Extending Participative Decision making

Participative decision-making (PDM) is the extent to which employers allow or encourage employees to share or participate in organizational decision-making. According to Cotton et al., the format of PDM could be formal or informal. In addition, the degree of participation could range from zero to 100% in different participative management (PM) stages.

PDM is one of many ways in which an organization can make decisions. The leader must think of the best possible way that will allow the organization to achieve the best results. According to Abraham Maslow, workers need to feel a sense of belonging to an organization (see Maslow’s hierarchy of needs).

Styles:

Democratic Leadership. This is the type of leadership style in which members are encouraged to share their ideas and then synthesizes the available information into the best possible decision. Researchers have found that this style is usually the most effective and leads to better contributions from the group, as it produces a work environment that employees can feel good about because they know their opinion counts and they can bring a real difference to the organization.

Autocratic Style. Here, the leader takes the employees’ opinions, collects them and facilitates the conversation, but takes control and responsibility of the final decision. This is most effective during crises and emergencies where decisions have to be made quickly.

Consensus. In the consensus participative decision-making style, the leader gives up complete control of the decision and leaves it to the members of the group to conclude the majority decision. Doing this requires teamwork, trust, and communication (and time, because it takes a while) but it usually brings out the best decisions since it is well thought out. Consensus style improves goal-setting, problem-solving, and team-building among groups.

Delegated by Expertise. Of course, not everyone is an expert at everything. Everyone has their area of expertise. Here, the leader delegates the responsibility to the expert of their area of concern so they can arrive at the best outcome. This style of decision-making process can help the group feel more creative and engaged in the process.

Choosing the right style for your organization shouldn’t be a one-off. As HR practitioners, we always have to be mindful of the dynamics in our organization so we can decide on the right participative decision-making style (depending on the situation) that will improve our employee engagement and ensure that everyone in the company feels valued and respected.

Advantages

PM is important where a large number of stakeholders are involved from different walks of life, coming together to make a decision which may benefit everyone. Some examples are decisions for the environment, health care, anti-animal cruelty and other similar situations. In this case, everyone can be involved, from experts, NGOs, government agencies, to volunteers and members of public.

However, organizations may benefit from the perceived motivational influences of employees. When employees participate in the decision-making process, they may improve understanding and perceptions among colleagues and superiors, and enhance personnel value in the organization.

Participatory decision-making by the top management team can ensure the completeness of decision-making and may increase team member commitment to final decisions. In a participative decision-making process each team member has an opportunity to share their perspectives, voice their ideas and tap their skills to improve team effectiveness and efficiency.

Participatory decision-making can have a wide array of organizational benefits. Researchers have found that PDM may positively impact the following:

  • Job satisfaction
  • Organizational commitment
  • Perceived organizational support
  • Organizational citizenship behavior
  • Labor-management relations
  • Job performance and organizational performance
  • Organizational profits

Outcomes

The outcomes are various in PDM. In the aspect of employees, PDM refers to job satisfaction and performance, which are usually recognized as commitment and productivity[9] In the aspect of employers, PDM is evolved into decision quality and efficiency that influenced by multiple and differential mixed layers in terms of information access, level of participation, processes and dimensions in PDM.

Research primarily focuses on the work satisfaction and performance of employees in PDM. Different measurement systems were applied to identify the two items and the relevant properties. If they are measured with different processes in PDM, the relationship is as described below:

  • Identifying problems: Do not have strong relationship with performance. Because even with full participation, participants may not explore their skills and knowledge in identifying problems, which is likely to weaken the desires and motivation then influence performance.
  • Providing solutions: Positive and “potentially strong” relations with performance. It is not only attributed to the skills and knowledge could be explored but also the innovative ways employees can provide and generate.
  • Selecting solutions: Positive to performance but not likely to enhance satisfaction. If the solutions generated are not acknowledged by the employees who are absent at the previous stage, the satisfaction could lessen.
  • Planning implementation: Positive and strong relationship with both performance and satisfaction. Participants are given the possibility to affect the achievement of a designed plan. As the “value attainment” is attached, the extent of performance and work satisfaction increase.
  • Evaluating results: Weaker relationship with performance, but positive relationship with satisfaction due to the future benefit.

There are a number of ways through which employees can participate in decision-making process of any organization.

  • Participation at the Board Level: Representation of employees at the board level is known as industrial democracy. This can play an important role in protecting the interests of employees. The representative can put all the problems and issues of the employees in front of management and guide the board members to invest in employee benefit schemes.
  • Participation through Ownership: The other way of ensuring workers’ participation in organizational decision making is making them shareholders of the company. Inducing them to buy equity shares, advancing loans, giving financial assistance to enable them to buy equity shares are some of the ways to keep them involved in decision-making.
  • Participation through Collective Bargaining: This refers to the participation of workers through collective agreements and by deciding and following certain rules and regulations. This is considered as an ideal way to ensure employee participation in managerial processes. It should be well controlled otherwise each party tries to take an advantage of the other.
  • Participation through Suggestion Schemes: Encouraging your employees to come up with unique ideas can work wonders especially on matters such as cost cutting, waste management, safety measures, reward system, etc. Developing a full-fledged procedure can add value to the organizational functions and create a healthy environment and work culture. For instance, Satyam is known to have introduced an amazing country-wide suggestion scheme, the Idea Junction. It receives over 5,000 ideas per year from its employees and company accepts almost one-fifth of them.
  • Participation through Complete Control: This is called the system of self management where workers union acts as management. Through elected boards, they acquire full control of the management. In this style, workers directly deal with all aspects of management or industrial issues through their representatives.
  • Participation through Job Enrichment: Expanding the job content and adding additional motivators and rewards to the existing job profile is a fine way to keep workers involved in managerial decision-making. Job enrichment offers freedom to employees to exploit their wisdom and use their judgment while handling day-to-day business problems.
  • Participation through Quality Circles: A quality circle is a group of five to ten people who are experts in a particular work area. They meet regularly to identify, analyze and solve the problems arising in their area of operation. Anyone, from the organization, who is an expert of that particular field, can become its member. It is an ideal way to identify the problem areas and work upon them to improve working conditions of the organization.

Indian constitution and Labour Welfare

Labour welfare activities arose in colonial India in reply to the need of cheap labours when; following the abolition of slavery in 1833, British colonies started importing Indian labours. British government passed legislations which led to the development of the concept of labour welfare in colonial India. The Apprentices Act of 1850 was passed with the objective of helping poor and orphan children to learn various trades by apprenticing them to craftsmen. The Fatal Accidents Act of 1853 aimed at providing compensation to the families of workmen who lost their lives as a result of an ‘‘actionable wrong.”

Part III of the Constitution of India is the benchmark for labor laws in India. Also, Part III (Article 12 to 35) of the Constitution covers the fundamental rights of its citizens which includes Equality before the law, Religion, Sex, caste, place of birth, the abolition of untouchability, freedom of speech and expression and prohibition of employment of children in factories.

Labour Rights and Indian Constitution

Indian constitution provides numerous safeguards for the protection of labour rights. These safeguards are in the form of fundamental rights and the Directive principle of State policy.

Articles 14,19,21,23 and 24 comprise of fundamental rights promised under part III of the Constitution. Articles 38, 39, 39A, 41, 42, 43,43A and 47 form part of the Directive Principles of State Policy under Part IV of the Constitution, but they are not enforceable in a court of law.

Article 39, 39A, 41, 42, 43 and 43A collectively can be termed “Magna Carta of working class in India.”

Article 14 commands State to treat any person equally before the law.

Article (19) (1) (c) grants citizens the right to form association or unions.

Article 21 promises protection of life and personal liberty.

Article 23 prohibits forced labour.

Article 24 prohibits employment of children below the age of fourteen years.

Article 39(a) provides that the State shall secure to its citizens equal right to an adequate means of livelihood.

Article 39A provides that the State shall secure the equal opportunities for access to justice to its citizens and ensure that such opportunities are not denied by reason of economic or other disabilities.

Article 41 provides that within the limits of its economic capacity the State shall secure for the Right to work and education.

Article 42 instructs State to make provisions for securing just and humane conditions of work and for maternity relief.

Article 43 orders the State to secure a living wage, decent condition of work and social and cultural opportunities to all workers through legislation or economic organisation. And

Article 43A provides for the participation of workers in Management of Industries through legislation.

List of major Labor law Acts in India

  • The Minimum Wages Act, 1948
  • The Payment of Wages Act, 1936
  • The Trade Unions Act, 1926
  • The Industrial Disputes Act, 1947
  • The Factories Act, 1948

Labour Welfare Policy and Five Year Plans

Labour has a vital role in increasing productivity and management has to help create conditions in which workers can make their maximum contribution towards this objective.

In free India, the labour movement and trade unions should be in a position to assume larger responsibilities in the context of new scenario and challenges which are coming up on the advent of 21st century. One of the main tasks in the Five Year Plans is to evolved practical ways in which they can make an increasing contribution to national development and national policy.

The National Commission on Labour, however, preferred to describe its approach as one in quest of industrial harmony rather than industrial peace as according to it the concept of industrial peace is somewhat negative and restrictive. It emphasises absence of strife and struggle.

A quest for industrial harmony is indispensable when a country plans to make economic progress. It may sound platitudinous but it is nevertheless true that no nation can hope to survive in the modern technological age, much less become strong, great and prosperous, unless it is wedded to industrial development and technological advance.

Economic progress is bound up with industrial harmony for the simple reason that industrial harmony inevitably leads to more cooperation between employers and employees, which results in more productivity and thereby contributes to all round prosperity of the country. Healthy industrial relations, on which industrial harmony is founded, cannot therefore, be regarded, as a matter in which only the employers and employees are concerned; it is of vital significance to the community as a whole.

The need for labour legislation arises because of:

(i) The relationship between the workers and employers, is one of partnership in the maintenance of the production and building up of the national economy,

(ii) The community as a whole as well as individual employers are under an obligation to protect the well-being of workers and to secure to them their due share in the gains of economic development.

The object of Labour Legislation, therefore, is two-fold namely:

(i) To improve the service conditions of industrial labour so as to provide for them the ordinary amenities of life.

(ii) To bring about industrial peace which could in its turn accelerate productive activity of the country resulting in its prosperity?

Labour Legislation is necessary for the following reasons:

(i) The individual workers are economically weak. They cannot bargain with the employers for the protection of their rights and even for subsistence wages. As such legislation for protection of labour against long hours of work, unhygienic working conditions, low wages and exploitation is needed.

(ii) In order to increase the bargaining power of labour, legislation is necessary to encourage the formation of trade unions.

(iii) In order to avoid industrial disputes which lead to strikes and lockouts, labour legislation is needed.

(iv) The workers are exposed to certain risks in factories, mines and other establishments. As such in order to make provision for their health, safety and welfare, legislation is needed.

(v) To protect children and women from taking to work under hazardous conditions and at odd hours and in hazardous process, laws are necessary.

Labour Legislation has grown up as one of the most important social institution in India. A quest for industrial harmony is indispensable when a country plans to make economic progress. It may should platitudinous but it is nevertheless true that no nation can hope to survive in the modern technological age, much less become strong, great and prosperous.

Unless it is wedded to industrial development and technological advance. Economic progress is bound up with industrial harmony for the simple reason that industrial harmony inevitably leads to more cooperation between employers and employees, which results in more productivity and thereby contributes to all round prosperities of the country.

Salient Features of Labour Legislation:

Labour legislation is based on certain fundamental principles:

  1. Social Equity:

Another principle on which labour legislation is based on social equity. Legislation based on social justice fixes a definite standard for adoption for the future, taking into consideration the events and circumstances of the past and the present. But with the change of circumstances and ideas there may be a need for the change in the law. This power of changing the law is taken by the Government by making provisions for rule making powers in the Acts in regard to certain specified matters.

  1. Social Justice:

In an industrial set up, social justice means an equitable distribution of profits and benefits accruing from industry between industrialists and workers and affording protection to the workers against harmful effect to their health, safety and morality.

  1. International Uniformity:

International uniformity is another principle on which labour laws are based. The important role played the International Labour Organisation (I.L.O) is praiseworthy. The main aims of the I.L.O. are to remove injustice, hardship and privation of large masses of toiling people all over the world and to improve their living and working conditions and thus establish universal and lasting peace based upon social justice.

The basic principles of the Labour Policy of I.L.O. are as follows:

(a) Labour is not a commodity.

(b) Freedom of expression and of association is essential to continued progress.

(c) Poverty anywhere constitutes a danger to prosperity everywhere.

(d) War against want requires to be carried on with unending vigour within each nation and by continuous effort is which the representatives of workers and employers enjoying equal status with those of Governments; join with them in free discussion and democratic decisions with a view to promoting of common welfare.

  1. National Economy:

In enacting labour legislation, the general economic situation of the country has to be borne in mind lest the very objective of the legislation be defeated. The state of national economy is an important factor in influencing labour legislation in the country.

Legislation is essential to safeguard the interests of the labouring classes. In the absence of legislation, factory worker is bound to be exploited by the employer. Labour legislation provides essential safeguard to workers in matters of conditions of work, hours of work, safety in the factories, minimum wages, bonus, and equal wages for men and women for the same work.

The first enactment to be framed was Apprentices Act 1850. The object of this Act was to better enable children, especially orphans and poor children brought up by public charity, to learn trades, crafts, and employment, by apprenticing them to livelihood.

However, at that time the policy of the Government was to protect workers from the social system, and so legislation was acted in 1859 and 1860 making workmen liable to criminal penalties for branches of contract.

Public attention was drawn to the unsatisfactory working conditions in Indian factories and the need for regulating or by law them the first time in 1874, when Major Moore, the Chief Inspector of Bombay Cotton Department, pointed out in his report, that in Bombay Cotton factories women and children were employed in large numbers, that many of the children were hardly eight years old, all of them had to work from sunrise to sun set with only half an hour’s recess and they had no periodically recurring day of rest.

Labour policy in India derives its philosophy and content from the Directive Principles of the Constitution and has been evolving in response to specific needs of the situation to suit requirements of planned economic development and social justice.

It has been envisaged that growth of the economy would not only increase production but also absorb the backlog of unemployment and under-employment and a substantial proportion of additional labour force. Seventh Plan laid emphasis on harnessing country’s abundant human resources and improving their capabilities for development.

Different Plan Periods & Development of Labour Policy:

In the First Five Year Plan, the approach to labour problems rested on two considerations namely the welfare of the working class and the country’s economic stability and progress, workers’ right to form association, organisation and collective bargaining were recognised.

In order to govern relations between employers and workers, the Planning Commissions recommended for certain norms, and standards. Works Committees were recommended for the settlement of differences. During Second Five Year Plan, a code of discipline in industry was accepted voluntarily by all the organisation of employers and workers which has been in operation since the middle of 1958.

The code has laid down specific obligations for the management and workers with the object of promoting constructive cooperation between their representatives all levels. As a result of this new concept of such far-reaching aims, there has been considerable improvement in the sphere of industrial relations.

The number of man-days lost declined significantly from 47 lacks during Jan-June 1958 to 19 lacks during July-December 1960. Besides, the inter-union rivalry has been mitigated to some extent by the code of conduct which was drawn up and accepted by the representatives of worker’s organisation. The code provides that every employee shall have the freedom and right awards to join a union of his own choice.

During Second Five Year Plan, two significant steps were undertaken. Firstly a form of workers’ participation in management was evolved. Joint management councils were established on experimental basic. The Council has to bring about mutual consultation between employers and workers over many important issues which affect industrial relations.

Secondly a scheme of workers’ education has been implemented. The scheme comprises training of teacher- administration and worker teachers. This scheme has helped to raise the self-confidence of workers and has increased their ability to take advantage of protective labour laws.

Third Five Year Plan:

Under the Third Five Year Plan, labour policy was designed according to immediate and long term need of a planned economy. India’s present labour policy is directed towards that attainment of full employment and assisting standard of living of the people. The concept of socialist society was kept in mind. Hence, as pointed out in the Third Five Year Plan, the fruits of progress should be shared in an equitable manner.

The surplus that are generated a social product to which neither the employer not the working class can lay an exclusive claim, their distribution has to be according to the worth of the contribution of each, subject to the requirements of further development and his interest of all the sections of society, in particular, the satisfaction of the basic needs of all its members.

Fourth Five Year Plan:

The labour policy in the Fourth Five Year Plan was evolved with reference to two basic concepts:

(1) The relationship between workers and employers is one of partnership.

(2) The employees are under obligation to protect the well-living of employees. Greater emphasis was placed on collective bargaining.

Fifth Five Year Plan:

The labour supply projections contained in the Fifth Plan imply an increase in the labour force about 18.26 million Hence the plan is oriented towards substantial employment opportunities.

Sixth and Seventh Five Year Plan:

The labour policy adopted in the Sixth Plan was oriented towards the achievement of the following objectives:

(i) To establish harmonious relations between employers and workers.

(ii) To accelerate the rate of industrial development and to create expanding opportunities for employment.

(iii) To rise the living standard of workers in general and the weaker section in particular.

From time to time, suggestions have been made to review the working of labour policy. Since independence the industrial scene has undergone radical changes. The structure of working class has changed in several respects. Important changes are likely to take place in the future and composition of labour movement in the years to come.

Having regard to those considerations in December 1966, the Government of India set up a National Commission on Labour to study and make recommendations on various aspects of labour including wages, working conditions, welfare, trade union development and labour-management relations. The Commission submitted its report in August 1969. It made 300 recommendations. The Government accepted 200 recommendations out of 300 made by the Commission.

A Tripartite Committee constituted under the scheme- Workers Participation in Management and comprising representatives of some Central Ministries/State Governments, major public sector undertakings and Central Trade Union Organisations, reviews progress of the scheme from time to time and suggests remedial measures.

So far, 8 meetings of this committee have been held. A monitoring cell has also been created in the Ministry of Labour to assist the Committee. Out of 203 Operational Central Public Sector Enterprises, 109 have implemented the 1983 scheme at shop floor/plant levels.

As the Third Plan stated, “Labour policy in India has been evolving in response to the specific needs of the situation in relation to industry and the working class and has to suit the requirements of a planned economy”.

As a result of consultation between the representatives of the Government, the employers and employees, a body of principles and practices has grown up and the legislation and other measures adopted by the Government in this field represent the consensus of opinion of the parties vitally concerned and thus acquire the strength and character of a national policy.

In the formulation of policies and in their implementation, the Government has set up joint committees consisting of the representatives of the Government, the employers and the employees and at the apex of this tripartite machinery is the Labour Conference.

Recent Developments of Labour Legislation:

The structure of industrial relations has been designed to secure industrial peace in industry, promote production and labour productivity and give a fair deal to the workers. Conciliation of disputes and adjudication through tribunals has been tried.

The system has helped in reducing industrial unrest and promoting security to working classes but it has also created the spirit of litigation among the parties concerned. During the Second Plan, the Government tried a new approach, viz. the Code of Discipline voluntarily accepted by the parties concerned.

The stress was on the prevention of unrest by timely action in the appropriate stages. Besides, the Code of Discipline makes it obligatory on the management and labour to promote constructive co-operation between them, to avoid litigation, settle disputes and grievances by mutual negotiations, conciliation and voluntary arbitration, facilitate free growth of trade unions and eliminate all forms of coercion and violence in industrial relations. This new concept of industrial relations with such far-reaching aims will take some time to be fully implemented in practice.

Two aspects of labour policy evolved during the Second Plan deserve special mention, because they hold great promise for the future. One was the workers’ participation in management which was meant to give the workers a sense of belonging and to stimulate their interest in higher productivity. This was done in an experimental fashion in 23 industries in the form of Joint Management Councils.

Its main function was to bring about mutual consultation between employers and employees over many important issues which affect industrial relations. The second was the programme of workers’ education which was widely welcomed. The scheme was to train teacher-administrators and worker-teachers. The latter, when they return to their industrial establishments, would start unit-level classes for the rank and file of the workers.

Labour Policy and Third Plan:

Industrial relations during the Third Plan were based on the Code of Discipline which was evolved during the Second Plan. The Third Plan aims at extending an awareness of the Code to all constituents of the Central Employers’ and Employees’ organisations, so that the Code would become more and more of a living force in the day-to-day conduct of industrial relations.

The sanctions on which the Code of Discipline is based were reinforced, relying on the consent of the parties concerned. The Third Plan also aimed at increased application of the principles of voluntary arbitration in resolving differences between workers and employers.

Policy Regarding Trade Unions:

Trade unions have to be accepted as an essential part of the apparatus of the industrial and economic administration of the country. For this, there has to be considerable re-adaptation in the outlook, functions and practices of trade unions according to the changed conditions and circumstances in which India is placed now. The Government looks that at present trade unions are handicapped by insufficient resources and a non-progressive leadership.

According to the Code of Discipline, a trade union will have to be recognised by the management, provided the former has at least 15 per cent of the workers engaged in the establishment enrolled as members for a continuous period of six months. In case there are several unions, the union with the largest membership will be recognised. Once a union is recognised as such, there should be no change in its position for a period of two years.

Policy Regarding Wages:

A just or even an economically sound wage policy should encourage increase of national income and secure to the wage earner a legitimate share in that increase. The purpose of the Government’s wage policy, as clearly stated by the Second Plan, is “to bring wages into conformity with the expectations of the working class in the future pattern of society.”

The First Plan:

The First Plan stated that all wage adjustments should conform to the broad principles of social policy and the disparities of income should be reduced to the utmost extent. The immediate aim was to restore the pre-war real wage level, as the first step towards the living wage.

The First Plan insisted on avoiding any wage rise which would raise the cost of production and set in motion wage-price spiral; for in such a case, gains to the workers would prove illusory since they would, in all probability, get cancelled by a rise in the price level.

But soon after Independence, the Government assumed responsibility for securing a minimum wage for certain sections of workers both in industry and in agriculture who were economically weak and who stood in need of protection. Towards this end, the Minimum Wages Act was passed in 1948 to provide for the fixation and revision of wage rates in certain occupations. But the Government was aware that the Act was not effective in many cases.

The Second Plan:

The Second Plan proposed to give labours a fair wage. Fair wage was distinguished from minimum and living wage. For instance, minimum wage must provide to the worker and his family not only sustenance but also something more to preserve his efficiency. Living wage should enable the worker to provide for himself and for his family not only the bare essentials of food, clothing and housing but also a measure of comfort, etc.

On the other hand, fair wage was somewhere midway between the minimum and the living wage and it would be determined with reference to the capacity of the industry to pay the wage and the prevailing rate of wages in the same or similar industry.

Government’s policy was to link the wage-rise with the rise in productivity. The Second Plan specifically stated: “Earnings beyond the minimum wage should be necessarily related to results.”

Third Five Year Plan:

The Government is continuing the wage policy as enunciated by the Second Plan. The Third Plan has accepted the system of wage boards and also proposes that the unanimous recommendations of a wage board in an industry should be implemented fully. In the determination of wages, the need-based minimum wage should be used.

Apart from the minimum wages, adequate incentives should be provided for the acquisition and development- of skills and for improvements in output and quality. The Third Plan proposed to appoint a Commission to study the problems connected with bonus claims and to evolve guiding principles and norms for the payment of bonus.

Working Conditions Safety and Welfare:

The Government has evolved a comprehensive code to ensure satisfactory working conditions, safety of persons and the provision of a variety of facilities to promote the welfare of the workers. But the implementation of the statutory provisions has not been effective.

The Third Plan calls upon all State Governments to strengthen the inspectorates provided for the administration of factory laws. Emphasis is placed on the safety of persons in factories and mines and appropriate machinery is being devised. Special Welfare funds are being constituted for financing welfare measures for workers in coal and other mines.

The Government is interested in encouraging workers’ co­operatives in the field of credit, housing, distribution of consumer goods, etc. The Government feels that trade unions and voluntary organisations should take initiative and evince interest in starting and running such cooperatives.

The Third Plan points out that despite the operation of the subsidised Industrial Housing Scheme, for some years, housing of industrial workers has not made much progress and in many cases it has actually deteriorated. The Third Plan calls for a new approach to the problem of industrial housing so that workers would have decent living conditions within a reasonable period of time.

Employment and Training Schemes:

In a developing economy, the demand for skilled workers would increase continuously and the Government has various schemes to meet such demand. By the end of the Second Plan, there were 166 industrial training institutes with 42,000 training seats. The Third Plan has proposed to increase the number of these institutes to a total of 318 with an additional 58,000 training seats.

The annual training capacity would be raised to 1 lakh. The Government has also made adequate provisions for “in-plant training” facilities. It has also introduced a voluntary apprentice training scheme; the Third Plan has proposed to convert this voluntary scheme into a compulsory one.

The Third Plan has set a target of 14,000 seats for apprentice training scheme. It has also set a target of 15,000 seats in the programme of evening classes for industrial workers. One hundred employment exchanges would be set up during the Third Plan period and the objective is to open one employment exchange in each district.

Principles and Theories of Labour Welfare

Labour welfare is also defined as “Anything done for the intellectual, physical, moral and economic betterment of the workers, whether by employers, by government or by other agencies over and above what is laid down by law or what is normally expected as part of the contractual benefits for which the workers may have bargained”. Another definition on labour welfare defines it as “ that cover all the efforts which employers make for the benefit of their employees over and above the minimum standard of working conditions fixed by the factories act and over and above the provision of social legislation providing against accident, old age, unemployment and sickness.” The most significant definitions describes labour welfare work as “ the voluntary effort of the employer to improve the living and working conditions of his employees, the underlying assumption of course being that the first essentials to the welfare of the employees are steady work, a fair wage and reasonable hours of labour .”

Principles of Labour Welfare

Principle of Social Responsibility: According to this principle, industry has an obligation towards its employees to look after their welfare and this is also backed by the constitution of India in its directive principles of the state policy.

Principles of Efficiency: Plays an important role in welfare services and is based on the relationship between welfare and efficiency, though it is difficult to measure this relationship. Whether one accepts the social responsibility of industry or not, the employer quite often accepts the responsibility for increasing such labour measures as would increase efficiency. For eg. Diet planning in canteens.

Principle of Adequacy of Wages: Labour welfare measures cannot be a substitute for wages, workers have a right to adequate wages, but high rate of wages alone cannot create a healthy environment nor would bring in commitment on the part of the workers. A combination of social welfare, emotional welfare and economic welfare together would achieve good results.

Principle of Re-personalisation: The development of human personality is found to be the goal of industrial welfare and this principle should counteract the baneful effects of the industrial system. Therefore it is necessary to implement labour welfare services, both inside and outside the factory.

Principle of Co-ordination: The concept of co-ordinated approach that will promote a healthy development of the worker in his work, home and community. This is essential for the sake of harmony and continuity in labour welfare services.

Principle of Democratic Values: Cooperation of the worker is the basis of this principle and thus consultation and the agreement of the workers in the formulation and implementation of the labour welfare services are very necessary for their success. Moreover workers allowed to participate in planning these programmes get keenly interested in their proper implementation. This principle is based on the assumption that the worker is a mature and rational individual and industrial democracy is the driving force here and workers also develop a sense of pride when they are made to feel that labour welfare programmes are created by them and for them.

Principle of Totality of Welfare: Emphasizes that the concept of labour welfare must spread throughout the hierarchy of an Organisation and employees at all levels must accept this total concept of labour welfare without which the labour welfare would not be implemented.

Principles of Responsibility: Recognises the fact that both employers and workers are responsible for labour welfare. Trade unions too are involved in these programmes in a healthy manner, for basically labour welfare belongs to the domain of the trade union activity. Further, when responsibility is shared by different groups, labour welfare work becomes simpler and easier. Accordingly various committees are elected or nominated and various powers and responsibilities in the welfare field are delegated to them. For Eg. Safety committee, the canteen supervision committee etc.,

Principle of Accountability: Here one responsible person gives an assessment or evaluation of existing welfare services on a periodical basis to a higher authority. In these criteria one judges the success of labour welfare programmes.

Principle of Timeliness: The timeliness of any service helps in its success. To identify the labour problem and to discover what kind of help is necessary so solve it and when to provide this help are all very necessary in planning labour welfare programmes.

Principle of Self Help: Labour welfare must aim at helping workers to help themselves in the long run. This helps them to become more responsible and more efficient.

Theories of Welfare

The Religious Theory: Propounded on the concept that a man is essentially a religious animal. Even today many acts of man are related to religious sentiments and beliefs. Hence these religious feelings sometimes prompt an employer to take up welfare activities in the expectation of future benefits either in his life or in some future life. According to the theory, any good work is considered an investment both the benefactor and the beneficiary are rewarded, based on this philosophy many charitable and other religious institutions have come into existence. Another aspect of the religious theory is the atonement aspect, as some people take up welfare work in a spirit of atonement for their sins and any welfare act is treated either as an investment or atonement.

The Police Theory: Based on the contention that a minimum standard of welfare is necessary for labourers. The theory assumes that without compulsion, periodical supervision and fear of punishment, employers will not be ready to provide even the minimum welfare amenities. The welfare state has to step in to prevent the atrocities and exploitation and force industrialists to offer minimum standard of welfare to their workers.

Philanthropic Theory: Based on mans love for mankind. Man is believed to have an instinctive urge by which he strives to remove the suffering of others and promote the well being and this being very powerful drive it impels him to perform noble sacrifices. Thus the labour welfare movement began in the early years of the industrial revolution with support of Robert Owen and in India the movement began with the ardent support of Mahatma Gandhi, who strove for the welfare of the labour.

The Placating Theory: Based on the act that labour groups are becoming demanding and militant. They are more conscious of their rights and privileges than ever before. Their demand for higher wages and better standards cannot be ignored and hence it said that the timely and periodical acts of labour welfare can appease the workers.

Public Relations Theory: Provides the basis for an atmosphere of goodwill between labour and management and also between management and the public. Labour welfare programmes under this theory work as a sort of an advertisement and help an industrialist to build up good and healthy public relations. The theory is based on the assumption that the labour welfare movement may be utilized to improve relations between management and labour. Thus an advertisement of the industrialist in promoting labour welfare schemes may improve his relations with the public and at the same time these kind of programmes may lack sincerity and continuity as such programmes when loses its advertisement value may become redundant and be withdrawn or even abandoned may become only a publicity stunt rather than labour welfare.

Trusteeship Theory: Also called as paternalistic theory of labour welfare says that the industrialist or employer holds the total industrial estate, properties and profits accruing from them in trust. Hence he uses them for himself and for the benefit of his workers and for the society. Here the workers are treated as minors and they are ignorant because they lack in education and they are not able to look after themselves. Therefore employers have the moral responsibility to look after the interest of their wards who are the workers. Here there is no binding or obligation legally but only morality issues are raised. Here, the welfare of the labour depends on the initiative of the top management and more related to moral conscience of the industrialists and hence may create a good will between the labour and management.

The Functional Theory: Also known as efficiency theory, welfare work is used as a means to secure, preserve and develop the efficiency and productivity of labour. It is obvious that if an employer takes good care of these workers, they will tend to become more efficient and will thereby step up production. Thus this depends on the healthy relationship between the union and management and their mutual concern for the growth and development of the industry.

Social Welfare Concept, Scope

Social welfare refers to the efforts made by the government and non-profit organisations to assist families living in poverty by providing medical care, public health services, assisting with household needs, and assisting with social adjustments, among other things.

Social welfare is a well-organized system of social services and institutions aimed at assisting individuals and groups in achieving acceptable levels of   health and happiness. As a result, social welfare aims to help the less fortunate members of society who are unable to access social services or have been historically denied access to them.

Social Welfare is considered a branch of public administration because it identifies social problems and then works to solve them by implementing programmes aimed at improving the lives of the poor and disadvantaged. It is not considered an independent discipline because it is primarily based on   social sciences and other sciences.

Social welfare has two main characteristics: the use of welfare measures to support or strengthen the family as a basic social institution through which needs are met, and the intention to strengthen individuals’ capacity to cope with their life circumstances. According to Fried Lander (1959), social welfare is an organised system of social services and institutions aimed at assisting individuals and groups in achieving satisfactory living and health standards.

“In its narrowest sense, social welfare includes those non-profit functions of society, public or voluntary, which are clearly aimed at alleviating distress and poverty or at ameliorating the conditions of the casualties of society.”

Scope:

The following arguments have been presented to support the notion that social welfare is a form of art. It is something that can be learned; the art of social welfare is something that can be learned.

Talented individuals can become versatile administrators with the right training. As a result, social welfare administration is similar to other arts in terms of acquisition.

It is subjective in nature: A social welfare administrator can make significant changes and development by combining and bringing together available human and material resources to change the nation’s fate with the application of knowledge and skill.

Today, the success of any welfare programme is determined by the performance of a social welfare administrator.

Art is the systematic application of knowledge in the form of a practical application. Knowledge application in practise entails not only the application of theory but also the application of theory in practise. Similarly, social welfare administration is more than just theory; it is also application, because the best knowledge is gained through practise.

Social welfare has a wide range of applications. With the emergence of new social problems of a completely different nature, a new strategy for their solution must be developed. In a changing environment, it may be necessary to make the best use of available resources such as human, institutional, financial, technological, and so on.

The term “Social welfare” refers to a variety of factors that play a role in the successful resolution of social problems. The scope of social welfare administration, according to Bhardwaj, can be divided into two categories:

The POSDCORB perspective

The POSDCORB view of   social   welfare is a narrow one that focuses on the implementation of government-sponsored programmes. As such, this viewpoint is consistent with the managerial viewpoint. This viewpoint is shared by Henri Fayol, L. Urwick, Fercey M. Ovean, and Luther Gulick.

The Social Welfare System as a Whole

With the emergence of new social problems every day, the field of social welfare is expanding. As a result, a new perspective on the scope of social welfare emerged, known as the integral perspective. As the number of social problems grew, the government, which was already overburdened and unable to effectively address the issues, enlisted the help of various non-governmental organisations. As a result, this viewpoint encompasses not only   the subject of social welfare, but also the implementation aspect, which is the primary focus of the POSDCORB viewpoint

Customer Relationship Management Advantages and Disadvantages

Advantages

Enhances Better Customer Service

CRM systems provide businesses with numerous strategic advantages. One of such is the capability to add a personal touch to existing relationships between the business and the customers. It is possible to treat each client individually rather than as a group, by maintaining a repository on each customer’s profiles. This system allows each employee to understand the specific needs of their customers as well as their transaction file.

The organization can occasionally adjust the level of service offered to reflect the importance or status of the customer. Improved responsiveness and understanding among the business employees results in better customer service. This decreases customer agitation and builds on their loyalty to the business. Moreover, the company would benefit more by getting feedback over their products from esteemed customers.

The level of customer service offered is the key difference between businesses that lead the charts and those that are surprised with their faulty steps. Customer service efficiency is measured by comparing turnaround time for service issues raised by customers as well as the number of service errors recorded due to misinformation.

A good business should always follow–up with customers on the items they buy. This strategy enables a business to rectify possible problems even before they are logged as complaints.

Facilitates discovery of new customers

CRM systems are useful in identifying potential customers. They keep track of the profiles of the existing clientele and can use them to determine the people to target for maximum clientage returns.

New customers are an indication of future growth. However, a growing business utilizing CRM software should encounter a higher number of existing customers versus new prospects each week. Growth is only essential if the existing customers are maintained appropriately even with recruitment of new prospects.

Increases customer revenues

CRM data ensures effective co-ordination of marketing campaigns. It is possible to filter the data and ensure the promotions do not target those who have already purchased particular products. Businesses can also use the data to introduce loyalty programs that facilitate a higher customer retention ratio. No business enjoys selling a similar product to a customer who has just bought it recently. A CRM system coordinates customer data and ensures such conflicts do not arise.

Helps the sales team in closing deals faster

A CRM system helps in closing faster deals by facilitating quicker and more efficient responses to customer leads and information. Customers get more convinced to turn their inquiries into purchases once they are responded to promptly. Organizations that have successfully implemented a CRM system have observed a drastic decrease in turnaround time.

Enhances effective cross and up selling of products

Cross–selling involves offering complimentary products to customers based on their previous purchases. On the other hand, up–selling involves offering premium products to customers in the same category. With a CRM system, both cross and up selling can be made possible within a few minutes of cross– checking available data.

Apart from facilitating quicker offers to customers, the two forms of selling helps staff in gaining a better understanding of their customer’s needs. With time, they can always anticipate related purchases from their customer.

Simplifies the sales and marketing processes

A CRM system facilitates development of better and effective communication channels. Technological integrations like websites and interactive voice response systems can make work easier for the sales representatives as well as the organization. Consequently, businesses with a CRM have a chance to provide their customers with various ways of communication. Such strategies ensure appropriate delivery of communication and quick response to inquiries and feedback from customers.

Makes call centers more efficient

Targeting clients with CRM software is much easier since employees have access to order histories and customer details. The software helps the organization’s workforce to know how to deal with each customer depending upon their recorded archives. Information from the software can be instantly accessed from any point within the organization.

CRM also increases the time the sales personnel spend with their existing customers each day. This benefit can be measured by determining the number of service calls made each day by the sales personnel. Alternatively, it could also be measured through the face–to–face contact made by the sales personnel with their existing customers.

Enhances Customer Loyalty

CRM software is useful in measuring customer loyalty in a less costly manner. In most cases, loyal customers become professional recommendations of the business and the services offered. Consequently, the business can promote their services to new prospects based on testimonials from loyal customers. Testimonials are often convincing more than presenting theoretical frameworks to your future prospects. With CRM, it could be difficult pulling out your loyal customers and making them feel appreciated for their esteemed support.

Builds up on effective internal communication

A CRM strategy is effective in building up effective communication within the company. Different departments can share customer data remotely, hence enhancing team work. Such a strategy is better than working individually with no links between the different business departments. It increases the business’s profitability since staff no longer have to move physically move while in search of critical customer data from other departments.

Facilitates optimized marketing

CRM enables a business understand the needs and behavior of their customers. This allows them to identify the correct time to market their products to customers. The software gives ideas about the most lucrative customer groups to sales representatives. Such information is useful in targeting certain prospects that are likely to profit the business. Optimized marketing utilizes the business resources meaningfully.

Disadvantages of Customer Relationship Management

Costly:

Implementation of CRM system requires huge cost to be spent by the business. CRM software are too costly as it came with different price packages as per the needs of organizations. It increases the overall expenses of business and may not be suitable for small businesses.

Training:

For proper functioning of CRM, trained and qualified staff is required. It takes a huge cost and time for providing training to employees regarding CRM systems. They need to learn and acquire information regarding CRM software for a proper understanding of it. All this takes large efforts both in terms of money and time on the part of the organization.

Security Issues:

Another major drawback with CRM is the insecurity of data collected and stored. All of the data collected is stored at one centralized location which has a threat of being lost or hacked by someone. Employees may add inaccurate data or manipulate figures leading to wrongful planning.

Eliminates Human Element:

CRM has eliminated the involvement of humans as it works on a fully automated system. Whole Data is collected and processed automatically through CRM software. A company relationship with its customers can be properly managed through direct interaction between peoples and its staff. Loss of human touch may cause customers to shift anywhere else thereby reducing sales and revenue.

Third Party Access:

CRM data can be obtained and misused by other parties. There have been many cases where web hosting companies take and sells CRM data to the third party. Various sensitive data about customers may get into the wrong hands and cause loss to peoples.

Motivational Research, Types, Nature, Scope and Role

Motivational Research is a psychological approach to understanding the underlying motives, desires, and emotions that influence consumer behavior. Developed in the mid-20th century, it uses techniques like in-depth interviews, focus groups, and projective tests to uncover subconscious factors driving purchasing decisions. This research delves beyond surface-level preferences to explore emotional triggers, cultural influences, and personal values that shape consumer choices. By identifying these hidden motivations, businesses can craft marketing strategies that resonate deeply with target audiences, leading to more effective branding, product development, and advertising campaigns. It emphasizes the psychological connection between consumers and products, fostering loyalty and engagement.

Types of Motivational Research:

  • Depth Interviews

This qualitative technique involves one-on-one, unstructured interviews to explore a consumer’s underlying motivations. The focus is on understanding emotional triggers, personal experiences, and subconscious reasons behind their choices. For instance, a consumer may reveal why they associate a product with prestige or comfort.

  • Focus Groups

Focus group involves guided discussions among 6–12 participants to gather diverse opinions about a product, service, or concept. These discussions often reveal shared motivations, attitudes, and perceptions.

  • Projective Techniques

These techniques use indirect methods to uncover hidden emotions and motivations. Common methods include word association, sentence completion, and thematic apperception tests. Participants project their feelings and thoughts onto ambiguous stimuli, revealing subconscious patterns.

  • Observation

Observing consumers in real-life settings, such as stores or online platforms, helps researchers understand behavior without direct interaction. Observational methods reveal actions influenced by subconscious motives.

  • Surveys and Questionnaires

While typically structured, surveys can include open-ended questions designed to delve into emotional drivers behind purchases. These tools gather broad data, combining qualitative and quantitative insights.

  • Psychographic Analysis

This involves segmenting consumers based on psychological traits, such as personality, values, interests, and lifestyles. It reveals deeper motivations and helps marketers align products with consumer aspirations.

  • Behavioral Experiments

Controlled experiments test consumer responses to specific stimuli, such as packaging, pricing, or advertising. These experiments reveal preferences influenced by emotional and subconscious factors.

  • Neuromarketing

This advanced technique uses brain imaging and physiological measurements to study how consumers react to marketing stimuli. It identifies emotional responses and subconscious influences.

Nature of Motivational Research:

1. Psychological in Nature

Motivational research focuses on the psychological aspects of consumer behavior. It delves into emotions, desires, fears, and subconscious motives to understand why consumers behave in specific ways. This psychological focus helps businesses create marketing strategies that resonate deeply with their audience.

Example: Understanding that consumers buy luxury goods to express status and self-worth.

2. Exploratory and Qualitative

This research is primarily exploratory, relying on qualitative methods to uncover deep insights. Techniques like depth interviews, focus groups, and projective methods are used to explore the emotional and subconscious dimensions of consumer behavior, rather than relying on statistical data alone.

3. Subconscious-Oriented

Motivational research emphasizes the role of subconscious factors that influence consumer decisions. It does not stop at surface-level preferences but digs deeper to uncover hidden triggers.

Example: A consumer might choose a product due to nostalgia or a subconscious association with childhood memories.

4. Focus on Emotional Drivers

Consumers often make decisions based on emotions rather than logic. Motivational research identifies these emotional triggers, such as love, fear, pride, or security, and connects them to product attributes or marketing campaigns.

Example: Highlighting themes of safety and care in advertisements for insurance products.

5. Interdisciplinary Approach

Motivational research draws from various disciplines, including psychology, sociology, anthropology, and marketing. This interdisciplinary nature allows it to provide a comprehensive understanding of consumer behavior.

6. Qualitative Techniques-Driven

It relies on qualitative tools such as projective techniques, thematic apperception tests, and in-depth interviews. These methods help uncover underlying motives and attitudes that are not easily captured through structured surveys or quantitative methods.

7. Consumer-Centric

The core focus of motivational research is the consumer. It seeks to understand their values, preferences, and attitudes, ensuring that businesses create offerings that align with consumer expectations and needs.

Example: Identifying that health-conscious consumers prefer organic and non-GMO products.

8. Application-Oriented

The ultimate goal of motivational research is practical application. Businesses use its findings to improve product design, refine marketing campaigns, and enhance customer engagement, resulting in better business outcomes.

Scope of Motivational Research:

1. Understanding Consumer Motivation

Motivational research delves into the psychological triggers that influence consumer behavior, such as emotions, desires, fears, and social influences. By identifying these factors, businesses can tailor their offerings to meet the underlying motivations of their target audience.

Example: Discovering that consumers associate a product with status can guide marketing campaigns emphasizing luxury and exclusivity.

2. Product Development and Innovation

The insights derived from motivational research help businesses design and develop products that resonate with consumer needs. It identifies features, styles, and attributes that appeal to customers’ preferences, ensuring the product meets market demands.

Example: Understanding that eco-conscious consumers value sustainability can lead to the creation of environmentally friendly products.

3. Advertising and Communication Strategies

Motivational research informs the creation of compelling advertising campaigns. By understanding emotional drivers, businesses can craft messages that resonate deeply with their audience and create a lasting impact.

Example: If research shows that families value security, advertisements for insurance products can focus on themes of protection and stability.

4. Brand Positioning

Motivational research helps companies position their brand effectively by identifying consumer perceptions and emotional connections. It uncovers how consumers view a brand and what they expect from it, aiding in creating a strong and differentiated brand identity.

Example: A brand associated with innovation and cutting-edge technology can position itself as a leader in its industry.

5. Market Segmentation and Targeting

This research is crucial for dividing the market into segments based on psychological traits, such as personality, values, and lifestyles. It enables businesses to target specific consumer groups with tailored products and marketing strategies.

Example: Marketing adventure travel packages to thrill-seekers based on their risk-taking personality.

6. Predicting Consumer Trends

Motivational research identifies shifts in consumer preferences and emerging trends, enabling businesses to stay ahead of the competition. It helps predict future demands and adapt strategies accordingly.

Example: Research showing an increase in health consciousness can lead to the introduction of organic or low-calorie products.

7. Improving Customer Experience

By understanding the motivations behind consumer satisfaction or dissatisfaction, businesses can enhance their service delivery and customer experience. It ensures a seamless alignment between consumer expectations and the brand’s offerings.

Example: Recognizing the importance of personalized experiences for customers can lead to the implementation of loyalty programs.

8. Competitive Analysis

Motivational research provides insights into what motivates consumers to choose competitors’ products or services. By analyzing these factors, businesses can refine their strategies to capture market share.

Example: Discovering that competitors offer better emotional appeal in their advertising can inspire more impactful campaigns.

Role of Motivational Research:

  • Understanding Consumer Behavior

Motivational research explores the subconscious motives, emotions, and attitudes that drive consumer decisions. By uncovering why consumers prefer certain products or brands, businesses gain a deeper understanding of their needs and desires. For instance, it may reveal that consumers buy luxury products not just for utility but to express status and identity.

  • Enhancing Product Design

Insights from motivational research guide the development of products that resonate with consumer preferences. It identifies features, designs, or functionalities that appeal to the target audience, ensuring products align with their psychological and emotional expectations. For example, research might show that eco-conscious consumers prefer sustainable materials, leading to better product design.

  • Improving Marketing Campaigns

Effective marketing campaigns rely on emotional resonance. Motivational research helps craft messages that appeal to consumer emotions, making advertisements more engaging and memorable. For instance, if research shows that a target audience values family bonds, a brand can create ads centered around themes of togetherness and love.

  • Building Brand Loyalty

By understanding the psychological triggers that create strong emotional connections with a brand, businesses can foster loyalty. Motivational research reveals what makes consumers repeatedly choose a particular brand, such as trust, quality, or emotional satisfaction, enabling companies to strengthen these attributes.

  • Identifying Market Trends

Motivational research detects shifts in consumer attitudes, values, and preferences. By analyzing these trends, businesses can adapt their strategies to stay relevant in the market. For example, an increasing preference for health-conscious lifestyles might prompt companies to innovate in the wellness sector.

  • Segmentation and Targeting

This research aids in segmenting the market based on psychological and emotional traits, such as personality, aspirations, or lifestyles. It allows businesses to focus on specific consumer groups with tailored marketing strategies, maximizing the impact of their campaigns.

  • Reducing Marketing Risks

Launching new products or campaigns involves risks. Motivational research minimizes these by providing insights into consumer preferences and potential reactions, helping businesses avoid costly failures and refine their strategies before implementation.

  • Strengthening Competitive Advantage

Businesses gain a competitive edge by leveraging unique insights from motivational research. By understanding unmet needs or emotional triggers that competitors overlook, companies can create distinctive products, services, or campaigns that stand out in the market.

AI based Startups issues Challenges and Prospects

Lack of Business Ailment

Although the majority of companies nowadays use machine learning, that doesn’t make them an AI company. In order to be a real AI company, businesses need to have a system based on self-learning algorithms and should be able to make their own decisions.

For startups, to identify business use cases for artificial intelligence applications, require a deep understanding of current AI technologies, the limitations and the correct usage in the business. For an AI system to show positive results, it requires the right blend of NLP, deep learning and related tech, which most startups fail to achieve. Such startups may lose their relevancy and perspectives overtime, hence never get the chance to scale up to the mark. Experts believe, in most cases, that the lack of knowledge can majorly hinder the adoption of AI in startups.

Poor IT Infrastructure & Insufficient Funds

An AI technology processes huge amounts of data and therefore needs high-performing hardware. In order to drive a successful AI-based marketing strategy, startups require a robust IT infrastructure and advanced computer systems behind it, which can be very expensive to set up and run. These systems also likely require frequent maintenance and updating to ensure a smooth workflow. And, this can be a significant stumbling block for startups and smaller companies with more modest IT budgets. While large companies like Facebook, Apple, Microsoft, Google, Amazon have separate budget allocations for AI implementation, it becomes difficult for startups and smaller companies to implement AI solutions to their business processes.

Lack of Right Talent & Resources

To succeed in your startup business, companies need the right blend of different talents. Similarly, an AI startup demands expertise and resources that are more science-focused and who has an interest in playing with complex models with a lot of math and problem-solving skills. Some of the key favourable skills are physics, robotics, cognitive and computer science with a definite focus on machine learning. It takes immense patience and endurance to build a startup, and the relevant talent supply may still be undeveloped, which leaves most startup companies bereft of the right talent to deal with emerging technologies. Since the right people are at the core of driving growth, a lack of availability of right resources may be a deterrence in implementing AI in your startup.

Access to Data and Product Focus

For eCommerce you need execution skills. That means you want to grow fast and secure a market share. Once you can scale the business, your success depends on making fewer mistakes and securing more funding than the number 2 in the market.

For fintech and healthtech you need to build trust, seek cooperation with established players and solve the complexity of heavy regulations.

SaaS startups need to own their users with amazing usability, since they often replace excel or paper & pen.

Lack of Trust & Patience

AI is a relatively new technology and is somewhat complex. It usually takes a considerable amount of time to develop an AI system, and it is normal to wait up to at least two years before the system could actually generate its first revenue. This gap between the theory and real implementation is huge, which makes it a huge challenge for startups who are wishing to see some profits from the first day of their business. Unlike larger companies, it also gets quite frustrating for startup founders to wait forever for any ROI from their investment. Product development in AI demands an extensive interaction with potential customers to understand their problems and accordingly train models, which, in turn, is a time and capital intensive task. It sometimes gets even challenging for startups to find the right balance between research and its application.

Data Scarcity

It is a fact that business has access to more data in the present time than ever before; however, the datasets that are applied to an AI application to learn are rare. Although the most powerful AI machines are those that are trained on supervised learning, this training usually requires labelled data which has a limit. And therefore, for businesses, automated creation of increasingly difficult algorithms will only worsen the problem. For a business to successfully implement AI strategies requires having a basic set of data and needs to maintain a constant source of relevant information incoming in order to ensure that AI can be useful in their industry. For a startup, this becomes a huge hurdle, as there is a massive scarcity of relevant data available for them.

Future progress in Artificial Intelligence

Digital life is augmenting human capacities and disrupting eons-old human activities. Code-driven systems have spread to more than half of the world’s inhabitants in ambient information and connectivity, offering previously unimagined opportunities and unprecedented threats. As emerging algorithm-driven artificial intelligence (AI) continues to spread.

The experts predicted networked artificial intelligence will amplify human effectiveness but also threaten human autonomy, agency and capabilities. They spoke of the wide-ranging possibilities; that computers might match or even exceed human intelligence and capabilities on tasks such as complex decision-making, reasoning and learning, sophisticated analytics and pattern recognition, visual acuity, speech recognition and language translation. They said “smart” systems in communities, in vehicles, in buildings and utilities, on farms and in business processes will save time, money and lives and offer opportunities for individuals to enjoy a more-customized future.

Many focused their optimistic remarks on health care and the many possible applications of AI in diagnosing and treating patients or helping senior citizens live fuller and healthier lives. They were also enthusiastic about AI’s role in contributing to broad public-health programs built around massive amounts of data that may be captured in the coming years about everything from personal genomes to nutrition. Additionally, a number of these experts predicted that AI would abet long-anticipated changes in formal and informal education systems.

Yet, most experts, regardless of whether they are optimistic or not, expressed concerns about the long-term impact of these new tools on the essential elements of being human. All respondents in this non-scientific canvassing were asked to elaborate on why they felt AI would leave people better off or not. Many shared deep worries, and many also suggested pathways toward solutions. The main themes they sounded about threats and remedies are outlined in the accompanying table.

AI Workforce Augmentation

In the future, we’ll see even more of our jobs being outsourced to AI. Artificial intelligence can now do amazing things like read, write, speak, and smell that previously only humans could do. That frees up humans to do the things we do best on the jobs, like being creative and practicing emotional intelligence.

Better Language Modeling Capability

Language modeling is the process that allows machines to understand and communicate with us in ways we understand. We can even use it to take natural human language and turn it into computer code that can run programs and applications.

Recently, we have seen the release of GPT-3 by OpenAI, the most advanced and largest language model ever created, consisting of around 175 billion parameters for processing language.

OpenAI is already working on its successor, GPT-4, which will be even more powerful. Although the details haven’t been confirmed, some people believe it will contain up to 100 trillion parameters, making it 500 times larger than GPT-3. In theory, that would take it one giant step closer to being able to create language and hold conversations that are indistinguishable from those of a human. This model will also become much better at creating computer code.

Cybersecurity

This year, the World Economic Forum noted that cybercrime may actually pose a more significant risk to society than terrorism. As machines take over more of our lives, hacking and cybercrime inevitably become bigger and more dangerous problems.

The good news is that artificial intelligence can be a helpful weapon against cybercrime, because AI is quite good at analyzing network traffic and recognizing patterns that might suggest nefarious intentions.

The Metaverse

The word “metaverse” describes a unified, persistent, digital environment where users can work and play together. It’s a virtual world like the internet, but with the emphasis on enabling immersive experiences that are created or enabled by users. Companies like Meta, Microsoft, and Epic Games are helping to build the metaverse, and AI will be a key component of creating online immersive environments where humans can feel at home and explore their creative impulses.

Low-Code or No-Code AI

In the not-so-distant past, you needed specialized coding skills to create even simple websites. But these days, we have drag-and-drop graphical interfaces that make it easy to create websites and post new content with just a few clicks.

In the future, the same thing will happen with artificial intelligence and machine learning. We will have simple tools we can use to build our AI so we are less reliant on coding skills and can still use AI to develop more and more applications. These low-code or no-code tools will truly democratize artificial intelligence technology.

Data-Centric AI

Traditionally, artificial intelligence has relied on big data. We needed huge volumes of data to train the AI’s algorithms and neural networks, so they were software-centric. The latest trend is becoming more focused on the data, because many applications beyond the world of big tech have access to billions of unique, structured data sets.

Meaning and Definition, Benefits and Risks of Artificial intelligence

Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems. Specific applications of AI include expert systems, natural language processing, speech recognition and machine vision.

AI programming focuses on three cognitive skills: learning, reasoning and self-correction.

Learning processes. This aspect of AI programming focuses on acquiring data and creating rules for how to turn the data into actionable information. The rules, which are called algorithms, provide computing devices with step-by-step instructions for how to complete a specific task.

There are three main types of AI based on its capabilities – weak AI, strong AI, and super AI.

  • Weak AI: Focuses on one task and cannot perform beyond its limitations (common in our daily lives)
  • Strong AI: Can understand and learn any intellectual task that a human being can (researchers are striving to reach strong AI)
  • Super AI: Surpasses human intelligence and can perform any task better than a human (still a concept)

Advantages:

1) Takes risks instead of Humans:

This is one of the biggest advantages of Artificial intelligence. We can overcome many risky limitations of humans by developing an AI Robot which in turn can do the risky things for us. Let it be going to mars, defuse a bomb, explore the deepest parts of oceans, mining for coal and oil, it can be used effectively in any kind of natural or man-made disasters.

AI Robots can be used in such situations where intervention can be hazardous.

2) Available 24×7:

An Average human will work for 4–6 hours a day excluding the breaks. Humans are built in such a way to get some time out for refreshing themselves and get ready for a new day of work and they even have weekly offed to stay intact with their work-life and personal life. But using AI we can make machines work 24×7 without any breaks and they don’t even get bored, unlike humans.

3) Helping in Repetitive Jobs:

In our day-to-day work, we will be performing many repetitive works like sending a thanking mail, verifying certain documents for errors and many more things. Using artificial intelligence we can productively automate these mundane tasks and can even remove “boring” tasks for humans and free them up to be increasingly creative.

4) Digital Assistance:

Some of the highly advanced organizations use digital assistants to interact with users which saves the need for human resources. The digital assistants also used in many websites to provide things that users want. We can chat with them about what we are looking for. Some chatbots are designed in such a way that it’s become hard to determine that we’re chatting with a chatbot or a human being.

5) Faster Decisions:

Using AI alongside other technologies we can make machines take decisions faster than a human and carry out actions quicker. While taking a decision human will analyze many factors both emotionally and practically but AI-powered machine works on what it is programmed and delivers the results in a faster way.

6) Reduction in Human Error:

The phrase “human error” was born because humans make mistakes from time to time. Computers, however, do not make these mistakes if they are programmed properly. With Artificial intelligence, the decisions are taken from the previously gathered information applying a certain set of algorithms. So errors are reduced and the chance of reaching accuracy with a greater degree of precision is a possibility.

7) Daily Applications:

Daily applications such as Apple’s Siri, Window’s Cortana, Google’s OK Google are frequently used in our daily routine whether it is for searching a location, taking a selfie, making a phone call, replying to a mail and many more.

8) New Inventions:

AI is powering many inventions in almost every domain which will help humans solve the majority of complex problems.

Disadvantages:

High Costs

The ability to create a machine that can simulate human intelligence is no small feat. It requires plenty of time and resources and can cost a huge deal of money. AI also needs to operate on the latest hardware and software to stay updated and meet the latest requirements, thus making it quite costly.

No creativity

A big disadvantage of AI is that it cannot learn to think outside the box. AI is capable of learning over time with pre-fed data and past experiences, but cannot be creative in its approach. A classic example is the bot Quill who can write Forbes earning reports. These reports only contain data and facts already provided to the bot. Although it is impressive that a bot can write an article on its own, it lacks the human touch present in other Forbes articles.

Unemployment

One application of artificial intelligence is a robot, which is displacing occupations and increasing unemployment (in a few cases). Therefore, some claim that there is always a chance of unemployment as a result of chatbots and robots replacing humans.

For instance, robots are frequently utilized to replace human resources in manufacturing businesses in some more technologically advanced nations like Japan. This is not always the case, though; as it creates additional opportunities for humans to work while also replacing humans in order to increase efficiency.

Make Humans Lazy

AI applications automate the majority of tedious and repetitive tasks. Since we do not have to memorize things or solve puzzles to get the job done, we tend to use our brains less and less. This addiction to AI can cause problems to future generations.

No Ethics

Ethics and morality are important human features that can be difficult to incorporate into an AI. The rapid progress of AI has raised a number of concerns that one day; AI will grow uncontrollably, and eventually wipe out humanity. This moment is referred to as the AI singularity.

Emotionless

Since early childhood, we have been taught that neither computers nor other machines have feelings. Humans function as a team, and team management is essential for achieving goals. However, there is no denying that robots are superior to humans when functioning effectively, but it is also true that human connections, which form the basis of teams, cannot be replaced by computers.

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