The Role of Non-Resident Indians for Financial Scenes of Many Advanced Countries - Case Study Example

 The Role of Non-Resident Indians for Financial Scenes of Many Advanced Countries Non resident Indians are a flourishing part of financial scenes of many advanced countries. They work, do well and millions of them send money to India to their relatives which contributes to the financial stability of India in a marginal way. In 2000, India’s share of such remittance was 15% of the total remittance covering 73% of regions1 and this share is steadily increasing every year due to present globalisation, migration and mobility. “Migration and remittances are important signifiers of the human face of globalization. Millions of migrant workers and their families maintain their bonds and continue their obligations to each other using numerous means, including by sending remittances—money and goods—to their families and communities of origin” http://www.thedialogue.org/publications/country_studies/remittances/worldwide%20remittances.pdf Wealth management of non-resident Indians could be done by banks very effectively for advantage of all leaving out the local resentment against immigrants. Talking about gulf countries, Atiyyah says: “Hostile attitudes towards expatriates held by many Gulf hosts are not conducive to successful interaction between the two groups. Many natives are alarmed by the erosive effect these expatriates may have on their local culture and identity” Atiyyah (1996). Some of the Non-resident Indians have gone into private banking and wealth management2. In UK South Asians are only 2% of the working age population; but their achievement is significant. Socio-cultural factors of long hours of work and socio-economic factors like higher education have contributed to their success. With delegation of responsibilities, and converting it into a family business with family members and friends help, trying to get cheaper labour from the community, these small entrepreneurs had been successful in creating capital and a comfortable life. . “An important aspect not considered by ethnic resources and opportunities theory is the role of socio-economic resources such as the level of education and the class background of migrants, emphasised by Light (1984), in stimulating entrepreneurial entry and expansion” Basu and Goswamy (1999). They have managed well in small businesses with supporting ethnic clientele, previous business and professional experience, business inheritance in countries of origin, size of the starting up capital, informal capital from family and friends without interest and eliminating repaying pressure. They start in an extremely small way and this enables them to adjust and avoids difficult financial necessities. They have Asian clientele, ethnic labour, family support, and easy cash flow for expansion. The Indian-American group is described as: “The first group, who came to the USA in the 1960s, are generally well-educated successful men, with homemaker wives and adult children. The second group came in the 1970s and are also well educated. However, both the husband and wife are employed, and they typically have young children. The third group is generally less-educated and typically own motels and convenience stores (Mogelonsky, 1995)” from Kaufman-Scarborough (2000). They have achieved immense amount of success through socialization, consumer acculturation and traditional assimilation3. It is a fact that misconceptions exist due to media about this group. Organisations usually tend to over generalize certain similarities. They believe that all Indian population could be grouped together into a single segment. India is too large a country where regional dissimilarities are prominent. Another misconception is one Indian language is understood by all, which again is wrong, because there are hundreds of languages in India. Third one since all Indians seem to know English, it can be used to interview or advertise for them. Again this is wrong; they might know English, but not ‘consumer English’4. Also it should be kept in mind that this group is growing rapidly due to education, mobilization and western need of IT experts, and cannot be ignored, or reached only through mass media, because significant media differences are found in its sub-groups. Usually they are more educated, with high profile employment, economic stability and family values and a higher average income sometimes better than an average Westerner. They have strong ties with native culture and country; consider families, filial piety and loyalty to authority as important and value achievements as it reflects on their group, community, religion and country. Family is also considered as the source of individual identity. Most of the households are traditional and hence, decisions are made traditionally. Native tongues are used often and younger generations are fluent in many languages. Because of present day technology, travel, availability of entertainment in native languages, more than half of the younger generation remain ‘linguistically isolated’ by not taking English seriously. And the main difference lies in language separation. The same reason has made it inessential for them to assimilate with the ‘foreign’ culture. Also it is said that non-resident Indians buy the best item for cheapest price. They have strong attraction towards brand names, prefer to do business with people and not unanimously; they build a relationship while doing business. Names of banks could be the strongest matter of influence while making a financial decision. They are mostly comfortable with English advertisements and media. “Ads should also avoid trying to motivate the consumer by using psychological appeals. Direct, clear information is best, with an emphasis on verbal messages. India is a country that does not place much emphasis on using visual information in advertising (Zandapour, 1994)” says the same study. This may not be true because in the last fifteen or twenty years, Indian advertising has become highly visualistic evolving into one of the best advertising industries. But then Zandapour is talking about non-resident Indians. .Data Protection Act of 1998 governs the use of personal information in UK where law requires that it is used fairly and lawfully. Customers should be informed the ways in which it might be used so that they should not be surprised later. It cannot be used where they least expect it or made public without written permission. It cannot be passed on to another business or organisation with a few exceptions like helping police in preventing a crime, disclosure to obtain legal aid etc. All research connected personal information should be guided by Data Protection Act. Research conducted on the basis of face to face interviews on conditions of anonymity, based on a detailed and structured questionnaire is the best method for initial preparation. Questionnaire should cover a range of closed and open-ended questions on personal and family characteristics of the interviewee. Qualitative research methods are highly suitable for the present interview as meanings assume significance here. Qualitative method is clearly interpretative compared to other methods. It has increasingly sophisticated procedures and analysable tools to guide. For this research qualitative has to go well beyond the traditional research methods as here diversities in cultural, ethical, moral and social outlooks exist. It is necessary to reach beyond the boundaries of qualitative research methodology to accommodate the subtleties, details and illustrations. “Qualitative research is a particular tradition in social science that fundamentally depends on watching people in their own territory and interacting with them in their own language, on their own terms,” Kirk and Miller (1986, p.9) and hence, this is the most suitable method for present research. This is an empirical method with its own analytical tools and has an academic tradition. “Qualitative research is socially concerned, cosmopolitan, and above all, objective,” (Ibid). Qualitative research is amenable in testing the hypothesis, predictions, discoveries, dramatic and sound reasoning, and is intrinsically exploratory. It has reliability and validity as well as objectivity. It has four phases of invention, discovery, interpretation and explanation. All four phases must figure in the research and they should not substitute for one another. Phases should be completed in proper sequence so that the phase products are not extremely interdependent. They should naturally coordinate to support interdependent research projects. Ethnographic researchers do extensive fieldwork, which is the most importable part of Qualitative Research. Study of consumer behaviour on this matter is of paramount importance as it alters significantly from the usual western behaviour, even though some of the non resident Indians might have lived in western countries all their lives. Western perspective on consumers and marketing strategy are obviously different from Indian culture, lifestyle and languages. And all Indians cannot be the same in their behaviour, because they have ethnical and sub-cultural differentiations, even though as part of a large culture, they definitely share cultural values and strongly held beliefs. Also consumers, whoever they are, should be treated as individuals with individualistic consumer behaviours and not in an en mass way. Consumer behaviour “…is the study of the process involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires,” Solomon et al (1999, p.8). Consumers are ‘actors on the market place stage’ and consumer behaviour involves many different actors while issues remain pre-purchase, purchase and post-purchase. Consumer impact on marketing strategy is immense and variables for market segmentation could depend upon demographics, geographic, psychographic and behavioural categories. Demographic features cover age, gender, family structure, social class and income and race and ethnic background. Decision making model is better than the cultural model and more suitable in this context, as it depends on individual decision making considering consumers as problem solvers. Individual decision making is straightforward and less cumbersome. It depends on the theory that individual is capable of making his own decisions, after weighing the pros and cons of circumstances, because no one is more conversant with the surrounding circumstances than the individual himself. He will go through the steps of problem recognition, information search, evaluation of alternatives and product choice. Consumer researchers have to approach from a rational perspective. Decision making has many perspectives and strategies. Two types are habitual decision-making and extended problem-solving. Problem recognition is followed by the marketer’s role of problem creation that will lead to information search, both internal and external, under the framework of determinants, motives and outcomes. This will be followed by evaluation of alternatives and product categorisation which will result in many mental short-cuts and country of origin is always used as a product signal. “Country of origin can function as a stereotype – a knowledge structure based on inferences across products. These stereotypes may be biased or inaccurate, but they do play a constructive role in simplifying complex choice situations,” Solomon (p.228). All research and marketing in every sector is done with profitability alone in mind. “The ultimate purpose of the marketing concept is to help organizations achieve their objectives. .. Private firms should not aim for profits as such, but rather to achieve profits as a consequence of creating superior customer value. A company makes money by satisfying customer needs better than its competitors”, Kotler (2003, pp. 23-24). Approaching banks’ strategy is important while creating an appropriate questionnaire. Friendly approach, with proactive and reactive combined strategy and a clear core concept of banking is necessary. A company/bank has to deliver the best acceptable profitability to its customers. “A company’s business model thus is management’s storyline for how and why the company’s product offerings and competitive approaches will generate a revenue stream and have an associated cost structure that produces attractive earnings and return on investment” Thompson (2005, p.11). RESEARCH QUESTIONS: 1. Which part of India do you belong to? 2. In which year you have migrated to this country? 3. How many family members you have, what do they do and where are they now? 4. Which extended family members do you still have in India? 5. Do you keep in touch with them? 6. How often do you visit them? 7. Do you help them financially? 8. Approximately what percentage of your income you keep aside to help them? 9. Do you feel mental happiness by helping? 10. Do you feel closer to your country of origin by keeping in touch with them? 11. Do you still have strong ties with India? 12. How do you think younger generation is attached to India? 13. How to do you do banking transactions? 14. Do you feel that international transaction charges are expensive? 15. If better service at cheaper rate is provided, are you interested in shifting your transactions to another banking organisation? 16. Do you consult your family members before making these transactions or shifting them? 17. In what way the family members are connected with your financial transactions? 18. How do you assess the younger generation’s desire to help the extended family members in India? 19. Do they speak your language fluently or are they dependent on English? 20. Do they feel out of place when they visit India? 21. In what way do you think international banking could be improvised? 22. What rate do you think is reasonable for regular transactions of money to India? 23. Would you like to invest in India? 24. Are you comfortable with the economic reforms in India? 25. Do you feel that your family back home is helped by your migration to this country? RESEARCH QUESTIONS: I would like to probe into the strength of cultural links that non resident Indians possess in spite of being in a more glamorous western country. Another question of importance is the joint-family mentality that inspires these immigrants to help the extended families back in India, which is totally diverse from the western attitude of insular family. Also it is important to know the percentage that they are comfortable to sent to their families and the approval and backing of younger, fully westernised generation to that act. METHODOLOGY: Most of the non resident Indians live as a community either connected to religious places or to cultural and artistic institutions that makes them feel at home and part of the culture they left behind. I propose to conduct my survey and interview in such places with prior approval. I propose to give questionnaires to more educated individuals requesting them to complete the questionnaire. I will interview the lesser educated immigrants with the same questions and this could be time consuming and sometimes rather contradictory. I hope to do sampling with the much wider group. Emails and internet contacts will help me in this research to reach the distant people and if done in a methodical way, this will save a lot of time while bringing enormous amount of information. India NRIs are very fond of talking about themselves, their family and their culture and getting information and responses from them will not be difficult. They have a nostalgically romantic idea about India and its way of living. They know that they would never return to that life again; but love to retain a part of it. This is ideally my primary data of research and important target group. Secondary data comes from journals, books, reports, internet information, articles on web, information from cultural and religious organisations, earlier studies, released banking general information, already conducted researches etc. Asian cultures are more vocal and the best way to conduct research is to talk to them. They are friendly, gossipy and healthily nosy. They retain great interest in surroundings. This will help me in talking to this group in all available cultural, social and financial gatherings apart from contacting them through electronic tools. SAMPLING: I propose less time consuming questionnaires and more time consuming, but information gathering informal talks as basis of main sampling. For the purpose, I propose to choose three groups of 50 strength, one from earlier immigrants, another from recent immigrants and yet another from the younger group who are born and bred in Western countries. They will have very different outlooks and priorities. This will make my sampling highly authentic. I propose to find the first chosen group of working/worked and retired males, with domesticated, less-educated wives and western born children. They are financial sound, happy with their achievements and usually they are from Indian rural regions. The second group is far more educated, intelligent, from urban, semi-urban and rural areas, hard working, ambitious and here wives too are educated and working. They might or might not have children. They are free, independent thinking and forthcoming. Third group belongs to western citizens of Indian origin, who hardly know India other than through their parents’ coloured versions and through a few Indian holidays. They are lesser educated, not greatly ambitious, not highly intellectual, more materialistic and focus on earning money. They neither belong to western culture, nor to Indian. They are more westernised than they like to believe. They prefer to flaunt their diversities as part of their individuality. Sampling population is the one that has extended family connections in India. They have living parents, needy siblings and affectionate nephews and nieces. This would rule out people who are born in west because their connection with India is weak. Hence, it is the first group of immigrants or recent immigrants who have family members living in India. Western born group is totally unsuitable for sampling. It is done using the first generation and recently immigrated educated group with strong Indian ties. Sampling is difficult because people are not highly forthcoming with their financial details. Still it is done with rough details with the questionnaire about the frequency of money transactions, transaction charges, why and how the money was sent and who was benefited by it. Sampling provides information about the future possibility of money transactions to India. Usually money transaction is one-sided. Unless it is the student population, money hardly ever comes from India and hence, it makes it easier for sampling. Some of the sample population comprises males aged 18-25 living in Leicestershire region. (please explain how that age group could be employed here). I will do extensive mail survey and questionnaires will be posted on 1st of June 2007 with pre-paid envelope and a gift voucher and will be followed up by a reminder a month later. I shall be doing data analysis through SPSS softwear. BIBLIOGRAPHY: 1. Atiyyah, Hamid S. (1996), Expatriate Acculturation in Arab Gulf Countries, Journal of Management Development, Vol. 15 No. 5, 1996, pp. 37-47. © MCB University Press, 0262-171. 2. Basu, Anuradha and Goswamy, Arati (1999), South Asian Entrepreneurship in Great Britain: Factors influencing Growth, International Journal of Entrepreneurial Behaviour & Research, Vol. 5 No. 5, 1999, pp. 251-275. © MCB University Press, 1355-2554. 3. Kaufman-Scarborough, Carol (2000), Asian-American Consumers as a unique market segment, JOURNAL OF CONSUMER MARKETING, VOL. 17 NO. 3 2000, pp. 249-262, # MCB UNIVERSITY PRESS, 0736-3761. 4. Kotler, Philip (2003), Marketing Management (11th edn.), Prentice Hall International, London. 5. Kirk, Jerome and Miller, Mark L. (1986), Reliability and Validity in Qualitative Research, Sage Publications, London. 6. Solomon, Michael, Gary Bamossy and Soren Askegaard (1999), Consumer Behaviour, Prentice Hall Europe, London. 7. Thompson Jr. Arthur A., A.J. Strickland and John E. Gamble (2005), Crafting and Executing Strategy, McGraw-Hill International, London. ONLINE SOURCES: 1. http://iadialog.org/publications/country_studies/remittances/worldwde%20remit.pdf 2. http://www.thedialogue.org/publications/country_studies/remittances/worldwide%20remittances.pdf 3. http://www.sghambros.com/news_view_20050901.shtml Read More