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SLBS-ECE INDUSTRIAL ECONOMICS & MANAGEMENT

HANUMAN BHARATI Page 1

RAJASTHAN TECHNICAL UNIVERSITY

Kota, Rajasthan

SLBS ENGINEERING COLLEGE, JODHPUR

Near Bawarla Fanta, Dangiawas, Jodhpur (Raj.) 342027

Department of Electronics and communication Engineering

Incharge: Er. SURENDRA BOHRA (H.O.D. ECE Deptt.)

SUBJECT : INDUSTRIAL ECONOMICS AND MANAGEMENT

SUBJECT CODE: 8EC6

STUDENT NAME: HANUMAN BHARATI

ROLL NO. : 08ESLEC018

YEAR/SEMESTER: 4th

/8th

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SYLLABUS

8EC6 INDUSTRIAL ECONOMICS & MANAGEMENT

UNIT 1 : Organizational forms, Profit maximization and other objectives of

industrial firms, Theory of profitability, Economies of scale.

Financing of Industries- Need and sources of finance, Role of special financial

institutions, Investment criteria-NPV, IRR.

UNIT 2 : Approaches to industrial location analysis, Productivity analysis, Input-Output analysis, Concentration of economic power.

New Industrial PolicyCritical analysis, Role of technology and entrepreneurship

in industrial development.

UNIT 3: Management Principles of management, functions-planning,

Organization staffing, Directing, Controlling, Coordination, Decision making.

UNIT 4 : Production ManagementTotal quality management, JIT, Quality circle,

Quality-ISO9000, ISO14000, KANBAN, Bench marking, Effective

communication.

UNIT 5: Labour Legislations.

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INDEX

S.NO. TITLE PAGE NO. DATE SIGNATURE

1 ASSIGNMENT-1 6

2 ASSIGNMENT-2 16

3 ASSIGNMENT-3 27

4 ASSIGNMENT-4 39

5 ASSIGNMENT-5 51

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Assignment 1

Q) Management is a art or a science. Comment on it.

Ans) Management is everywhere - office, hospital, school, curity, Finance, trust etc.,

Management is basically Planning, Organizing, Coordinating, Directing, Assessing, Correcting,

Motivating and Achieving a set goal. It is objective-oriented. We always have a doubt whether it

is an art or science. It is the oldest of arts and youngest of science, because it is of dynamic

nature.

Different Managements need different approaches; for example Business Management and

Personnel Management are based on Common principles but vary a lot in the approach.

Economists say Management is a Factor of Production; Socialist views it as a Group of People;

others say that is a process; Mary Parker says Management in its true sense, a process by which

an organization realizes its objectives in a planned manner; Management is all about great

ideas, people and achievements.

Management is taking inputs, transforming them into output-either a good or service; the

effectiveness of this transforming the input into output depends on the Management - especially

when the resources are scarce; It is a group activity; motivating others and getting the things

done within the stipulated time, without compromising on the quality of the result; it gives shape

and color to the great ideas of the manager; Management involves dealing with people who have

different understanding, sensitivity, knowledge, capability, responsibility, maturity.

Science is a collection of systematic knowledge, collection of truths and Inferences after

continuous study and experiments. The Relationship between Variables and Limits are defined

and the Fundamental Principles discovered.

Management Principles have also evolved and it is changing day by day according to the change

in the human behaviour; In science keeping one factor as Variable and all others as constants the

same experiment is repeated many times in order to arrive at a conclusion; but Management

involves human element and hence all the factors are wildly varying.

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Art uses the known rules and principles and uses the skill, expertise, Wisdom, experience to

achieve the desired result. The point is how to get the things done in the desired manner to get

the desired result. New methods can be adopted from the past experiences and incidents what to

do and what not to do; Effective Management is extracting voluntary cooperation from the staff.

So it is definitely an art and it can be acquired only by practicing the theoretical knowledge

skillfully and prudently.

Management has got two faces like a coin; on one side it is art and on the other it is science.

Management has got scientific principles which constitute the elements of Science and Skill and

Talent which are the attributes of Art.

Management skills are acquired by constant practice as in the case of medicine, engineering and

accountancy; Mere knowledge of concepts will not fetch results; understanding human

behaviour, tactfulness, vision, pragmatism, creativity, compassion towards staff, team spirit are

all needed by a Successful Manager for effective management. The Science and Art are not

mutually exclusive but complementary to each other. Therefore Management is both a science

and an art.

Q) managers are born or managers are made. Comment on it.

Ans) The opinions are divided over whether managers are born or made. It is actually a

combination of both. You have to be born with a potential. This trait or potential then needs to be

nurtured and fine tuned which is the development part. Mozart was not born a musician. But he

had tremendous potential to be one of the greatest, and luckily for him, he had the surroundings

to nurture this talent. Strictly speaking, no one is born a leader, just as no one is born a talented

artist. But you can be born with the underlying traits that make you a potential artist given the

right stimulus and environment.

Becoming a manager is a tough job and the toughest part is managing people. You have your

back against the wall and are always bombarded with pressures from three directions -

management above you, people below you and from home. How you manage and handle these

pressures and become a successful manager can be learnt. There are several training programs

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which talk about skills required to be a manager - communication skills, team building, change

management, stress management, people management, etc.

These skills can be learnt.

But can you solve problems just by learning from books or from what is taught to you? No. You

need to have a trait which you are born with which will enhance your training. You need to have

that inborn talent. By undergoing training, what you are doing is fine tuning that trait.

It is like two kids learning to ride a bicycle. One may learn within a couple of days while the

other may take a few weeks. Two students - one becomes a doctor but the other hates medicine

but is excellent in technical stuff. These are traits and potentials you are born with. So if one can

correctly analyze and zero down on what one's trait or potential is, one will be very successful.

One can be born with a silver spoon in the mouth, yet be a terrible leader and a bad manager.

Someone might be born as a commoner, yet have the traits to lead and manage.

Q) Explain the various levels of management in detail.

Ans) The term Levels of Management refers to a line of demarcation between various

managerial positions in an organization. The number of levels in management increases when the

size of the business and work force increases and vice versa. The level of management

determines a chain of command, the amount of authority & status enjoyed by any managerial

position. The levels of management can be classified in three broad categories: -

1. Top level / Administrative level2. Middle level / Executory3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the three

levels is discussed below:

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LEVELS OF MANAGEMENT

Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is

the ultimate source of authority and it manages goals and policies for an enterprise. It devotes

more time on planning and coordinating functions.

The role of the top management can be summarized as follows -

Top management lays down the objectives and broad policies of the enterprise. It issues necessary instructions for preparation of department budgets, procedures,

schedules etc.

It prepares strategic plans & policies for the enterprise. It appoints the executive for middle level i.e. departmental managers. It controls & coordinates the activities of all the departments. It is also responsible for maintaining a contact with the outside world. It provides guidance and direction. The top management is also responsible towards the shareholders for the performance of

the enterprise.

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Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible

to the top management for the functioning of their department. They devote more time to

organizational and directional functions. In small organization, there is only one layer of middlelevel of management but in big enterprises, there may be senior and junior middle level

management. Their role can be emphasized as -

They execute the plans of the organization in accordance with the policies and directives of the

top management.

They make plans for the sub-units of the organization. They participate in employment & training of lower level management. They interpret and explain policies from top level management to lower level. They are responsible for coordinating the activities within the division or department. It also sends important reports and other important data to top level management. They evaluate performance of junior managers. They are also responsible for inspiring lower level managers towards better performance.

Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of

supervisors, foreman, section officers, superintendent etc. According to R.C. Davis,

Supervisory management refers to those executives whose work has to be largely with personal

oversight and direction of operative employees. In other words, they are concerned with

direction and controlling function of management. Their activities include -

Assigning of jobs and tasks to various workers. They guide and instruct workers for day to day activities. They are responsible for the quality as well as quantity of production. They are also entrusted with the responsibility of maintaining good relation in the

organization.

They communicate workers problems, suggestions, and recommendatory appeals etc tothe higher level and higher level goals and objectives to the workers.

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They help to solve the grievances of the workers. They supervise & guide the sub-ordinates. They are responsible for providing training to the workers. They arrange necessary materials, machines, tools etc for getting the things done. They prepare periodical reports about the performance of the workers. They ensure discipline in the enterprise. They motivate workers. They are the image builders of the enterprise because they are in direct contact with the

workers.

Q) Explain the main objective of management?

Ans) The main objectives of management are:

Getting Maximum Results with Minimum Efforts - The main objective of management isto secure maximum outputs with minimum efforts & resources. Management is basically

concerned with thinking & utilizing human, material & financial resources in such a

manner that would result in best combination. This combination results in reduction of

various costs.

Increasing the Efficiency of factors of Production - Through proper utilization of variousfactors of production, their efficiency can be increased to a great extent which can be

obtained by reducing spoilage, wastages and breakage of all kinds, this in turn leads to

saving of time, effort and money which is essential for the growth & prosperity of the

enterprise.

Maximum Prosperity for Employer & Employees - Management ensures smooth andcoordinated functioning of the enterprise. This in turn helps in providing maximum

benefits to the employee in the shape of good working condition, suitable wage system,

incentive plans on the one hand and higher profits to the employer on the other hand.

Human betterment & Social Justice - Management serves as a tool for the upliftment aswell as betterment of the society. Through increased productivity & employment,

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management ensures better standards of living for the society. It provides justice through

its uniform policies.

Q) Explain the difference between management and administration?

Ans) According to Theo Haimann, Administration means overall determination of policies,

setting of major objectives, the identification of general purposes and laying down of broad

programmes and projects. It refers to the activities of higherlevel. It lays down basic principles

of the enterprise. According to Newman, Administration means guidance, leadership & control

of the efforts of the groups towards some common goals

Whereas, management involves conceiving, initiating and bringing together the various

elements; coordinating, actuating, integrating the diverse organizational components while

sustaining the viability of the organization towards some pre-determined goals. In other words, it

is an art of getting things done through & with the people in formally organized groups.

There are many factors according to which administration can be distinguished from

management. These are as follows:

Nature of work

Administration: It is concerned about the determination of objectives and major policies of an

organization.

Management: It puts into action the policies and plans laid down by the administration.

Type of function

Administration:It is a determinative function.

Management: It is an executive function.

Scope

Administration:It takes major decisions of an enterprise as a whole.

Management: It takes decisions within the framework set by the administration.

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Level of authority

Administration:It is a top-level activity.

Management: It is a middle level activity.

Nature of status

Administration:It consists of owners who invest capital in and receive profits from an enterprise.

Management: It is a group of managerial personnel who use their specialized knowledge to fulfill

the objectives of an enterprise.

Nature of usage

Administration:It is popular with government, military, educational, and religious organizations.

Management: It is used in business enterprises.

Decision making

Administration:Its decisions are influenced by public opinion, government policies, social, and

religious factors.

Management: Its decisions are influenced by the values, opinions, and beliefs of the managers.

Main functions

Administration:Planning and organizing functions are involved in it.

Management: Motivating and controlling functions are involved in it.

Abilities

Administration:It needs administrative rather than technical abilities.

Management: It requires technical activitiesPractically, there is no difference between

management & administration. Every manager is concerned with both - administrative

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management function and operative management function as shown in the figure. However, the

managers who are higher up in the hierarchy denote more time on administrative function & the

lower level denote more time on directing and controlling workers performance i.e.

management.

The Figure above clearly shows the degree of administration and management performed by the

different levels of management

Q) define the management in following categories :

(a) Process

(b) Activity

(c) Discipline

Ans) Lets start by defining "management": "the act of overseeing or directing something"

Now, lets define "process": "a particular course of action intended to achieve a result"

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Clearly, if you are going to direct something - such as a group of people - then you are intending

to achieve a result. In order to achieve that resul, you will need a course of action. So, the very

idea of management is that it is a process. The two are inextricably intertwined.

Next, we will define "discipline": "a system of rules of conduct or method of practice" OR "abranch of knowledge"

Both of these definitions lend themselves to what we have already said about management. If

you are going to direct something, there should be a system of rules in place so that you are both

consistent and effective. It is impossible to learn a sport without having a system of rules to

follow - otherwise, it would be impossible to play. There would be no way to know who wins -

no one would agree upon what action equals a point. The same is said in business - management

is its own branch of knowledge because there is system of rules that has to be enacted,

understood by all players, and followed.

A human activity sounds pretty straightforward - any activity that is commonly performed by

humans. Management is performed by humans in all areas of life. Management of a household,

a business, a school, a sport. Even personal relationships require some form of management to

keep things running smoothly. As a species, we are heirarchial by nature, and have incorporated

principles of management into our everyday lives.

Definition of 'Activity-Based Management - ABM'

A procedure that originated in the 1980s for analyzing the processes of a business to identify

strengths and weaknesses. Specifically, activity-based management seeks out areas where a

business is losing money so that those activities can be eliminated or improved to increase

profitability. ABM analyzes the costs of employees, equipment, facilities, distribution, overhead

and other factors in a business to determine and allocate activity costs.

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Assignment 2

Q) Explain the term POSDCORB in the terms of management.

Ans) POSDCORB is an acronym widely used in the field of Management and Public

Administration that reflects the classic view of administrative management. Largely drawn from

the work of French industrialist Henri Fayol, it first appeared in a 1937 staff paper by Luther

Gulick and Lyndall Urwick written for the Brownlow Committee. Luther Gullick has given a

keyword POSDCORB where P stands for Planning, O for Organizing, S for Staffing, D for

Directing, Co for Co-ordination, R for reporting & B for Budgeting.

PLANNING : Planning is working out in broad outline the things that need .to be done and the

methods for doing them to accomplish the purpose set for the enterprise;

ORGANIZING : Organizing is the establishment of the formal structure of authority through

which work subdivisions are arranged, defined and coordinated for the defined objective;

STAFFING : Staffing is the whole personnel function of bringing in and training the staff and

maintaining favorable conditions of work;

DIRECTING : Directing is the continuous task of making decisions and embodying them in

specific and general orders and instructions and serving as the leader of the enterprise;

CO-ORDINATING : Coordinating is the all-important duty of interrelating the various parts of

the work;

REPORTING : Reporting is keeping those to whom the executive is responsible informed as to

what is going on, which thus includes keeping himself and his subordinates informed through

records, research and inspections;

BUDGETING : Budgeting, with all that goes with budgeting in the form of fiscal planning,

accounting and control

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All executives perform broadly similar functions. The President of the United States, like the

governors of the states or the Prime Minister of England, does many things in common with his

subordinate executives and with all those who have headed large organizations. Luther Gulick

and Lyndall Urwick have classified these common tasks of the executive, and his categories of

important executive functions: What is the work of the chief executive? What does he do? The

answer is POSDCORB.

Q) Explain the basic functions of management?

Ans) The key managerial functions of planning, organizing, leading and controlling are all

crucial to the success of any manager.

Managers exist in every business. In fact, managers do the same types of tasks in all businesses.

Whether a person manages a hair salon or a factory, the managers job consists of similar tasks.

Planning, organizing, leading and controlling all serve an important part in achieving

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managements vision. Each component is important and one cannot function well without the

others.

Planning : The first component of managing is planning. A manager must determine what the

organizations goals are and how to achieve those goals. Much of this information will comedirectly from the vision and mission statement for the company. Setting objectives for the goal

and following up on the execution of the plan are two critical components of the planning

function. For example, a manager of a new local restaurant will need to have a marketing plan, a

hiring plan and a sales plan.

Organizing : Managers are responsible for organization of the company and this includes

organizing people and resources. Knowing how many employees are needed for particular shifts

can be critical to the success of a company. If those employees do not have the necessary

resources to complete their jobs, organization has not occurred. Without an organized workplace,

employees will see a manager as unprepared and may lose respect for that particular managers

supervisory techniques.

Leading : Managing and leading are not the same activity. A manager manages employees; this

person makes sure that tasks are completed on time and policies are followed. Employees

typically follow managers because he or she is the supervisor and in-charge of employees.

Employees see a leader as someone that motivates them and guides them to help meet the firms

goals. In an ideal situation, the manager also serves as the leader. Managers who want to lead

effectively need to discover what motivates their employees and inspire them to reach the

company objectives.

Controlling : The controlling function involves monitoring the firms performance to make sure

goals are being met. Managers need to pay attention to costs versus performance of the

organization. For example, if the company has a goal of increasing sales by 5% over the next two

months, the manager may check the progress toward the goal at the end of month one. An

effective manager will share this information with his or her employees. This builds trust and a

feeling of involvement for the employees.

Being a manager involves many different tasks. Planning, organizing, leading and controlling are

four of the main functions that must be considered in any management position. Management is

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a balancing act of many different components and a good manager will be able to maintain the

balance and keep employees motivated.

Q) Explain the principles of management described by Henry Feyol.

Ans) Management Principles developed by Henri Fayol:

DIVISION OF WORK: Work should be divided among individuals and groups to ensurethat effort and attention are focused on special portions of the task. Fayol presented work

specialization as the best way to use the human resources of the organization.

AUTHORITY: The concepts of Authority and responsibility are closely related.Authority was defined by Fayol as the right to give orders and the power to exact

obedience. Responsibility involves being accountable, and is therefore naturally

associated with authority. Whoever assumes authority also assumes responsibility.

DISCIPLINE: A successful organization requires the common effort of workers.Penalties should be applied judiciously to encourage this common effort.

UNITY OF COMMAND: Workers should receive orders from only one manager. UNITY OF DIRECTION: The entire organization should be moving towards a common

objective in a common direction.

SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS:The interests of one person should not take priority over the interests of the organization

as a whole.

REMUNERATION: Many variables, such as cost of living, supply of qualifiedpersonnel, general business conditions, and success of the business, should be considered

in determining a workers rate of pay.

CENTRALIZATION: Fayol defined centralization as lowering the importance of thesubordinate role. Decentralization is increasing the importance. The degree to which

centralization or decentralization should be adopted depends on the specific organization

in which the manager is working.

SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Eachmanager, from the first line supervisor to the president, possess certain amounts of

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authority. The President possesses the most authority; the first line supervisor the least.

Lower level managers should always keep upper level managers informed of their work

activities. The existence of a scalar chain and adherence to it are necessary if the

organization is to be successful.

ORDER: For the sake of efficiency and coordination, all materials and people related to aspecific kind of work should be treated as equally as possible.

EQUITY: All employees should be treated as equally as possible. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should

always be a high priority of management. Recruitment and Selection Costs, as well as

increased product-reject rates are usually associated with hiring new workers.

INITIATIVE: Management should take steps to encourage worker initiative, which isdefined as new or additional work activity undertaken through self direction.

ESPIRIT DE CORPS: Management should encourage harmony and general goodfeelings among employees.

Q) Explain the following terms in brief:

(i) Motivation

(ii) leadership

Ans) (i) Motivation: Motivation is a term that refers to a process that elicits, controls, and

sustains certain behaviors. Motivation is a group of phenomena which affect the nature of an

individual's behaviour, the strength of the behaviour, and the persistence of the behaviour. For

instance: An individual has not eaten, he or she feels hungry, as a response he or she eats and

diminishes feelings of hunger. Motivation is a general term for a group of phenomena that affect

the nature of an individual's behaviour, the strengh of the behaviour, and the persistence of the

behaviour. There are many approaches to motivation: physiological, behavioural, cognitive, and

social[1].It's the crucial element in setting and attaining goalsand research shows you can

influence your own levels of motivation and self-control.

Motivation is a very important for an organization because of the following benefits it provides:-

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Puts human resources into action Improves level of efficiency of employees Leads to achievement of organizational goals Builds friendly relationship Leads to stability of work force

(ii) leadership: Leadership has been described as the process of social influence in which one

person can enlist the aid and support of others in the accomplishment of a common task"

Leadership is a process by which a person influences others to accomplish an objective and

directs the organization in a way that makes it more cohesive and coherent. Leaders carry out this

process by applying their leadership knowledge and skills. This is called Process Leadership.

However, we know that we have traits that can influence our actions. This is called Trait

Leadership. In that it was once common to believe that leaders were born rather than made.

These two leadership types are shown in the chart below

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Q) How leaders and managers can be compared? Give the detailed points.

Ans) Leadership and managership are two synonymous terms is an incorrect statement.

Leadership doesnt require any managerial position to act as a leader. On the other hand, a

manager can be a true manager only if he has got the traits of leader in him. By virtue of hisposition, manager has to provide leadership to his group. A manager has to perform all five

functions to achieve goals, i.e., Planning, Organizing, Staffing, Directing, and Controlling.

Leadership is a part of these functions. Leadership as a general term is not related to

managership. A person can be a leader by virtue of qualities in him. For example: leader of a

club, class, welfare association, social organization, etc. Therefore, it is true to say that, All

managers are leaders, but all leaders are not managers.

A leader is one who influences the behavior and work of others in group efforts towards

achievement of specified goals in a given situation. On the other hand, manager can be a true

manager only if he has got traits of leader in him. Manager at all levels are expected to be the

leaders of work groups so that subordinates willingly carry instructions and accept their

guidance. A person can be a leader by virtue of all qualities in him.

Leaders and Managers can be compared on the following basis:

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Q) Explain the financial management with respect to following terms:

1. Meaning of financial management.2. Elements of finance.3. Objective of financial management.

Ans) Meaning of Financial Management

Financial Management means planning, organizing, directing and controlling the financial

activities such as procurement and utilization of funds of the enterprise. It means applying

general management principles to financial resources of the enterprise.

By Financial Management we mean efficient use of economic resources namely capital funds.

Financial management is concerned with the managerial decisions that result in the acquisition

and financing of short term and long term credits for the firm. Here it deals with the situations

that require selection of specific assets, or a combination of assets and the selection of specific

problem of size and growth of an enterprise. Herein the analysis deals with the expected inflows

and outflows of funds and their effect on managerial objectives. In short, Financial Management

deals with Procurement of funds and their effective utilization in the business.

Scope/Elements

Investment decisions- includes investment in fixed assets (called as capital budgeting).Investment in current assets are also a part of investment decisions called as working

capital decisions.

Financial decisions - They relate to the raising of finance from various resources whichwill depend upon decision on type of source, period of financing, cost of financing and

the returns thereby.

Dividend decision - The finance manager has to take decision with regards to the netprofit distribution. Net profits are generally divided into two:

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Dividend for shareholders- Dividend and the rate of it has to be decided. Retained profits- Amount of retained profits has to be finalized which will depend upon

expansion and diversification plans of the enterprise.

Objectives of Financial Management

The financial management is generally concerned with procurement, allocation and control of

financial resources of a concern. The objectives can be-

To ensure regular and adequate supply of funds to the concern. To ensure adequate returns to the shareholders which will depend upon the earning

capacity, market price of the share, expectations of the shareholders.

To ensure optimum funds utilization. Once the funds are procured, they should beutilized in maximum possible way at least cost.

To ensure safety on investment, i.e, funds should be invested in safe ventures so thatadequate rate of return can be achieved.

To plan a sound capital structure-There should be sound and fair composition of capitalso that a balance is maintained between debt and equity capital.

Functions of Financial Management

Estimation of capital requirements: A finance manager has to make estimation with regards to

capital requirements of the company. This will depend upon expected costs and profits and

future programmes and policies of a concern. Estimations have to be made in an adequate

manner which increases earning capacity of enterprise.

Determination of capital composition: Once the estimation have been made, the capital

structure have to be decided. This involves short- term and long- term debt equity analysis. This

will depend upon the proportion of equity capital a company is possessing and additional funds

which have to be raised from outside parties.

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Choice of sources of funds: For additional funds to be procured, a company has many choices

like-

Issue of shares and debentures Loans to be taken from banks and financial institutions Public deposits to be drawn like in form of bonds.

Choice of factor will depend on relative merits and demerits of each source and period of

financing.

Investment of funds: The finance manager has to decide to allocate funds into profitable

ventures so that there is safety on investment and regular returns is possible.

Disposal of surplus: The net profits decision have to be made by the finance manager. This

can be done in two ways:

Dividend declaration - It includes identifying the rate of dividends and other benefits like

bonus.

Retained profits - The volume has to be decided which will depend upon expansional,

innovational, diversification plans of the company.

Management of cash: Finance manager has to make decisions with regards to cash

management. Cash is required for many purposes like payment of wages and salaries, payment

of electricity and water bills, payment to creditors, meeting current liabilities, maintainance of

enough stock, purchase of raw materials, etc.

Financial controls: The finance manager has not only to plan, procure and utilize the funds but

he also has to exercise control over finances. This can be done through many techniques like

ratio analysis, financial forecasting, cost and profit control, etc.

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Assignment 3:

Q) Explain PDCA cycle in detail.

Ans) Also called: PDCA, plandostudyact (PDSA) cycle, Deming cycle, Shewhart cycle. The

plandocheckact cycle (Figure 1) is a fourstep model for carrying out change. Just as a circle

has no end, the PDCA cycle should be repeated again and again for continuous improvement.

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When to Use PlanDoCheckAct

1. As a model for continuous improvement.2. When starting a new improvement project.3. When developing a new or improved design of a process, product or service.4. When defining a repetitive work process.5. When planning data collection and analysis in order to verify and prioritize problems

or root causes.

6. When implementing any change.

PlanDoCheckAct Procedure

1. Plan. Recognize an opportunity and plan a change.2. Do. Test the change. Carry out a small-scale study.3. Check. Review the test, analyze the results and identify what youve learned.4. Act. Take action based on what you learned in the study step: If the change did not

work, go through the cycle again with a different plan. If you were successful,

incorporate what you learned from the test into wider changes. Use what you learned

to plan new improvements, beginning the cycle again.

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Q) Explain the BENCHMARKING. What are various techniques of benchmarking?

Ans) Benchmarking is a systematic process for identifying and implementing best or better

practices. Although experts break benchmarking into several types, there exist two main types;

"Informal" and "Formal" Benchmarking.

Whichever methodology or type of benchmarking is used the BPIR website has become an

essential tool for benchmarking - it helps organizations to quickly find benchmarks,

benchmarking partners and best practices.

Benchmarking is the process through which a company measures its products, services, and

practices against its toughest competitors, or those companies recognized as leaders in its

industry. Benchmarking is one of a manager's best tools for determining whether the company is

performing particular functions and activities efficiently, whether its costs are in line with those of

competitors, and whether its internal activities and business processes need improvement. The

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idea behind benchmarking is to measure internal processes against an external standard. It is a

way of learning which companies are best at performing certain activities and functions and then

imitatingr better still, improving onheir techniques.

Benchmarking focuses on company-to-company comparisons of how well basic functions andprocesses are performed. Among many possibilities, it may look at how materials are purchased,

suppliers are paid, inventories are managed, employees are trained, or payrolls are processed; at

how fast the company can get new products to market; at how the quality control function is

performed; at how customer orders are filled and shipped; and at how maintenance is performed

Benchmarking enables managers to determine what the best practice is, to prioritize

opportunities for improvement, to enhance performance relative to customer expectations, and to

leapfrog the traditional cycle of change. It also helps managers to understand the most accurate

and efficient means of performing an activity, to learn how lower costs are actually achieved,

and to take action to improve a company's cost competitiveness. As a result, benchmarking has

been used in many companies as a tool for obtaining a competitive advantage.

BENCHMARKING BASICS

The goal of benchmarking is to identify the weaknesses within an organization and improve

upon them, with the idea of becoming the "best of the best." The benchmarking process helps

managers to find gaps in performance and turn them into opportunities for improvement.

Benchmarking enables companies to identify the most successful strategies used by other

companies of comparable size, type, or regional location, and then adopt relevant measures to

make their own programs more efficient. Most companies apply benchmarking as part of a broad

strategic process. For example, companies use benchmarking in order to find breakthrough ideas

for improving processes, to support quality improvement programs, to motivate staffs to improve

performance, and to satisfy management's need for competitive assessments.

Benchmarking targets roles, processes, and critical success factors. Roles are what define the job

or function that a person fulfills. Processes are what consume a company's resources. Critical

success factors are issues that company must address for success over the long-term in order to

gain a competitive advantage. Benchmarking focuses on these things in order to point out

inefficiencies and potential areas for improvement.

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Q) what are the various benefits and classes (elements) of ISO 9000.

Ans) ISO 9000 is a set of international standards of quality management that have become

increasingly popular for large and small companies alike. "ISO is grounded on the 'conformance

to specification' definition of quality, " wrote Francis Buttle in the International Journal ofQuality and Reliability Management. "The standards specify how management operations shall

be conducted. ISO 9000's purpose is to ensure that suppliers design, create, and deliver products

and services which meet predetermined standards; in other words, its goal is to prevent non-

conformity." Used by both manufacturing and service firms, ISO 9000 had been adopted by

more than 100 nations as their national quality management/quality assurance standard by the

end of 1997.

This quality standard was first introduced in 1987 by the International Organization for

Standards (ISO) in hopes of establishing an international definition of the essential

characteristics and language of a quality system for all businesses, irrespective of industry or

geographic location. Initially, it was used almost exclusively by large companies, but by the mid-

1990s, increasing numbers of small-and mid-sized companies had embraced ISO 9000 as well.

In fact, small and moderate-sized companies account for much of the growth in ISO 9000

registration over the past several years. The total number of ISO 9000 registrations in the United

States increased from a little more than 2, 200 in 1993 to more than 17, 000 in 1998; of those 17,

000 registrations, nearly 60 percent were held by companies with annual sales of $100 million or

less.

The increased involvement of small and midsized firms in seeking ISO 9000 registration is

generally attributed to several factors. Many small businesses have decided to seek ISO 9000

certification because of their corporate customers, who began to insist on it as a method of

ensuring that their suppliers were paying adequate attention to quality. Other small business

owners, meanwhile, have pursued ISO 9000 certification in order to increase their chances ofsecuring new business or simply as a means of improving the quality of their processes. "The

pressure for companies to become ISO 9000-certified is absolutely increasing and will continue

to increase, " predicted one management consultant in an interview with Nation's Business. "The

question many smaller companies have to ask is when, not if, they [will] get ISO 9000-

registered."

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ELEMENTS OF ISO 9000 QUALITY MANAGEMENT SYSTEMS

The standards of ISO 9000 detail 20 requirements for an organization's quality management

system in the following areas:

1. Management Responsibility2. Quality System3. Order Entry4. Design Control5. Document and Data Control6. Purchasing7. Control of Customer Supplied Products8. Product Identification and Tractability9. Process Control10.Inspection and Testing Control of Inspection, Measuring, and Test Equipment11.Inspection and Test Status12.Control of Nonconforming Products13.Corrective and Preventive Action14.Handling, Storage, Packaging, and Delivery15.Control of Quality Records16.Internal Quality Audits17.Training18.Servicing19.Statistical Techniques

ADVANTAGES ( benefits ) OF ISO 9000:

The advantages associated with ISO 9000 certification are numerous, as both business analysts

and business owners will attest. These benefits, which can impact nearly all corners of a

company, range from increased stature to bottom-line operational savings. They include:

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1. Increased marketabilityNearly all observers agree that ISO 9000 registration providesbusinesses with markedly heightened credibility with current and prospective clients

alike. Basically, it proves that the company is dedicated to providing quality to its

customers, which is no small advantage whether the company is negotiating with a long-

time customer or endeavoring to pry a potentially lucrative customer away from a

competitor. This benefit manifests itself not only in increased customer retention, but also

in increased customer acquisition and heightened ability to enter into new markets;

indeed, ISO 9000 registration has been cited as being of particular value for small and

mid-sized businesses hoping to establish a presence in international markets.

2. Reduced operational expensesSometimes lost in the many discussions of ISO 9000'spublic relations cache is the fact that the rigorous registration process often exposes

significant shortcomings in various operational areas. When these problems are brought

to light, the company can take the appropriate steps to improve its processes. These

improved efficiencies can help companies garner savings in both time and money. "The

cost of scrap, rework, returns, and the employee time spent analyzing and troubleshooting

various products are all considerably reduced by initiating the discipline of ISO 9000, "

confirmed Richard B. Wright in Industrial Distribution.

3. Better management controlThe ISO 9000 registration process requires so muchdocumentation and self-assessment that many businesses that undergo its rigors cite

increased understanding of the company's overall direction and processes as a significant

benefit.

4. Increased customer satisfactionSince the ISO 9000 certification process almostinevitably uncovers areas in which final product quality can be improved, such efforts

often bring about higher levels of customer satisfaction. In addition, by seeking and

securing ISO 9000 certification, companies can provide their clients with the opportunity

to tout their suppliers' dedication to quality in their own business dealings.

5. Improved internal communicationThe ISO 9000 certification process's emphasis onself-analysis and operations management issues encourages various internal areas or

departments of companies to interact with one another in hopes of gaining a more

complete understanding of the needs and desires of their internal customers.

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6. Improved customer serviceThe process of securing ISO 9000 registration often servesto refocus company priorities on pleasing their customers in all respects, including

customer service areas. It also helps heighten awareness of quality issues among

employees.

7. Reduction of product-liability risksMany business experts contend that companies thatachieve ISO 9000 certification are less likely to be hit with product liability lawsuits, etc.,

because of the quality of their processes.

8. Attractiveness to investorsBusiness consultants and small business owners alike agreethat ISO-9000 certification can be a potent tool in securing funding from venture capital

firms.

Q) Explain the environmental management system ISO-14000?

Ans) ISO 14000, which was initially released in 1996 and updated in 2004, is a global series of

environmental management systems (EMS) standards. As a continuation of the standardization

process that was initiated with the ISO 9000 series, the ISO 14000 series of international

standards have been developed so that organizations may incorporate environmental aspects into

operations and product standards. It is a set of voluntary environmental management standards,

guides and technical reports, which specifically focuses on corporate environmental management

systems, operating practices, products, and services. The ISO standards in general aim tofacilitate international trade and commerce. Companies can implement any or all of the ISO

14000 series standards. They do not prescribe environmental performance targets, but provide

organizations with the tools to assess and control the impact of their activities, products or

services on the environment.

The ISO 14000 series addresses the following aspects of environmental management:

1. Environmental Management Systems (EMS)2. Environmental Auditing & Related Investigations (EA&RI)3. Environmental Labels and Declarations (EL)4. Environmental Performance Evaluation (EPE)5. Life Cycle Assessment (LCA)6. Terms and Definitions (T&D)

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Compliance to an ISO 14000 EMS:

1. Assures customers of your commitment to demonstrable environmental management2. Maintains excellent public relations3. Satisfies investor criteria and improves access to capital4. Obtains insurance at reasonable cost5. Enhances your image and market share6. Meets your clients' registration requirements7. Improves cost control by identifying and eliminating waste and inefficiency8. Lessens incidents that result in liability9. Reduces your consumption of materials and energy10.Facilitates the attainment of permits and authorizations11.Decreases the cost of complying with environmental regulations12.Improves industry-government relations

ISO 14000 registration

With respect to ISO 14000, registration is the formal recognition of an organization's ability to

conform to the requirements of an EMS. Organizations may simply declare that their EMS meets

the requirements of ISO 14001 ("self-declaration"). However, many organizations choose to

have their EMS registered, usually to provide greater assurance to clients and the public, or

because regulators and clients require it.

The ISO 14000 standards and documents are being developed with the following key principles

in mind:

1. To result in better environmental management2. To encompass environmental management systems and the environmental aspects of

products3. To be applicable in all countries4. To promote the broader interests of the public as well as users of these standards5. To be cost-effective, non-prescriptive and flexible so they are able to meet the differing

needs of organizations of any type or size, worldwide

6. As part of their flexibility, to be suitable for internal and/or external verification

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7. To be scientifically based8. Above all, to be practical, useful and usable

ISO 14000 standards- "Organization" and "Product" oriented

The ISO 14000 series fall into two major groupings: organization-oriented and product-oriented

documents. The organization-oriented standards provide complete guidance for establishing,

maintaining and evaluating an EMS. They are also concerned with other organization-wide

environmental systems and functions.

The following is a list of the published organization-oriented ISO 14000 standards, TRs and

guides:

1. ISO 14001:2004, Environmental Management Systems-Specification With Guidance forUse

2. ISO 14004:2004, Environmental Management Systems-General Guidelines on Principles,Systems and Supporting Techniques

3. ISO 14010:1996, Guidelines for Environmental Auditing-General Principles4. ISO 14011:1996, Guidelines for Environmental Auditing-Audit Procedures-Auditing of

Environmental Management Systems

5. ISO 14012:1996, Guidelines for Environmental Auditing-Qualification Criteria forEnvironmental Auditors

6. ISO 14031:1999, Environmental Management-Environmental Performance Evaluation-Guidelines

7. ISO/TR 14032:1999, Environmental Management-Examples of EnvironmentalPerformance Evaluation (EPE)

8. ISO/TR 14061:1998, Information to Assist Forestry Organizations in the Use ofEnvironmental Management System Standards ISO 14001 and ISO 14004

The product-oriented standards are concerned with determining the environmental aspects and

impacts of products or services over their life cycles, and with the application of environmental

labels and declarations on or to products. These standards assist an organization in assembling

the data needed to support planning and decision-making, and to communicate specific

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environmental information about a product/service to customers, end-users, and other interested

parties.

ISO 14000 and International Trade

ISO endeavors to avoid the creation of unnecessary barriers to trade. The objective of

environmental management standards has been to develop a common language platform for

environmental issues, so that businesses, prospective customers, and governments are certain that

all organizational level environmental concerns have been addressed. By focusing on

management and product standards, and emphasizing guidance over strict specifications in its

documents, ISO 14000 has created a positive ambiance for world trade, at the same time

encouraging progress in environmental performance.

Q) Explain the various elements of ISO 14000?

Ans) The ISO 14000 is a standard for environmental management systems that is applicable to

any business, regardless of size, location or income. The aim of the standard is to reduce the

environmental footprint of a business and to decrease the pollution and waste a business

produces. The most recent version of ISO 14001 was released in 2004 by the International

Organization for Standardization (ISO) which has representation from committees all over the

world.

Elements of an ISO 14000 EMS

1. Environmental policyDevelop a statement of your organizations commitment to theenvironment. Use this policy as a framework for planning and action.

2. Environmental aspects Identify environmental attributes of your products, activitiesand services. Determine those that could have significant impacts on the environment.

3. Legal and other requirements Identify and ensure access to relevant laws andregulations (and other requirements to which your organization adheres).

4. Objectives and targets Establish environmental goals for your organization, in linewith your policy, environmental impacts, views of interested parties and other factors.

5. Environmental management programPlan actions to achieve objectives and targets.6. Structure and responsibilityEstablish roles and responsibilities and provide resources.

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7. Training, awareness and competence Ensure that your employees are trained andcapable of carrying out their environmental responsibilities.

8. Communication Establish processes for internal and external communications onenvironmental management issues.

9. EMS documentationMaintain information on your EMS and related documents.10.Document control Ensure effective management of procedures and other system

documents.

11.Operational control Identify, plan and manage your operations and activities in linewith your policy, objectives and targets.

12.Emergency preparedness and response Identify potential emergencies and developprocedures for preventing and responding to them.

13.Monitoring and measurementMonitor key activities and track performance.14.Nonconformance and corrective and preventive action Identify and correct problems

and prevent recurrences.

15.RecordsKeep adequate records of EMS performance.16.EMS auditPeriodically verify that your EMS is operating as intended.17.Management review Periodically review your EMS with an eye to continual

improvement.

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ASSIGNMENT-4

Q) Explain just-in-time (JIT) production?

Ans) Just in time (JIT) is a production strategy that strives to improve a business return on

investment by reducing in-process inventory and associated carrying costs. Just-in-time

production method is also called the Toyota Production System. To meet JIT objectives, the

process relies on signals or Kanban between different points in the process, which tell production

when to make the next part. Kanban are usually 'tickets' but can be simple visual signals, such as

the presence or absence of a part on a shelf. Implemented correctly, JIT focuses on continuous

improvement and can improve a manufacturing organization's return on investment, quality, and

efficiency. To achieve continuous improvement key areas of focus could be flow, employee

involvement and quality.

`Just-in-time' is a management philosophy and not a technique.

It originally referred to the production of goods to meet customer demand exactly, in time,

quality and quantity, whether the `customer' is the final purchaser of the product or another

process further along the production line. It has now come to mean producing with minimumwaste. "Waste" is taken in its most general sense and includes time and resources as well as

materials. Elements of JIT include:

Continuous improvement.

Attacking fundamental problems - anything that does not add value to the product. Devising systems to identify problems. Striving for simplicity - simpler systems may be easier to understand, easier to manage

and less likely to go wrong.

A product oriented layout - produces less time spent moving of materials and parts. Quality control at source - each worker is responsible for the quality of their own output. Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes

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Preventative maintenance, Total productive maintenance - ensuring machinery and

equipment functions perfectly when it is required, and continually improving it.

Eliminating waste. There are seven types of waste:

waste from overproduction. waste of waiting time. transportation waste. processing waste. inventory waste. waste of motion. waste from product defects.

Good housekeeping - workplace cleanliness and organisation.

Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is

1item. Multi-process handling - a multi-skilled workforce has greater productivity, flexibility and

job satisfaction.

Levelled / mixed production - to smooth the flow of products through the factory.

Kanbans - simple tools to `pull' products and components through the process.

Jidoka (Autonomation) - providing machines with the autonomous capability to use

judgement, so workers can do more useful things than standing watching them work.

Andon (trouble lights) - to signal problems to initiate corrective action.

Q) Explain the key element of JIT?

Ans) ELEMENTS OF JIT PRODUCTION

An overview of JIT production can be gained by understanding the following outline of key

elements of JIT strategy.

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1. Policies: to provide direction, and to indicate to the work for that management is concerned

and involved; cover a wide range of subjects: customer service, elimination of waste, continual

improvements, lead time reduction.

2. The people strategy: Positive attitude towards workforce; treating people as companys

valuable asset; Employment as a long term decision; employee involvement, flexibility, small-

group improvement activities (SGIA); company unions.

3. The Product Strategy: The design 'quality; integration of product design with manufacturing

and-vendor capabilities; role of CAD/CAM configuration control and standardization, grouping

products; by families for production through group technology.

4. The plant and equipment strategy: Concepts of focused factories, group layouts, quick

conveyance means such as belt conveyor, chute, fork lift; productive maintenance.

5. The process Strategy: Shojinka (flexibility of process in meeting demand)'through GT layout,

multifunction work force and job rotation; autonomation (autonomous control of defects),

statistical control of defects, set up time reduction, small lot production; achieving balanced

production add uniform plant loads through standard operations and mixed model assembly and

fabrication.

6. The Planning Strategy: The three month horizon, production plan leveling, Final assembly

scheduling (daily buckets) and sequencing.

7. The production scheduling strategy: The Kanbansystem, the role of kanban in achieving

improvement activities; produce to exact demand; no contingencies) whirling round tour system.

8. The purchasing strategy: The long-term supplier relations, the subcontractor networks; the

transport innovations.

Q) Explain labour legislation?

Ans) Labour Legislation. Industrialisation creates a number of social and economic problems

like employment of women and children, minimum wages, trade unions, insanitary living

quarters and deplorable working conditions in the factories, etc. Labour laws are, therefore,

enacted to facilitate their solutions, as ordinary civil laws are inadequate to meet them. The State

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has adopted a progressive policy, and is keeping pace with the labour policy of the Government

of India and the standard laid down by the International Labour Organisation. This has produced

a plethora of legislation and their administration. These laws also deal with the regulation of

industrial relations between the management and the workers.

Labour Legislation refers to all laws of the Government which have been enacted to provide

social and economic security to the labour or workers. The evils of industrial volution have led to

the labour legislation. Now the state has a direct interest in the industrial peace and prosperity.

These acts are aimed at reduction of production losses due to industrial disputes and to ensure

timely payment of wages and other minimum amenties of the workers.

Need of labour Legislation :

The basic principle of industrial legislation is to ensure social justice to the workers . The object

of legislation is the equitable distribution of profits and benefits accruing from industry between

industrialists and workers and affording protection to the workers against harmful affects to their

health safety and morality.In a developing country like India, Labour legislation becomes

especially important because of the following reasons :

1. Labour organizations are relatively weak and in most of the cases, they depend merely on the

mercy of the employers. Individual worker is economically very weak and is unable to bargain

his terms with the employers. Now the prior payment of wages lay off, dismissal, retrenchments

etc , are all governed by legislation. The economic insecurity of the workers is removed to a

great extent.

2. In many organizations, workers may feel occupational insecurity. The workers may not be

given by amount in case of accidents, death, occupational Act, Employees State Insurance Ac,

certain benefits have been statutarily given to workers which the employees otherwise may not

get from their employers.

3. In any factories, there important working conditions on account of which the employees health

and safety is always in danger. The factories Act contains a number of provisions relating to

health safety and welfare of workers. Special provisions have been made for the women.

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4. Labour legislation is also necessary from the view point of law and order situation and

national security of the country. State plays a vital role I the continuing production. It helps in

the economic development of the country. The idea of Welfare State is embodied in the Directive

Principles of the constitution and for reason, various labour laws have been enacted to protect the

sections of the society.

5. Labour Legislation is one of the most progressive and dynamic instruments for achieving

socio-economic progress :

The main objectives for various labour laws are as follws :

To protect the workers from profit seeking exploiters. To promote cordial industrial relations between employers and employees. To preserve the health safety and welfare of workers. To product the interests of women and children working in the factories.

There are four principles on which the labour legislation is based viz,

1. Social Justice

2. Social and Economic Justice

3. National economy

4. International conventions

Social Justice:

The concept of social justice refers to providing justice to everyone in the society so that the poor

are not exploited by the rich. It is an in the interest of both employers and employees that they

should consider themselves as two wheels of a cart and firmly believe that one cannot exist

without the other.

National Economy :

Labour legislation ensures industrial peace and helps in the industrialization of the country. The

Directive principles of the constitution contain the idea of welfare state. It is a fundamental of a

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welfare state to look after the interest of workers who are the weakest section of the society and

satisfy their physical needs with the increase in productivity the benefits are shared with the

workers, resulting ih their prosperity. Thus for the growth of economy and development of the

country, labour legislation acts as guiding principle.

International Conventions :-

International labour originations aims at securing the minimum standard of living for the workers

throughout the world. If any convention is passed by govt, it becomes binding if it is ratified by

any country. Thus, labour legislation is guided by these conventions.

Q) Explain the following laws related to labour legislation :-

i. Factories act1948ii. The workmans compensation act 1923

iii. The payment of gratuity act1972iv. Employees provident fund and misc. act1952v. Equal remuneration act1976

Ans)

i. Factories act1948:

The Factories Act, is a social legislation which has been enacted for occupational safety, health

and welfare of workers at work places. This legislation is being enforced by technical officers i.e.

Inspectors of Factories, Dy. Chief Inspectors of Factories who work under the control of the

Chief Inspector of Factories and overall control of the Labour Commissioner, Government of

National Capital Territory of Delhi

APPLICABILITY : It applies to factories covered under the Factories Act, 1948. The industries

in which ten (10) or more than ten workers are employed on any day of the preceeding twelve

months and are engaged in manufacturing process being carried out with the aid of power or

twenty or more than twenty workers are employed in manufacturing process being carried out

without the aid of power, are covered under the provisions of this Act.

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SALIENT FEATURES OF THE ACT ARE :-

o Approval of Factory Building Plans before construction/extension, under theDelhi Factories Rules, 1950 .

o Grant of Licences under the Delhi Factories Rules, 1950, and to take actionagainst factories running without obtaining Licence.

o Renewal of Licences granted under the Delhi Factories Rules, 1950, by the Dy.Chief Inspectors of Factories .

Inspections of factories by District Inspectors of Factories, for investigation of

complaints, serious/fatal accidents as well as suo moto inspections to check compliance of

provisions of this Act relating to :-

Health Safety Welfare facilities Working hours Employment of young persons Annual Leave with wages etc.

Administrative Machinery : - The enforcement of this legislation is being carried out on district

basis by the district Inspectors of Factories. After inspection, Improvement Notices are issued to

the defaulting managements and ultimately legal action is taken against the defaulting

managements. The Inspectors of Factories file Challans against the defaulters, in the Courts of

Metropolitan Magistrates. The work of Inspectors of Factories is supervised by the Dy. Chief

Inspector of Factories on district basis.

Penalties:- This Act provides for a maximum punishment up to two years and or a fine up to Rs.

one lakh or both.

ii. The workmans compensation act 1923:

The Workmen's Compensation Act 1923 was enacted to help workmen face the hardships

resulting from accidents. These legal provisions apply equally to women workers also. An

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employer liable to provide monetary compensation to a disabled workman, or to his dependents,

in case of his death, if the disablement or death occurs "out of and in the course of employment."

Any worker employed in any of a wide variety of hazardous occupations who has suffered an

injury is eligible for compensation. If he dies, his dependents can claim the benefits provided bythe Act. The injury must disable him for more than 3 days, totally or partially. The disablement

means the loss in the earning capacity of a workman in every employment which he was capable

of doing at the time of the accidents. Its effect may be temporary or permanent (Schedule 1). To

get compensation for an occupational disease, a workman must have been employed in the

specified occupation for a continuous period of at least 6 months. If the compensation is not paid

within one month after the date due, a simple interest at 6% per annum on the arrears can be

recovered from the employer.

The compensation is paid to the worker according to the damage:

1. In case of death: 40% of the monthly wage of the deceased workman, multiplied by the

relevant factor or Rs. 20,000; whichever is more.

2. In case of total permanent disablement: 50% of the monthly wage, multiplied by the relevant

factor: or Rs. 24,000; whichever is more.

3. In case of partial permanent disablement: The compensation is a percentage of that payable in

the case of total permanent disablement. The earning capacity is determined by a qualified

medical practitioners.

4. In case of (total or partial) temporary disablement" A sum equal to 25% of the monthly wages

of the workman shall be paid half-monthly.

The minimum rate of compensation is proposed to be raised from 50,000 to Rs. 80,000 for death

and from Rs. 60,000 to Rs. 90,000 in case of permanent/total disablement.

State Government appoint Commissioners to investigate and solve every case for workmen's

compensation. The appointed Commissioner's tribunal has some of the powers of a civil court.

An appeal against any order of the Commissioner can be filed in the High Court. This must be

done within 60 dasy of the order or decision of the Commissioner.

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iii. The payment of gratuity act1972:

The Act provides for the payment of gratuity to workers employed in every factory, shop &

establishments or educational institution employing 10 or more persons on any day of the

proceeding 12 months. A shop or establishment to which the Act has become applicable shallcontinue to be governed by the Act even if the number of persons employed falls bellow 10 at

any subsequent stage. All the employees irrespective of status or salary are entitled to the

payment of gratuity on completion of 5 years of service. In case of death or disablement there is

no minimum eligibility period. The amount of gratuity payable shall be at the rate of 17 days

wages based on the rate of wages last drawn, for every completed year of service. The maximum

amount of gratuity payable is Rs. 3,50,000/-.

Formula is - Last Wages *15*No. of services/26

Nomination : Each employee is required to nominate one or more member of his family, as

defined in the Act, who will receive the gratuity in the event of the death of the employee.

ADMINISTRATIVE MACHINERY : All the Assistant Labour Commissioners and Labour

Officers in the Labour Department have been appointed Controlling Authority and all the Deputy

Labour Commissioners have been appointed Appellate Authority under the Act.

RESPONSIBILITY OF THE EMPLOYEERS : It is the duty of the employer to determine the

amount of gratuity as soon as it becomes payable and to give notice of the same to the person to

whom gratuity is payable and also to the Controlling Authority. The employer shall also provide

to pay the amount of gratuity to the person to whom it is payable. Failure to do so shall render

him liable to pay the interest at the prevailing rate from time taken. In case the employee is not

paid the due amount of gratuity he should apply, ordinarily within thirty days, in Form-I to the

employer. Is an employer fails to pay due gratuity even after the receipt of notice in Form-1, the

claimant employee or his nominee or legal heir, may within ninety days of the occurrence of thecase for the application, should apply in Form-IV, to the Controlling Authority for issuing

direction to the employer. After conducting the enquiry as prescribed, the Controlling Authority

will determine the amount payable and direct the employer to make the payment. If the employer

fails to comply with the direction the Controlling Authority can direct the Collector to recover

the amount due and pay to the applicant.

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PENALTY : The Act provides that whoever makes false statement for the purpose of avoiding

any payment shall be punishable with imprisonment for a term which may extend to six months

or with fine which may extend to ten thousand rupees or with both. An employer who

contravenes any provisions of the Act shall be liable for imprisonment for a term of not less than

three months but which may extend to one year or with fine which shall not be less than ten

thousand rupees but which may extend to twenty thousand rupees or with both. Where the

offence relates to non-payment of gratuity the employer can be punished with imprisonment for a

term which is not less than six months.

iv. Employees provident fund and misc. act1952:

The umbrella legislation relating to provident fund is the Employees' Provident Funds &

Miscellaneous Provisions Act, 1952 (EPF & MP Act). The Act was enacted with the main

objective of making some provisions for the future of industrial workers after their retirement

and for their dependents in case of death. It provides insurance to workers and their dependents

against risks of old age, retirement, discharge, retrenchment or death of the workers. It is

applicable to every establishment which is engaged in any one or more of the industries specified

in Schedule I of the Act or any activity notified by Central Government in the Official Gazette

and employing 20 or more persons.

However, the Act shall not apply to any establishment:-

Registered under the Co-operative Societies Act 1912 or under any other law for the time

being in force in any State relating to co-operative societies employing less than fifty persons

and working without the aid of power; or Belonging to or under the control of the Central

Government or a State Government and whose employees are entitled to the benefits of

contributory provident fund or old age person in accordance with any scheme or rule framed by

the Central Government or the State Government governing such benefits; or Set up under any

Central Provincial or State Act and whose employees are entitled to the benefits of contributory

provident fund or old age person in accordance with any scheme or rule framed under that Act

governing such benefits; or

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Newly set up until the expiry of a period of three years from the date on which such

establishment has been set up.

The Act is administered by the Government of India through the Employees' Provident Fund

Organisation (EPFO). EPFO is one of the largest provident fund institutions in the world in terms

of members and volume of financial transactions that it has been carrying on. It is an

autonomous tripartite body under the control of Ministry of Labour with its head office in New

Delhi. It aims to extend the reach and quality of publicly managed old-age income security

programs through its consistent efforts and ever-improving standards of compliance and benefit

delivery system to its members. This way it seeks to contribute to the economic and social well-

being of the country.

EPFO functions under the overall superintendence of the policies framed by the Central Board of

Trustees, headed by Union Minister for Labour as Chairman. The main functions of the Board

are :-

Administering the funds created and vested in the Board and performing other worksincidental thereto.

Maintaining accounts of income and expenditure in prescribed form and manner. Delegation of powers for administration of the schemes. Submitting audited accounts with comments and annual report on performance of the

Organisation to Government.

The contribution which shall be paid by the employer to the fund shall be eight and one-third

per cent of the basic wages, dearness allowances and retaining allowance (if any) for the time

being payable to each of the employees. While, the employees' contribution shall be equal to the

contribution payable by the employer in respect of him and may if any employee so desires andif the Scheme makes provision therefore be an amount not exceeding eight and one-third per cent

of his basic wages, dearness allowances and retaining allowance (if any), subject to the condition

that the employer shall not be under an obligation to pay any contribution over and above his

contribution payable under the Act.

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The Central Government may by notification in the Official Gazette constitute one or more

Employees' Provident Funds Appellate Tribunal to exercise the powers and discharge the

functions conferred on such Tribunal by this Act and every such Tribunal shall have jurisdiction

in respect of establishments situated in such area as may be specified in the notification

constituting the Tribunal

Whoever for the purpose of avoiding any payment to be made by himself under this Act or of

enabling any other person to avoid such payment, knowingly makes or causes to be made any

false statement or false representation, shall be punishable with imprisonment or with fine or

with both.

vi. Equal remuneration act1976:Equal Remuneration Act, 1976 has been enacted to provide for the payment of equal

remuneration to men and women workers and also for the prevention of discrimination, on the

ground of sex, against women in the matter of employment Remuneration has been defined as

the basic wage or salary, and any additional emoluments whatsoever payable, either in cash or in

kind, to a person employed in respect of employment or work done in such employment, if the

terms of the contract of employment, express or implied, were fulfilled.

Regarding recruitment, the act makes it clear that no employer shall, while making recruitment

for the same work or work of a similar nature, or in any condition of service subsequent to

recruitment such as promotions, training or transfer, make any discrimination against women

except where the employment of women in such work is prohibited or restricted by or under any

law for the time being in force.

The Act also provides safeguarding rights of women by allowing for the complying with the

requirements of any law giving special treatment to women, or to any special treatment accorded

to women in connection with

- the birth or expected birth of a child, or

- the terms and conditions relating to retirement, marriage or death or to any provision

made in connection with the retirement, marriage or death will not be affected by the act.

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ASSIGNMENT-5

Q) what are the various principles of organization. Explain in brief.

Ans) Organisations matter because just about everything that we do occurs within an

organization. The broad aim of this module is to give all students, regardless of academic

background, an introduction to the ideas, theories, models and values used to make sense of

organizations and the way these theoretical insights are applied to understanding different

organizational forms and their competitive significance in an era of global competition. The

module reviews some of the major contributions to management thought, identifies trends in

organizational analysis and management thinking and evaluates theories and research in terms of

their usefulness in understanding and improving management practice.

The organizing process can be done efficiently if the managers have certain guidelines so that

they can take decisions and can act. To organize in an effective manner, the following principles

of organization can be used by a manager.

Principle of Specialization: According to the principle, the whole work of a concern should

be divided amongst the subordinates on the basis of qualifications, abilities and skills. It is

through division of work specialization can be achieved which results in effective organization.

Principle of Functional Definition: According to this principle, all the functions in a concern

should be completely and clearly defined to the managers and subordinates. This can be done

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