The role of Italian export in eastern Europe market of Pasta

The role of Italian export in eastern Europe market of Pasta Introduction Main goals This report aims to be a complete and accurate analysis of the pasta market in Eastern Europe, and to show how three of the most important italian pasta exporters were able to penetrate in this market. We will also show the possibility of growth of this market and his development for years to come. Some informations about Russia and Poland I decided to analyze these two countries because, as I will explain in more detail below, historical and political reasons led the people to have similar food consumption. However, beyond other differences much more pronounced (like the geographical size or the number of inhabitants), both countries have a market characterized by the importation of pasta from Italy almost identical. Yet a country is a member of the EU, the other not. One enjoys the privileges of Europe treaties and has no duty. The other keeps the ruble and taxes and tariffs influence over the consumption of imported products. 1.2.1) Russia The collapse of the Soviet Union has brought about great changes in Russia. The economy was centrally planned and has now become a global market. The economic reforms in 1990 have privatized industry factory, except for some strategic sectors such as energy and defense. To know the real power of Russia, I ´d like to show you that this country is the largest exporter of natural gas in the whole world, the second oil exporter and the third exporter of aluminum steel. This makes Russia an economically strong country, but weak about fluctuations on the variability of commodity prices. After a long economic crisis (1998), the economy began to grow on average 7%. However, the recent global crisis influenced heavily the new middle class. The Central Bank of Russia used a third of its 600 billion U.S. dollars in international reserves to avoid the crisis and stabilize the ruble. The government has also spent $ 200 billion for a rescue plan to increase liquidity in financial sector and aid for Russian companies. In 2010 happens disastrous situation from the environmental point of view, with a severe drought and wildfire in central Russia that have reduced agricultural production, leading to a ban on wheat exports for the year, and increase in other sectors, such as manufacturing and retail trade (but the growth is really slow). 1.2.2)Poland. In 1990, Poland has begun a policy of economic liberalization and today is one of the most active transition economies. Before 2009, GDP had grown by about 5% per year, mainly due to inflows of EU funds. GDP per capita is still below the EU level, but it is among the most high in the Baltic states. Unfortunately, EU membership was blocked by the unemployment rate to 11.8% for the year 2010 and for inflation to 4.2%, above the upper limit of the target audience of the National Bank and the deficit of public sector budget went to 7.9% of GDP, for the crysis events. The countrys potential held back by lack of modern infrastructure, an inefficient commercial court, a code of hard work and too much bureaucracy. Russia Poland GDP (purchasing power parity)  [1]   $2.229 trillion (2010 est.) $2.147 trillion (2009 est.) $2.331 trillion (2008 est.) $721.7 billion (2010 est.) $698.6 billion (2009 est.) $687 billion (2008 est.) GDP real growth rate: 3.8% (2010 est.) -7.9% (2009) 5.2% (2008) 3.3% (2010 est.) 1.7% (2009 est.) 5.1% (2008 est.) GDP per capita (PPP): $15,900 (2010 est.) $15,300 (2009 est.) $16,600 (2008 est.) $18,800 (2010 est.) $18,200 (2009 est.) $17,800 (2008 est.) GDP composition by sector: agriculture: 4.2% industry: 33.8% services: 62% (2010 est.) agriculture: 3.9% industry: 31.8% services: 63% (2010 est.) Labor force by occupation: agriculture: 10% industry: 31.9% services: 58.1% (2008 agriculture: 17.4% industry: 29.2% services: 53.4% (2005) Unemployment rate: 7.6% (2010 est.) 8.4% (2009) 11.8% (2010 est.) 11% (2009 est.) Population below poverty line: 13.1% (2009) 17% (2003 est.) Investment (gross fixed): 18.9% of GDP (2010 est.) 19.5% of GDP (2010 est.) Public debt: 9.5% of GDP (2010 est.) 8.3% of GDP (2009 est.) 50.5% of GDP (2010 est.) 46.4% of GDP (2009 est.) Inflation rate (consumer prices): 6.7% (2010 est.) 11.7% (2009) 2.4% (2010 est.) 3.5% (2009 est.) Industr. production growth rate: 8.3% (2010 est.) 6.5% (2010 est.) Exports: $376.7 billion (2010 est.) $303.4 billion (2009 est.) $160.8 billion (2010 est.) $142.1 billion (2009 est.) Exports partners: Netherlands 10.62%, Italy 6.46%, Germany 6.24%, China 5.69%, Turkey 4.3%, Ukraine 4.01% Germany 26.06%, Italy 6.84%, France 6.78%, UK 6.38%, Czech Republic 5.85%, Netherlands 4.14% Imports: $237.3 billion (2010 est.) $191.8 billion (2009 est.) $167.4 billion (2010 est.) $146.4 billion (2009 est.) Imports partners: Germany 14.39%, China 13.98%, Ukraine 5.48%, Italy 4.84%, US 4.46% Germany 28.08%, Russia 8.65%, Italy 6.5%, Netherlands 5.59%, China 5.27% Debt external: $480.2 billion (2010 est.) $467.2 billion (2009) $252.9 billion (2010 est.) $239.6 billion (2009 est.) 1.3)Some information about the industries 1..3.1) Barilla S.p.a. Barilla S.P.A. is an international food company founded in 1877 in Parma. The company is still privately held, and remains in family ownership and control also today. Barilla_pasta_logo.svg.png Barilla Group control multiple brands. The most famous are: Mulino Bianco, Pavesi, Voiello, Alixir, Wasabrod, Misko, Filiz, Yemina and Vesta. The Group has several production plants all over the world: in Italy, Greece, France, Germany, Russia, Sweden, Turkey and United States, but the central office remains in Parma. Barilla Pasta produces various kinds of pasta and bakery products; is one of the worlds leader in pasta, with 25% of the US market and 40% of European Market. Barilla produces 4,000 tons of dried pasta annually in over 120 shapes and sizes. It is also the leading seller of bakery products in Italy. After the acquisition of the Swedish company Wasa, Barilla became the worlds major producer of flatbread. The Group has 16,000 employes, control 20 different brands and has a turnover of 4.5 billion euros. This market giant produce every year 3 ´000 ´000 tons of food products. In East Europe, the group is present in different countries: according to the website information, is present in Poland from 1999 with the brands Wasa, Barilla and Mulino Bianco. In Russia is present a bakery plant, and 880 people works there. Barilla set his presence in Moskow from 2003 and sell products like Barilla, Harry ´s and Wasa. In Sweden the society is present since 1999, with offices, production plants and a mill. 545 employees works for the group in Filipstad, and create food for brands Wasa and Barilla. 1.3.2)Pasta Zara Pasta Zara S.p.A. Italian food is specialized in the production of pasta, founded in1898 with factories in Riese Pio X (TV) and Muggia (TS). The company is the leading exporter of pasta in the world and the second in terms of production. Exports represent 95% of the market for Pasta Zara, and 13.5% of meals eaten in the world is Zara, in 2009 has sold 208,000 tons of pasta. Actually exports to 97 countries and increased sales particularly in Asian markets, America and Russia. In its continued growth, Pasta ZARA has launched an industrial development plan with the aim is to increase the production capacity from current 208,000 tons per year to about 320 thousand tons by 2015. It works about 300 people in his factory, and is one of the few italian companies that succesfully survived the recent financial crisis.logozara.png Pasta Zara has also been active for years an interesting collaboration with the Italian chefs, and is an active social life of its region by promoting a number of sporting and culinary events, as well as sponsoring several youth sports teams. 1.3.3) De Cecco It was founded in 1886 in Fara San Martino by Filippo Giovanni De Cecco. His father, Nicola De Cecco, a few years ago produced flour in a small local mill. As early Filippo De Cecco had the insight to properly dry the pasta so that they can maintain and withstand the long journeys to America. The current factory in Fara San Martino was built in the early 70s when that age was no longer able to produce the quantities required by the market. In 1950 it was rebuilt in Pescara on the industry model of the former mill town from the years 20 and almost completely destroyed during World War II. Industry Pescara De Cecco is called Mill and De Cecco pasta and is a public limited company controlled by the parent F.lli De Cecco di Filippo Fara San Martino SpA. De Cecco pasta produces water-based and durum wheat, although the laws in many countries allow the use of blends based on durum wheat and wheat flour that are called semolina. Pasta De Cecco has spread to 90 countries around the world inc luding Italy, Great Britain, Japan, United States, and France for over 100 years. It has recently started exporting in Mongolia. logo_home.png The pasta market in east Europe 2.1) What is pasta Pasta is a so popular food for many reasons: its nutritional value, taste and convenience. This is a healthy and important part of a balanced diet (such as mediaterranea). The inventor of pasta is still unknown: legends says Marco Polo imported from the east, while for others the differences between western and eastern pasta are too great, and they think that the Etruscans were the first to prepare pasta. There are two kind of pasta: fresh or dried. The dry consists of semolina, which is produced by grinding kernels of durum wheat. Sometimes other grains are also used. The semolina is mixed with water to form a dough. Usually, the fresh pasta is prepared by adding eggs too. You can enrich the mixture with other ingredients such as spinach, tomatoes and saffron to change its color. The dough is kneaded until it reaches the right consistency, and then is pushed (extruded) through a metal disk with holes. The size and shape of the holes in the disk determine what shape of pasta will be. When the pasta reaches the right length, is cut with knives. The paste is then sent through large dryers which circulate hot, moist air to slowly dry the pasta. The pasta is then packed in bags or boxes. The fresh pasta instead should be consumed within a few days of preparation, without the stage of drying. The most popular type of pasta in the world is spaghetti. 2.2) Similarity and differences between east and west market The differences between these two worlds are very marked. In west side, pasta is the most common food ever, on the other, at best, a simple seasoning. Export pasta in these countries does not mean selling a product, means to make them share as a lifestyle. Some Italian companies there are trying, even now. 2.2.1) Russia and Poland Pasta Market Historical reasons (including the three partitions of Poland in 1772, 1773 and 1775) and social behaviours urge me to consider the current pasta market of Russia and Poland as similar in many aspects, both unique, but distinct from those of Western Europe. These two markets, so similar to consumer preferences, have one big difference: Poland is a member of the European Union, and as such have access to products faster and cheaper, in the case of Russia, but the products are burdened with duties and exchange rates. The Russian and Polish food market is highly fragmented and there is not a single monopoly; the top 10 retailers only reach a market share of 10 percent (datas from 2006). In these two countries, traditional trade detail shop are common, in Russia still remain the Soviets (small independent stores), representing three quarters of total food sales. However, in both countries are becoming more modern retail chains. Hypermarkets and supermarkets are growing rapidly. Most of them have started business in Moscow and are now slowly expanding into other regions. The centerpiece of the food market and based for all foreign companies wishing to spread throughout the country is the area of Moscow and St Petersburg. The degree of success for future expansion can be examined by the successful sale of their products at the increasingly large middle class and upper-middle in these cities. The most important fair in this area is World Food Moscow, held annually in September. The fair is an internat ional fair, the bigger and largest in central and eastern Europe. Manufacturers who want to introduce their products and brands in the Russian market must participate to this event (with nearly 1,300 exhibitors and 60,000 visitors, most of them are international wholesalers and retailers of food). Prices are not set by law, but vary from region to region. This is due to differences in income and cost of living across the country. Russians spend a higher percentage of their income than consumers desserts in many other countries. In 2007 the total consumption was 1.1 million tonnes. About taxation, the prices of modern retail stores are subject to a 18% value added tax (VAT) flat rate which can make it difficult to compete. Import tariffs can vary from 5-20 percent depending on the product and the country is imported from has the status of most favored nation. In the case of Italy, the nominal tax rate is 20 per cent. Poland does not have these problems because it adheres to the Schengen Treaty and E.U. and the goods may be imported without tariffs. In general, corruption and bureaucracy are the major obstacles to doing business in Russia. However, the Russian government abolished many requirements and simplified import licensing and reduction of existing non-tariff barriers, the accession to the World Trade Organization. Food companies who want to import into Russia must apply for certification by the Russian Agency for Health and Consumer Rights, which confirms the safety and quality standards. In these countries, where for historical and social reason consumption of pasta is naturally very small, extensive marketing campaigns are needed, a lot of patience and creativity to support the business. It s very interesting to note that the lack of duties has facilitated the export of pasta in Poland. But what we can analyze from Russia? If we apply corrections to the data due to distortions and normalize the population, we get very similar fuel consumption. So is it true that the duties will not affect this business? No, for one simple reason: in Russia imported pasta is a luxury item. It is certainly not a few rubles on the price that discourages the wealthy citizens of Moscow from buying Italian products. Because the larger part of these products is sold in Moscow. and St. Petersburg, the remaining part of Russia is not a consumer of Italian products. A reduction of duties could encourage the spread of pasta between other groups of the population, while businesses might think of high gamma products for rich citizens. 2.2.2) West-Europe pasta market In the Europe of the east, the pasta is a well- known food. Its nutritional and organoleptic characteristics make it an excellent food, balanced and healthy for human consumption. In fact, the pasta is also at the base of the Mediterranean diet. Production volumes is estimated at 3.2 million tones, and continues to grow. The italian market in 2009 represented about 1.5 million tons, worth about 2.7 billion euro. Approximately 52% of national production is exported. In 2009, Italian pasta companies have increased their export volumes of around 1, 35%. Pasta is definitely one of the key areas of the Made in Italy, but competition with foreign countries, in particular the European Union is very strong. Despite phenomena of short duration (for example, sales crisis), the Italian pasta continues to be a success in international markets, where consumption is rising everywhere. Overall, they were exported around 1.7 million tonnes of Pasta, worth approximately à ¢Ã¢â‚¬Å¡Ã‚ ¬ 1.7 billion. In particular, 1 million and 145 thousand tons of pasta were exported to EU countries (4% more than last year) and 514 000 tonnes to third countries. As regards the geographical distribution of exports in the rankings of the five largest customers, Germany confirms first place with a share of 20% in quantity, followed by France (16%), the United Kingdom (15%), United States ( 7%) and Japan (5%). In ten years the production of pasta in the world has risen from around 7 million tonnes to around 12 million tonnes. This means that, with about 3.2 million tonnes of production, our country is about 26% of world production of pasta and 75% of the EU at a glance a pasta dish eaten all over the world in 4 and 3 out of 4 in Europe is made with Italian pasta. However, the Italian leadership cannot be taken for granted. New international competitors now face the global market. The gradual reduction in the number of pasta- makers (consider that in 1970 the companies were 450, now about 150) concerned as an indication of the difficulties in the sector. The Italian pasta market, right now, suffering considerable difficulty, as demonstrated by the actions of antirust Italian, which cyclically apply sanctions to the main producers. The Italian market is saturated: the prices are very low compared to the raw material, the number of producers is high and profit margins are very low. But this concern only the Italian pasta. If we add to this the cheap products imported from Spain, but even more from Asia and South America, the situation is really problematic. Many artisan pasta makers have closed, and the remaining have had to made compromises to maintain an adequate levels of prices. There is no place in the market for new innovations. Focus on new forms or in terms of recipes is very difficult because it is a subject already much exploited. Is possible to focus in increase quality level, but the return of sales compared to the price increase requested is not cheap. Sales are down and prices are strongly influenced by the fluctuation of raw material (such as the recent fire in Russia has led to a shortage of grain in the world). Thats why many companies have decided to invest abroad, in America some of the others in East Europe 2.3) General indicators Country tons of pasta produced Italy 3,161,707 Russia 858,400 Poland 150,00 Country Per capita consuption of pasta (kg) Italy 26,0 Russia 6,0 (fast grown) Poland 3,0 (quite stable) Country Average selling price (à ¢Ã¢â‚¬Å¡Ã‚ ¬) Italy 2 Russia 4 Poland 3 Market shares of Italian companies in the area of pasta in Italy 2.4) Consumers behaviour Italy West Europe East-Europe Pasta is a food for all people Is healty and cheap Thousands and thousands of differents brands Brand name and reputation create trusts Recipes are usually fresh and light, tastefull. The buyers knows lots of things about pasta, how to prepare the best recipe, a lot of experience of the product. Is made in Italy Unlimited existence of different size and shapes The package is less important than the brand Possibility of collusion between similar products to keep high prices The original Made In Italy Pasta is an expensive product When controls are are carried out strictly, the product has a good quality Only the most famous brands and names can attract a foreign customer. Expensive marketing campaigns can help selling pasta Cultural mix of italian pasta and west-Europe products can create unpleasant tastes (Pasta with Vodka sauce) Lack of basic knowledge. Especially about cooking time! Fake products are common (unfortunately) Spaghetti, Macaroni, Lasagne, Fettuccine. No more. The package must be as distinctive as brand, especially for the expensive products Fees and taxation keep high prices Quantity of pasta exported (tons) graph.emf The Italian industry in West Europe As seen above, De Cecco and Barilla are two companies leading her Italian pasta. If we add to Zara, the largest exporter of pasta, we get a great deal of products to be sold in these countries. Each of these three companies has followed a different system, with strengths and weaknesses, which we will analyze in detail. 3.1) Barilla As seen previously, export pasta in these countries is difficult because there is no culture of pasta. Barilla has begun the process of its introduction in the country with the acquisition of two companies operating in different sectors. We had to remember that Barilla was sold to U.S. multinational W. R. Grace and Company in 1970. For the company the acquisition was very helpful because it help to increase sales and became famous and powerful. But it remains a national pride in foreign hands. In 1979, Pietro Barilla with his sons repurchase it. Initially, to inject liquidity in the difficult moments of the 80 and 90, the Barilla became partner with Walter Wurth, chairman of Oerlikon Buhrle, a major Swiss company producing weapons. Its probably the first international Italian food company: it begins acquisition of several foreign companies in the same industry, such as the Greek Misko (1991), the Turkish Filiz (1994) and Swedens Wasa (1999). In 1999 opened its office in Poland, where he began to export pasta produced in Italy in local markets. The landing in Russia and not planned, but with the acquisition of Harrys Wasa gain control of these companies small offices in Moscow. We are in 2002 and the situation for a foreign investor is favorable to the resumption of the Russian economy after the financial crisis of 1998. So Barilla decided not only to invest in the country, but also to enhance the production facilities, acquiring the plant Solnechnogorsk. The process is not smooth: 20 million being spent to rebuild the plant Solnechnogorsk after a disastrous fire in 2004. Another 40 million are used, from 2004 to 2007, to improve the production of this plant that produces only for the subsidiarys Harry. Barilla pasta that matter in Russia always comes from Italy. Harrys hand and the colossus of French bread loaves, which produces many varieties suitable for each meal. To bear the internalization, the company has suffered over the years, many structural changes. The holding has also changed over the years several times its operating structure to achieve its present form. Then the system for foreign Barilla provides direct entry into the market, acquiring companies that can provide knowledge and know-how, to use as a base for future expansion of its core business abroad. While this system is characterized as very solid, almost textbook economics, however, is only possible by companies such as Barilla, that have large, very solid financial basis (also accessible through the weapon trade), confidence banks, large availability of money for long-term investment. Although the expansion in Eastern Europe has begun for the last decade, the recent imbalances of the economy are putting a strain on the coffers. barilla organigramma.jpg 3.2)Zara in West Europe Pasta Zara is an unusual case in the Italian industrial sector. While most other food companies producing for the domestic market and possibly export the surplus, since 1958 this company, with rare foresight, has started to export, so that now the export is the main source of income of the company. In Italy it is a little known brand in the main distribution channels, but through some sub-brands popular discount stores. The experience in Eastern Europe began in the 80 and 90. Through small improvements every year, Zara was the first going through uncharted territory. Zaras experience in Eastern Europe is very attractive. Pursuing a long policy of small steps, it has earned the trust of consumers and respected brands and quality. This system is fairly inexpensive, considering that need no infrastructure in place but only an exporter with a warehouse. Must be added also costs of marketing. It s true that with this system Zara has become the largest exporter of pasta in the world but to become it took years of effort, sacrificing the domestic market to focus entirely on exports. And it was really long! But the positive side is that now Zara, while its competitors are suffering and reel, squeezed by banks and crisis, has an enviable financial position, rather it is also able to expand its production facilities. A successful economic policy, therefore, provided to be able to wait many years and do not be alarmed by the lack of results. zara organigram.gif 3.3)De Cecco in west Europe De Cecco has always been the pride of Italian quality. It began to export its products only recently, but in Russia especially stood out for its products in the range Premium Segment. In particular, the company has distinguished itself for its commitment in the use of new technologies, especially the e-commerce and Web 2.0. The use of these powerful new media and online marketing campaigns, combined with the companys presence in social networks and YouTube, have fostered his knowledge outside of Italy. Is too early to comment on the results obtained by De Cecco nellexport online. The system is in fact not be operational until 2007, after a year that had put a strain on the company. It seems that the idea to focus mainly on trade web has been in practice a gamble in which few people believed. In the absence of funds and massive investment, however, seemed a logical solution. In practice it is not exported to Eastern Europe but to explore a whole new space (internet), very little used by Italian companies to sell their products. The data so far are very fragmentary. On social networks, the company has a large number of fans, as well as recipes on youtube channel. This is the first Italian company to have understood the potential of Web 2.0, but there is no practical data on the quantities sold. Despite this, I think this is an excellent system, able to demonstrate that the business is not achieved only with exaggerated amounts of money, but also with good ideas and lots of advertisin g. Future of Pasta market The pasta is a food that is going through a second youth, in recent years. Its nutritional properties make it an excellent item, but not yet adequately known outside the Mediterranean region and North America. From this point of view, the efforts of many Italian companies to showcase the product is impressive, especially in the East of Europe In a few years the consumption of pasta in those countries began to grow exponentially, a sign of the goodness of product. But if the increased consumption of pasta, it makes it necessary to increase the users understanding of the product and best practices on how to consume it. Only in this way, a product still popular but seen as a foreigner will be able to enter definitively into the hearts of people. However, the paste cannot hope to increase its market share in the intensely until remains a niche product of luxury. If this can start to attract more wealthy clients, it must then expand to all other social classes, with appropriate pricing policies and promotional purposes. It should not underestimate the different cultures from which the users come. If in some cases the result of any intersections of recipes is not pleasant, very often you get tasty combinations. The expansion into new markets becomes the only option for companies at home suffer more and more competition. Not only the internal ones (in Italy exists, in each store, tens of hundreds of shapes and products) but also from China and countries in the developing world. It is important to point out then that the real Made in Italy for wine and food products every year suffer more from clones from different countries, much cheaper but with much lower quality. Not only that, the pasta industry is still in danger from the changes in the price of wheat (see fires in Russia that in 2005 and 2010 have destroyed the stocks of that country, a formidable exporter) and in general of market imbalances: particular the recent crisis has led to a negative peak of exports, and fear for one of the key sectors of Italian economy, although it is early to reach definitive conclusions or analysis. But this I can definitely say that the pasta industry will expand only through export. Conclusions The situation of the market for products derived from corn is very precarious. On one side we have the farmers, who are fighting daily against nature to obtain a more healthy wheat, but their efforts are frustrated by the industries that underpaid their product. From other side we have to endure the same companies that increasingly stringent budgetary constraints in order to sell their products, and increasingly fierce competition. Thats why these three large Italian companies have decided to export its products to countries that are foreign to the culture of pasta. Someone called him a chance, something else a fail, but all these companies are fighting every day to sell their products. It s just business, but it is also through these channels that the real Made in Italy spreads. We have seen how difficult it is to enter a different market. is a long-term investment, and massive investments of money, time and energy are required, as well as know-how previously unknown. Until 2009 these companies have made it. With the recent crisis, the situation has deteriorated drastically, and perhaps have a good product will not be enough to save himself. Sources 1) www.istat.it 2) Comtrade 3) www.barillagroup.com 4) www.cia.gov 5) http://www.pastazara.it/ 6) http://www.dececco.it/IT/ Barilla official report 2001 -2010 http://www.eiu.com/public/ Italian Embassy in Moscow www.ambmosca.esteri.it www.confindustria.it www.worldfood-moscow.com http://www.unipi-pasta.it/dati/andam.htm http://www.pasta.it/consumo.htm Tutto il Grillo che conta (Beppe Grillo, Feltrinelli 2006) http://www.intracen.org/appli1/TradeCom/TP_IP_CI.aspx?RP=643YR=2008 16) http://www.pastaria.it/rivista-pasta/russia-un-mercato-promettente/

How Contract Breaches Affect Businesses

A contract is an agreement between two parties, each agreeing to do or forbear from doing something. A contract, if properly formed, is legally binding and all parties to a contract are required to perform their respective obligations under the contract, failing which legal action can be taken. A failure or refusal to perform one's obligations under the contract will be called a â€Å"breach† of the contract. Contract breaches have wide ranging consequences both legal and practical to the parties to the contract.This article will address the various effects that contract breaches will have on businesses. Some of them are set out below:- (a) Injury to reputation – It is not good for a business' reputation if word gets out that they have not honored their part of the contract. Other companies will be reluctant to do business with an entity which has previously defaulted on other contracts, especially when the default can be seen to be intentional or as part of a sharp bus iness practice.The injury to reputation can be incalculable and can have long lasting effects on the company getting new business. (b) Events of default – Sometimes breaching a contract, especially if it involves payment of money, can expose you to legal action including insolvency proceedings. These will often trigger the â€Å"event of default† clause in a lot of commercial contracts, especially those involving financial institutions. This will of course have dire consequences and can affect the smooth operation of one's business in the event an â€Å"event of default† clause is triggered.This of course goes without saying. (c) Legal fees – Breaches of contract, if serious enough, will often lead to litigation and dispute. It is no secret that legal fees can be exorbitant especially when the subject matter at stake runs into the millions. It is therefore important for all parties to involve to think carefully and try to avoid breaches of contract as the price you will pay to remedy the situation will far outweigh any good you can possibly receive from an intentional breach.d) Damage to relationship – It goes without saying that a breach of contract, especially intentional, will sour the relationship between the contracting parties. As it is often said, you should never burn your bridges and having a bad relationship with a commercial partner will not do well for one's business and should be avoided at all costs. At the end of the day it is common knowledge that contract breaches bring nothing but negative consequences, and as far as possible, parties should try to stick to their contract obligations to the best of their ability.

Workplace Bullying Costly And Preventable Written By...

Many of us have experienced some type of bullying in our lives. The impact of bullying no matter where it occurs whether at home, school or workplace is same. It affects victims both physically and emotionally. With every instance of bullying, the cast of players includes a target and a bully. In the workplace, the employer can assume a supporting role in bullying if the leader or manager is not building a culture that welcomes all employees. Organizational bullying is an epidemic spreading quickly within the workplace but it can be treated and eliminated. Bullying is a topic of many articles, books and movies. Many describe the negative effects of bullying on an individual and an organization. Workplace Bullying: Costly and Preventable written by Terry Wiedmer is an insightful article that addresses the bullying crisis, but also reflects on how it can be stopped. He covers the profiles of a bully and the target, the behavior of a bully, company responsibilities with regard to bullying and more importantly, prevention. According to Wiedmer (2010), â€Å"Workplace bullying is a pervasive practice by malicious individuals who seek power, control, domination, and subjugation† (p.35). Statistics show that thirty-seven percent of U.S. workers reported being bullied at work. Most bullies are men and most targets are women (Wiedmer, 2010). These alarming facts only boost the need to communicate more about the impact of bullying on the target and the organization.

Effect of Prior Work Experience - Free Essay Example

Sample details Pages: 20 Words: 5950 Downloads: 5 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Training is an integral part of workforce development and creation of new competencies within the workforce to ensure that the organization keeps up with the changing needs of the times. Training is related to performance in two ways. Effective training has a direct impact on the performance output and any gap in an individuals performance can sometimes be filled with training. For employees, lack of training also causes a lack of self-satisfaction and productivity. Don’t waste time! Our writers will create an original "Effect of Prior Work Experience" essay for you Create order Training is seen as a major cost center in most organizations in India even though its necessity is widely accepted. This negative view can mostly be attributed because of the apparent lack of direct linkage between training and the bottom-line of the company. In todays world, where the HR department needs to justify its expenses, especially in the wake of recession and lay-offs, it is essential that the trainings rendered are of optimum efficiency in achieving the set target and also that it be done at the least possible cost. Hence it is important to understand whether the methods of training employed are yielding the desired results or alternatively if the same results can be attained in more cost effective ways. One major factor influencing the training effectiveness is training motivation, as we have explained in the literature review below. But the attitude of employees towards formal training is another factor which will decide whether it is justified to spend so much money on formal training modules if the same end result can be obtained by informal on the job training if it is preferred by the employees. Hence we explore the links between these constructs. Theoretical Review and Hypothesis: Training Attitude: Development activities like training are significantly affected by attitudes and perceptual variables (Noe and Wilk, 1993).Eagly Chaiken (1998) defined attitude as the psychological tendency to evaluate an entity with a certain degree of favor or disfavor. These attitudes are good predictors of behavior (Ajzen, 1991).We can extend this line of reason to say that a person with a positive attitude to certain entity will show favorable behavioral response towards it and a person with a negative attitude to it will show an unfavorable behavioral response. Training attitude applies the definition of attitude to training. A persons attitude towards training is a measure or reflection of his or her attitude towards the formal process of knowledge and skill acquisition. Thus we can say that training attitude is indirectly a measure of liking an individual has for the formal process of training as opposed to say learning something on-the-job informally. It logically follows that those who ha ve a positive attitude towards training will be more likely to attend the training programs willingly and gain from it as compared to someone who has a negative attitude towards training which is to say, that training attitude determines the motivation with which a person attends training programs, especially in an organizational scenario where training programs are mandatory. Also this very attitude can be linked to how much learning happens in the training. The scale for measuring the training attitude construct was developed by Anupama Narayan and Debra Steele Johnson (2007) for their research. This was a 20 item scale addressing participants evaluation of 2 issues: How relevant and useful they perceived training programs to be. How much they desired to practice acquired skills on job. This scale with 7 point likert type response pattern had a high level of internal consistency (alpha =0.92) However some items were redundant and for the purpose of this research were omitted. The resulting 9 item scale was again tested for internal consistency and displayed a Cronbachs Alpha= 0.91 which is fairly high. The response to the 7 point likert scale was interpreted as a summated score which indicated the degree of positive attitude towards training among the respondents. Training Motivation: Quinones (1997) aptly described motivation to be an individuals choice to dedicate more energy to one set of behavior over others. In the training context, Blanchard Thacker (2004) explain motivation as an inspiration which is directed by trainees personal needs and decision processes they use to satisfy those needs. Or, as Colquitt (2007) puts it , training motivation is the persistence and intensity of learning -directed behavior in the context of training. Training motivation is affected by a diverse set of internal and external factors as suggested by various research papers. Work environment, organizational climate, supervisory support etc are a few of the external factors researched upon whereas the internal factors hypothesized to affect training motivation include self efficacy, personal mental ability and personality (Colquitt et al, 2000). One of the most popular theories to explain motivation is the expectancy theory of how people are motivated by the results of their behavior (Bandura, 1997). We can also view Vrooms expectancy theory as a theoretical framework for examining training motivation. Vrooms model suggests that expectation of an act being followed by a certain outcome often shapes the motivation for doing that act. To extend this to the context of training motivation, if a trainee expects that the effort he puts into attending training programs will yield valued outcomes to him then he will be motivated to attend the same. Hence this research attempts to understand the valence -instrumentality link associated with training. We measure what the trainee values and whether he perceives those things to be outcome of training programs. A 14 item scale, with 7 items each for valence and instrumentality of factors associated with training, was adapted from the research paper by Phyllis Tharenou (2001).The factors of valence included in the scale are Reaching career goals, Pay increase, Job security, Change to workplace, Promotion or advancement, Opportunities for different career paths, Supervisor praise. The responses for these questions were taken on a 7 point likert scale and scores were summated to arrive at the level of training motivation of the respondent. A higher score symbolizes that the respondent values the inherent factors highly and also perceives that training will help him achieve the same. Training Effectiveness: Training effectiveness is essentially a measure of how effective the training imparted was. Many researchers including Ford (1997), Noe (1986), and Tannenbaum (1992) have recognized training effectiveness as a crucial issue for organizations. Employee performance and productivity can be measurably improved if trainings are effective and organizations will be able to avoid wasteful spending on ineffective trainings. Most organizations would want to have a good return on their training investment. According to London (1989) and Noe (1999) training interventions in organizations are going to increase hence the training effectiveness is going to be an important feature in the organizations. Kirkpatricks (1976) four level approach is one of the most extensively used methods for evaluating training effectiveness (Alliger Janak, 1989). This four level approach measures training effectiveness vis-ÃÆ'Â  -vis the trainees reactions to a training program, the extent to which trainees can exe cute desired behaviors related to the training, the acquisition of skills and knowledge by the trainee and resulting change in the job behaviors of the trainee. It has been a common assumption among researchers that these 4 levels linked in a linear fashion hierarchically. Hamblin (1947) illustrated the cause and effect chain as training leading to reactions which in turn leads to learning and that leads to change in job behavior. But this empirical evidence for this proposed link has been inconclusive. This led Alliger Janak (1989) to conduct a Meta analysis and conclude that the four factors are not necessarily linearly linked. There are several factors like training motivation attitude, context of training and other influences which attenuate the link between trainees reaction and other criterion measures. A four item shortened version of the Kirkpatrick scale was used for measuring the training effectiveness. The measured effectiveness was the perceived effectiveness of the las t imparted training program. Sample items in the scale included questions like Did I enjoy the course. The response was obtained on a 7 point likert scale varying from strongly disagree to strongly agree and the summated score of each item response was used as the measure of the training effectiveness and higher the score higher was the perceived effectiveness of the training. Training Attitude and Training Motivation: Individuals disposition or attitude towards formal training programs has been shown to have a direct influence on his training motivation (Ford Noe, 1987). Training attitude also displays his motivation to learn (Tannenbaum Yukl, 1992) and his motivation to attend training (Facteau et al, 1995) as distinct from training motivation. What the above mentioned research suggests is that there is a logical and empirical link between a person liking a training program and being motivated to attend the same. However the extant literature mentions this relationship in a very general and broad format. We would like to hypothesis a more specific relationship. Going back to our definition of training motivation , we have said that it is the perceived valence the trainee associates with certain outcomes and how instrumental he feels attending a training is in order to acquire them .We listed these outcomes as career development, superior praise, promotion or development, pay increase , job secu rity etc. Research suggests that there is very strong link between training attitude and training motivation .Carlson et al.(2000) found a high correlation between training attitude scores and training motivation scores in their research.Now most employees may find that there is a perceived strong connection between attending trainings and achieving these outcomes and hence may attend trainings when they are mandatory rather than volunteer for it. But otherwise, based on his experience he might feel that training programs are a waste of time over all and he learns more on his job. Especially in the context of Indian manufacturing industry where trainings are mandatory, employees might not be predisposed to attending trainings, but will attend them anyways due to perceived benefits. Hence in this research we are testing whether having a positive attitude towards training increases the individuals training motivation and how much is it correlated. Hence, Training Attitude of an individual positively impacts his Training Motivation: Training Motivation and Training Effectiveness: Based on our understanding of motivation, an individual is more likely to expend more energy for a task he is motivated to do and hence is more probable to do that task more effectively than other tasks. Extending this logic forward if a person is motivated to attend training then he is more likely to enjoy the training, learn most from it and apply it on to his job. In other words the effectiveness of the training imparted will be high if the trainees entering the training program are highly motivated for the same. In the organizational context it is imperative that different individuals enter the training with different levels of motivation. These differences in the level of motivation may be an outcome of various factors like personal characteristics and work environments. After studying these effects, Salas et al.1(1992) hypothesized that individuals motivated to do well in training will be the ones who end up learning the content of the program better than their lesser motivated counterparts. Training effectiveness is measured in terms of 4 parameters derived from the Kirkpatricks model. These parameters are namely, Learning, Behavior, Reaction and Applications of skills. Several studies put forth empirical support indicating a link between trainees motivation and learning (Rails Klien, 1991; Clark 1990; Hicks Klimoski 1987; Baldwin et al., 1991).The attention levels and openness to new ideas is increased by pre-training motivation. Hence theoretically trainees who are more motivated should be more ready or primed to learn and apply their learnings. Also a person motivated to attend the training will be more likely to enjoy it thus displaying a positive reaction. Whereas a person who is unmotivated to attend training will not learn much from the training even if he ends up enjoying the experience (Mathieu et al., 1992). Consequently we also hypothesize a direct relation between how much the trainee learns and how much he is motivated about the training to how much of the learned skills he will apply in his job. Thus training motivation can be hypothesized to bring about change in behavior of the trainee as well. Based on the above reasoning we state out second hypothesis as, Training motivation positively impacts training effectiveness Training Attitude and Training Effectiveness. Hicks and Klimoski (1987) attempted to study the effect of choice of attending the training program with effectiveness of the training program. They hypothesized that if trainee had a choice of attending a training program then he will be more satisfied by it than otherwise. Ryman and Biersner (1975) also studied the effect of choice on training outcome. They found that giving a choice to attend the training program resulted in lesser dropouts from the program and greater training success. In a slight variation of this experiment, Baldwin, Magjuka and Lober (1991) reported that when trainees received their top choice from the available training programs they reported higher pre training motivation and. They also learned more as compared to other trainees who did not get their top pick. Tannebaum et al. (1992) showed by way of their research that individuals who nominate themselves for training actually attach a greater instrumentality to the program and report higher training motivat ion than others. This in turn leads to greater training effectiveness. The same was researched upon and confirmed by Gormley, Collins et al. (2009) on their study on Medical students undergoing E-learning programs. In our research we would like to extend the above findings to the context of training attitude. Training attitude can be seen as the pre disposition of the individual towards attending training. If the individual has a positive attitude towards training then he will choose to attend the same whereas if he has a negative attitude towards training he will not attend it or attend it grudgingly if forced to the same. Hence incorporating Tannenbaums findings, we can say that people who attend training against their choice will not undergo an optimally effective training. Hence we hypothesize that only people who choose to attend the training by way of their positive attitude towards it will be more motivated about the training and hence consequently the training imparted to them will be effective. No previous research has aimed to study this mediating effect of training motivation on the relationship between Training attitude and training effectiveness and this is the gap we propose to fi ll by means of our research. We hypothesize that Training effectiveness is impacted by Training Attitude of the individual via the mediating variable of training motivation. Training attitude positively affects training effectiveness. Training Motivation acts as the mediating variable on the relationship between Training Attitude and Training Effectiveness. Moderating Effect of Prior Work Experience: Goldstein (2002) stated in his research that training transfer happens more effectively if tasks in the training environment are congruent with those in the actual work environment. Typically the young Indian professional fresh out of college will prefer the formal training programs as he is not exposed to any other way of learning. However as we have talked about training attitude it is important to study the effect of previous trainings on the individuals attitude. Employees who have undergone much training and have worked for enough years in the organization may have seen other methods of learning their job or skill apart from formal training programs to form different attitudes about training than those who have very little work experience. Learning On -the-job takes place within the workplace while the employee is doing actual work in the actual work environment under normal working conditions. This is important because it ensures that skills taught in such informal training can be readily transferred to the job (Kleiner Read, 1996). Work based learning focuses on reviewing and learning from experience and is cantered on learning from action rather than simply developing competencies (Dymock Gerber, 2002). Since the employee is trained in normal working condition, there is a high sense of relevance and validity to the employee (Clifford Thorpe, 2007) and is a tool to increase the productivity (Jain, 1999). Learning on the job happens on an individual level and the greatest advantage of this is that it enables each participant to determine the speed with which learning can proceed, at the same time providing a high level of feedback and trainee involvement (Kleiner Read, 1996). Other advantages are that the employee is being productive during training, and thus the associated costs may be less (Kleiner Read, 1996); this training may be given to more people than it is possible at a training institution (Jain,1999). Thus we can see that on the job learning may be perceived to be more effective than formal trainings by employees with greater years of work experience behind them. This could also possibly affect their attitude towards formal training programs and its utility. Hence the effect of training attitude on training effectiveness may be moderated by the prior work experience of the individual. We hypothesize that more is the prior work experience of an individual the more likely he has understood how to perform on his job and how to acquire skills on the job and hence the more it is likely that he will not have a favourable attitude towards formal training programs. Thereby the effectiveness of training programs on such individuals will be subdued. Thus, in this research we will aim to study the moderating effect of Prior work experience on the relationship between Training Attitude and Training Effectiveness. The prior work experience of individual has a negative moderating effect on the relationship between Training Attitude and Training Effectiveness. We would also like to study whether the Mediating Effect of Training Motivation on the relationship between Training attitude and Training effectiveness is valid for different groups of people with varied work experience. For this purpose we propose to study the said relationship by dividing the data set into groups of people with differing work experience. According to our theoretical study we expect to observe a more significant mediated relationship between training attitude and effectiveness for people with lower work experience than those with higher work experience. For people with lower work experience the relationship between training attitude and training effectiveness mediated by training motivation is more significant. Methods: Sample: Around 200 participants from various manufacturing organizations were contacted in person and via e-mail and the questionnaire was administered. Out of the 200 people contacted 122 (61%) people chose to participate. Most of the participants were chosen from the technical background who have undergone some sort of training at their work place. To maintain anonymity the questionnaire did not contain any identifiers. The researchers themselves administered the questionnaire and they themselves collected the responses. Measures: All the scale used to measure the various constructs were measured using a 7 point Likert scale ranging from 1(Very Strongly Disagree, Very Strongly Unlikely) to 7(Very Strongly Agree, Very Strongly Likely). Training Attitude: Training attitude was measured using a 9 item scale developed by Anupama Narayanan and Debra Steele-Johnson (2007). A sample item is I enjoy participating in training programs offered at work. Training Motivation: Training motivation was measured using a 14 item scale developed by Phyllis Tharenou (2001) which was adopted from Noe and Wilk (1993) 17 item scale. This scale was based on the valence instrumentality expectancy theory and had 7 items each for valence and instrumentality. A sample item for instrumentality is How likely you will obtain a pay increase from KSA from TD. A sample item for valence is How important is obtaining pay increase to you. Training Effectiveness: The training effectiveness was measured through a 4 item scale. This scale was a shortened version of the Kirkpatricks scale and was developed by Alan Chapman. The training effectiveness was measured on different parameters namely reaction, learning, behavior and productivity. Prior Work experience: The prior work experience was measured using a single question to the participants asking them of the number of years of prior years of work experience. Analysis: The study was intended to find the mediation effect of training motivation between training attitude and training effectiveness. The procedure followed to study the mediation effect was adopted from the study by Baron and Kenny (1986). Further the researchers also studied the moderation effect of years of prior work experience on the direct relation between training attitude and training effectiveness. This was done through a 2 model approach using the standardized multiplied values for training attitude and years of prior work experience. All the analysis was done using SPSS software. Further the entire sample of respondents was divided into 2 classes based on the work experience, one having work experience more than the median and one having less than the median. The median value was ignored and the mediation analysis was carried out using the Baron and Kenny model (1986). Results: The means, standard deviations and correlations .All the variables were found to be significantly correlated with each another. It can be easily seen from the table 1 that the correlation among all the variables is very high. To test the internal consistency of the scales measuring the constructs, the Cronbachs Alpha Coefficient was calculated and it was found that all the scales were reliable as the Cronbachs Coefficient was greater than 0.7. The results of the measures of internal consistency. Again it can be seen that the Cronbachs Alpha Coefficient is very high indicating that the internal consistency of the scales is very high. Mean, Standard Deviation and Correlations: Measures of internal consistency Cronbachs Alpha Coefficient: In this research we have primarily hypothesized the relationship between training attitude and training effectiveness with training motivation as the mediating variable. Apart from the mediation effect, the moderation effect of number of years of prior work experience on the direct effect of training attitude on training effectiveness has been studied. The results of the mediation effect of training motivation on the relationship between training attitude and training effectiveness. The mediation effect was studied using the 4 step Baron and Kenny model of regression analysis. In the first step, the independent variable training attitude was shown to affect the outcome variable i.e. training effectiveness significantly. In the next step, the independent variable was shown to affect the mediator variable i.e. training motivation significantly. In the third step, the mediator variable was shown to have a significant effect on the dependent variable. These steps showed that the relation between training attitude and training effectiveness was mediated by training motivation. In the 4th step, the mediation effect was calculated through a regression analysis in which the mediator and the independent variable were the predictors and the criterion variable was the dependent variable. Regression results to study mediation effect: The mediation is significant and the mediation effect was calculated to be 0.923 standard deviations. Also in the fourth step, since the effect of training attitude on training effectiveness becomes insignificant we can safely infer that full mediation is present. The step I shows the regression results when training effectiveness was taken as the criterion variable and the training attitude was taken as the independent variable. From this step we saw that training attitude was significantly related to the training effectiveness. Here the value of R2 was found to be 0.796 with F = 468.143 at p The step II shows the regression results when training motivation was taken as the dependent variable with training attitude as the predictor variable. In this step it was seen that training attitude was significantly related to training effectiveness. The R2 value was found to be 0.883 with F = 904.66 at p The step III shows the regression results when training effectiveness was taken as the dependent variable with training motivation being the predictor variable. In this step it was found that the training motivation is significantly related to training effectiveness. The R2 value was found to be 0.909 at p The step IV shows the regression results when training effectiveness was taken as the criterion variable with both training motivation and training attitude as the predictor variables. From this step we could conclude that training motivation was significantly related to training effectiveness and also we see that training attitude loses the significance of its effect that it had on training effectiveness in step I. The R2 value was found to be 0.909 at p The above 4 steps show that the mediation effect of training motivation between training attitude and training effectiveness is a full mediation effect as the independent, variable training attitude, becomes insignificantly related to the criterion variable (Baron and Kenny, 1986). The steps I, II and III are used to test the first 3 hypothesis. In step I it was shown that training attitude was significantly related to training effectiveness hence H3 is accepted. Similarly in the step II it was shown that training attitude was significantly related to training motivation and hence H1 is accepted. In the third step, it was found that training motivation was significantly related to training effectiveness and hence H2 is accepted. Training attitude was significantly related to training effectiveness in the first step and to training motivation in the second step but it was non-significantly related to training effectiveness in the fourth step. From this we could infer that training motivation fully mediates the relation between training attitude and training effectiveness. Thus H4 is supported. The Sobels test was used to just verify the mediation effect. The test showed that the mediation effect is statistically significant (Mediation effect = 0.923; Z-score = 8.68; p In addition to the above mediation analysis, we also tried to understand the role of work experience on the mediation analysis. Hence 2 more mediation analysis were carried out in which the entire data set was broken down in 2 sets, one with respondents having 2 or more years of work experience, second with respondents having less than 2 years of work experience. This was so done because the median work experience of the sample studied was 2 yrs. Impact of years of work experience on the mediating role of training motivation on training effectiveness was studied. First we take the case of respondents having less than 2 years of work experience. The same steps as stated above according to the Baron and Kenny Model were repeated and the results. Regression results to study mediation effect on respondents with work experience of less than 2 years: Again as we can see that training motivation fully mediates the relation between the training attitude and training effectiveness. In the first step we used training effectiveness as the criterion variable with training attitude as the predictor variable. The relation was found to be significant and positively related with R2 = 0.468; p In the next step, training motivation taken as the criterion variable and training attitude was taken as the independent variable. This relation was again found significant and positively related with R2 = 0.639; p In the third step, training motivation was now taken as the predictor variable and training effectiveness was taken as the dependent variable. It was found that this relation was significant with R2 = 0.660; p In the last step, both training attitude and training motivation were taken as the predictor variables and training effectiveness was taken as the dependent variable. In this step, the relation between training attitude on training effectiveness became insignificant hence it was proved that training motivation fully mediates the relation between training attitude and training effectiveness. The mediated effect was found to be 0.592 and the overall mediation was found to be significant using the Sobels test. Using the Sobels Test the Z score was found to be 4.7498. Thus showing that the mediation effect of training motivation on the relation between training attitude and training effectiveness is significant. Another mediation analysis was done to test the mediation effect of training motivation on the relation between training attitude and training effectiveness for respondents having more than 2 years of work experience. This was again a 4 step analysis as per the Baron and Kenny model and the results. As we can see in the table 5, in the first step it was found that training attitude significantly affect training effectiveness. In the second step it was found that training attitude significantly affects training motivation. In the third step, it was found that training motivation significantly affects training effectiveness. And in the fourth it was found that training motivation significantly affects effectiveness but impact of training attitude on effectiveness becomes insignificant. This showed that training motivation mediates the relation between attitude and effectiveness. Regression results to study mediation effect on respondents with work experience of more than 2 years: From the fourth step we can see that training motivation mediates the relation between training attitude and training effectiveness fully. The overall significance of the mediation was checked using the Sobels test. It was found that the mediation is significant with Z-score = 7.95; p Now from the above 3 mediation analyses we have established the fact that training motivation fully mediates the relation between training attitude and training effectiveness. But from the 2nd and 3rd mediation analyses we have found that the mediation effect of training motivation is higher for respondents having more than 2 years of work experience. We can see that there is quite a bit of difference between mediation effects of the 2 classes of respondents. The mediation effect for respondents with less than 2 years of work experience is 0.592 whereas that for respondents with more than 2 years is 0.809. This shows that years of work experience plays a major role in shaping employees attitude towards training which affects their motivation which proves H5b. A plausible interpretation of these results could be that employees with lower work experience, at least in the Indian manufacturing industry, who are probably fresh out of college are not aware of any other means of learning except formal training. Hence they might have a positive attitude and willingness to attend the same. However as an individual on gains more experience and attends a lot of trainings he realizes that on the job learning is much more relevant to improving his performance than formal trainings. Hence possibly a change in attitude towards training programs develops with increasing years of work experience in individuals. Further the moderation effect of years of prior work experience between training attitude and training effectiveness was studied without using the work experience as a dichotomous moderator and splitting the sample group. Since years of prior work experience is a metric moderator we use a 2 model method to test the moderation effect. In the first model, the training attitude and years of prior work experience are the 2 independent variables and training effectiveness is the criterion variable. In the second model, the interaction effect of the moderator and predictor on the criterion variable is studied by using the product of standardized values of training attitude and years of prior work experience. A linear regression is done with training effectiveness as the criterion variable and the above mentioned models simultaneously entered as the independent variables. The training attitude and years of prior work experience are taken as the independent variables and training effectiveness is taken as the criterion variable. Here we found out that this model is significant with R2 = 0.957; p The standardized values of training attitude and years of prior work experience were calculated and multiplied. This standardized multiplied value was used as the predictor and it was found that this relation is also significant with R2 = 0.959; p Moderation effect of years of prior work experience: To test our H5, the results of model 1 and model 2 were used. As it was found that the moderation effect of years of prior work experience on the direct relation between training attitude and training effectiveness is significant and there was an inverse relation of years of work experience with training effectiveness, H5 is supported. Hypothesized model of Mediating effect of training motivation on the relationship between Training Attitude and training effectiveness (* significant at p Likely Implications: The results of this research study might possibly have immense impact on the Training Development function of the HR department of organizations in India. The study will provide basis for the HR department to take into account employee preferences and the effectiveness of various training methods to develop an efficient and user acceptable training programme to suit the needs of their respective organizations, thus enhancing the role and impact of the HR department. Also by knowing the attitudes towards training it will be possible to create a conducive organizational culture in which employees feel that the training will help them to discharge their duties more efficiently and also enhance their future job prospects. The HR department has been traditionally viewed as a cost centre this study might help to bring some of those costs in check while ensuring the training achieves its objectives for the organisation. For instance allowing employees to choose between learning on the job and attending training programs might achieve the required learning objective at a lower cost. Especially in times of recession and layoffs, this study will provide HR department with tools to dole out new and effective outcome focused training show its impact on the companys numbers or make its presence felt on the financial statements of the company. Limitations: The survey was conducted in a few organizations due to lack of time and resources. Also the effect of organizational culture on the training needs was not studied .Since the organizational culture is major factor affecting employee preference, performance and training motivation this can be said to be the biggest limitation of this survey. The effect of the industry and the sector on the training attitudes cannot be studied accurately and the study cannot be said to be representative of the entire country. Also the study is limited to manufacturing sector. Hence generalizations cannot be made from the findings of this study. The training effectiveness measured is based on perception of the trainees and their supervisors. The most accurate method would be to do a pre and post training measurement of the Kirkpatricks parameters on the trainees. But since it would be difficult to find such organisations with the ongoing training where this method can be applied, we have to stick to perceived training effectiveness. Scope for future study: If this study establishes concretely the correlation between training attitudes, preferences, motivation and training effectiveness then further study can be made on what exactly are the specific methods which will prove to be most effective based on the employee preferences. Future study should also take into account factors not considered here, including organisational culture as well as individual personality traits to make for a comprehensive study on all factors included in developing the optimum training program. Since the individual personality traits will have an impact on the employee attitudes towards training, this is an important factor to consider in the study. Also the scope of the study needs to be broadened to encompass bigger geographies and more industry sectors so that the relationship under study can be generalised. Also the effect of gender on employee attitude has not been studied. These factors provide a wide scope for future study.