisations (Hayes, 2014). It is their responsibility to ensure that change is accepted by all the
employees working within the organisation, because they are the ones who will work for the
achievement of organisational goals. According to Cameron, & Green (2015) organisational
culture plays an essential in the implementation of change within the organisation. Organisations
with traditional cultures are rigid towards change, whereas organisations with contemporary
culture are flexible and they adapt and change their culture as per the circumstances. British Red

Cross is an organisation with traditional culture, thus, there culture is not flexible towards the
changing circumstances, and as a result the organisation is struggling to achieve its goals of
ensuring the provision of quality health and care facilities to humanity. It has now become
essential for the top management of British Red Cross to devise certain improvement decisions
keeping the changing environmental conditions under considerations in order to continue its
successful run in the ICRS movement.
In past few years British Red Cross has struggled to change its traditional structure;
however they have failed to develop and implement the new welfare services and programs due
to the reduction in donations and fundings due to the high rate of inflation, and global financial
crisis. Thus, development and implementation of effective change management policies within
organisations like British Red Cross could serve as the key towards the achievement of success
(Swayne et.al, 2012). British Red Cross is required to adapt to the environment and keep on
making changes in their business management policies in order to cope-up with the changing
needs of the people, specifically the vulnerable population. British Red Cross and its employees
are dedicated to ensure that high level of care, and services are provided to the people suffering
from disasters or other issues such as poverty, increasing inflation, and healthcare costs. British
Red Cross is trying its level best to utilise the available resources in an adequate manner to
reduce the sufferings of the people all over the world.

Chapter 3: Methodology
3.1. Research Process

This section of the study provides an overview of the research process that was adopted
by the researcher while conducting this study. It begins with the introduction and explanation of
the research philosophy that was utilised by the researcher for the study. This section also
provides a brief illustration of the research approach taken by the researcher is order to conduct
the study. After this the researcher briefly describes the research strategy and the design adopted
by the researcher in order to collect and analyse the data for achieving the desired outcomes.
Lastly, in this chapter, the researcher has provided a brief overview of the data collection and
analysis methods, along with the relevance of the selected methodology for this study.
3.2. Research Philosophy

Research philosophy could simple be explained as the belief about the manner in which
data regarding a specific phenomenon should be gathered, analysed and then utilised for the
study (Tolman, 2012). There are different research philosophies that are used by researchers and
a few of which are post-positivism, positivism, pragmatism, realism, post-structuralism,
interpretivism, critical theory and constructivism.
3.1.1. Interpretivism
For this research study the researcher has selected interpretivismapproach. Interpretive
philosophy helps the researcher in comprehending the human experiences of the respondents. It
views that the reality is socially-constructed and is fluid in nature. Influenced by cultural and
social relationships between people, this reality seeks to adopt a change that is why it is

considered fluid or alterable.The researcher used the interpretivism methodology approach and
the rationale for selection of this philosophy is that it provides a rich data on construction of
social reality from participants on the effectiveness and vulnerabilities present in the business
development policies of British Red Cross.
3.3. Research Approach

Gioia et.al, (2013) explained thatthe research approaches are classifiedinto two different
categories. These categories were inductive and deductive approach. In the inductive approach,
the research is initiated through the collection of relevant data that is related to the selected
phenomenon and research problem identified by the researcher.Once the data is collected, the
next phase is data analyses to evaluate the overall results of the study (Gioia et.al, 2013).
Whereas, on the other hand in deductive approach the research usually begins with a social
generalised theory linked with the selected phenomenon and then its implications are evaluated
through the collection of data.
In this study, the researcher adopted inductive approach, since the researcher has
collectedinformation from the management and the employees of British Red Cross and after
that the researcher concludes the research by developing a general theory, which focuses on the
main aims of the study. Thus, this approach enables the researcher to move from specific
phenomenon to a much more general one. The analysis conducted through inductive approach is
purely based on the data collected from the respondents.
3.4. Research Strategy

In simple words research strategy is the approach that is utilised by the researchers in
order to conduct the research. Some of the frequently used research strategies include surveys,

interviews, experiments and case studies etc. For this study, the researcher has selected
questionnaire survey and interviews (Creswell, 2013). Utilising the survey and interviews
strategy, the researcher has developed survey and interviews keeping the research topic under
consideration, since the questions provide the essential information that could be used for
achieving the results of the research study.
3.5. Research Design

For this study, the researcher has utilised a mix of both qualitative and quantitative
research methodology. Quantitative research could simply be explained as the phenomenon of
collecting numerical data, which is analysed by the researcher through mathematical based
methods, particularly statistical tests (King, 2012). Qualitative design aims on subjective
evaluation of opinions, attitudes and behaviours of the research participants and respondents. In
this study, the researcher collected that data from the management and the employees in order to
analyse the effectiveness and vulnerabilities present in the current business development policies
of British Red Cross. The researcher collected the data through survey questionnaire and
analysed the data using statistical tool SPSS17.0 to determine the results of the study. The data
collected from interviews was analysed using thematic analysis.
3.6. Data Collection

Data collection is regarded as one of the most essential elements of the research study,
specifically, because data collection has a direct impact over the results of the study. In this study
the data was collected using survey questionnaires and interviews.
3.5.1. Surveys

The reason behind the selection of survey questionnaires is that they are easy to attempt,
low-cost, accurate and can be analysed by the researcher swiftly and easily. Survey
questionnaire is one of the most effective tools of collecting large amount of data in a time
efficient manner. As the main aim of the study is to analyse the importance of effective
management policies; therefore,data from large number of respondents need tobe collected,
which can only be gathered through survey questionnaire.
3.5.2. Interviews
Additionally, interviews were also conducted for this research because it helps to understand
the perception and opinion of the participants and stresses on a certain point in order to maintain
the focus over the central theme of the research. Management of British Red Cross were
interviewed for the purpose of acquiring the inside news of the organisation and how these
managers implement different business policies within the company.
3.5.3. Relevance
The selected research design is relevant to the current research phenomenon, as
quantitative researchvalidates the answers for a larger sample. The mixed method research was
conducted in order to obtain precise and quantifiable dataalong with qualitative data to generate
broad themes based on the responses of the participants. Since quantitative research is a
structured process, it enabled the researcher to obtain highly objective and reliable data for the
researcher. The questions of the survey were close ended; thus, they ensured that the researcher is
provided with definite answers to the questions, which were asked from the participants.
Qualitative research helped in gathering the opinions and provides the researcher with details
about human behaviours of the participants.
3.7. Sampling
Sampling is the method, which involves the selection of elements from an ordered
sampling frame. There are two types of sampling methods probability and non-probability used
for research purposes. For this study, the researcher selected non-probability sampling technique,
which is further classified into availability or convenience sampling. The reason behind choosing
convenience sampling is that it allows the researcher to save cost and time for conducting the
process while provides a facilitative choice in selecting relevant participants for the study. The
target population for the study consists of the management and the employees working within the
British Red Cross.
3.8. Data Analysis

Data analysis is another crucial element of the research methodology. It is a plan, which
guides the researcher in the process of analysing the collected data for the research through
different methods and techniques. Since in this study the researcher has collected primary data
through questionnaire survey as well as interviews, the researcher applied different analysis
methods for both designs. The analysisfor quantitative data included frequency distribution and
regression, which were performed using SPSS. While, the qualitative data collected from
interviews was analysed using thematic analysis.

Chapter 4: Analysis
4.1. Overview
Chapter four of this study comprises of analysis and findings from questionnaire survey
as well as interviews. The researcher analysed surveys by conducting regression analysis to test
the research hypothesis and the interview responses were analysed using thematic analysis. The
study aimed to understand and evaluate the effective business management policies on the
performance of the British Red Cross.
4.2. Questionnaire Analysis

The survey data for this research was gathered from 70 employees of British Red Cross
using Likert scale questionnaire. The aim was to understand the impact of effective business
management policies on the performance British Red Cross. The researcher chose to test the
hypothesis using Regression Analysis on SPSS.
4.1.1. Frequency Distribution

The frequency distribution chart generated on SPSS is presented below.
Table 1: Frequency Responses for Question 1

Regarding the question related to employee reaction , Management has introduced
employee empowerment strategies in the company to increase retention, 7.1 percent of
employees strongly disagreed to the statement, 32.9 percent of employees disagreed, 22.9
percent of employees replied neutral, 17.1 percent of employees agreed, and the remaining 20.00
percent respondents strongly agreed. This means that employees believe empowerment and
delegation of authority helps in satisfaction towards work, which eventually results in retention.
For the question Management is concerned about the needs of employees in order to
increase retention, 11.43 percent of employee strongly disagreed to the statement, 40 percent of
employees disagreed, 15.71 percent of employees replied neutral, 20 percent of employees
agreed, and the remaining 12.86 percent respondents strongly agreed. Hence, majority of
employees believe that their managers are concerned about their employees and develop various
strategies to retain them.
For the question Has there been an excessive turnover of the supervisory personnel,
7.14 percent of employee strongly disagree, 27.14 percent disagreed to the statement, 25.71
percent of employee replied neutral, 25.71 percent of employees agreed, and the remaining 14.29
percent respondents strongly agreed.
For the question The job descriptions of the employees are clearly established and
communicated to the employees, 5.71 percent of employees strongly disagreed to the statement,
28.57 percent of employees disagreed, 27.14 percent of employees replied neutral, 24.29 percent
of employees agreed, and the remaining 14.29 percent respondents strongly agreed.Hence,
majority of employees believe that in British Red Cross the employees have well-defined job
descriptions that are clearly communicated.

Regarding the question Does it appear that management, accounting, and information
technology personnel are sufficiently competent to perform their assigned responsibilities, 2.8
percent of employees strongly disagreed to the statement, 40 percent of employees disagreed,
21.43 percent of employees replied neutral, 25.71 percent of employees agreed, and the
remaining 10 percent respondents strongly agreed.Hence, majority of employees believe thatin
British Red Cross the employees in the management, accounting, and information technology
departments are well qualified and highly competent and help in achieving better performance.
About the question Is there an effective employee performance evaluation system

present for identifying incompetent or employees?, 1.4 percent of employees strongly disagreed

to the statement, 34.3 percent of employees disagreed, 30 percent of employees replied neutral,
20 percent of employees agreed, and the remaining 14.3 percent respondents strongly agreed.The
frequency distribution chart generated on SPSS is presented above. Hence, majority of
employees believe thatdespite companys efforts, the performance evaluation system at British
Red Cross is still not efficient and streamlined.
About the question Management provides adequate training opportunities for

employees, 11.4 percent of employees strongly disagreed to the statement, 15.7 percent of
employees disagreed, 14.3 percent of employees replied neutral, 58.6 percent of employees
agreed.Hence, majority of employees believe that the training programs at British Red Cross are
adequate for employees.

For the question Professional development is given high value in this organisation,
21.43 percent of employees disagreed to the statement, 22.86 percent of employees replied
neutral, 41.3 percent of employees agreed, and the remaining 14.29 percent respondents strongly
agreed.Hence, majority of employees believe that theBritish Red Cross gives high value to
professional development and for this they provide necessary training and development
programs.
For the question Does the organisation link training and development with the business
strategy of the company, 7.14 percent of employees strongly disagreed to the statement, 17.14
percent of employees disagreed, 21.43 percent of employees replied neutral, 40 percent of
employees agreed, and the remaining 14.29 percent respondents strongly agreed.Hence, majority
of employees believe that the British Red Cross has incorporated training and development of
employees as part of their organisational strategy in order to ensure operational efficiency.
For the question Organisational performance is dependent on the performance outcomes

of the human resources which includes; such skills, attitudes and behaviour, 2.9 percent of
employees strongly disagreed to the statement, 25.71 percent of employees disagreed, 14.29
percent of employees replied neutral, 37.14 percent of employees agreed, and the remaining 20
percent respondents strongly agreed.
For the question HRM policies are developed in line with the business management
policies are developed, 11.4 percent of employees strongly disagreed to the statement, 11.4
percent of employees disagreed, 18.57 percent of employees replied neutral, 41.53 percent of
employees agreed, and the remaining 17.54 percent respondents strongly agreed.Hence, majority
of employees believe that the British Red Cross human resource policies are in synergy with
business strategies of the company.
For the question Participation, compensation, incentives, training and development are
kept in consideration while developing the business management policy, 11.4 percent of
employees strongly disagreed to the statement, 20 percent of employees disagreed, 10 percent of
employees replied neutral, 47.14 percent of employees agreed, and the remaining 11.43 percent
respondents strongly agreed.
4.1.2. Regression Analysis
For testing the hypothesis of the study, the researcher applied regression analysis using
SPSS software. The aim was to understand the impact of business policies on performance of
British Red Cross. The regression analysis was used based on the following equation of linear
regression:
y = a + bx
Hypothesis: Business Policies impact on performance of employees

The following table presents the regression analysis showing the impact of business
policies on the performance of employees.

Table 13: Regression Analysis
The above table explains that relationship between training & development and employee
empowerment strategies. Since the p value is 0.000, which is greater than 0.05 (p>0.05), it can be
concluded that the relationship between training & development and employee empowerment
strategies is highly significant. Thus, the regression equation is:
y = a + bx
Therefore,
Employee Performance = 0.254+ 0.681 (x)
4.3. Interview Analysis

The interview analysis is based on the qualitative information obtained from different
employees of other organisations. These responses are evaluated by thematic analysis and are
discussed below.
4.2.1. British Red Cross Business Management Policies &Success of Organisation

As mentioned above in the literature review and analysis, skill development and business
decision policies are important aspect for an organisation success and enhance the expertise of

the employees. In the interview, the participants responded that organisations need to invest more
time and money in carrying out different training programs for the employees, which will benefit
them in the long run. Other participants responded that strong business policies are valuable to
secure human capital and gain competitive edge in the market. Other participants also responded
that strong business policies will develop a favourable perception among employees about the
organisation and this will result in better work performance.
4.2.2. Effective Business Management Policies & British Red Cross Performance
Researchers explain that effective business management policies are directly related to
the work abilities and productivity of the employees. In the case of British Red Cross, one of the
participants responded that effectiveness of business management policies are based on the
employees training, which should be dependent on the current need of employees. These
activities must be interlinked with the job of the employee and organisations expectations and
goals. Another participant responded that HRM policies are also an important aspect in the
motivation of employees, which impacts the performance. Therefore, HRM policies should be
designed with active participation and contribution of the employees. British Red Cross is more
interested in achieving their expectations instead of analysing the employees need.
British Red Cross needs to train the employee as per their skills and area of knowledge so
that different needs of employees are met. Conventional modes of training are only related to the
imposition of a single package of activities over all the employees of an organisation.
4.2.3. Measurement ofEffectiveof Business Management Policy of British Red Cross

Employees and researcher mentioned the importance of internal communication system
to analyse the effectiveness of business management policy. The interview also revealed
important opportunities for improvement in the current business management policy. Internal
communication is of significant importance as it connects the enterprise executive level
leadership and employees to promote new business management policy. Few respondents
mentioned the importance of conducting periodical internal audits for the assurance of policy
compliance. Internal audit committee should be assigned to uncover any difficulties in
compliance of business management policy. Likewise an integrated policy management plan
should be implemented in order to achieve effective compliance program. One of the participants
mentioned the importance of measuring the volume of regulations impacting the current business
operations and to modify or merge the old policies to form new regulations. Organisations that
are more connected according to the compliance framework are prepared to minimise any
systematic risk and perform better in every situation.
4.2.4. Implementation of Business Management Policies at British Red Cross

From the responses of employees it can be concluded that British Red Cross needs to
manage itshuman resources effectively and enhance its management policies in order to add
value to the organisation. However, the employees are overall satisfied with the management
policies. The ultimate aim of the management policies is to make sure that organisation deliver to
its business strategy. It is the main focus of HR to achieve the goals in alignment with the
business strategy. HR policies need to be aligned with the organisation structure and employees
for better management and development.
4.2.5. Improvements in Business Management Policy of British Red Cross

According to the responses recorded from the participants, employees were unified about
the concept of better training and development process,as this increases the productivity level
and increases the prospects of future growth for employees. One of the participant explained that
personal and professional training will enable them for better productivity level and provides
them with career growth based on their performance and enhance expertise. Few employees
were more concerned about incentives and reimbursements rather than training and development,
since, better incentives will provide them with chances of engaging in off job educational
activities, which will led to their career and personal development.

Chapter 5: Conclusion
5.1. Conclusion
The main focus of the research is to analyse and evaluate the impact of effective business
management policies on the performance of the British Red Cross. According to Chenhall et.al
(2012), effective business policies act as boundary between the relationships of managerial layer
with lower level employees. It is regarded as the pre-determined guideline that aims on
successfully achieving the business aims and objectives. It has been researched that effective
business policies have become an integral part for many organisations including British Red
Cross. Organisation are findings new ways to design, develop and implement effective business
policies for the purpose of integrating effective integration between various departments of the
company such as human resources, finance and operations. As per the survey conducted with the
employees of British Red Cross, it can be concluded that the company has introduced new
employment empowerment strategies, whichnot only aims on increasing employee satisfaction
but also improves employee retention. However, it was also reported that the management of
British Red Cross has introduced effective policies but its implementation has not been effective.
Majority of the employees are of the opinion that the management does not care about their
needs and development. As per the interview findings and survey analysis, it can be concluded
that majority of the employees are in the favour of having internal audit surveys in each
departments for the purpose of ensuring proper compliance and quality. According to Bryson
(2011), organisations that are more prone towards compliance framework are more likely to
minimise and reduce all types of systematic risks; thus, having an opportunity to perform better
in different situations.

Moreover, it has also been found that the employees of British Red Cross has
recommended to introduce new intrinsic and extrinsic rewards for their performance, which
would automatically enhance job performance and satisfaction; thus, benefiting the company for
long-run. Through interviews and questionnaire it was also concluded that the employees of
British Red Cross demanded for more training and development opportunities to be offered by
the company. According to the respondents of the study it can be concluded that employees at
British Red Cross were unified regarding better training and development process as it would
enhance the productivity level and also provide high chances for future growth of the employees.
Furthermore, professional and personal training allows employees to perform better productivity
and assist them in achieving high career growth.
According to Chenhall et.al (2012), there is a highly significant relationship between
training and development and employee empowerment strategies. When organisations are able
to offer effective training and development policies, it automatically increases employee
satisfaction and employees can better perform their work related tasks; thus, benefiting the
organisation in return. Moreover, it has also been found that effective business policies help in
training future managers through which organisation members can be connected with one
another in order to improve business efficiency. It can be concluded that British Red Cross
Company has drastically expanded its operation by having effective business management
policies for the purpose of developing dynamic strategies of disaster management worldwide.
However, it has also been researched that company should consider the decentralised
organisational structure of their head office and different operational divisions. This would assist
them in developing appropriate policies for organisational growth.
5.2. Recommendations

Following are some of the important recommendations for British Red Cross Company
for the purpose of implementing effective business policies and ensuringorganisational
performance.
Employee Training and Development: One of the most important recommendations for
the company is to develop effective training and development sessions for its employees.
British Red Cross should design training sessions that would not only ensure quality
work performance but would also motivate the employees to develop new skills and
techniques. According to Bryson (2011), in todays modern and competitive market,
employees are not only looking for high paid salary but are also aiming to improve their
skills through effective training and development opportunities.
HRM Policies: Human resource management is one of the most vital departments of the
organisation. Due to this reason, HRM needs to be managed through an effective manner
in order to ensure high organisational growth. British Red Cross Company should design
effective HRM policies that would not only benefit the organisation but also the current
employees including new recruits. An effective HRM policy does not only motivate
employees but also helps in retaining them.
Employee Involvement Policies: Another important recommendation for British Red

Cross company is to ensure high employee involvement in their decision making process.
Through employee involvement, an organisation does not only obtain new ideas but also
helps in creating employee ownership; thus, enhancing performance and employee
satisfaction.
Workforce Diversity Policies: The Company is recommended to promote workplace

diversity within the organisation. An accurate implementation of diversity policies

improves human and organisational capital and assets, which can act as a competitive
edge for the organisation to generate more capital. An effective workforce diversity
policy would enhance British Red Cross reputation. This would also assist the company
in attracting and retaining talented employees within the organisation.
5.3. Implications for future Research

The implications for future researches are as follows:
The future research should be covering the different business policies except for training,
development, HRM and Standardisation. Some new factors that have a direct impact on
business policies should be analysed on an in-depth level.
The current research has focused on a charity organisation to conduct the research. Future
researches can analyse the same point of view by focusing on different profit-based
companies that aims on generating higherrevenue for the company and shareholders. By
analysing the different nature of the firms, future researches can fill the gap that has been
left unaddressed in the current research or the elements that were beyond the scope of this
research.
study of Lloyds Bank
Introduction
In past few years internet banking has gained a wider level of acceptance as compared to
other forms of banking (George, & Kumar, 2014, p. 75). In United Kingdom all the banks are
now offering its customer internet banking facility in order to provide them convenience through
online banking with the aim of achieving high level of customer satisfaction and loyalty.
Ramboca and Arjoon, (2012) conducted a study in which they founded that emergence of

information technology has significantly influenced the banking industry. Lloyds Bank is among
the few banks that have successfully forecasted and implemented this technology within their
business model, in order to achieve a high level of customer satisfaction and loyalty.
Background of the Study
Predominantly, evolution of internet, and the increasing popularity of personal computers
have resulted in the creation of opportunity and challenge at the same time for the banks in
United Kingdom. Internet baking has experienced a rapid growth in only a decade (Ganguli, &
Roy, 2011, p. 169). According to a report published by the Statistics Portal (2015) the total
percentage of internet banking users in United Kingdom has raised to 56%, which in 2012 was
40%. The results of the study revealed that the number of people utilizing internet banking has
been increasing at a steady pace, and it is expected to grow in the coming years.
Rapid growth of internet in recent years provides a clear indication of the high level of
acceptance towards this technology. However, the influence of internet banking on the level of
customer satisfaction, and loyalty in Lloyds Bank is extremely high. Yet not many studies have
studied the correlation between internet banking and customer satisfaction and loyalty.
According to (Yoon, & Steege, 2013, 1138) it was concluded that mobile and internet
technologies are changing he behaviour of the customers, which in turn is leading towards the
changes in the banking model. Lloyds Bank continuously keeps on developing and amending its
business model, and they expect that in past few years some major changes are expected to occur
in the payment systems.
Objectives of the Study
The objectives of this study are to determine:
To investigate the concept and significance of internet banking and its role in satisfying
customers and improving loyalty.
To examine the impact of internet banking on customer satisfaction of Lloyds Bank.
To evaluate the impact of internet banking on customer loyalty of Lloyds Bank.
To identify a set of recommendations for Lloyds Bank for improving customer

satisfaction and loyalty in of internet banking.
Research Questions
The research questions that will be addressed in this study are:
What is the impact of internet banking on the level of customer satisfaction of Lloyds
Bank UK?
What role has internet banking played in increasing customer loyalty and satisfaction
among the customer of Lloyds Bank?
What are the strategies that can be induced in in internet banking for improving customer
loyalty and satisfaction?
Methodology
For this study the researcher will utilize quantitative research methodology. It is a
systematic empirical investigation method, which is conducted through the utilization statistical
or computational techniques. Quantitative research aims to develop and employ various theories,
and mathematical models along with hypothesis pertaining to phenomena (Creswell, 2013, p.
125). The purpose of this deductive study is to create an enhanced understanding of the impact of
internet banking on customer loyalty and satisfaction. The researcher will conduct an online

survey of the customers of Lloyd Bank in order to determine loyalty and satisfaction in the
context of internet banking.
Teacher asked:
1) Check spelling errors
2) What is the time scale for doing survey?
3) How to contact the customers of different banks
4) How the survey questionnaire design?
5) Submit Literature Review and Survey Questionaire by beginning of
December
_How to measure customer satisfaction? (research the general theory, coule be in
different industry than banking industry)
_How to measure customer loyalty? (research the general theory, coule be in
different industry than banking industry)
Then evaluate the empirical research applying to banking industry (put in
Literature review)
1. Contextual Background
Technological evolution has significantly affected the banking sectors across the globe.
Increasing competition in the banking sector has forced the banks to look for new markets to
enter, which is why financial institutions are increasingly offering e-banking (electronic banking)
products and services (Al-Smadi, 2012, p.294). In the banking sector, development of
Information Technology has resulted in more flexible payment options and more accessible and

user-friendly financial services. Internet or e-banking allows customers to use Internet to access
their accounts and make transactions online, transfer funds, check their account balances even
when banks are closed, pay their bills online, saving time and money (Hassanuddin, Abdullah,
Mansor and Hassan, 2012, p.136). They are also able to compare services that different banks
offer (p.136).
However, along with the various benefits that e-banking provides, there are various risks
associated with it, for example, security and privacy issues (Dixit and Datta, 2010, p.2). The
major challenge for banks with respect to internet or e-banking is customers acceptance towards
e-banking technology and building their trust towards security and privacy issues associated with
e-banking. Other issues involve awareness of e-banking technology, products and services,
accessibility i.e. convenience and ease of use, usefulness of technology, stability and quality of
Internet, etc. (Hassanuddin et al., 2012, p.137).
An initial review of literature has revealed that there are hardly any studies investigating
consumer acceptance of e-banking technology in the context of the UK. Therefore, the aim of
this research is to address this research gap by analysing the level of acceptance of e-banking
technology among consumers in the UK banking sector as well as factors enabling and inhibiting
consumer acceptance of e-banking technology.
2. Objectives of the Study
To study the use of e-banking technology in the UK
To investigate the factors contributing to consumer acceptance towards e-banking

technology in the UK
To determine the level of acceptance of e-banking technology among the consumers of

the UK banking sector
To provide recommendations to the banking sector for developing effective strategies to

increase acceptance of e-banking technology among the consumers
3. Research Questions
What are the enablers and inhibitors of consumer acceptance towards e-banking
technology?
How do consumers perceived usefulness, ease of use and security and privacy affect
their use of e-banking technology?
How accepting are the UK consumers towards e-banking technology?
4. Methodology
This study will take the form of an explanatory, deductive and quantitative research based
on the post-positivist paradigm. Primary data for this study will be collected through online
surveys, using close-ended questionnaires as the research instrument. Sample size will be n=200
consumers of various banks in the UK, selected through non-probability sampling method and
purposive sampling technique. Sample will include consumers of UK banks who are over 18
years of age, are residents of the UK and have access to a computer and Internet. Data will be
analysed using SPSS (Statistical Package for Social Scientists).
5. Theoretical Model
Figure 1: Technology Acceptance Model

Source: Legris, Ingham and Collerette (2003, p.193)
Technology Acceptance Model will be used as a theoretical and conceptual framework to

analyse how external variables, i.e. perceived usefulness and perceived ease of use affect the
attitude of consumers towards e-banking technology, how their attitude determines their
behaviour intentions to use e-banking technology and how behavioural intentions in turn
determine the actual use of that technology. The impact of one additional factor i.e. perceived
security and privacy will be determined on the consumer acceptance of e-banking technology.
Micro-Economics
Question 1:
The importance of higher education is very high for any student. The reason is that higher
education not only provides an opportunity to the student in getting knowledge but also to be in a
position to acquire valuable learning. In this way, the student is then able to progress in their
respective field of education and achieve success once their professional career starts. The
enrolment in higher education has witnessed a strong growth, for instance in Asia, over the last
20 years period (UNESCO, 2014). Though, the fundamental question in this regard is whether

the Participation in Higher Education isan Investment or a Consumption. This is an important
question but its answer requires critical analysis of several aspects.
In the first case, it is necessary to understand some essential aspects related to higher
education. There is no doubt that participation in higher education is an investment. The
reasonsare that from financial point of view, whatever the investment is carried out in education,
for instance, $100,000 in bachelorette education; its Return on Investment will be higher. The
salaries and the overall compensation packages received over the years by the student after
getting a job will certainly help in explaining this phenomenon in the best possible way. It is
understandable that the initial pay will not be very high but gradually, depending on the overall
effort of the employee, the salary will increase. Though, from financial point of view, this
investment is justified. However, it is not just the financial view that matters. The biggest
investment is the knowledge of the student, overall learning, communication and interpersonal
skills and development of critical thinking ability. All these elements certainly increase the value
of higher education. Moreover, there are many other things that the student is able to learn such
as time management skills, decision making skills, personal skills etc. The participation in the
extra-curricular activities can further enhance the overall personality of the student, which is will
not onlybenefit individuals in professional life but also in their personal life.
The second question that needs to be addressed is that whether the participation in higher
education is a form of consumption. The participation in higher education can also be considered
as consumption because the student is able to acquire several benefits associated with the
investment made in education. It can be said that the investment that has been made, for instance,
the $100,000 in bachelorette education has made it possible for the student, in return to obtain all
the important education content along with the overall positive experience achieved during the

academic life. Though, it all depends on the student in the end, whether they are able to take
advantage of the investment in higher education or not. Furthermore, it also depends on whether
the students have effectively acquired the knowledge and learning. In many cases, students are
only able to acquire a degree, but they lack necessary skills and knowledge, which are required
for successful career. In such a situation, theparticipation in higher education is neither
consumption nor an investment.
The main purpose of education is to acquire knowledge. A degree without knowledge is
just a piece of paper. Although gaining high academic credentials and a degree is necessaryfor a
successful career but knowledge and skills are necessary for transforming the overall personality
of the students. Hence, it can be said that the participation in education is both an investment and
consumption, but it is dependent on the overall skills and competencies demonstrated by the
students. Parents make a lot of sacrifices while providing higher education to their children and
they make very difficult financial decisions in this regard. Therefore, students need to respect
and acknowledge sacrifices of their parents and admire their hard work by taking approaching
higher education not only for the degree but for the actual knowledge and learning.
Question 2:
This particular question requires an analysis by the student regarding his decision related
to acquiring a 4 years-bachelorette degree. This analysis is crucial for all those studentswho need
to consider whether or not they must go for bachelorette degree. It will also help in determining
the opportunity cost for the student in this regard.In the first case, it is necessary to assess the
Mean Earnings by Highest Degree Earned. The table in this regard is mentioned below:
Years
2005
Mean Earnings ($)

67,980

2006
69,818
2007
70,898
2008
72,868
2009
69,479
Source: United States Census Bureau (2015)
It can be seen from this table that the mean earnings has gone through several variations
over the five years period, from 2005 to 2009.On the other hand, it is important to determine
theAverage Out-of-Pocket Net Price of Attendance associated with the total cost of bachelorette
degree. The table is mentioned below in this regard:
Years
Net Price of Attendance ($)
2001
8,852
2002
8,852
2003
6,500
2004
6,500
2005
6,500
Source: United States Census Bureau(2015)
After the illustration of these tables, it is now important to determine the average
financial rate of return associated a 4-year bachelorette degree. First of all the return values for
both Mean Earnings and Net Price of Attendance over the five years period, from 2005 to 2009,
is calculated below:
Year
2005
2006
2007
2008
2009
Mean Earnings
Net Price of
Return
Attendance
67,980
8,852
13.02%
69,818
8,852
12.68%
70,898
6,500
9.17%
72,868
6,500
8.92%
69,479
6,500
10.48%
Therefore, the average financial rate of returns associated with a 4 year bachelorette
degree is mentioned with the help of a table below:

Year
Return
2005
13.02%
2006
12.68%
2007
9.17%
2008
8.92%
2009
10.48%
Total
10.85%
Source: United States Census Bureau (2015)
Therefore, the average rate of return associated a 4-year bachelorette degree is 10%. This
has been the overall opportunity cost analysis for the students, who need to decide whether to
obtain a 4-years bachelorette degree or not.
Question 3:
The table below presents the average cost of obtaining a 4-year bachelorette degree:
Years
Total Costs of 4-Year
Bachelors Degree
1999-2002
8,852
2003-2006
6,500
2007-2010
8.061
Total
7,804
The average cost of 4-years bachelorette degree since last 11 years has been $7,804.
Moreover, the net-present value of the four-year bachelorette degree is calculated in the
following table. In order to simplify the calculation, the four year period on which the net present
value is calculated is 2005-2009.
Values
Cash
2005
67,980
2006
69,818
2007
48,256
2008
72,868
2009
69,479

Flows
DF
=67,980/1.05^1
=69,818/1.05^2
=48,256/1.05^
=72,868/1.05^
=69,4/1.05^
64743
63327
3
61244
4
59949
5
54439
Rates
Discoun
ted Cash
Flows
(DCF)
Net Present Value= Discounted Cash Flows- Initial Investment

Net Present Value= $30,3701-$8,852
Net Present Value= $294,849
The total Net Present value that has been calculated is $294,849. The assumption used for
this particular calculation was that an investment of $8,852 made in 2001 for financing of 4bachelorette degree will result in gaining the mean earnings value from the period between 2005
and 2009. The net cash inflows will start from the period of graduation when the individual will
be able to get a job during this time. Therefore, the net present value was positive related to the
4-yearbachelorette degree, suggesting that the student can certainly opt for a 4 year-bachelorette
degree, which will provide him long-term benefits in the form of high amount of earnings.
Question 4:
The concept of Giffen goods is very important from the economics point of view. Giffen
good is considered as a product whose higher price actually causes its demand increase. This is a
very unusual concept in the field of economics. Alfred Marshall attributed the name Giffen good
after Scottish economist Sir Robert Giffenduring the development of the Principles of

Economics. Marshall explained the conventional principle that when the price of good increases,
the quantity demanded of that good falls. For instance, it was pointed out that when an increase
of the price of bread occurs, it leads to a drain of resources for the poor labour families; thus,
makes them to reduce their consumption of meat and many other expensive food items. This also
leads to an increase of marginal utility for them. Hence, the poor family would depend largely on
bread as it still remains the cheapest of the food items. This helps in explaining the overall
significance of the Giffen good because the consumer tries to purchase cheap item because they
cannot afford to purchase substitute products (Conversable Economist, 2012).
The important logic, which Sir Robert Giffendescribed based on the modern day
conditions that every price change leads to two kinds of effects on the people: 1) itcauses them to
switch to other kinds of goods, which are not expensive and are affordable. 2) It will also
produce a change in the buying power of the income of the people. In majority of the situations,
these two effects try to reinforce each other. The higher price associated with any particular good
will encourage the user to consume less of that good because it does not have the same price
asbefore. Moreover, the higher price also causes a reduction in the buying power of the income
of the consumer (Conversable Economist, 2012).
In economics, Giffengoodsare considered as inferior goods. In order to determine the
price elasticities for these goods, it is vital to first understand the income and substitution effect
for these goods. For instance, since Giffengoods are considered as inferior goods, there is an
inverse relationship between real income and the good that is in demand (Tejvan, 2011). If real
income will decrease, then the demand for the inferior good is going to increase. Some of the
basic examples in this regard will be:
Potato and Steak Consumption: Normally, people would consume 2 steaks of price 20
dollar and 20 potatoes of price 10 dollars in their budget. However, if the price of potato
increases by 1 dollar each, the consumer would still purchase 2 steaks but could reduce
the potato consumption by 10 units. However, reduction in potato consumption may
cause insufficient food for the consumer. Hence, the consumer may choose to decrease
the purchase ofsteaks by 1 unit and increase the purchase of potatoes to 20units once
again.Now if the prices of potato are increase up to 1.5 dollar, the consumer will further
reduce the consumption of steak to zero and consume more units of the potato. Hence,
potato is a great example of Giffen good. This example can be illustrated with the
following graph.
Cars:Another example of Giffen good is in semi-luxury goods like cars. Increase in

income of the consumer cause a perceived decline in the price of cheap car. However,
since the income of the buyer has increased, he would opt for an expensive car rather
than the cheap car. Hence, in this case cheap car is an inferior good not based on its
quality but rather on the perception and affordability of the consumer.
Therefore, in the end, it can be said that price elasticity of inferior goods is going to have
a negative income elasticity of demand.It can be said that the concept of Law of Demand will
not be invalidated with the help of income and substitution effects because the basic principle

related to the affordability of the product will be there. For instance, the Law of Demand states
that when the increase in the price of the product occurs, the quantity demand decreases, and the
case is opposite during the decrease in price. Thus, in the case of Giffengoods, the increase in
product demand is highly dependent on the increase in income. The substitution effect also has
the same impact on the consumption of the product. The decrease in the price of the substitution
effect will certainly make the consumer to switch to another product. All these aspects
demonstrate the overall buying behaviour associated withGiffengoods (Singh, 2014).
Question 5:
The risk return trade-off is known as a trade-off in which the investor experiences
between risk and return during their investment decisions. The high amount of risk has strong
association with greater probability level of higher return and lower risk has a strong association
with a greater probability level of smaller return. This whole concept can be best explained with
the help of a scenario when an investor is experiencing a risk return trade off while considering
the decision to invest. Under such a scenario, if the investor is going to deposit all money in a
saving bank account, he is going to earn a very low amount of return, i.e. interest rate being paid
by the bank, but his entire money will be under high insurance protection. On the other hand, if
the investor is going to make an investment in equities, then the risk of losing a big portion of
this capital will be there, but there will also be an opportunity of receiving a much higher return
in comparison with saving the deposit in a bank (Joe, 2014). The concept of risk return trade-off
can be explained with the help of a following diagram as well:
Three reasons because of which risk is important in understanding the consumer and
producer decision making are:
i.
In the first case, the identification of the risks associated with consumer decision making
will help to eliminate any kind of issue or threats that might hinder the consumer
purchase decision.
ii.
In the second case, when the producer will conduct the risk identification assessment, it
will help them to manufacture their products accordingly.
iii.
In the third case, the organisation will be able to manage their tasks in accordance with
the overall criteria of the risk defined. Whether it will be a project management risk,
financial risk or organisational risks, the organisation is going to be in a good position to
manage them in the best possible way (Ready Ratios, 2014).
The concept of Risk Premium is even very important for the organisations to understand.
It is also known as market risk premium, which is basically referred as a variance between the
two concepts known as predictable return on a market portfolio and risk-free rate. Market
Premium provides an opportunity to the investor in assessing the investments, which are given a
lot of value. The formula, which is utilised in calculating the Market Risk Premium, is:

Market Risk Premium = Expected market return Risk-free rate
This is the reason why it is necessary for the investors to have a strong understanding of
the concepts of Market Risk Premium. When the demand and supply are in equilibrium, there is
no need at all in paying the premium. Though, if the demand is going to increase, the supply can
also meet the demand and price of the asset. The difference in the price that occurs is then
referred as Market Risk Premium (Ready Ratios, 2014).

CHAPTER 1: INTRODUCTION
1.1 Introduction
The tourism industry in outgrown extensively serving many small and sub industries
including hotels, logistics, travelling and therefore create many new business opportunities.
According to Zhong et.al (2011, p. 48), the growth rate of tourism in China has increased after
significant reforms were introduced by the government. After the emergence of rich middle class
incomes and less restrictions on movement by the Government of China, the travel and tourism
industry has witnessed an unprecedented period of growth. Moreover, China is one those
countries that has a large outbound and inbound tourist market. According to Salazar (2015, p.
835), China is regarded as the third most visited region of the world. The total number of foreign
tourists that came to China in 2010 was around 56 million. This resulted in the foreign exchange
income to rise to $45.9 billion which was also regarded as the fourth largest foreign exchange
income to a specific country. On the other hand, the total number of local tourist were found out
to be 1.6 billion and resulted in a total income of $7.8 billion.
As per the survey conducted by WTO (World Trade Organization), by 2020, China would
become the largest tourist destination in the world. With regards to net outbound travel spending,
the country is assumed to be fastest growing economy of the world and has been able to maintain
the second position in world ranking. It has also been researched that the growing economy of
China has resulted in the increase in overall business travel. With regard to China, the total
percentage of sales based on business travel is more (38%) as compared to UK (28%) and US
(21%). Moreover, as per the report of World Travel and Tourism council (2013), the tourism
revenue of China in 2009 was $185 billion (Lijuan, 2013, p.16).

1.2 Contextual Background
During the era of 1949 to 1975, China only allowed selected foreign visitors to visit
China and closed its gate to other foreigners. During 1970, the paramount leader of China, Deng
Xiaoping made a decision to promote and encourage tourism for the purpose of earning highvalue foreign exchange. After this decision, the Chinese government started developing its
tourism industry. A hotel construction program increased the number of guest houses and hotels
in China and more scenic sports and historical places were renovated and were offered to tourists
including professional guides. Due to increase in international and airline traffic including other
tourist transportation facilities assisted travel to be more convenient and less time consuming.
According to Xie (2015, p. 11), at least 250 counties and cities were opened up for foreigners
and local tourists during the year 1980. At that time, travellers were only required to show their
residence permit (for local citizens) and valid visas (for foreigners) through which they could
visit at least 100 nationwide locations in China. During 1985, approximately 1.5 million
foreigners were reported to have arrived in China which resulted in total earning of $1.3 billion
from tourism sector.
According to Wall et.al, (2014, p. 190), development of tourism especially in rural areas
has resulted in enormous challenges for the government, particularly related to the issue of
involvement and recognition of local people and other stakeholders of the society. Heung and
Kucukusta (2013, p. 13) stated that tourism is mainly dependent on two significant factors i.e. (1)
the local community and its population and (2) tourists and their activities. Moreover, Qin and
Min (2012, p. 122), conducted a study in identifying the importance of ecotourism based on
community in Thailand. According to the researcher, the community people or local people are
the actual stakeholders and are regarded as the heart of tourism management.

Tourism researchers have researched and concluded that local community people usually
accept and support tourism activities only if it provides socio-economic and sociocultural
benefits along with protection of the environment. Thus, in developing tourism, the involvement
of community and local members in the decision making process and its implementation is said
to be critical. According to Lijuan (2013, p. 16), rural tourism has become important in
developing national tourism policies and has also been highlighted in the Chinas Tourism
development and management master plan (1980-2000). As the main focus of the tourist is to
have a friendly experience, therefore the locals living around the locality has a strong impact on
the tourist destination. Therefore, the involvement of local and community people towards
tourism development is of utmost important as they act as the main stakeholders and have a
direct impact on the overall quality being delivered by the tourism industry.
1.3 Research Aims and Objectives

The aim of this study is to analyse the impact of culture and history of China in relation
to the benefits of locals in promoting the tourism industry.
1.3.1 Research Objectives
To understand how Chinese culture and history is impacting the tourism in China.
To analyse the role played by the government and locals in promotion of cultural tourism
and the overall tourism industry
To recommend future initiatives to promote the role of local government in the

promotion of tourism in China

1.4 Research Questions
The research questions selected for this research are as follow:
1. What is the relationship between history and culture of China on tourism industry?
2. What is the role played by government and locals in the promotion of Chinese tourism?
3. What is the impact of culture and history of China for the benefits of locals in promoting
tourism industry?
4. What future initiatives can be taken by the government for promoting local government
for increasing tourism activities in China?
The research questions mentioned above will be used to analyse the research studies. As
the study is based on secondary research, therefore online articles and journals pertaining to the
above research questions will be selected.
1.5 Rationale of the Study

The tourism industry in China is growing at very high pace. The revenue that was
generated in 2009 from the tourism industry of China was $185 billion (Salazar & Zhang, 2013,
p.81). The total contribution of the tourism industry in total GDP was 2.6% in 2014, which also
helps in identifying the potential opportunities for local and government with to tourism
promotion. Locals living in many rural areas earn their living by selling local piece of art,
artefacts etc. (Tao, 2012, p. 17). Reforms carried out in 1970 catered to growing tourism industry
of China. Hotel industry provides many opportunities providing jobs and services.
Socioeconomic development is induced with increased tourism as government invests more on
heritage and recreational sites (Su, 2011, p. 1441). This on the whole improves the infrastructure
development of the region. Art and culture has been one of the foremost reasons that attract

tourists in China (Salazar & Zhang, 2013; Walle, 2010; Nyri, 2011). Therefore, the rich culture
and history of China has been one of the important reasons to attract tourists. There is a need
investigate the relationship between history and culture of China and tourism industry and the
impact it has made on locals of China. Another important reason for conducting this research can
be analysed from the fact that the local peoples involvement in tourism activities has a direct
and positive impact on the overall tourism industry. According to Ghimire (2013, p. 31), tourism
is now considered as the most effective strategies to promote economic development in the
country. It has been researched that tourism develops high employment and also results in high
income. Moreover Zhong et.al (2011, p. 45) stated that community based tourism development
generates significant advantages to the local community members of the society.
The current research has not only focused on the benefits of local towards tourism
promotion but also has focused on the benefits which the local would attain through tourism
activities. Therefore, there is not much discussion on the fact that whether local should be a part
of tourism development or not. However, there is much debate on how the community should be
involved. As local involvement is usually considered as an important factor in achieving success
of development projects, it is now being included in various policies pertaining to government
and NGOs
1.6 Problem Statement

According to the authorities of Chinese Government, the numbers of foreign tourists have
been declining since 2007 till 2014. However, there are number of reasons behind such decline.
The first reason is the exchange rate fluctuation as the cost of visiting China increases due to
which many potential visitors are visiting other destinations other than china. Secondly, the

economic recession of Europe and American counties have resulted in less spending in tourism
and travelling industry. Thirdly the old travel route lacks competitiveness and novelty.
Moreover, another big reason for low tourism in China is because of the less investment and
focus of Chinese authorities towards the promotion of tourism.
Figure 1: Inbound Tourist Arrival and Growth Rate

Source: www.travelchinaguide.com
On the whole, Chinese culture and history has a strong influence in the tourism in China for the
purpose of attracting tourists. The changing trends in tourism in China has played a vital role
therefore, locals needs to be involved in promotion of cultural tourism and the overall tourism
industry. For the purpose of channelizing and development of cultural tourism, it is important for
the government to induce effective tourism policies. Therefore, this study identifies impact of
culture and history in china and the benefits of locals in promoting tourism

1.7 Structure of the Dissertation
The structure of study is based on five chapters. Following is the main structure of the
study.
Chapter 1: This section is based on introduction to the research including research aims
and objectives, research questions, rationale and significance of the research, background of the
study together with problem statement and issue of research.
Chapter 2: This chapter of the study will include theoretical underpinning and literature
review based on past studies and researches. It will help in understanding the researches that has
been conducted in the past.
Chapter3: Chapter three of the study identifies the research plan and will be based on
research methodology. Research methodology will include research philosophy, research design,
methods of data collection, research approach and nature of the study. Further, the study will also
incorporate research plan and limitations of research.
Chapter 4: The collected data for the research will be analysed in this chapter and the
extracted findings from the results will be discussed under the objectives. This chapter will
evaluate how successful the research has attained its objectives.
Chapter 5: This section or chapter of the dissertation is based on conclusion and will also
discuss recommendations, future implications and summary of findings.

CHAPTER 2: LITERATURE REVIEW
Tourism is one of the most important aspects that influence the economy both directly
and indirectly in most countries. Travel and tourism has become a strategic industry in Chinas
development towards the socialist market economy. China is still penetrating new and better
channels through which the tourism industry can strive in local and international markets
successfully (Tourism Market in China, 2014, p. 5). China is facing the new opportunities and
challenges for the growth in the tourism market as compared to the opportunities and challenges
they faced decades before.
China is one of those regions of the world, which is rich in culture and historical heritage.
People around the world take interest in the historical places, like the Forbidden City, Mount Tai
and The great Wall, to visit. The locals are interested in cultural and historical heritage of the
China as well. This rising attention in Chinas cultural diversity is encouraging an emergent
fragment of tourism industry (Walle, 2011, p. 59).
2.1 Culture of China and Tourism

Walle (2011) examined the Marketing Equitable Ethnic Cultural Tourism in China. In this
study, researcher has focused on the ethnic cultural tourism of China and the market equitability
(p. 67). With a modest start in 1970, ethnic cultural tourism in China has become an influential
force and governing bodies and private agencies use it to revive economic activity. Hence, as an
outcome, cultural tourism strategies, planning and encouraging is more considerable than
elsewhere. Historically, ample amount of this activity was led through micro-marketing sights
(Walle, 2011, p. 67). This notion focuses mainly on the benefits that integrate a company and its

consumers, whenever they interrelate with each other. A blind promotion of this method is that
the wants, desires and vulnerabilities of providers of products and services of cultural tourism
can be ignored. A substitute of this micro outlook is offered by the macro-marketing, a
perspective that is dedicated to probing the overall influence of marketing actions and suggesting
replacements that are impartial and feasible (Walle, 2011, p. 67).
Gradually, macro-marketing outlooks are applied when the planning of marketing
strategies are intended. These methods have a significant part to perform whenever cultural
tourism approaches are established and executed. China is a land of an extensive range of ethnic
locals and the tourists have been attracted towards them (Wang & Wall, 2005, p. 9). Mosou is
one of these localities that have established as a sophisticated cultural development association,
which works to assure that the tourism policies and plans are not controlled merely from top
authorities and that they are equal and mirror the needs and desires of the people. The study
appreciated these efforts as a great corporate strategy and an ethical way that can directly
influence stakeholders (Wang & Wall, 2005, p. 9).
Tourism, on a positive note, encourages relations and insights of perspectives between
cultures. On the other hand, on an adverse note, it is simply a bottleneck between cultures.
Unfortunately, it seems like the worst part is common in case of Tibet currently. According to a
report Culture Clash: Tourism in Tibet (2014, p. 24), Tibets mesmerising sites attracted tourists
for centuries. Yet today, the actual tradition of Tibet is commercialized and sold by the noninherited occupying Chinese regime. Tibets local are no longer in position of taking part in
controlling or even consulting in any manner in their own towns and cities or the renovation of
their holy pilgrimage places into tourist attractions (Culture Clash: Tourism in Tibet, 2014, p.
24).

Qingming, Honggang & Wall (2012) stated that numerous Tibetan do not even get any
kind of economic advantage from the local tourism. Qingming, Honggang & Wall (2012)
notified that, most of the jobs generated by tourism growth go to non-resident employees from
China. Furthermore, numerous tourists visiting each year need the expansion and advancement in
infrastructure and services on an extent that generally foreign or local government Chinese firms
can fund or invest (Qingming, Honggang & Wall, 2012, p. 27). The views seen on the Tibetan
blog and social media sites reveal that several tourists favour Chinese tourist service providers
and tour guides.
Wang and Wall (2005) analysed cultural tourism: an assessment of marketing strategies in
Dalian, Nanjing and Hainan, China. The essence of the research is that the Chinese locals have
more chances to travel in big cities arranged by the local travel agencies and the number of
tourists is gradually increasing yearly in China (Wang & Wall, 2005, p. 9). Cultural tourism
theme is evolving the modern tourism in China. The research employed a modest theoretical
outline to cultural tourism based on high culture, popular culture, festivals and special events.
The key aim of the research was to analyse the scope of the different cultures and the highlighted
cultural theme in Dalian, Nanjing and Hainan in perspective of tourism and to assess the
significance of regional culture in tourism marketing (Wang & Wall, 2005, p. 9). A question
arose by (Wang & Wall, 2005, p. 9) is How and what features of culture is being promoted
contrarily in Dalian, Nanjing and Hainan? The outcomes of the study propose that high culture,
particularly historical inheritance, is substantial in Nanjing tourism, popular culture is vigorous
in tourism within the Hainan, and festivals and special events are major features in Dalian
tourism (Wang & Wall, 2005, p. 9). Regional culture is extremely vital in tourism and is
highlighted and showed by vibrant images of people, events and buildings by words and images

for tourism marketing. Though, it is tough to reach to a conclusion that the prime emphasis of the
trips is undergoing culture (Wang & Wall, 2005, p. 9).
While analysing A Cultural Perspective on Wildlife Tourism in China Qingming,
Honggang & Wall (2012, p. 34) stated that Chinas residents have a specific opinion concerning
relation of tourists and nature or wildlife. The Chinese are intended to think that animals will not
be influenced much in attracting tourist from around the world. Researchers debate through
scientific studies that tourism has damaging impacts on wildlife, but Chinese tourism managers
and the mass media as well, have a perception that being close to wildlife shows a pleasant state
amongst humans and animals (Qingming, Honggang & Wall, 2012, p. 27).
2.2 History of China and Tourism

Since the Chinese history is very rich and very old and dates as back as 4700 years.
Shefard, Yu and Himin (2011, p. 14) examined Tourism, heritage and sacred space in their study.
They focused on the influence that tourism has had on localities and the kinds of tourists world
heritage prestige appeals. The study pointed out the outcome that UNs Educational, Scientific
and Cultural Association world heritage status can direct to spatial conflicts among nations,
which results in division of cultural sites, business events and local life. It also does not include
the fact that most of the tourists that visit these heritage sites are actually local tourists with
religious intents (Yan & McKercher, 2013, p. 20).
The result of the study reveals that heritage protection is not the main concern for both
local people and authorities. However, it is the tourists that are concerned about the local heritage
of Wutai Shan. Furthermore, monastic establishments, active monks, and local population are

concerned about money because commerce, religious practice, tourists pilgrims have been part of
the local landscape for centuries (Zhong et al. 2011, p. 45).
Furthermore, the Chinese authorities are exerting to restore this place as an open air
museum for the tourists to experience. Though, it is not the mere issue between heritage and
tourism. However, heritage conservancy conflicts with religious activities and views as well. The
question arises that can a current religious site be declared as a heritage site?
Yamamura, Zhang & Fujiki (2006, p. 117) analysed the social and cultural impact of
tourism development on world heritage sites, particularly the Old Town of Lijiang, China. The
study is aimed to clarify the associated social impact on the city caused by being registered as a
World Heritage Location and its conversion as a tourist destination. As a part of an analysis of
the issue regarding the rapid growth of tourism and its pressure on World Heritage Places, this
research tried to elucidate the problems faced by the tourism industry at the Old Town of Lijiang,
Yunnan, China by focusing on local tourism providers (Yamamura, Zhang & Fujiki, 2006, p.
117). Salazar (2015) revealed that in recent times the usage of historic buildings has significantly
transformed. Now, over the 90% of the shops are tourist-based souvenir shops and restaurants.
Additionally, more than 50% of traders are temporary citizens, primarily Han Chinese, and a
majority of them rent out accommodations from indigenous proprietors. These outcomes explain
that the society of local minorities and their culture are quickly changing as tourism increases
(Salazar, 2015, p. 835).

2.3 Tourism Environment of China
2.3.1 Chinese Environment of Building (In Context of the Current Building Boom)
In 21st century, China has taken urbanization it to an unparalleled extent in human history.
McKinsey Global Institute report indicates that by 2025, China will have 221, tier 2 and tier 3
cities of over one million residents, 23 of more than 5 million and eight mega cities of 10
million. Over the next 20 years, China will build a space equivalent of 50,000 new skyscrapers
(Tourism Market in China, 2014, p. 5).
Upper class standards in China caused increase in energy demand such as hot water,
lightening, heating and cooling, increased usage of computers, office electronic equipment and
appliances. This means that with the growth in tourism and hospitality sector, Chinese
government and hospitality industry has to consider these issues for providing better
opportunities to the tourism industry for development with the eco-friendly options
(Environmental Management of Tourist Growth in China 2011, p. 16).
2.3.2 Basic Environmental Challenges for the Hospitality Industry

Chinas hospitality industry can anticipate that energy and resources scarcity will
influence the growth policies in hotels and travel and tourism sector. Hotel industry have a
chance to react proactively to challenges regarding the environment by managing the demand
and supply requirements, ecological building structures, training of employees in green
construction procedures, and technological improvement (Su, 2011, p. 1438). These sustainable
options can take hospitality on the frontline of Chinas current building boom. Following are the
key issues that have concerned the tourism and the hospitality industry of China:

2.3.2.1 Water Scarcity
China possesses nearly 20% of worlds population, while it has merely 7% of the worlds
water resources. 16% of the Chinese water resources are devoted to the construction sector.
Standard ways for saving the water can be attained by a reformed water distribution systems,
effective observing and monitoring, water metering and visible efforts of spreading awareness in
citizen (Qi, Xuegang & Xiaodong, 2014, p. 55).
2.3.2.2 Indoor Air Quality Management

One of the key distractions for the tourists in China is the poor quality of indoor air
quality. SARS declare China the epicentre or environmental diseases in mid 2000s, a negative
image, which the country tried to manage (Ghimire, 2013, p. 31). A substantial drawback for the
hospitality sector is consequently the poor air purity provision (Environmental Management of
Tourist Growth in China 2011, p. 19).
2.4 Tourism Industry and benefits for Locals

Chi-Lyi, Rong and Qinbin (2003) analysed Chinas International Tourism under
Economic Transition: National Trends and Regional Disparities and analysed the domestic trends
of Chinas international tourism from 1982. It also examines the variations in local inequalities
since 1995. Though, the exploration of trends proposes that International tourism in China is
expected to keep growth with the substantial pace, the study of local disparities focused on Gini
index specifies that the regional discrimination in international visitors and revenue has exposed
a descending trend as of 1995. Outcomes of this research proposed that economic

transformations of China has encouraged the development in global tourism and the influence of
international tourism on the economic and business development.
Local market is also growing with the growth of tourism industry on the international
level. With developments, the opportunities for local residents of China for employment are
getting higher. Similarly, the local business community is getting more chances for the growth as
well as more opportunities are now available to them. The recreational activities for the localities
are promoting by these expansions as well. According to China hotel market overview (2014),
the local sector has made a huge progress amid regional Chinese tourists. For example, 'Golden
Week' is a seven day national holiday attracting many tourists each year which creates business
opportunities or the locals.
2.4.1 Trends in Hospitality and Tourism Market in China

There are five core trends in the hospitality and tourism market in China which create
opportunities for Chinese locals in terms of business opportunities:
2.4.1.1 Development will Diversify in Multiple Business Segments
There are many other sectors that are associated with tourism industry and will expand up
to next decade. The changing trends in this industry reveal that many business small business
opportunities have opened their doors for middle class as well.
2.4.1.2 Consolidation in High and Mid-Scale Divisions

During the past few years, significant amount of investment has occurred in many sectors
of hospitality industry but the past few decades were accompanied by dominance of higher
income group in the business activities but the current trends and business opportunities have

opened doors for middle class in terms of growth (Chinas hospitality industry-Rooms for growth
2013, p. 2).
2.4.1. Change in the Lifestyle

Developing economy of China has created a huge mid-class which is seeking the higher
quality of lifestyle services. The percentage of tourism carries out for recreation raised from 30%
to 46% from 1999 to 2010 and the trend is predicted to sustain in future (Chinas hospitality
industry-Rooms for growth 2013, p. 4).
2.4.1.4 Innovations in Models and Formats

To catch with the rising demand of recreational travellers, major hospitality business
chains like Starwood and Mariott and boutiques and Club Med and Banyan Tree are expanding
their recreational resorts footsteps all over China. The trend is not restricted to high-end
lodgings, local budgets operatives, but on the other hand touches high-class accommodation
including resorts, luxury facilities, complete tourist packages etc. (Chinas hospitality industryRooms for growth 2013, p. 6).
2.4.1.5 Continuous Shaping of the Market by Government

Five year plan for China identifies the tourism as the core growth area to gain an
advantage for improving economic and social growth. Many provincial government authorities
plan to further promote tourism by encouraging in direct investment in tourism real estate and
tourism industry (Chinas hospitality industry-Rooms for growth 2013, p. 7).

2.4.2 Local Tourism and Evolving Business Opportunities
As defined in the Environmental Management of Tourist Growth in China (2011, p. 7),
the advantages for the local tourism business agencies and recreational travellers are as follows:
Increase in demand of Chinese vehicles and earnings of Chinese locals raise opportunities
for rich logistics and transportation sector in the hotel industry as an advantage for hotel
chains.
Local tourism in China follows many new trends including adventure tourism that
provide opportunities to those living far away from urban region. adventure venues I
China are usually located in the suburbs or rural areas and the tourism, therefore provides
many small businesses and professions like travel guides, accommodation in form of
small motels and hotel, lodging services to the tourists. The average percentage of profits
in budget hotels in China is around 30% to 40% today.
Recreational resorts generally associated with the activities like scuba diving, growing in
southern China in terms of popularity. Hainans five-star hotels, Chinas equivalent to
Hawaii, provide mostly to rich tourists of China.
Technology has opened doors for many online businesses as it promotes online booking
and travel plan for new destinations to be explored. Moreover, technology has also
improved many areas of tourism like construction, interior of the restaurants and hotels,
interaction and modes of interaction with the user and safety & security for the tourist.
All these areas open opportunities for the locals to invest in the tourism sector.
By the above discussion, it is revealed by the study that the rising opportunities for locals
in the tourism market in China. As the development in tourism and hospitality industry is
progressing, the opportunities lies within multiple sectors and new sectors emerge for the

advancements and growth of locals in terms of business. Moreover, it is also adding to the
facilities for easing and comforting the lives of the societies. Not only for the business
community but the individuals will be benefited by these opportunities as the rising business in
tourism industry will raise the rate of employment opportunities for the residents.
2.5 Governments Role in Promoting Tourism in China

The notion of policy has been reflected in various manners. Global business corporations
bring their competencies and exertions to the Chinas sustainability efforts towards the
promotion of tourism.
The functions of the government for promotion of tourism as described by the Cameron,
Memon, Simmons and Flairweather (2001) explained that at the level of local government, the
role of government officials is to describe the norm of sustainable tourism promotion into
activities. Local bodies (District and City Councils) perform two prime operations regarding the
tourism:
2.5.1 Enabling Tourism Development

1. Assist economic growth initiatives, like financing for local Tourism agencies, carry out
and improve business viability analysis.
2. Support development of local recreational activities and destinations, like as zoos, art
galleries, parks and reserves that contribute to the historical picture of China.
3. Indorse events like traditional or sporting carnivals for attracting more tourist and
branding China as a sustainable option or tourism.

2.5.2 Managing Negative Social and Environmental Influences
1. Control tourism progress; for instance, standardize environment, health and safety
measures.
2. Planning facilities like transportation systems, wastage management, and sewerage or
drainage.
3. Observe tourism growth and trends like feedback surveys from visitors and ecological
look after.
2.5.3 Government Initiatives in Promoting Tourism in China

Government to Government Initiatives: these involve voluntarily promotion, market
centred prospects to energy efficacy in building sectors. US-China ecological construction
sponsored by US-AID and shared venture the URBN hotel groups to develop the green
environment friendly hotel in China are its example (Tourism Market in China, 2014, p. 5).
Scientific Expertise: China energy group at US department of Energys Lawrence Berkely
National lab led an analytical research on Chinese building energy and supports the Chinese
government in developing technical standards for governing building energy use (Nyri, 2011, p.
65).
Global Alliances Partnerships: the alliance initiated and applied several programs such as
Global Climate and Energy Policy, Clinton Climate Initiative, the Energy Foundation, China
Business Council for Sustainable Development, China Academy of Building Research (Chen,
Lehto & Cai, 2013, p. 284).
Research and Think-Tanks: The world resources institute assists the US-China clean
energy research centre for developing and building energy efficiency improvements. The China

building program and China sustainable energy program widely contributes and supports for the
development of sustainable building sectors (Heung & Kucukusta, 2013, p. 346).
China Green Building Council: CGBC gets assistance from US Green Building Council,
the US Department of Energy and its founders and members. CGBC issues an annual Green
Building Report and has helped in organizing the sixth annual international building energy
efficiency and Green Building Symposium hosted in Beijing (Environmental Management of
Tourist Growth in China 2011, p. 30).
2.6 Tourism and Economic Development in China

China is heading with a long demonstrative economic transformation causing in record
development. During 2000 to 2010, economy of China got triplicated in size, eventually exiling
Japan for being the second biggest economy after the United States of the world. Regardless of
global recession, GDP of China is expected to expand at a yearly rate of 7.9% over the period of
next 10 years as compare to 2.8% of U.S and 1.7% of Germany. On the basis of estimations by
both OECD and the International Monetary Fund (IMF), China is expected to exceed the U.S in
a few years by 2017, for being the leading economy in the world (Review of Chinas Outbound
Travel Market 2013, p. 15).
After the implementation of the open-gate policy in 1990s, Chinas international and
national tourism have developed rapidly, causing in its being labelled as one of the countrys
national keystone sectors in 2009. The growth speed and historical background of China, caused
in a somewhat exclusive patterns of tourism growth in China. For instance, contrasting to other
rising countries which depend on international tourism, Chinas local tourism surpassed

international tourism and has had the most substantial influence on Chinese social, economic and
environment aspects within a very short period of time (Xo, Zhang and Lew 2014, p. 711).
Pedrana (2013, p. 91) studied local economic development and tourism policies with
respect to sustainability and culture. Like every economic activity, which affects the growth of an
industry, tourism has to be managed in a certain way and in some particular framework. The
primary part that tourism performs in economic development is very significant. Public
organizations have to be aware about the dimensions of the areas and attempt to support its
expansion and growth (Tourism Market in China, 2014, p. 5). However, if it is not managed
effectively the local resources may be damaged by tourist. Regional policies of tourism for
sustainability are crucial for the development and improvement of local areas in future.
Government interference has to proclaim developments for the local economic progress,
particularly with respect to sustainability (Qi, Xuegang & Xiaodong, 2014, p. 55).
Songhong (2002) investigated the economic impact of tourism in China. During the last
few decades, inbound and local tourism have attained sustainable development in China.
Tourism has progressed and its contributions are very considerable towards the economy and
social upgradation. The contributions are based on direct and indirect rise in production, labour
wages, employment, imports and indirect tax etc. Past trends in many researches revealed that
the local tourist spending has a huge influence on economy in terms of overall GDP of China.
2.6.1 Tourisms Contribution to the Economic Development

According to WTTC Travel & Tourism Economic Impact (2015), the direct contribution
of tourism to economic development (i.e. GDP) shows that internal investment on tourism (i.e.
total spending by the citizens and foreigners on tourism) and the governments spending money

on tourism facilities are directly related to tourist attractions, like cultural heritage sites,
museums or recreational sites like national parks etc. (Salazar, 2015, p. 835)
In 2014 the travel and tourism industry of China contributed directly to the economy up
to 2.6% of the total GDP and it is anticipated to rise by 6.7% by the end of 2015 and an increase
of 6% annually in direct contribution of tourism industry to GDP from 2015 to 2025 (Salazar,
2015, p. 835). The total contribution of tourism comprises of extensive effects like the secondary
and induced effects on the economy. The indirect contribution includes, travel and tourism
investment and spending in activities like buying planes and building of new hotels for usage in
tourism, government and tourism sectors shared spending on on larger aspects of the society, like
tourism marketing and promotion, aviation, administrations etc., and domestic procurements of
products and services by the businesses, which are involved in the tourism sector (Salazar &
Zhang, 2013, p. 81). The total contribution of tourism and travel industry in the GDP of a
country in 2014 was 9.4% of total GDP and forecast to increase by 7.5% in 2015 and 6.2% by
2025 (Salazar, 2015, p. 835).
2.6.2 Key Trends in Outbound Tourism of China

China National Tourism Administration (CNTA) reported that Hong Kong is a favourite
site among Chinese outbound tourists, i.e. 20% of Chinese citizen prefer Hong Kong for tourism,
followed by the Thailand, which is 15% and Macao, which is at 10% (Xie, 2015, p. 11).
However, United States and South Africa are also benefited most in terms of outbound tourism
from China in 2012 (Tourism market in China 2014, p. 6).

2.6.3 Key Trends in Inbound Tourism of China
By the end of 2012, vast number of inbound tourists visited China for recreational
purposes; however, business travellers generally dropped by 1%. In terms of regions of inbound
tourism of China, Beijing, Shanghai and Guangzhou received the most tourists from the world
(Tourism Market in China, 2014, p. 5). The popularity of Shenzhen and Guangzhou can be seen
by their closeness with Hong Kong. Guilin also noted the fastest development in international
arrivals throughout the same duration (Lijuan et al. 2013, p. 16).
2.7 Community Participation in Tourism Development

A recent research conducted by Stone and Stone (2010, p. 97) lay great emphasize on the
significance of local people involvement in developing tourism industry. The author stated that
the success of tourism is highly dependent on the cooperation and goodwill of the local
community people as they constitute as one of the most important part of tourism. Moreover, the
author also argues that if tourism planning and development are not aligned with local
capabilities and aspirations, it can damage the potential of the industry. In the end the author
concluded that there are different methods in which local people of a community can be indulged
in tourism activities. Therefore, it is crucial that whether local should be a part of tourism
development or not. However, there is crucial aspect that relates that the community gains an
immense advantage when involved in development process. As local involvement is usually
considered as an important factor in achieving success of development projects, it is now being
included in various policies pertaining to government and NGOs.
According Sebele (2010, p. 136), majority of the organizations have focused on attaining
local participation in their specific programs which eventually results in the project being better

and effective. However, in reality there is no single form of local participation, thus the term may
often be used inappropriately. Murphy (2013, p. 104) asserted that there is an uncritical method
in which local participation is practiced and conceptualized which attains increasing attention.
Different authors have analysed the various methods through which local people and
communities can be incorporated in tourism activities. For instance Eshliki and Kaboudi (2012,
p. 333), made a clear difference between involvement in the benefits of tourism and participation
in decision making process.
Moreover, Pretty (1995) has developed a clearer typology of local participation in
development projects, primarily focusing on the agricultural sector. This typology was beneficial
in many developmental projects. This similar concept was later implemented by France (1998) to
analyse the context of tourism industry development.
Table 1: Overview typologies of participation

The above table gives overview of different typologies of community and local
participation. Both the authors have focused on the passive form of participation through which
the community does not have any opinion in the project planning and are also not subjected to
any benefits. Through different steps such as consultation and other types of participation, the
highest stage of community participation is regarded as self-mobilization. During this phase, the
local communities and local people have fill authority in the decision making process including
its executing and benefits.
Moreover, there are various constraints to community and local participation in tourism
industry. Beaumont and Dredge (2010, p. 7) stated two different opinions regarding the

difficulties in the involvement of local people in tourism development. The first opinion revolves
around the fact that all communities are heterogeneous in nature. A specific community
incorporates various types of people, usually with different aspirations and unequal positions.
This usually results in an unequal opportunity of community people to involve in tourism
activities. It has also been researched that community members possessing high status have
greater chances to participate and involve in tourism development. However, they would not act
in the best interest of other members of the community (Lee, 2013, p. 37). The major question
remains unaddressed as how and who should be involved in the local community.
On the other hand, second opinion that was identified by the author revolves around the
fact that different communities usually possess low amount of information, power and resources.
This often results in difficulties in reaching out the market. Therefore, community is largely
dependent on other various stakeholders, thus making them vulnerable. Based on the research of
South African tourism industry, Wang et.al (2010, p. 759) highlighted the same opinions as
presented above and in addition of two more constraints of involvement which can be
implemented in multiple settings.
It has also been noted that the local communities do not own the natural resources and
land, thus when these resources are possessed by outsiders, the locals have limited access
provided by the owners. Another major constraint that was identified was that majority of the
poor communities have issues in attracting resources and capital to develop infrastructure and
facilities which are necessary for tourism development.
A more in-depth analysis regarding the difficulty of community participation was
presented by Sebele (2010, p. 136). The author differentiated between three primary categories
of limitations. The first limitation is categorized under operational level. This involves the

centralization of tourism administration which results in high difficulty for the local community
to get involved including lack of coordination because of the fragmented tourism industry. The
second type of limitation is known as structural limitations in local participation with regards
tourism development. One of the categories of structural limitations is the attitude of professional
individuals who are usually not focused on developing negotiation with locals. Another structural
limitation is there is an absence of a specific legal system in majority of the developing countries
in order to safeguard the rights of local people and communities. Other types of structural
limitations includes; dominance of the elite class in tourism development and lack of financial
and human resources in tourism development.
Moreover, it has also been researched that community participation is time consuming
process and requires high amount of cost in the form of investments. The other constraints as
highlighted by Beaumont and Dredge (2010, p. 7) includes (1) cultural limitations, which focuses
on less awareness of the local community with respect to social culture, (2) Political and (3)
Economic consequences of tourism development. Due to these reasons, the benefit of
participation is relatively low. According to Murphy (2013, p. 104), majority of the individuals in
Yogyakarta, Indonesia did not considered the involvement in tourism planning as a significant
phenomenon.
2.7.1 Benefits of local Community on Tourism Industry

However, there are various advantages and benefits of local community on tourism
industry. One of the main focuses of sustainable tourism is that the industry (tourism) considers
the aspirations, views and opinions of the host community. The support of local community for
tourism promotion and development is important and trustworthy community involvement and

participation can improvise the tourists experience. According to Sebele (2010, p. 136), when a
particular community participates in decision making process of tourism development, it
automatically becomes a proactive member and takes special ownership of the particular tourism
development. Moreover, the economic benefits of tourism industry are constantly being
appreciated by local individuals and local communities. There are many advantages of tourism
business in developing a valued and respected partner of local economy and community:
Positive contributions towards community development assist in improvising relationship

with local communities and simultaneously minimize the risk of future conflicts and
issues.
Constant support to community development can improvise reputation and develops

effective publicity.
Positive contributions to community development can improvise approval from guest and
other individuals who are worried regarding local community welfare.
Offers many benefits to local individual including sources of livelihood.
Improvising economic association with local individuals, communities and businesses

supports the sustainability of tourism industry.

2.8 Theoretical and Conceptual Framework
Figure 1: Conceptual Framework

The above conceptual framework has categorized the independent and dependent variable
of the research and also highlights the different factors that have an impact on tourism industry
of China. The independent variables are classified under (1) Community involvement in tourism
activities and (2) Relationship quality with the stakeholders. The community involvement
includes different significant factors such as knowledge sharing, empowerment, participation in
decision making and level of knowledge regarding tourism industry. Moreover, relationship
quality with stakeholders includes the factors such as trust, commitment and satisfaction. On the
other hand, the dependent variable of the study is the tourism industry of China which includes
the impact of social, economic, environmental and cultural impacts on tourism.
CHAPTER 3: METHODOLOGY
3.1 Introduction
This chapter presents methodological considerations of this study. The chapter begins
with philosophical assumptions undertaken in this study followed by research approach and
research strategy employed. This is followed by inclusion and exclusion criteria used to gather
literature from various electronic databases. This chapter then continues to explain data analysis
technique and sampling for secondary data collection. Finally, the chapter presents ethical
considerations adopted by the researcher of this study and the chapter ends with discussion of
reliability and validity of this study.
3.2 Epistemological Considerations

Research is conducted under the aim to gain knowledge therefore it is essential to
establish principles and assumptions regarding acceptable knowledge. The fundamental paradox
presides in the choice of applying principles and procedures of natural sciences in social
research. Epistemological considerations of a research study deals with these assumptions. There
are two contradicting schools of thought. First known as the positivism epistemological position
assumes and argues that in order for knowledge to be acceptable it must be validated by natural
sciences methods and techniques. Thus positivism posits that natural sciences methods are
applicable in social science research. On the contrary interpretivism school of thought assumes
and argues that there must be a separate research strategy with different principles and methods

for social research. This is because the nature and subject matter of social phenomena is different
as compared to the subject matter of natural sciences (Bryman, 2012, p.27).
In this study the social phenomena under consideration are history and culture of China
and tourism industry in China. The aim is to analyse the impact of culture and history of China in
relation to the benefits of locals in promoting the tourism industry. Since the subject matter of
phenomena under consideration, i.e. relationship between both phenomena to understand impact
of the former on later, is qualitative in nature upon which methods and techniques of natural
sciences are not applicable therefore the underlying epistemological consideration undertaken in
this study is interpretivism.
3.3 Ontological Considerations

Ontological considerations of social research deal with the nature of relationship between
the social phenomena under consideration and related social actors. The paradox is whether
social realities are external to social actors or social realities are social constructions developed
by actions and behaviours of social actors. Objectivism is an ontological position that states that
social phenomena are external realities to social actors and they are independent from the
influence of social actors and related meanings. On the other hand and in contrast to objectivism,
constructionism is an ontological position that states that social phenomena are social
constructions that develop and are in a constant state of change due to the influence of social
actors. Social phenomena are no independent from social actors and their related meanings
(Somekh and Lewin, 2011).
The social phenomena under consideration of this study are history and culture of China
and tourism industry of China and related social actors are locals and government involved in

cultural tourism industry which include government agencies and authorities and the locals that
reside in cultural tourism locations in China. The researcher assumes that the relationship
between the social actors and social phenomena is not independent and that social phenomena
under consideration is developed and faces continuous changes in relation to the actions and
behaviour of social actors and their related meaning. Thus, the chosen ontological assumption in
this research is constructionism because it matches the existing relationship.
3.4 Research Approach

Research approach refers to the way a researcher approaches social phenomena and
determines the scope of the research. Important aspects of research approach are to understand
and make choices about staring from general observations to make specific conclusions or
starting from specific observations and make general conclusions. There are two types of
research approaches. If the research begins with collection general information and works his
way to make specific observations and conclusions; it is called inductive approach. This
approach is also known as top-down approach. This approach is typically used to test existing
theories. The other research approach is called deductive reasoning or deductive approach in
which the researcher begins with making specific observations and works his way to draw
general conclusions. It is also called bottoms-up approach. This approach is typically used to
develop theories (Pasian, 2015, p.317).
In this research the aim is to explore the impact of culture and history of China on
tourism industry by studying the relationship between the two. The researcher aims to draw
specific observations by analysing existing studies focusing the same and then draw general
conclusions about what existing research literature indicates about this relationship. This implies

that the better research approach for this study between two opposing reasoning is deductive
reasoning or the bottoms-up approach.
3.5 Research Strategy Secondary

Research strategy refers to the choices made by researcher with respect to nature of data
to be collected for the research and the nature of methods and techniques to be used in the
research. Fundamentally there are two types of research strategies primary and secondary. In
primary research the researcher collects first-hand information by using research instruments or
data collection methods and then applies suitable data analysis techniques to derive meaningful
information. In secondary researcher the researcher analyses existing research studies and
critically analyses their results and findings to draw results and conclusions for current study.
The results of secondary research are derived from results of already existing studies and thus it
is often and justifiably called review of existing literature (Bryman, 2012, p.312).
In this study in order to explore the impact of history and culture of China on tourism
industry of Chinas in relation to benefits of local people the researcher aims to conduct
secondary research. The researcher chose secondary research because due to limited budget and
time available for this study the researcher cannot afford extensive travelling to China and collect
first information from related social actors. Thus the research approach of this study is secondary
research or review of existing literature.
3.6 Sampling Strategy

The researcher will use electronic databases to retrieve relevant research studies. These
databases are EBSCO, ScienceDirect, Emerald and Proquest. In order to retrieve research articles

keywords and combinations of keywords are searched in the libraries. For this study the
researcher chose following research keywords selected from research aims and objectives.
Databases
Keywords
EBSCO
Culture of China
ScienceDirect
History of China
Emerald
Tourism industry in China
ProQuest
Cultural Tourism benefits

Relationship/impact
When researcher searched aforementioned keywords in databases the search queries

retrieved huge number of articles many of which were not relevant to research aim. Due to
budget and time constraints the researcher decided to filter down research articles on the basis of
following criteria:
Inclusion Criteria: are used to ensure that search queries retrieve research articles while
maintaining specificity and sensitivity. Specificity refers to the ability of search query to retrieve
comprehensive results (Emmel, 2013, p.27). This means that search query retrieves all articles
that have important information for review and ensure that this important information is not
missed. Sensitivity refers to the ability of search query to retrieve relevant articles with respect to
the aim of the review. This is done to make sure that irrelevant information and articles are not
reviewed and presented in results of the review. In order to maintain high level of specificity and
sensitivity in search strategy inclusion criteria are used (Kara, 2015, p.111). Following inclusion
criteria were used in this research
Research articles published from year 2000 to current year 2015 are included and studies
published prior to 2000 were rejected
Studies focusing on impact of history and culture of china on tourism industry of china in
the perspective of benefits to the locals are included in the study
Studies in English language are included in this review
Studies that are available free of cost are included in this review
After applying these criteria the researcher was able to filter down huge search results
into viable number of studies while ensuring specificity and sensitivity in the results and findings
of this review.
3.7 Data Analysis technique: Content Analysis

There are various qualitative data analysis techniques among which most popular are
thematic analysis, content analysis, and grounded theory. Content analysis is a technique that is
used to analyse certain concepts in a text or set of texts. It is used for making valid and replicable
inferences from data into their contexts. It is a method that enables researchers to evaluate
research findings systematically with respect to the symbolic and actual content of texts (Ritchie,
Burns, and Palmer, 2005, p.191). Ritchie, Burns, and Palmer also gave example for content
analysis being used for studying effects of impact on readers perception by newspaper coverage.
Thus content analysis is a useful technique to analyse results and findings of research articles to
derive meaningful results for literature review. Since the aim of this study is to study the impact
of history and culture of china on tourism industry in China therefore the researcher chose to
employ content analysis to evaluate the research articles retrieved from search in the databases
and derive meaningful findings for research.
3.8 Ethical Consideration

Ethics in research field, using data, and interpreting results as well as analytical methods
conducted by researchers have gained increasing significance in qualitative research discourse.
Novel issue emerge and researchers continuously develop new tools to produce acceptable
knowledge with high reliability and validity. This means that researchers are increasingly
becoming responsible for knowledge they produce and how they produce it. Ethical
considerations refer to principles and moral values that researchers undertake throughout the
research process to show integrity with research community and research participants (Miller,
et.al, 2012, p.54). There has been a rapid increase in the governance and regulations pertaining to
research ethics and consequently it has become highly important for researchers to explain and
discuss all ethical considerations that they undertake during their research processes.
In this review in order to show integrity with fellow researchers the foremost ethical
consideration undertaken is paying respect and proper credit to the work of other authors through
Harvard referencing system. Using results and findings of other researchers and presenting as
their own is known as plagiarism which is considered to be a serious academic offense. Since
this is a literature review therefore referencing is critical to the reliability and validity of the
results and findings of this study. Since there are no human participants in this study therefore
various other ethical considerations such as no harm principle, confidentiality, and anonymity are
not applicable.

3.9 Reliability and Validity
Reliability and validity of research is critical aspect to be established by researchers.
Reliability and validity of secondary research are as important as they are in primary research
studies therefore researchers must discuss and establish these aspects in their results and findings
so that they can justify their research. Reliability of a qualitative research can be defined as the
extent to which methods and techniques applied in the research can be replicated by other
researchers at another point of time. Validity of the results and findings of a qualitative research
can be defined as the extent to which methods and techniques applied by the researcher would
produce similar results if conducted by other researchers at another point of time. The definitions
show that reliability and validity are highly dependent upon the methods and techniques i.e. data
collection methods and data analysis techniques applied in the study. Thus they are also highly
dependent upon the ability of the researcher to choose methods and techniques (Thyer, 2009,
p.356).
In this study the reliability of the results and findings can be reflected by the fact that
reviewer has fully defined databases, keywords, and inclusion and exclusion criteria so that other
researchers can use them to conduct similar methods of data collection or in other words to
retrieve research articles for the literature review. Furthermore, the data analysis technique used
in this review is content analysis which is a well-established technique with explicit procedures
that are followed to derive meaningful results. Thus it is assumed that there reasonably high
degree of reliability and validity in the results and findings of this review. However, if keywords,
inclusion criteria, or any other feature is changed then it is highly likely that validity will be
compromised.

3.10 Conclusion
This chapter presented philosophical assumptions and concludes that interpretivism is
best epistemological position for this study; in addition this chapter concluded that
constructionism is more suitable ontological position for this study. The research approach
undertaken by this study is deductive reasoning or top-down approach. The research strategy
chosen for this study is the secondary research based on review of research articles retrieved
form electronic databases. Search queries, keywords, and inclusion criteria have been fully
explained. The chapter also concluded that most suitable data analysis technique for this review
is content analysis. The chapter also presented discussion on ethical considerations undertaken
by the researcher and highlighted that Harvard referencing style has been adopted to reflect
integrity with research community. Finally the chapter presented discussion of validity and
reliability in the results and findings of this review and concluded that there is a fair degree of
reliability and validity.
Task 1
1. Introduction
1.1
Context and Overview of the Company

Marketing trends and strategies are increasingly defined by product
innovation and design. Product design has been ignored as a key component of
marketing strategies, but it has now become a critical success factor for many firms
who stand out from others, even in times of crisis, owing to their distinction in
design and differentiation in marketing, firms like Apple for instance. Design is the
form characteristics of a product that provides any kind of benefit to its users.
(Bloch, 2011, p. 378). Organizations now respond to these changing trends by

investing in design and innovation and marketing these aspects of their products
(European Union, 2014).
Toyota is a multinational automotive corporation engaged in the production
and sales of vehicles. Headquartered in Toyota, Aichi, Japan, the company was
founded in 1937 by Kiichiro Toyoda and employs around 340,000 people. Apart from
the automotive business, Toyota Motor Corporation also provides financial services,
design and sale of houses, biotechnology, robotics, and a number of diversified
business activities. The company is a host of around 600 subsidiaries, including the
well-known automotive companies like Lexus, Scion, Diahatsu, and Hino. Toyota has
its production facilities in a number of countries and exports its products to over
140 countries around the world (Toyota Global, 2015). The Toyota Corolla is one of
the compact and subcompact category of cars manufactured by Toyota. First
introduced in 1966, Corolla has been one of the best selling and well-known cars
worldwide, and has gone through various redesigns in its long lineage. The chosen
product for this study is the 2016 Toyota Corolla. The key rivals of the Corolla series
are the Honda Civic and Nissan Sunny models. Toyota reported an operating income
of 2,750bn Yens in 2015 (Financial Highlights, 2015).
1.2
Problem Statement
The object of this study is to understand the evolution of design in the Toyota
Corolla with respect to the changing needs of its market. For this purpose, the
investigation seeks to highlight what changes in design and innovation are made
over the time, how these changes were received by the customers, and how it
enabled the product to compete with its competitors.

1.3
Objectives of the Study

The following objectives are proposed for this study:
To assess the value and benefits derived by the customers from Toyota
Corolla
To investigate the uniqueness of Toyota Corolla in term of design and

innovation
To examine the brand appeal of Toyota Corolla in relation to other

competitors.
2. Corollas Benefits & Value Derived by the Customers

2.1
Product Description Corolla

A product is an offering that satisfies a need or want. The current model of
Corolla (2015-16) addresses the various needs of the consumers and provides new
design solutions, innovation and efficiency. Apart from the mainstream features like
LED lights, power mirrors, automatic transmission, 6-way adjustable seat, the new
Corolla provides full multimedia and audio compatibility through CD, USB,
Bluetooth, wireless, and other technologies, audio, Bluetooth, and hands free
controls on steering, 12V power outlet, cup holders, back camera, climate control
features, centre console for storage, rear spoiler, remote keyless entry, integrated
camera, button start, ECO drive mode, advanced safety controls, and a host of
other features (Toyota Corolla, 2015). The product presents a unique and elegant
design with plenty of stylistic features and internal controls, coupled with advanced
technology, easy accessibility and navigation. The new 11 th generation Corolla
particularly targets Millennials and middle-aged groups of people with a seamless

match of a car with other essential features like phone and music, wireless
connectivity and integrated navigation.
Source: A Brief History of The Toyota Corolla (Be Forward, 2015)
2.2
Customer Perception
The success of Corolla can be attributed to Toyotas approach of customer-
oriented thinking about its products. A successful family car must satisfy the
customers in comfort, feel, and performance, as expressed by one of the chief
engineers involved in the development of Corolla (Be Forward, 2015). The Kaizen
philosophy of continuous improvement informs the design and innovation at Toyota,
which helps them stay current and conscious of the prevailing trends, expectations,
and demands of consumers.
Moreover, consumers top-rated the brand in its fuel economy, perceived
quality, and value in comparison to brands like Ford, Tesla, Mercedes, Sabaru,
Honda, and others (Yahoo Autos, 2014). The report expressed that consumers are
driven by perception, which is influenced by marketing, experience, media, and
word of mouth. Around 70% of consumers rate design and style as the decisive

factor in their buying decisions, 68% side with technology and innovation, while the
top rated aspects are quality (90%), safety (88%), and performance (83%). Value
and fuel economy closely follows at 82% and 81%, respectively (Brindusescu,
2014).
2.3
Product and Service Value

The core competency of Toyota has been its reliable quality, product benefits
with attractive prices compared with the competitors, which maximizes the value
for the customer and puts the brand in a preferred zone.
With competency in quality and reliability, Corolla has been able to attract
higher perceived value which provides the firm leverage on prices against the rivals
because its consumers value it more than others. When Toyota and General Motors
produced an identical car in a venture, the one with the Corolla nameplate sold for
$1000 higher than the one with GM nameplate because of the higher perceived
value of Toyota. Many customers even claimed superior quality in Corolla even
though it was identical with GM (Keegan and Bhargava, 2011, p. 174).
While Toyota has other luxury brands that focus on quality in exchange of
premium prices, such as Lexus, Corolla enjoys a unique position with its excellent
mix of reliability, design and innovation, and features with a comparatively lower
price with respect to both competitors and its other premium brands. Once again,
perceived value and quality of the company puts Corolla in a favourable position
(Hill and Jones, 2011, p. 88). It perfectly addresses the consumer needs for a
comfortable, reliable, technologically advanced, safe, and fuel efficient family car in
an affordable and reasonable price. The prominent benefits which the evolution of
Corolla now offers to the customers includes latest car technologies, especially, the

multimedia, connectivity, and phone features, along with increased safety systems,
eco-friendly design, and enhanced automation and fuel efficiency.
3. Corollas Uniqueness in Design Elements

3.1
Design, Colour, and Shape

The evolution of Corolla since its inception to its current model shows a
transition in design from simpler to stylistic shape and form The new 2016 Corolla
presents a compact, elegant, and aerodynamic design, which is at once stylish and
simple. With a well-designed curved architecture the exterior of the car projects an
outlook of a luxury sedan, which is totally complimented by its stylish and spacious
interior with a great deal of flexibility. The car retains its aerodynamic style and
smooth lines of the exterior with a fluid and simple dashboard, which is crafted to
host cutting-edge technology, including, among other features, the GPS, wireless
connectivity, multimedia and applications interface, music and call functions. This
exterior also improves efficiency and performance in terms of fuel consumption and
mileage. The design also incorporates 8 airbags to improve and ensure safety.
Toyota is also engaged in reducing its carbon footprint and utilizing the recycled
material in its production. These innovative features of the design improved the
environmental efficiency of Corolla.
Source: 2016 Corolla (Toyota Corolla, 2015)
3.2
Benefits and Utility for Customers

The new Corolla is available in 10 colours with different models to suit the
needs of different customers, models like sports, Eco plus, base and premium LE. It
also comes with certain internal customization features. Its internal space allows
many adjustments to make room for more cargo and to accommodate more people.
The rear seats of 2016 Corolla can be completely folded down to make room for a
lifestyle. Likewise, theres a storage compartment for the front seats, which can be
adjusted in 4-6 different ways. The automated climate control system maintains the
internal environment and variable transmission aids the driver in stop and go traffic.
The design of the car enables a good degree of adjustments and flexibility.
The shape of its interior also reflects a pleasant view, with efficient ergonomics and
design optimization facilitating accessibility and navigation of controls. Features like
music and multimedia integration through USB, CD, FM, and Bluetooth are useful
features which are required by many customers. Moreover, access to maps and

applications also facilitate the driving experience, with options like making online
and mobile reservations, restaurant orders, and making phone calls to people are
also one of the commonly used features which customers now require on the move
and within their cars. Backup camera and voice recognition are also some of the
helpful aids, enhancing the driving experience (2016 Corolla, 2015).
3.3
Evolution of Design
The transformation in Corollas design reflects the changing consumer
perception of style, which is moulded by social and cultural trends and a gradual
need for transformation. Observing the local companies and culture, Toyota
engaged in a number of innovations in its design, body style, and integrated
technologically advanced systems and features in its cars to make its products
contemporary or, better, future (always staying ahead of the times). Such an
approach was an apt identification and fulfilment of a consumer need (Toyota Blog,
2013). This evolutionary trend continued to respond to the market trends and
consumer needs to for Corolla to stay ahead of its rivals.
4. Brand appeal in Relation to the Competitors

4.1
Corollas Brand Appeal

With respect to consumer perception and brand appeal, as discussed earlier,
the Corolla is strongly associated with reliability, quality, and perceived value. The
case of Corolla and GM illustrated that earlier and it is also supported by consumer
choice survey, and other studies (Keegan and Bhargava, 2011, p. 174; Hill and
Jones, 2011, p. 88; Brindusescu, 2014). Corolla is distinguished for its design and

innovation, comfort, reliability, and value. Its brand appeal with respect to perceived
quality, fuel efficiency, and value is strongest compared with the rivals like Ford,
Honda, Sabaru, and Chevrolet (Yahoo Autos, 2013). Moreover, the Corolla enjoys a
favourable consumer perception with connects its reliability with a reasonable price.
Hence, a sense of luxury, elegance, comfort, and quality comes at a lower price
compared to the competition. This makes for a powerful combination that drives the
sales and the overall brand value of Corolla (Hill and Jones, 2011, p. 88).
4.2
Comparison with the Competitors

In terms of innovation and design, the Corolla has improved much over the
years and stands in strong rivalry with its competitors, including even some
premium luxury brands with its exotic outlook. In comparison with Mazda3 GS
sedan, Corolla provides greater interior space and is more fuel efficient. Moreover,
the Mazda does not offer the automatic climate control and the automatic
transmission control (CVTi-S technology) (McAleer, 2013). The comparative models
of Ford, Chevrolet, and Honda provide marginally greater horsepower, but it does
not make a practical difference in terms of performance. Furthermore, among these
rivals, CVT is only built-in in the Corolla, which provides better efficiency and driving
control (Ford Fleet, 2015). With respect to price, the comparison between Corolla
and Honda Civic shows that the former is over a $1000 cheaper. The Corolla is more
spacious, comfortable, and provides value for money while the Honda is a little
smoother in drive and less noisy (The Car Connection, 2015). Compared to Hyundai
Elantra, the new Corolla is quieter, spacious, and fuel efficient while the Elantra may
be more exotic and stylish (Halvorson, 2015). Hence, consumers get the value for

money in Corolla and a lot of useful features, better interior space and mileage,
making it the preferred family car or even a luxury sedan.
4.3
Competitive Advantage
The key advantages the Corolla brand has secured for Toyota over its rivals is
the strong brand appeal and perception in terms of quality and affordability. It has
led to an increase in the perceived value of the brand and has created a positive
image of the brand as well as the company. This impact is deep because the Corolla
is probably the most popular and one of the best selling cars of any automotive
companies in its own category. Hence, the Corolla represents Toyota as such and
adds to the overall value of the company. Corolla represents a striking evolution of
innovation and design, which are the key forces that have kept Toyota ahead of its
competition and appealing to diverse global markets. The new Corolla has likewise
maintained the companys reputation for design and innovation, quality and value.
With the use of recyclable material and efficient design and processes, the new
Corolla is able to live up to the expectations without compromising on quality and
prices. Hence, Toyota has acquired and huge customer base with this strategy and
has earned customer loyalty by understanding and meeting their requirements.
Toyota now enjoys market leadership in many regions and has a sustainable brand
name (Nkomo, 2012). The brand value and success of the Corolla has in turn
increased the perceived value of other brands of Toyota as well.

5. Conclusion
The 2016 Corolla, or Corolla in general, projects an improvement in design
and innovation with an effective integration of consumer needs and wants. Although
the car is surrounded by its rivals with comparable and challenging features and
design, the Corollas brand appeal, customer orientation, cost leadership, reliability,
and overall value provide it an edge over the competition. Living up to the
expectations and adapting to the new technologies has enabled the Corolla to stay
ahead of time, and it continues to be its ground of distinction and differentiation.
The recent focus on fuel efficient and eco-friendly production processes and car
performance has also improved the position of Toyota in the market in terms of cost
reduction, brand perception, and sustainability. Moreover, a potential remains to be
tapped in the emerging markets where the presence of the Corolla is minimal or
non-existent. The company could utilize its process efficiency and cost leadership
strategy in the developing countries where it does not currently operate. Finally, the
Corolla has secured a strong brand image for Toyota and has lived up to consumer
expectations over the years to become one of the most popular and best selling
sedans. It has done so primarily with continuous innovation in design and efficiency,
which led its superior quality and value for the customers.

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Banking Development and Poverty1

Banking Development and Poverty2

Background of the Research

Some suggests an indirect bi-directional formal

Banking Development and Poverty3

1.3.1. Significance of the Research

Banking Development and Poverty4

To study the relationship of financial development on economic growth

To study the significance of banking sector development on financial development

To study the relationship of financial development with poverty reduction

To study the interrelation of Banking sector development with poverty reduction

Outline of the Research

Banking Development and Poverty5

Banking Development and Poverty6

Banking Development and Poverty7

Banking Development and Poverty8

Banking Sector Development

Banking Development and Poverty9

Banking Development and Poverty10

Relationship between Banking Sector development and Poverty Reduction

Banking Development and Poverty11

H1: Banking development has direct relation with poverty reduction

Banking Development and Poverty12

Methods of Data Collection

Banking Development and Poverty13

collected annually from 1980-2010, thus having 30 observations in total.

Distributed Lag. The equation for ARDL is:

Banking Development and Poverty14

LPOVt c1 1trend 1 LPOVt 1 2 LDCPt 1 i LPOVt i i LDCPt i u1t

LDCPt c 2 2 trend 1 LDCPt 1 2 LPOVt 1 i LDCPt i i LPOVt i u 2t

= First difference operator

LDCP= domestic credit to private sector

= coefficient on trend term

Banking Development and Poverty15

4.2. Time Series Analysis

4.3. Output from Eviews

Null Hypothesis: PAK_PER has a unit root

Augmented Dickey-Fuller test statistic

Banking Development and Poverty16

Augmented Dickey-Fuller Test Equation

Coefficient Std. Error

Mean dependent var

Banking Development and Poverty17

Null Hypothesis: D(PAK_PER) has a unit root

Augmented Dickey-Fuller test statistic

*MacKinnon (1996) one-sided p-values.

Coefficient Std. Error

Banking Development and Poverty18

Mean dependent var

Banking Development and Poverty19

Determinant resid covariance (dof 732.7634

Banking Development and Poverty20

Banking Development and Poverty21

Market Share of Grocery Stores in UK

Banking Development and Poverty22

(Source: Statista, 2015).

1.3 Supermarket industry UK

1.4 Key Requirements

Banking Development and Poverty23

Political:The politically growth of Tescos international business of country .

2.2 Critical Success Factors for Tesco

Banking Development and Poverty24

3.1 Internal Analysis

3.1.2 Internal Analysis of Tesco