2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 -
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1. INTRODUCTION
Emotional Intelligence (EI) is one of the most emerging and significantly growing
areas of study in organizational sciences. EI has its roots in psychology but due to
involvement of human beings in all sorts of businesses, it is important to accept it as an
inseparable part of study of business management and administration. Daniel Goleman in his
book ‘Emotional Intelligence’ (1995) had first unveiled the significance of EI for effective
business performance. He worked upon identification of capabilities that contribute to ideal
leadership. He categorized these capabilities into three parts: purely technical skills like
accounting and business planning; cognitive abilities like analytical reasoning; and
competencies demonstrating emotional intelligence, such as the ability to work with others
and effectiveness in leading change. In order to reach to the purpose he researched 200
companies across the world and when he calculated the ratio of technical skills, IQ, and
emotional intelligence as ingredients of excellent performance, emotional intelligence proved
to be twice as important as the others for jobs at all levels.
Another great contribution in field of EI was made by Dr. Stefen Covey through his
book ‘The Seven Habits of Highly Effective People’ (1989). He correlates effective
employee performance with high levels of Emotional Quotient (EQ). He also discussed
various ways how EQ is used on different scales in terms of management and leadership. He
synthesized number of EQ based initiatives that can lead businesses to great heights of
success in very short period of time.
Gordon Allport’s Trait theory emphasize upon the fact that ‘leaders are born, not
made’. His theory states that leaders have some innate traits on the basis of which they
achieve success or failure in their roles of leaders. This theory has been criticized by number
of thinkers of behavioral sciences who opined that traits can be learnt and developed. Being
emotional intelligent is significant trait that helps leaders to manage self behavior and
behavior of others including all their colleagues and subordinates. Travis Bradberry and Jean
Greaves in their book ‘Emotional Intelligence 2.0’ suggest 66 strategies which provide
specifics of what one need to say, do and think to increase their EQ. They developed these
strategies after careful testing and years of efforts in the field of study of emotional
intelligence fundamentals. Their study proves that EI is one of the most important
competencies that can be developed with appropriate interventions and strategies.
This research paper is an attempt to develop type of strategy in form of the business model
that take into assumption the principles of EI and help small, medium and new entrepreneurs
to develop their business as the big concerns do. The study investigates the core reasons
behind the success of world’s five most successful companies by way of comparative
analysis and justifies the significance of EI in their success. On the basis of findings of this
analysis, ‘360 Degree EI Implementation Business Model’ is developed which is expected to
help entrepreneurs who are in their inception and growth level of business cycle to achieve
the peak position and higher revenues.
2. METHODOLOGY
The study is divided into two parts. Part one enunciates the comparative analysis of
five Fortune 500 Companies: Tata Steel, Walmart, British Petroleum, Toyota Motors and
Samsung Electronics. This sample of five companies represents initiatives of world’s top 500
companies which use EI as the tool to achieve competitive advantage. The sample is selected
using convenience sampling technique. In order to empirically process the data the coding system
3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 -
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is implemented. Various study constructs are defined, interpreted and tested through systematic
structured coding. Most of the data for comparison is being collected from annual reports of the
companies available at company’s official websites and archives. Technique of observation is
used to study the reasons of slow growth of new, small and medium enterprises. Following null
hypothesis statement is formed to prove study results empirical and relevant.
H#1: EI initiatives to satisfy the business stakeholders are not the common concerns of world’s
most successful companies.
Two variables in above hypothesis are – EI initiatives and success of companies. On the basis of
principle of causal relationship these variables have been tested with empirical evidences. On the
basis of which a suggestive conceptual model is developed.
3. COMPARATIVE STUDY AND ANALYSIS
Through the study I tried to investigate the areas where companies exactly implement EI
strategies to ensure rapid growth. EI activates where element - ‘human’ needs to be confronted. In
course of business, we have to deal with this element in different forms. It can be your investor,
supplier, distributor, employee, government, consumer, society and even natural environment as
any adverse environmental business practice can cause societal distress and conflict. All these
human associations make business’s ‘Stakeholders’ who directly or indirectly affect business they
are associated with. All successful entrepreneurs give due importance to the interests of these
stakeholders as they consider business ‘of the people, for the people and by the people’.
For this study I have selected 5 companies out of the list of ‘Fortune 500 Global
Companies’ (year 2012) The Fortune Global 500 list of top companies is compiled by Fortune
Magazine annually and ranks publicly listed corporations on the basis of revenues companies
earn. If someone wants to know which companies are the biggest, most profitable and most
powerful in the world; Fortune Global 500 list is there to let you know all about these players.
This list is considered as the most authentic source to see corporation’s market standing and is
heavily used by investors and policy makers across the world. The sample of five companies for
this study has been selected using convenience sampling method. Further, companies dealing in
different industries are taken into consideration to reduce any bias of homogeneity of business
types.
In order to reach to the purpose of the study, information given in annual reports of the
companies and their official websites has been retrieved. A set of priori codes has been formed to
define various constructs onto which the comparison is made amongst various constructs.
Following six codes and constructs are being formed to make comparison:
Table 1: Codes and Constructs
Codes Constructs
C1 Human Resource based Practices
C2 Consumer based Practices
C3 Society and Community based Practices
C4 Government and Environment based Practices
C5 Investors and Shareholders based Practices
C6 Third Parties (Suppliers, Contractors, Vendors, Distributors
etc.) based Practices
Method of coding is basically selected to support the study with empirical evidence
and reduce the error of generalization. Priori codes were formed in anticipation and on the
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basis of study of data, various constructs – the bases onto which the comparison can be made
are defined. Several EI based strategies, initiatives, policies and practices relevant to the
constructs are then compared to reach to the purpose of the study.
Using codes, the method of constant comparison is also used wherein every time we
select a passage of text and code it, we compare it with all those passages we have already
coded that way. This ensures that the coding is consistent and allows us to consider the
possibility either that some of the passages coded that way don’t fit as well (and might
therefore be better codes as something else) or that there are dimensions or phenomena in the
passages that might well be coded another way as well. This method ensures the efficacy of
the comparison and reduces the bias of researcher’s generalizations over constructs taken into
consideration for the study.
4. RESULTS OF THE COMPARISON
Details pertaining to codes, constructs, companies and comparison can be seen with the help
of table 2.
Table 2 – Comparative Analysis of Five Fortune 500 Companies
Code Construct Companies
Tata Steel Walmart Stores Toyota Motors Samsung Electronics British Petroleum
C1
Human Resource
based Practices
Right to
freedom of
association
and
collective
bargaining,
Equal
opportunity
employer,
Promoting a
just and fair
workplace,
Encouraging
work-life
balance for
employees,
Caring for
the well-
being of its
employees,
including
those with
special
needs,
Providing a
safe,
hygienic and
humane
workplace,
Safety
Governance
Structure,
Skill
development
and creating
world-class
employees,
Offering a
harassment-
free
workplace to
all
Developing existing
talent through
programs like
Business Leadership
Series, Walton
Institute and Merchant
Development
initiatives, Building a
Diverse Team,
Supporting the
Nation's Heroes,
global women’s
strategy
Safety and health,
Mutual Trust
Between Labor and
Management, Fully
Committed and
Thorough Human
Resources
Development,
Diversity and Equal
Opportunities, Basic
Principles of
Personnel
Management, Stable
Employment,
Creating Good
Workplace
Environments,
Facility to Help
Child Rearing
"Toyota Child Care
Bubu Land", Career
Design Forum
Talent Management,
Provision of opportunities
and happy work
environment, Training and
education for self
development, opportunities
for lifetime learning, human
rights, health and safety,
balance between work and
personal life, developing
individual competence,
maximizing the efficiency
of human resource
management, and
cultivating a corporate
culture of trust and
cooperation, facilities to
women employees
Strengthening
capability, developing
people, Meeting the
expectations of people,
diversity and inclusion,
employee engagement,
work life balance
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C2
Consumer based
Practices
Customer Value
Creation, Serving
the overall well-
being of society,
Widening
customer choice
and encouraging
free competition
in all segments,
Educating
customers on
safe and
responsible usage
of steel products,
Building
knowledge
capabilities of
channel partners
to disseminate
information,
Encouraging
savings in natural
resources,
Leveraging
feedback to
deliver enhanced
value
Sam’s Club
membership,
Customer-Centric
Policies, Best
customer service,
lowest possible prices;
guaranteed satisfaction
with what customers
buy; friendly,
knowledgeable
service; convenient
hours; free parking; a
pleasant shopping
experience
Making Cars that
Customers in Each
Region Demand,
safe vehicle,
customer first
policy, customer
satisfaction,
Customer Relations
Division Initiatives,
"Amlux Toyota"
Functioning to
Exchange
Information with
Customers,
providing high
quality, making user
friendly vehicles
Safe and reliable
products, Improving the
VOC (voice of customer)
response system,
Customer communication,
Customer health and
safety, Customer
certification marks
Variety of methods
to communicate
with and listen to
our customers,
including
interviews, surveys,
feedback tools and
marketing
programmes, BP
tourism campaign,
Customer Insights
C3
Society and
Community based
Practices
Facilitating
policies for the
future as a
responsible
corporate citizen,
Innovating and
investing to
promote the well-
being of the
society,
Employee
volunteerism,
Social change
through sports,
Access to urban
amenities, Rural
development,
Resettlement and
rehabilitation of
communities
One of the world’s
largest charitable
contributors to local
communities through
volunteerism, financial
contributions and in-
kind donations, We
help millions of
associates build
successful and
rewarding careers.
grants to local
nonprofits,
Scholarships for
Walmart associates
and their Dependents,
Driving change to feed
the nation
Support for
Recovery from the
Great East Japan
Earthquake,
Contribution
Towards Sustainable
Development,
Traffic safety
campaigns, Safe
driving courses,
Satoyama Learning
Institute Eco-no-
Mori House
Opened,
Employment of
Disabled Persons
Community support and
contribution programs,
"Green Planet School for
Environment and
Children", participation in
community-oriented
volunteer activities, such
as Free Eye Treatment
Project that has continued
for 17 years, building
community networks for
collaborative projects
with various stakeholders,
sharing activities to
further enhance win-win
cooperation with the
community and dedicate
ourselves to
communicating with the
community and
implementing
personalized volunteer
activities
Philanthropy,
Employee supported
causes, Enterprise
development
programmes,
Agricultural
development
programmes,
Education and other
community needs,
Access to energy,
Infrastructure
development, Arts
and culture,
Community
engagement in
projects and
operations
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C4
Government and
Environment based
Practices
Resource
conservation,
Process optimisation,
waste management
through reduce,
reuse and recycle,
Research and
development of
innovative
technologies and
processes for Ore
and Coal
Beneficiation,
Adoption of green
and clean
technologies, best
operating practices
and process
upgradation,
Mitigating the
impact of Climate
Change,
Environment
Management
Systems (EMS),
Employee
participation,
Extending
environment
management across
the supply chain,
conducting meetings
with Governmental
bodies like-
Pollution Control
Boards, Tax
Departments, Central
and State Ministries
and other influential
groups
Three aspirational
sustainability goals
- to be supplied
100% by
renewable energy;
to create zero
waste; to sell
products that
sustain people and
the environment,
Walmart public
affairs and
government
relations initiatives
Adoption of Earth
Charter,
Environmental
Action Plan,
implementing three
major environmental
technology
development themes
- energy source
diversity, CO2
emission (global
warming
prevention)
reduction and air
pollution
prevention,
Preliminary Events
to the Opening of
the Toyota
Shirakawa-Go
Nature School,
Toyota
Environmental
Activities Grant
Program, Support
for Environmental
NPOs, Working
with government
agencies for
enhanced traffic
environment safety,
The Toyota Smart
Center optimizes
environment-
friendly car battery
charging and home
energy management
Eco value creation, Eco
Networking,
environmental
sustainability goal setting,
environmental
accounting, supply chain
environmental
management, cleaner
production, environment
conscious designing,
green communication,
confirming fair taxation
payment to governments
in all nations
Working with state
and federal agencies
to identify and
support emergency
and early projects to
restore natural
resources in the
Gulf of Mexico,
Wildlife
monitoring,
Emergency
restoration projects,
Early restoration
projects, National
Fish and Wildlife
Foundation projects,
Engagement with
governments on
many fronts, from
consulting on
environmental
regulation to
understanding the
tax liabilities and
collaborating on
community or
entrepreneurial
initiatives. In some
places, work in
partnership with
governments
through production-
sharing contracts
C5
Investor and
Shareholder based
Practices
Forums of the
Annual General
Meeting, analyst
meetings and
investor road shows
to meet with
investors and address
issues of
performance, long-
term strategy and
growth plans,
Ensuring maximum
possible return to
shareholders on their
investments
Report on Internal
Control Over
Financial
Reporting, Good
return on
investment,
Transparency in
reporting,
Evaluation of
Disclosure
Controls and
Procedures, Report
on Ethical
Standards
Financial Securitiy,
good returns and
transparency
Vision to realize common
interest and to create
values, promoting various
IR activities such as an IR
road show, conferences,
one-on-one meetings, a
line tour and performance
result meetings based on
active communication
with shareholders and
investors
Engage with
shareholders and
analysts through
well-defined
channels, including
our annual general
meeting and other
events, keep
shareholders and the
investment
community
informed about our
progress as a group,
including providing
opportunities for
regular dialogue and
feedback.
C6
Third Parties –
(Suppliers,
Contractors,
Vendors,
Distributors etc.)
based practices
The Company helps
suppliers and
vendors increase
their capability
through various
training sessions,
vendor meets and
survey
Ethical Sourcing,
Sam's Club
collaborate with
NGOs and
government leaders
to verify the
products sold are
produced in a way
that provides
dignity and respect
for workers in the
supply chain
Good Relationship
Management with
third parties with
special focus on
suppliers
Range of support to 1st-
tier suppliers, 2nd and
3rd-tier suppliers
provided in areas of
production innovation,
R&D collaboration,
renovating inefficient
processes, funding, and
HR development,
Establishing Fair Trade
Practices, Major support
activities for suppliers
Focus on six key
themes for third
parties: consistent
standards and
priorities; fewer
suppliers to enable
deeper, longer-term
relationships;
detailed and
systematic selection
of contractors; clear
and specific
contracts; intensive
oversight and
verification; and
assurance that
supplier personnel
are competent.
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Biographical Sketch: Dr. Sehba Husain is currently working as the Assistant Professor in
JICM, Bhopal and is specialized in Management of Human Resources. With her high interest
in research she has won number of awards for academic and research excellence.
The study unveils both similarities and differences between the practices companies
have adopted for various constructs. When on one hand companies use same approach of EI
to attract its stakeholders, the other hand they use these strategies in different combinations
and compositions. For example Tata Steel relies more upon CSR based initiatives whereas
Walmart uses limited CSR tools. The table shows how companies in the sample implement
strategies which directly target fundamental human emotions. Any stakeholder in the
business assures his participation in company’s business only when he finds his interests and
motives associated with that business. Similarly stakeholders who are not directly associated
with business like communities and societies accept business as the part of the system only
when it confirms certain required ethical and concerned behavior. As a matter of fact this
association of motives and social acceptance is based upon how effectively companies can
satisfy emotions of the parties concerned.
When we talk about satisfaction of emotions of the human resources of the company,
various human resource based practices make employees feel full of joy, ecstasy, gaiety,
bliss, elation, delight, happiness and all this sort of positive emotions. Similarly when
consumer buys a product other than fulfillment of his utility, he also wants to satisfy his
emotional needs associated with the products. Companies therefore try hard to ensure to
satisfy some more consumer emotions like – fondness, attraction, adoration, sentimentality,
caring etc. along with all positive emotions discussed above in case of HR. Governments,
communities and society need companies to behave in most responsible way so as to avoid
all sort of negative externalities caused by businesses. These parties also have their motives
associated directly or indirectly with the business which when fulfilled or unfulfilled result in
positive or negative generation of emotions. Investors, shareholders when investing in
business expect to earn money or share company’s profit and as they play very significant
role in business growth they should also be confirmed of proper returns on their investments.
Third parties like suppliers, vendors, contractors etc. also have their motives associated with
the business and every party finally needs positive fulfillment of the motives they have with
the business.
Emotions are basically the outcomes of the motives. Motives or our expectations
decide the emotions we feel and experience. If motives are fulfilled the absolute way they
will result in positive emotions which confirm the positive behavior too. For example if
motives of employees are fulfilled, their productivity will enhance, if it happens with
consumers their brand loyalty will get strong, investors and shareholders will make more
investments more frequently and third parties also perform the way they are expected to. This
is what a business needs to be successful. All stakeholders when perform with full motivation
businesses grow more quickly and this is the lesson which new, small and medium scale
entrepreneurs should learn.
Small and medium enterprises in India contribute to 22% of GDP. Despite this great
contribution it is felt that small and medium enterprises in India face number of problems
including strong competition with multinational corporations. Apart from the benefits of
economies of scale, MNCs as discussed in our comparative analysis use great level of
emotional intelligence to ensure sustainable business growth. Taking that comparative
analysis as the pilot study, 360 Degree Emotional Intelligence Model of Business
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Development has been developed to guide new, small and medium level entrepreneurs to the
path of sustainable business growth and development.
Figure 1: 360 Degree EI Implementation Business Model
The model is based on the assumption that all stakeholders in the business have almost equal
contribution in business growth and development. Considering it as the 360 degree coverage,
the area of 60 degrees has been allotted to each segment of stakeholders which is shown in
the comparative table as various constructs. The model suggests that entrepreneurs should use
EI with all stakeholders in almost equal amount to have synchronized functioning. All
business stakeholders function under the umbrella of EI. EI based strategies should be
implemented to manage emotions of all stakeholders as contribution of every single
stakeholder is equally important. And this is what big Fortune 500 companies are doing.
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5. CONCLUSIONS AND SUGGESTIONS
The study tries to set instance before new, small and medium entrepreneurs to help
them to achieve fast and sustainable growth with the use of EI. In order to reach to the
purpose we investigate the EI based strategies big corporations implement. This study has
been divided in two parts. One, the comparative analysis of five global fortune 500
companies to know the ways big companies are using EI to achieve competitive advantage in
business and second, on the basis of findings of the comparative analysis, develop the
business model for new, small and medium enterprises.
Comparative study of corporations show how similar companies are in using EI
practices to manage relationships with all their stakeholders. Study also revealed that these
companies use EI strategies in different combination and compositions. Some companies are
more concerned about their consumers and use more EI based practices to attract them
whereas some companies put more emphasis on the emotional satisfaction of their
employees. Hence companies are similar and in a way different the way they use EI as a tool
to achieve competitive advantage. Scientific methods are used to make the comparisons
which empirically prove the findings of the study. The investigation clears that use of
emotional intelligent practices is a common feature all successful companies have. And hence
a suggestive ‘360 Degree EI Implementation Business Model’ is developed for new, small
and medium enterprises to achieve fast sustainable growth. Model suggests that just like big
successful fortune 500 companies, new, small and medium scale entrepreneurs should also
use EI as the tool to achieve competitive advantage. This model is expected to help these
entrepreneurs ensure smooth business functioning with high level cooperation from the side
of all business stakeholders.
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International Journal of Management (IJM), Volume 4, Issue 2, 2013, pp. 31 - 43, ISSN
Print: 0976-6502, ISSN Online: 0976-6510.