1a)Differences between Strategic planning and operational planning Strategic planning 1) It is long term 2) Done at top management 3)It

consists of major goals and policies of an organization and resources to facilities to accomplish the goals 4) It is less detailed , focuses only on long term goals 5)It is based on long term goals and is more uncertain 1b)What are the features of good planning ? i) Uncertainty and minimize risk : In the todays complex organisation , decision making cannot be relied only upon intuition , planning plays a vital role in decision making in such complex situations. Planning provides logical facts and procedures to managers for making decisions. this logical making based on plans to organisation minimizes uncertainty and risk. In a developing country like India, with rapidly changing social and economic conditions, planning helps the managers to cope up with uncertainty and risk. ii) Effective control : Planning sets goals, targets and means to accomplish these goals. These goals and plans become standards or bench marks against which performance can be measured. thus good plan helps effective control on the activities. iii ) Focus attention and concentration on the objectives of the enterprise : planning helps the manager to focus their attention on the goals and activities of organisation.This makes the entire organisation to walk towards the goals and create coordination in accomplishing the goals. iv)Economic operation and leads to success : More planning does not ensure success , but planning leads to success. this is because if the work is planned in advance there will be no confusions arising and things will happen as per plan and achieve goals. This results in economical operation and reduces unquoted expenditure. v)Bridge between present and future : Plans bridge gap between the present and future. there is a vast gap between what we are today and what we want to be in future.A proper and systematic plan forms the bridge between these two. Organisation planning 1) It is short term 2)Done at the lower levels of the management 3)It consists of use of facilities and resources.

4)It is more detailed since it caters to day to day operations and activities of the organisation. 5)It is based on performance and is less certain.

2A) What are the limitations of planning?

A manager's plans are directed at achieving goals. But a planning effort encounters the following limitations: 1. Planning is an expensive and time consuming process. It involves significant amounts of money, energy and also risk,without any assurance of the fulfilment of the organisation's objectives. In view of this,many organisations,particularly the smaller ones,are usually unable to afford a formal planning programme. 2. free within the limits set by it. In an emergency when there is need for the manager to take a quick decision,he may be bogged down by rules and procedures. 3. The scope of planning is said to be limited in the case of organisations with rapidly changing situations. It is claimed that for industries producing fashionable articles or for industries engaged in the publication of textbooks,working on a day-to-day basis is more economical than on a planned basis. 4. Establishment of advance plans tends to make administration inflexible. When unforseen changes in the environment,such as business recession,change in government policy,crop failure etc. take place,the original plan loses its value and there is need to draw up a fresh plan. But there is a tendency to make the original plan work. 5. Another limiting factor in planning is the difficulty of formulating accurate premises. Since these premises are background against which a set of plans is made , they necessarily deal with future. Since the future cannot be known with accuracy, premising must be subject to a margin of error. 6. Planning may sometimes face people's resistance to it. In old,established organisations, managers are often frustrated in instituting a new plan simply by the unwillingness or inability to accept it. Planning sometimes restricts the organisation to the most rational and riskopportunities. It curbs the initiative of the manager and forces him to operate

2B) What is SPAN OF CONTROL? What are the factors influencing it?

Span of management or control refers to the no. of subordinates who report to a manager or the number of subordinates a manager can effectively supervise.
Its also called The Span of supervision. A manager can effectively manage/supervise a limited number of people and this results in the existence of organizational levels. The span of control and organizational levels are inversely proportional to each other. There are two types, Narrow span and Wide span. Narrow span- has many levels. It requires close supervision and control and also fast communication between subordinates and supervisors. Wide span- has few organizational levels. FACTORS INFLUENCING THE SPAN 1. Subordinate Training- well trained subordinates require less time with their managers and also less contact with them. 2. Clarity of Delegation of authority If a manager clearly delegates authority to undertake a well defined task then a well trained subordinate can get it done in minimum of superior time, otherwise, that is when the task is not clearly defined or if there is no authority , either the task will not be performed or the managers spend time guiding and suborninates. 3. Clarity of plan if the plans are well defined, workable, understandable then supervisors time required will be less. Otherwise, the subordinates have to do their own planning and the decisions will require considerable guidance. 4. Use of Objective standards A manager must find either by personal observation or by the use of objective standards if the subordinates are following the plan. Good objective standards reveal any deviation from plans resulting in time consuming relationships. 5. Rate of change- it is important in determining the degree to which policies can be formulated and stability of policies maintained. Explains the organizational structure of the company. 6. Communication techniques- if every plan or instruction has to be communicated by personal contact then a lot of managers time is wasted. Written recommendations by subordinates summarizing imp considerations frequently speed up decision making. 7. Amount of personal contact needed many a times , face to face meetings become necessary. Sometimes situations cannot be handled only by written reports, memorandums, policy statement or other communications where personal contact is not provided. Such cases span of management tends to narrow .

3. a ) What is MBO and MBE? Explain.

Ans) Management by objectives (MBO) is also referred as results management or management by results. Its main aim is to increase the effectiveness of managers by placing responsibility. MBO is a process, in which the General Manager and his subordinates of an organisation jointly identify the common objectives. These objectives must: Work in the same direction for achieving company goals. Clearly define and communicate to all. They can be easily attained. Flexible for making adjustments. The nature of objectives can be of the following types: Short Term: They are set to bring effect within a short time. Long Term: They are set to achieve things in a longer duration. Specific: They are related with the nature of goods, customers, type of production etc. General: They are related with nature of business, profit, growth of company etc. Management by exception (MBE) This principle was first given by F.W.Taylor. According to this principle only unusual or exceptional items of major deviations in daily activities should be brought the notice of the manager. The theory behind this principle is that once a standard is set for a particular activity and if it is going on smoothly, there is no point in informing this to the manager. The six phases in MBE are: Assignment of values often numbered to past and present performances. Else it would be impossible to identify the exception. Projection of meaningful measurements to business objectives and extend to future. Make observation. It is the phase of measurement that informs management about the current state of performance. Comparison of actual performance to identify those exceptions that require the attention of management. Reporting the balance to management. Decision Making: This prescribes the action to be taken to control the performances ,adjust exceptions to changing conditions or utilize opportunity.

3. b) What are planning premises? Explain internal and external premises with examples.
Ans) Planning premises is the process of creating assumptions about the future on the basis of which the plan will be ultimately formulated. Planning premises are important for the success of planning as they reveal facts relating to future.

There are three types of planning premises: Internal and external premises. Tangible and intangible premises. Controllable and uncontrollable premises.

Internal and external premises: Internal premises are premises within the organisation. Examples are: policies, forecasts, investment, availability of equipment, capability of work force, funds flow etc. External premises are premises outside the organisation. Examples are: Government policies, technological changes, business environment, population, economic conditions, buying power, political stability, demand etc.

Q4a. What are the characteristics of small scale industries ?

i) Capital investment is small and most of them have small number of workers. ii)Generally owned by a single or at the most two persons and engaged in production of small goods. iii)Most of them are family owned industries. iv)Workers are not well organized and may do different types of work as need arises. v)Innovation and risk bearing are high. vi)Few of them may grow as medium scale industries. vii)Incidents of early closure are of highest order. viii)Found generally in urban areas. ix)Profit margins are less due to competition. x)Funded by owner's savings or short-term loans.

4b)Write about the need and rationale of small scale industries.

In countries like India where plenty of labour is available and not enough capaital,small scale industries have a vital role to play in the industrialization and economy.Small scale indutries help in providing jobs and improving economy in urban areas. rationale are: i)Innovative

Small units are generally highly innovative.In small scale industries,there will not be enough facilities,machines or resources.To get the jobs done wiith the limited available facilities,innovation arises. ii)Self satisfaction It gives lot of self-satisfaction to workers for having done a good job with limited facilities. iii)Caters to individual taste and styles Small scale industries can change or alter their production according to the changes in taste and fashions of the customers. iv)Small in operation Small scale industries utilize small scale labour,small in operation and leads to satisfaction of the entrepreneur. v)Strength of nation Small scale industries are generally locally owned locally owned and well controlled.This leads to strengthening of a family and other social systems and thus strenghtening of nation. vi)Spread over wide area Unlike large scale industries that are concentreated in one or two places small scale industries are spread over the entire nation leading to uniform development of country. Government is supporting to start small scale industries in backward areas with an aim to improve nation.

5a)Write about steps to start a SSI. >SSIs have a vital role to play in the industrialisation & economy in developing countries. >They have high potential of employment with low capital investment. >The motto underlying the development of SSIs are the increase in the supply of manufactured goods,development of local entrepreneurial talents & skills,promotion of capital formation ,creation of broader employment opportunities and utilizing untapped investment. Various steps in starting a SSI are: 1>Selection of industry. 2>Arrange for know-how technology. 3>Study of resource requirement. 4>Selection of land & premises.

5>Study of investment requirement. 6>Study of requirement of plant & equipment. 7>Study of requirement of raw material & sources of supply. 8>Study of economic viability like marketing & pricing strategy,financing,staffing,SWOT analysis,break even analysis,return on investment. 9>Preparation of project report. 10>Application to financial institutions for loan for fixed assets & working capital. 11>Application to Directorate of Industries for No Objection Certficate,Registration as SSI,Power & Permission. 12>Get NOC & permission from local body. 13>Apply for power connection. 14>Recruit staff & workers. 15>Order for plant & machinery. 16>Order for raw materials. 17>Install the machinery. 18>Trial runs. 19>Production & sales 20>Profits & pay creditors.

5b)Discuss the impact of Liberalization , Privatisation and Globalisation on SSIs.

>Liberalization ,Privatisation and Globalization (LPG) started in India in July 1991. >It has attracted new areas of development ,foreign direct investment & new business areas. Impact of Liberlisation on SSIs: >It has made import of scarce and non-available raw materials easy. >This enabled entrepreneurs to start many SSIs. Ex:tremendous growth in electronics & computer industries. Impact of Privatisation on SSIs: >Earlier certain goods products were produced by Government organisations. As a result of Privatisation, competition grew & entrepreneurs started producing better quality goods at competitive prices. >This helped setting up new SSIs & create more employment opputunities. Ex:privatisation of Telecom sector. Impact of Globalisation on SSIs: >Globalisation led to export of Indian goods acrossthe globe. >Industries & service providers are going global from India. >Indian entrepreneurs in Pharma sector , I.T sector have gone to many countries to start new ventures >Indian entrepreneurs have used the globalisation for the growth of service sectors Hence investments & quality levels in service sectors have increased.

There has been a big growth of entrepreneurial activities in rural India in the areas like food processing,ready-to-eat,export of food products,handicrafts etc.

6a. What are the supporting Government agencies for SSI

Ans : The institutions providing assitance to small scale industries are broadly classified into three categories : 1. All India Institutions 2. State Level Institutions 3. Fund-Based Institutions All India Institutions : All India Institutions supporting entrepreneurs are as below : 1. Small Scale Industries Board 2. National Small Industries Corporation 3. The Khadi and Village Industries Commission 4. Small Industry Development Organisation 5. Training Institutes Small Scale Industries Board : The SSI Board is he apex non statutory advisory body constituted by the Government of India to render advice on all issues pertaining to the SSI sector. It provides a forum for its members for interaction to facilitate cooperation and inter institution linkages, and to render advice to the Government on various policy matters, for the development of small scale industries. National Small Industries Corporation : the NSIC was set up with a view to promote,aide and foster the growth of SSIs in the country, with the focus on commercial aspects of these functions. The Khadi and Village Industries Commission : The KVIC is a statutory body whish is supposed to do the planning, promotion, organization and implementation of programs for the development of Khadi and other village Industries in the rural areas, in coordination with other agencies involved in rural development. Small Industry Development Organization : The SIDO is an apex body, established to assist the Minsitry in formulation, coordinating, implementing and montioring policies and programs for promotion and development of smallscale industries. Training Institutes : There are three national level institutes :

 National Institute of Small Industry Extension Training, Hyderabad, which undertakes operations including training, consultancy, research, education, information services National Institute for Entrepreneurship and Small Business Development , New Delhi, which conducts national and international level training programs in different fields and disciplines Indian Institute of Entrepreneurship,Guwahati was established to act as a channel for entrepreneurship development with its focus on SSIs. State Level Institutions State level institutions supporting entrepreneurs are : 1. State Small Industrial Development Corporations 2. State Directorate of Industries 3. District Industries Centre Fund Based Institutions : Fund based institutions supporting entrepreneurs are : 1. Small Industries Development Bank of India 2. Commercial Banks 3. State Financial Corporations Small Industries Development Bank of India : The SIDBI is operating different programs and schemes through 5 Regional Offices and 33 Branch Offices. The financial assistance is channelized through two routes direct and indirect Commercial Banks : Credit requirement of SSIs is basically of two types : long term loans and working capital. Commercial banks with their extensive network of branches operating nation wide are primary channel for working capital requirement.Banks are required to compulsorily ensure that a defined percentage of their overall lending is made to priority sectors as classified by the RBI. These sectors include agriculture, small industries, export etc. The inclusion of small industries in this list makes them eligible for this earmarked credit. State financial Corporations : The following assistance is provided by the SFC to small scale and medium scale undertakings : Providing long term finance to industrial enterprises having sole proprietary ,partnership, company and cooperative society for of business organizations. Subscribing equity and debentures of industrial enterprises. Providing financial assistance to small and medium enterprises engaged in service sector. Providing working capital loans and meeting various short term needs of their client

6b.What do you mean by decision making ? Explain the characteristics of decision making .
Ans : Decision making is defined as the process of choosing among alternatives. Decision making and choosing the best alternative are probably the most important activities of the planning process. Types of decisions : Pragmatic and Non Pragmatic : Pragmatic decisions are the decisions taken within the purview of the policies, rules or procedures. These are also called programmed or routine decisions. These types of decisions are taken frequently and are repetitive in nature. Non pragmatic decisions are called strategic decisions . These involve heavy expenditure and are generally taken by top management. Individual and collective decisions : Individual decisions are the ones taken by an individual , which are taken if the problem is of routine nature, and define procedures exist. Collective decisions are taken by a group of individuals. It has advantages like increased acceptance, better communication and better coordination. It has disadvantages like delay in arriving at a decision, group may be indecisive, groups may need to compromise etc Minor and major decisions : Minor decisions are those that are related to day-today and periodical occurrences. Major decisions are those taken by top management. Strategic and Routine decisions : Strategic decisions are similar to major decisions and are taken by top management. Routine decisions are related to day-to-day operations or an organization. Temporary and permanent decisions : Temporary decisions are the decisions taken on a temporary basis, like a solution until a solution is found. Permanent decisions are taken on a permanent basis.

7) Write about 5 Industrial Policy Resolutions from 1956 to 2004. (10 Marks)
The importance of SSI in the industrial development of the country led to the establishment of various policies which highlight the intent of the government in developing small scale industries(SSI) .A brief overview of these policies has been given below: Industrial Policy Resolution 1956: The main aim of the policy put forth in 1956 was to ensure that the decentralized sector gained enough self-support, protection and development. 128 items were reserved for production in small sectors. A board was set up called the Small Scale Industries Board(SSIB) whose sole purpose was to examine and formulate a plan for the development of SSIs. Over the following years between 1961-1966 projects such as Rural Industries Project and Industrial Estate Project were started to strengthen the SSI sector.

Industrial Policy Resolution 1977: The main aim of the 1977 IPR policy was to promote cottage and small scale industries in rural ans urban areas. A new classification was established which categorized SSI into three categories:

a) Cottage and house hold industries: These SSIs provide employment on a large scale and also focuses on self employment. b) Tiny sector: This sector deals with investment in industrial units in plants and in the form of machinery upto Rs 1 lakh and is usually established in towns with a small population of less than 50000 according to the 1971 census. c) Small Scale Industries: All SSIs comprising of industrial investment of upto Rs 10 lakhs and in case of ancillary units with an investment upto Rs. 15 lakhs. This policy further reserved 504 items for exclusive production in SSI. The proposal to establish District Industry Centre(DIC) in each district to provide support in develpoing the SSI was also made in this plan.

Industrial Policy Resolution 1980: This policy was adopted on July 23rd , 1980. The main objective of this policy was to facilitate an increase in industrial production through optimum usage of current resources and also expansion of industries. This objective was achieved by increasing the ceiling value from i) Rs. 1 lakh to Rs. 2 lakhs for tiny industries ii) Rs 10 lakhs to 20 lakhs in case of small scale units iii) rs. 15 lakhs to Rs. 25 lakhs for ancillaries. DICs were replaced by Nucleus Plants The policy promoted villages to generate economy by setting up village and rural industires.

Industrial Policy Resolution 1990: This policy was adopted in June 1990. The main objective of the policy was to set up SSIs to generate wage and selfemployment opportunities in villages. Some of the topics emphasized in this policy are:

a)Investment ceiling for tiny units was increased to Rs. 5 lakhs, provided the unit is located in an area having a population less than 50,000 as per 1981 census. b) Investment ceiling for SSI was increased to Rs. 60 lakhs. c)Investment ceiling for ancillary units was increased to Rs. 75 lakhs. d)A scheme of central investment specific to SSI in rural and backward areas was established. e)The Small Industries Development Bank of India(SIDBI) was also established in 1990 to ensure timely and adequate flow of credit facilities to SSIs. f) 836 items were reserved for exclusive manufacture in SSIs. g) Emphasis to establish special cell in SIDO for developing and training women entrepreneurs. New Small Enterprise policy 1991: This policy was proposed in August 1991. The main objective was to improve the growth rate of sector which in turn contributes the policy is to improve the growth rate of sector which in turn contributes to economic growth.Some of the features of this policy are:

a)Investment ceiling for tiny units was increased to Rs. 5 lakhs, irrespective of the location. b)To give priority to small and tiny sector in the allocation of raw materials. c)Introduction of services to help the problems of delayed payments to small sector. d)To widen the scope of the National Equity Fund(NEF) to enlarge single window scheme and associate commercial banks with provision for corporate loans. e)Introduction of limited partnership. f) To set up Technology development cell and Export Development Centre(EDC) in the Small Industry Development Organization(SIDO). g)Introduction of Integrated Infrastructural Development(IID). h)Market promotion of small scale industry products. Industrial policy resolution 2000: This policy focuses on the SSI and tiny sector. Some of the objectives of this policy are as follows: a)The exemption for excise duty limit was raised to Rs. 1 crore to improve competitiveness. b)Credit linked capital subsidy of 12% against loans for technology upgradation was provided in specific industries. c)Limit of investment was increased in industry related service and business enterprises to Rs. 10 lakhs. d)Limit of composite loan was increased to Rs. 25 lakhs. f)IID was enhanced to cover various areas across the country.

g)The family income eligibility limit was increased to Rs. 40000 per annum. Industrial policy resolution 2001-02: This policy made the following improvements:

a)The investment limit was raised to Rs. 5 crore for units in hosiery and hand loom sectors. b)The corpus fund set up under the Credit Guarantee Fund Scheme was increased to 200 crores. c)14 items were de-reserved related to leather goods,shoes and toys. d)Market Developement Assistance Scheme was launched exclusively for SSI sector. Industrial policy resolution 2003-04: The policy introduced the following changes:

a)73 items were de-reserved related to chemical products,leather,reagents etc. b)Selective enhancement of investment was done to Rs. 5 crores. c)Banks were directed to provide credit to SSI sector. d)The composite loan limit was increased to Rs. 50 lakhs. e)The limit of dispensation of collateral requirement was raised to Rs. 25 lakhs based on good record and financial position of the unit. f)Specialized bank branches were set up for SSIs. g)Small and Medium Enterprise(SME) fund of Rs 10000 crore was set up to take care of the issue of inadequate finance for SSIs.

8) Write a note on Standing Plans .

(10 marks)

Based on thier use , plans are of two types. 1) Single use plans : Useless after achieving target. 2) Standing plans : Designed for situations that often repeat. Standing plans These are policies,procedures, rules and methods of any organization. 1] Policies ->Policy is verbal,written or implied guide setting up boundaries that supply the general limits and direction in which managerial action takes place. ->Top level activity ->Fulfill the objectives of organization ->Do not require study or analysis 2] Procedures

->Detailed guidelines at action level ->Departmental activity ->They guide to implement policies ->Require thorough study and analysis of work 3] Rules ->Detailed and recorded instructions that a specific action must or must not be done under given instructions ->It is different from policy and procedure as it is not a guide and not a sequential procedure 4] Methods ->prescribed way in which one step of procedure is to be carried out. ->part of procedure ->It helps in increasing effectives of procedure.