QUESTION BANK

B.E ELECTRONIC AND COMMUNICATION

SUBJECT: INDUSTRIAL MANAGEMENT
PAPER CODE: HUM-712
Section A,7TH Semester
UNIT-1
[1] ( BE-VII/12(A), 231091 /Odd Sem.)
Q1 . a) Define the term Entretreneur and intrapreneur. Explain the attributes of a successful
entrepreneur .
b) Illustrate the role of entrepreneurship in Indian economy. (20)

[2] ( BE-VII/12(A), 241913 /Odd Sem.)

Q1. Define entrepreneurship. Explain the main characteristics of entrepreneurship.
Describe briefly entrepreneurship as a career option for technocrats in India. (20)

[3] ( BE-VII/12(A), 241913 /Odd Sem.)

Q2. What do you mean by Partnership? Explain its main advantages and disadvantages.(20)

[4] ( BE-VII/12(A), 2416965 /Odd Sem.)

Q2. What do you mean by Sole Proprietorship? Discuss its main advantages and
disadvantages. (20)

[5] ( BE-VII/12(A), 220812/Odd Sem.)

Q1.What is entrepreneurship? Explain briefly the role of entrepreneurship in an economic
development of a country. (20)
UNIT-II
[6] ( BE-VII/12(A), 231091 /Odd Sem.)
Q4 . Discuss the Nature, Structure and role of collective bargaining. Outline an ideal process
of collective bargaining (20)

[7] ( BE-VII/12(A), 241913 /Odd Sem.)

Q2. Explain the function of Trade Union.
(20)

[8] ( BE-VII/12(A), 231091 /Odd Sem.)

Q4.Write Short notes on any two (20)
a)Trade Union
b) Economic Reforms
c) Collective bargaining

[9] ( BE-VII/12(A), 231091 /Odd Sem.)

Q3. What are the main causes of Industrial conflicts and how these disputes can be settled?

(20)
[10] ( BE-VII/12(A), 241913 /Odd Sem.)
Q3. What is workers participation in management? State the factors influencing the
participation.
 Important Questions-Answers of unit-1 and unit-2 combined
B. E. Electronics and Communication
SUBJECT: Industrial Management (HUM 712)
SECTION :-A,7th Semester

Q1. V1. Define entrepreneurship. Explain the main characteristics of entrepreneurship.

Describe briefly entrepreneurship as a carrer option for technocrats in India. (20)

[1] ( BE-VII/12(A), 231091 /Odd Sem.)

V2 . What is entrepreneurship? Explain briefly the role of entrepreneurship in an

economic development of a country. (20)

[4] ( BE-VII/12(A), 220812/Odd Sem.)

Solution:- Entrepreneurship is defined as the process of designing, launching and running a

new business, which typically begins as a small business, such as a startup company, offering
a product, process or service for sale or hire. It has been defined as the "...capacity and
willingness to develop, organize, and manage a business venture along with any of its risks in
order to make a profit."Entrepreneurship is the act of being an entrepreneur,which can be
defined as one who undertakes innovations,finance and business acumen in an effort to
transform innovations into economic goods. This may result in new organizations or may be
part of revitalizing mature organizations in response to a perceived opportunity. The most
obvious form of entrepreneurship is that of starting new businesses.

According to A.H.Cole, Entrepreneurship is the purposeful activity of an individual or a

group of associated individuals, undertaken to initiate, maintain or organize a profit-oriented
business unit for the production or distribution of economic goods and services.
The term entrepreneur is defined as an individual who organizes or operates a business or
businesses.
 Characteristics of Entrepreneurship:

Entrepreneurship is characterized by the following features:

1. Economic and dynamic activity:

Entrepreneurship is an economic activity because it involves the creation and operation of an
enterprise with a view to creating value or wealth by ensuring optimum utilisation of scarce
resources. Since this value creation activity is performed continuously in the midst of
uncertain business environment, therefore, entrepreneurship is regarded as a dynamic force.

2. Related to innovation:
Entrepreneurship involves a continuous search for new ideas. Entrepreneurship compels an
individual to continuously evaluate the existing modes of business operations so that more
efficient and effective systems can be evolved and adopted. In other words, entrepreneurship
is a continuous effort for synergy (optimization of performance) in organizations.

3. Profit potential:
Profit potential is the likely level of return or compensation to the entrepreneur for taking on
the risk of developing an idea into an actual business venture. Without profit potential, the
efforts of entrepreneurs would remain only an abstract and a theoretical leisure activity.

4. Risk bearing:
The essence of entrepreneurship is the willingness to assume risk arising out of the creation
and implementation of new ideas. New ideas are always tentative and their results may not be
instantaneous and positive.

Entrepreneurship as a career option for technocrats in India

Start a New Business Concept:-
An individual come up with a new idea for an innovative business.He/she figure out what
resources are needed to launch it -- money, retail space, equipment, employees -- and get
started.

Buy a Franchise:-
Some who have a strong desire to own their own business and be their own boss choose
to buy a franchise. A franchise is defined as an agreement between a small business
owner, the franchisee, and the parent company, the franchiser. The parent company gives
the franchisee the right to sell the company's products and often provides support services
like advertising and supplier relationships, in return for a franchise fee and percent of the
profits. Franchising is a very common -- for example, many of the largest fast food chains
are franchisers -- and it can offer an entrepreneur the advantage of starting out with a
well-known brand and business model. But that can come at the cost of sharing your
profits and losing some of the independence and control entrepreneurs value.

Buy an Existing Business:-

If there's no innovative idea than one might consider buying an existing business. This
offers the chance to start out with an established small business that already has an
income stream and a core set of customers. One can run his own show without having to
go through the initial start-up phase. But it's critically important to do a thorough job of
evaluating the business before buying it, and to understand that existing customers will
lose if owner don't manage the business at least as well as the outgoing owner.

Copy an Existing Concept:-

Find a great local business started by someone else. If there's nothing like it in ones own
community, he/she can study it and transfer it to his community or to a place he want to
live. There is a need of thorough research and be sure that a "match" exists between the
concept and demographics of where you choose to locate the business.

Become a One Person Firm:-

Individual can subcontract his skills and become a one person consulting or services firm.
Individual have the advantage of being highly focused and can offer his clients lower
costs, specialized services, and greater flexibility than they would have if they tried to
hire full-time employees with the same skills. A great many professional, technical, and
clerical specialists have chosen this career path. Companies find it easier and cheaper to
subcontract out work rather than hiring folks that they may have just laid off in their last
round of cost-cutting -- or may have to lay off next week or next year. It allows them to
stay lean and flexible.

Start a "Work at Home" Business:-

This is one of the important areas in the economy today. Many small business ideas can
be launched from home. This can involve everything from stuffing envelopes to running
an EBay business or starting your own web site.
Q2. What do you mean by Partnership? Explain its main advantages and disadvantages.(20)

[3] ( BE-VII/12(A), 241913 /Odd Sem.)

Solution:- The proprietorship form of ownership suffers from certain limitations such as limited
resources, limited skill and unlimited liability. Expansion in business requires more capital and
managerial skills and also involves more risk. A proprietor finds him unable to fulfill these
requirements. This call for more persons come together, with different edges and start business.
For example, a person who lacks managerial skills but may have capital. A partnership is an
arrangement where parties, known as partners, agree to cooperate to advance their mutual
interests. The partners in a partnership may be individuals, businesses, interest-
based organizations, schools,governments or combinations. Organizations may partner together to
increase the likelihood of each achieving their mission and to amplify their reach. A partnership
may result in issuing and holding equity or may be only governed by a contract.

Main Features:
The main features of partnership form of business ownership/organisation are as follows:

1. More Persons:
As against proprietorship, there should be at least two persons subject to a maximum of ten
persons for banking business and twenty for non-banking business to form a partnership firm.

2. Profit and Loss Sharing:

There is an agreement among the partners to share the profits earned and losses incurred in
partnership business.

3. Contractual Relationship:
Partnership is formed by an agreement-oral or written-among the partners.

4. Existence of Lawful Business:

Partnership is formed to carry on some lawful business and share its profits or losses. If the
purpose is to carry some charitable works, for example, it is not regarded as partnership.

5. Utmost Good Faith and Honesty:

A partnership business solely rests on utmost good faith and trust among the partners.

6. Unlimited Liability:
Like proprietorship, each partner has unlimited liability in the firm. This means that if the
assets of the partnership firm fall short to meet the firms obligations, the partners private
assets will also be used for the purpose.

7. Restrictions on Transfer of Share:

No partner can transfer his share to any outside person without seeking the consent of all
other partners.
8. Principal-Agent Relationship:
The partnership firm may be carried on by all partners or any of them acting for all. While
dealing with firms transactions, each partner is entitled to represent the firm and other
partners. In this way, a partner is an agent of the firm and of the other partners.

Advantages:
As an ownership form of business, partnership offers the following advantages:
1. Easy Formation:
Partnership is a contractual agreement between the partners to run an enterprise. Hence, it is
relatively ease to form. Legal formalities associated with formation are minimal. Though, the
registration of a partnership is desirable, but not obligatory.
2. More Capital Available:
The sole proprietorship suffers from the limitation of limited funds. Partnership overcomes
this problem, to a great extent, because now there are more than one person who provide
funds to the enterprise. It also increases the borrowing capacity of the firm. Moreover, the
lending institutions also perceive less risk in granting credit to a partnership than to a
proprietorship because the risk of loss is spread over a number of partners rather than only
one.
3. Combined Talent, Judgement and Skill:
As there are more than one owners in partnership, all the partners are involved in decision
making. Usually, partners are pooled from different specialised areas to complement each
other. For example, if there are three partners, one partner might be a specialist in production,
another in finance and the third in marketing. This gives the firm an advantage of collective
expertise for taking better decisions. Thus, the old maxim of two heads being better than
one aptly applies to partnership.
4. Diffusion of Risk:
The entire losses are borne by the sole proprietor only but in case of partnership, the losses of
the firm are shared by all the partners as per their agreed profit-sharing ratios. Thus, the share
of loss in case of each partner will be less than that in case of proprietorship.
5. Flexibility:
Like proprietorship, the partnership business is also flexible. The partners can easily
appreciate and quickly react to the changing conditions. No giant business organisation can
stifle so quick and creative responses to new opportunities.
6. Tax Advantage:
Taxation rates applicable to partnership are lower than proprietorship and company forms of
business ownership.
 Disadvantages:

There are certain drawbacks also associated with the partnership form of business
organisation.
1. Unlimited Liability:
In partnership firm, the liability of partners is unlimited. Just as in proprietorship, the
partners personal assets may be at risk if the business cannot pay its debts.

2. Divided Authority:
Sometimes the earlier stated maxim of two heads better than one may turn into too many
cooks spoil the broth. Each partner can discharge his responsibilities in his concerned
individual area. But, in case of areas like policy formulation for the whole enterprise, there
are chances for conflicts between the partners. Disagreements between the partners over
enterprise matters have destroyed many a partnership.

3. Lack of Continuity:
Death or withdrawal of one partner causes the partnership to come to an end. So, there
remains uncertainty in continuity of partnership.

4. Risk of Implied Authority:

Each partner is an agent for the partnership business. Hence, the decisions made by him bind
all the partners. At times, an incompetent partner may lend the firm into difficulties by taking
wrong decisions. Risk involved in decisions taken by one partner is to be borne by other
partners also.
Q3 . a) Define the term Entretreneur and intrapreneur. Explain the attributes of a successful
entrepreneur .
b) Illustrate the role of entrepreneurship in Indian economy. (20)

[2] ( BE-VII/12(A), 241913 /Odd Sem.)

Solution:- According to A.H.Cole, Entrepreneurship is the purposeful activity of an

individual or a group of associated individuals, undertaken to initiate, maintain or organize a
profit-oriented business unit for the production or distribution of economic goods and
services.
The term entrepreneur is defined as an individual who organizes or operates a business or
businesses while Intrapreneurship is the act of behaving like an entrepreneur while
working within a large organization. Intrapreneurship is known as the practice of a corporate
management style that integrates risk-taking and innovation approaches, as well as the reward
and motivational techniques, that are more traditionally thought of as being the province of
entrepreneurship
A successful entrepreneur must possess the following traits:

1. Mental Ability

Mental ability consists of intelligence and creative thinking. An entrepreneur should be

intelligent and must have an analytical mind.

2. Clear Objectives

An entrepreneur should have a clear objective as to the exact nature of the business, nature of
the goods to be produced and ancillary activities to be undertaken. A successful entrepreneur
must have the objective to establish his product in the market, make profit and also render
social service.

3. Business Secrecy

An entrepreneur must be able to guard business secrets. Leakage of business secrets to trade
competitors is a serious matter which should be carefully guarded against by an entrepreneur.

4. Decision making

Running a business requires taking a number of decisions. Hence, an entrepreneur should

have the capacity to analyse the various aspects of the business for arriving at a decision.

5. Risk-bearing

No-risk, no business or no-risk, no gains. There is an element of risk in every business,

hence an entrepreneur should be prepared to accept failure in its proper perspective and view
failure as a challenge and opportunity.
ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

The entrepreneur is the key to the creation of new enterprises that energise the economy and
rejuvenate the established enterprises that make up the economic structure. Entrepreneurs
initiate and sustain the process of economic development in the following ways :

1. Capital formation : Entrepreneurs mobilise the idle savings of the public through the
issues of industrial securities. Investment of public savings in industry results in productive
utilisation of national resources. Rate of capital formation increases which is essential for
rapid economic growth. Thus, an entrepreneur is the creator of wealth.

2. Improvement in per capita income : Entrepreneurs locate and exploit opportunities. They
convert the talent and idle resources like land, labour and capital into national income and
wealth in the form of goods and services. They help to increase net national product and per
capita income in the country, which are important yardsticks for measuring economic growth.

3. Improvement in living standards : Entrepreneurs set up industries which remove scarcity

of essential commodities and introduce new products. Production of goods on mass scale and
manufacture of handicrafts, etc., in the small scale sector help to improve the standard of life
of a common man. These offer goods at lower costs and increase variety in consumption.

4. Economic independence : Entrepreneurship is essential for national self-reliance.

Industrialists help to manufacture indigenous substitutes of hitherto imported products
thereby reducing dependence on foreign countries. Businessmen also export goods and
services on a large scale and thereby earn the scarce foreign exchange for the country. Such
import substitution and export promotion help to ensure the economic independence of the
country without which political independence has little meaning.

5. Backward and forward linkages: An entrepreneur initiates change which has a chain
reaction. Setting up of an enterprise has several backward and forward linkages. For example,
the establishment of a steel plant generates several ancillary units and expands the demand
for iron ore, coal, etc. These are backward linkages. By increasing the supply of steel, the
plant facilitates the growth of machine building, tube making, utensil manufacturing and such
other units. Entrepreneurs create an atmosphere of enthusiasm and convey a sense of purpose.
They give an organisation its momentum. Entrepreneurial behaviour is critical to the long
term vitality of every economy. The practice of entrepreneurship is an important to
established firms as it is to new ones.

6. Generation of Employment : At the beginning of seventh five year plan the backlog of
unemployment was estimated to be around 44 million persons. At present, the number of
unemployed in the country is far greater than what it was during 1985. Emphasis on
modernisation which usually results in automation, use of high technology, and technology
up gradation initiated during 1980s and structural changes introduced by the Government
during 1990s are likely to give much rise to capital-intensive rather than labour intensive
industry. It is feared that there will be very little additional job opportunities within the fold
of organised public and private sectors. Most of the job opportunities in future are likely to be
emerging from informal and unorganised sectors of economy. Entrepreneurship development
training which helps in strengthening informal and unorganised sector is expected to motivate
enterprising people to opt for self employment and entrepreneurial career. It will therefore,
help in solving the problem of increasing unemployment to some extent.

7. Harnessing Locally Available Resources and Entrepreneurship : India is considered to

be very rich in natural resources. In spite of about five decades of planned development a
large number of states have remained economically backward. A few large scale industries
started by entrepreneurs from outside the state in an economically backward areas may help
as model of pioneering efforts, but ultimately the real strength of industrialisation in
backward areas depend upon the involvement of local entrepreneurship in such activities :
Increased activities of local entrepreneurs will also result in making. use of abundantly
available local resources.

8. Balanced Regional Growth : Medium and large scale industries can only be started with
huge investment which is either available with well established industrial houses or need to
be drawn from public exchequer. Also, promotion of such industries does not help in reducing
disparities of income and wealth. On the other hand, an important advantage of small scale
enterprises is that they can be started with meager financial resources and little or no
previous experience or entrepreneurial background.

9. Reducing Unrest and Social Tension Amongst Youth : Many problems associated with
youth unrest and social tension are rightly considered to be due to youth not being engaged in
productive work. In the changing environment where we are faced with the problem of
recession in wage employment opportunities, alternative to wage career is the only viable
option. The country is required to divert the youth with latent entrepreneurial traits from
wage career to self-employment career. Such alternate path through entrepreneurship could
help the country in defusing social tension and unrest amongst youth.

10. Innovations in Enterprises : Business enterprises need to be innovative for their survival
and better performance. It is believed that smaller firms have relatively higher necessity and
capability to innovate. The smaller firms do not face the constraints imposed by large
investment in existing technology. Thus they are both free and compelled to innovate: The
National Science Foundation, an organisation in USA found that small companies produce
four time more innovations per research dollar than do bigger companies. Entrepreneurship
development programmes are aimed at accelerating the pace of small firms growth in India.
Increased number of small firms is expected to result in more innovations and make the
Indian industry compete in international market.
Q4. V1. Discuss the Nature, Structure and role of collective bargaining. Outline an ideal
process of collective bargaining.
[6] ( BE-VII/12(A), 241913 /Odd Sem.)

V2.Write a note on collective bargaining (20)

[8 c] ( BE-VII/12(A), 231091 /Odd Sem.)

Solution:- Collective Bargaining is a process in which the management and employee

representatives meet and negotiate the terms and conditions of employment for mutual
benefit. Collective bargaining involves discussion and negotiation between two groups as to
the terms and conditions of employment. It is termed Collective because both the employers
negotiators and the employees act as a group rather than individuals. It is known as
Bargaining because the method of reaching an agreement involves proposals and counter-
proposals, offers and counter offers. There should be no outsiders involved in the process of
collective bargaining.

According to Filppo , Collective bargaining is a process in which representative of a labour

organization and the representatives of business organization meet and attempt to negotiate a
contract or agreement , which specifies the nature of employee employer union
relationship.

Nature of Collective Bargaining:

1. It is a collective process.
2. The representatives of both workers and management participate in bargaining.
3. It is a continuous process.
4. It establishes regular and stable relationship between the parties involved.
5. It involves not only the negotiation of the contract, but also the administration of the
contract.
6. It is a flexible and dynamic process. The parties have to adopt a flexible attitude
through the process of bargaining.
7. It is a method of partnership of workers in managemenent.

Structure of Collective Bargaining

The term bargaining structure refers to the level Local, regional, industrial or national at which
bargaining takes place. One important determinant of bargaining structure is the nature of
bargaining issues. Some issues, like wages, which have wide implications, are handled within
expanded bargaining structure. Other issues, such as pensions and insurance plans, are best treated
on a company wide basis because of the need of uniformity created by actuarial and
administrative considerations. Finally there are questions of work rules, safety, washing facilities
that are essentially local in nature and must be related to the conditions that prevail in a particular
plant or department. Plant level bargaining is generally useful in that the settlement is tailored to
the condition of the enterprise e.g. its capacity to pay, its market conditions etc.
Collective Bargaining Process

There are two stages in collective bargaining, viz.,

1. The negotiation stage and
2.The stage of contract administration.
1. The negotiation stage
Negotiation, conciliation, mediation and arbitration are the four methods used for settlement
of industrial disputes in India. While last three are based upon the participation by outsiders,
negotiation presupposes the existence of two parties to a dispute eager to negotiate and settle
mutually? [There is no scope for third party intervention It relies only bipartite dialogue.
Thus, through negotiation both parties (representatives of labour and employer) may arrive at
mutually settled agreement. An agreement arrived at through negotiation or discussion
between the representatives of both the parties that is through collective bargaining .As a
treaty, it aims at reduction of disputes. However, problems arise only when the
Negotiating machinery breaks down in practice and the issue continue to be unresolved.

a) Identification of Problem:-
The nature of the problem influences whole process. Whether the problem
is very important, that is to be discussed immediately or it can be postponed for some other
convenient time, whether the problem is minor that it can be solved with the other party, is
acceptance on its presentation and does not need to involve long process of collective
bargaining process etc. It also influences selection of representatives, their size, period of
negotiations and period of agreement that is reached ultimately. As such, it is important for
both the parties to be clear about the problem before entering into the negotiations.
b) Preparing for Negotiations
When it becomes necessary to solve the problem through collective
bargaining process, both the parties prepare themselves for negotiations. The preparation
starts with selection of representatives. Such representatives should be selected who can carry
out negotiations With patience, composure and who can present their view effectively. After
selection, they should be fed with complete problem and its pros and cons. His powers and
authority during negotiations also should be clearly spelt out. Other preparations include
fixing up time for negotiations, period of negotiations etc. However, once the parties enter
into negotiations the period of negotiations may vary depending upon circumstances.
c) Negotiations of Agreement
Usually there will be a chief negotiator from management side. He
directs and acts as presiding officer of the process. The chief negotiator presents the problem,
its intensity, nature, and the views to both the parties. During negotiations, the representatives
should be attentive as to find out what the other party is arguing for the purpose. The
representatives tend to think about what counter arguments they can present and how to say
no effectively, while the other party is presenting its own views. This is a major obstacle in
the bargaining process. By understanding their problems and weighing them, sometimes a
better solution may be reached, which is more acceptable to both the parties. Therefore, it is
important that representatives should reach negotiating table with positive attitudes. When a
solution is reached at, it is put on the paper, considering concerned legislations. Both the
parties concerned sign the agreement that in turn, becomes a binding contract for both the
parties.
2) Contract Administration
Implementation of the contract is as important as making a contract.
Management usually distributes the printed contract, its terms and conditions throughout
organization. The union takes steps to see that all the workers understand the contract and
implement it. From time to time depending upon changing circumstances, both the parties
can make mutually acceptable amendments.

The tactics or strategies to be adopted in any collective bargaining situation vary widely,
depending upon the culture of the organization and different environmental factors, particularly
the type of union operating in an industrial establishment. Nevertheless, the followings are some
of the common strategies to make collective bargaining exercise more meaningful:
1. It is essential that a real team spirit is maintained throughout the negotiations.
2. The management has to anticipate the demands and understand the main directions in
which the demands are going to be placed. Negotiations are best done if both the parties do
their home- work well
3. Collective bargaining is two-way traffic. The management as well as the union must gain
out of collective bargaining. Hence, the management team should also present their
counter-proposals. For instance, the union pressure for a wage-hike may be matched by a
counter demand for an increase in production, reduction in absenteeism, avoidance of
wasteful/restrictive practices, industrial peace, and so on.
4. There is a greater necessity on the part of the management representatives to give a patient
hearing to the demands of the union and not to react even if there is a threat of strike or
work stoppage.
Q2. V1. Explain the function of Trade Union. (20)

[7] ( BE-VII/12(A), 241913 /Odd Sem.)

V2.Write a note on Trade Union (20)

[8 a] ( BE-VII/12(A), 231091 /Odd Sem.)

Solution The trade union is an association, either of employees or employers or of

independent workers. It is a relatively permanent combination of workers and is not
temporary or casual. It is an association of workers engaged in securing economic benefits
for its members.

Definition
According to Section 2(h) of the Trade Unions Act, 1926, a trade union is any combination of
persons, whether temporary or permanent, primarily for the purpose of regulating the
relations between employees and employers, or between employers and employees or
between employers and employers or for imposing restrictive conditions on the conduct of
any trade or business, and includes the federation of two or more trade unions.

The major objectives of trade union are the followings

1. Better wages
2. Better working conditions
3. Protection against exploitation
4. Protection against victimization
5. Need- based provisions of the welfare measures
6. Promote industrial peace
7. Take up Collective Bargaining [Win-Win]
8. Look after the interests of trade and business

Functions of Trade Unions

As per the Indian Trade Union Act, 1926, the primary function of a trade union is to protect
and promote the interests of the workers and the conditions of their employment. They can
also have other objectives, which are not inconsistent with this primary purpose or opposed to
any law. In India, trade unions generally undertake the following functions

(i) To achieve higher wages and better working and living conditions
for the members.
(ii) To acquire control over running of the industry by workers.
(iii) To minimize the helplessness of the individual workers by making them stand-up united
and increasing their resistance power through collective bargaining; protecting the members
against victimization and injustice by employers.
(iv) To raise the status of the workers as partners in industry and citizens of society by
demanding an increasing share for them in the management of industrial enterprise.
(v) To generate self-confidence among the workers.
(vi) To encourage sincerity and discipline among workers.
(vii) To take up welfare measures for improving the morale of the workers.
The National Commission on Labour has underscored certain basic functions to which trade
unions have to pay greater attentions such as
(i) To secure fair wages for workers.
(ii) To safeguard the security of tenure and improve conditions of service.
(iii) To enlarge opportunities for promotion and training.
(iv) To improve working and living conditions.
(v) To provide for educational, cultural and recreational facilities.
(vi) To cooperate and facilitate technological advancement by broadening the understanding.
(vii) To promote identity of interests of the workers with their industry.
(viii) To offer responsive cooperation for improving levels of production and productivity as
well as high standards of quality.
(ix) To promote individual and collective welfare.
(x)To enforce discipline among the employees

Besides these basic functions of trade unions, the Commission enjoined the following
responsibilities upon the unions
(i) Promotion of national integration.
(ii) Generally, influencing the socio-economic policies of the community through the active
participation in their formulation at various levels.
(iii) Instilling in their members a sense of responsibility to industry
and the community.

The trade union performs various other functions under theses heads:-

a) Function Relating to trade union members

1. To safeguard workers against all sorts of exploitation by the employees.

2. To protect workers from atrocities and unfair labour practices of the management.
3. To ensure healthy , safe and conducive working conditions.
4. To ensure a desirable standard of living by providing various types of social services-
health, housing, education etc.
5. To guarantee social justice to workers.
6. To make the workers aware of their rights.
7. To raise the status of the trade union members in the industrial organisation and in the
society at large.
8. To remove dissatisfaction and redress the day to day grievences.

b) Function Relating to Industrial organisation

1. To highlight industrial organisation as a joint enterprise between workers and
management and to promote identity of interest.
2. To increase production quantitatively as well as qualitatively, by laying down the
norms of production and ensuring their adequate observance.
3. To help in maintenance of disciple.
4. To create opportunities for workers participation in management and to strengthen
labour-management cooperation.

c) Function Relating to Trade union organisations

1. To formulate policies and plans consistent with those of the industrial organisation and
society at large.
2. To improve financial position by fixing higher subscription , by realising the union
dues and by organising special fund- raising campaign.
3. To preserve and strengthen trade union democracy.
4. To eradicate various types of ism, regionalism within the trade union movement.
 5. To save the union organisation from the exploitation by vested interest- personal and
political.

d) Function Relating to Society.

1. To render all sorts of constructive co-operation in the formulation and implementation
of plans and policies relating to national development.
2. To actively participate in the development of programmes of national development e.g.
national integration.
3. To enable oraganised sectors to organise itself.
4. To launch special campaigns against the social evils of corruption , nepotism,
communalism, hoarding etc.
Q4 ii)Write a note on Economic Reform. (10)

[8 b] ( BE-VII/12(A), 231091 /Odd Sem.)

Solution:The strategy of reforms introduced in India in July 1991 presented a mixture of

macroeconomic stabilization and structural adjustment. It was guided by short-term and long-
term objectives. Stabilization was necessary in the short run to restore balance of payments
equilibrium and to control inflation. At the same time changing the structure of institutions
themselves through reforms was equally important from long term point of view.In the year
1990s there has been crisis in the Indian market like, rising food prices, fall in foreign
exchange reserve, poor performance of public sector undertakings, huge domestic and foreign
debt, Gulf crisis.

India asked for bailout loan from IMF, in return IMF demanded reforms. In response to such
crisis the government led by P.V Narsimha Rao decided to introduce economic reforms. This
New Economic Policy was inaugurated by former Prime Minister P.V. Narasimha Rao under
the guidance his FM Manmohan Singh.

Major Steps in the 1991 Reforms

The major policy initiatives taken by the Government to fundamentally address the balance
of payments problem and the structural rigidities\ were as follows:

Fiscal Reforms: A key element in the stabilization effort was to restore fiscal discipline..
Some of the important policy initiatives introduced in the budget for the year 1991-92 for
correcting the fiscal imbalance were: reduction in fertilizer subsidy, abolition of subsidy on
sugar, disinvestment of a part of the governments equity holdings in select public sector
undertakings,. These recommendations aimed to raise revenue.

Trade policy Reform:- Trade policy means the policy by which the foreign trade is
controlled and regulated. New initiatives were taken in trade policy to create an environment
which would provide a stimulus to export while at the same time reducing the degree of
regulation and licensing control on foreign trade. The main feature of the new trade policy as
it has evolved over the years since 1991 are as follows:

Reduction in restriction f export and import.

Reduction in Export Import Tax.

Easy procedure for Export and import.

Provide Incentives for export (Export oriented units).

Monetary and Financial Sector Reforms: - Monetary reforms aimed at doing away with
interest rate. Some of the measures undertaken were:
Bringing changes in reserve Requirements: reduction in statutory liquidity ratio (SLR)
and the cash reserve ratio (CRR) in line with the recommendations of the
Narasimham Committee Report, 1991. It was proposed that the CRR brought down to
10 percent (from the earlier 25 percent) over a period of four years.
 Banks were given freedom to relocate branches and open specialized branches
Guidelines were given for opening new private sector banks

Capital Market Reform.The market in which securities are sold and bought is known as the
capital Market..Following were the reforms made in capital market

SEBI given statutory status.

Private sectors have been permitted to establish Mutual Funds.
The Registration of Sub Brokers has been mandatory.

Industrial Policy Reforms: . The New Industrial Policy established in 1991 sought
substantially to deregulate industry so as to promote growth of a more efficient and
competitive industrial economy. Its focus was on Liberalisation, Globalisation and
Privitisation.The central elements of industrial policy reforms were as follows:
Industrial licensing was abolished for all projects except eexcept the six industries,
Distillation and brewing of alcoholic drinks, Cigars and Cigarettes and manufacturing
tobacco substitute, Defense Equipments. Industrial explosives i.e. gunpowder,
Hazardous Chemicals, Drugs and Pharmaceuticalsin.
The Monopolies & Restrictive Trade Practices (MRTP) Act was repealed to eliminate
the need for prior approval by large companies for expansion or diversification.
Areas reserved for the public sector were narrowed down and greater participation by
private sector was permitted in core and basic industries.
Q3.What are the main causes of Industrial conflicts and how these disputes can be settled?
(20)

[9 ] (B.E VII/12(A) -231091/ Odd Sem)

Solution:-Conflict is a process in which an effort is purposefully made by one person or unit

to block another that results in frustrating the attainment of others goals or the furthering
of his or her interests. Conflict can be analysed at

Individual level
Goal Conflict
Role Conflict
Interpersonal Conflict
Intergroup Conflict

The analysis of conflict start at individual level because organisation is composed of

individuals and many conflict may arise at this level. Though there should be two parties to
the conflict, it may arise within an individual because of lack of smooth progression of the
need drive- goal cycle. Within an individual, there are usually a number of competing goals
and roles. Thus, there may be a goal conflict and role conflict within an individual.

In an organisational setting, there may be several forms of interpersonal conflicts such as

hierarchical conflict between various levels of management, functional conflict between
occupational specialists and so on. These conflict may be interpreted in two forms: vertical
conflict and horizontal conflict.Group exists in every organisation both at formal as well as
informal level. There may be conflict within the group or conflict among groups. Intergroup
conflict arises because of interaction of various groups.

Economic Causes Of Industrial Conflict

Wages: These include workers discontent regarding payment of inadequate wages or non
payment of it as expected, allowances, bonus, benefits, incentives and other economic
components that are part of periodic payments to workforce. Economic causes in nature
include non payment of such dues and the timing of payments like delayed payments,
employers tactic to withhold such dues and absence of communicating the reasons thereof.
Since the cost of living index is increasing, workers generally bargain for higher wages to
meet the rising cost of living index and to increase their standards of living.

Bonus: Bonus is a sum of money added to a person's wages as a reward for good
performance. Bonus has always been an important factor in industrial disputes. 6.7% of the
disputes were because of bonuses.

Non Economic Causes Of Industrial Conflict

Retrenchment and Closure: Retrenchment means involuntary separation of an employee
due to the replacement of labor by machines or the close of the department. Retrenchment
and closure of establishment have also been an important factor which accounted for
disputes.

Layoff: Due an apprehension about shortfall in market demand of products produced or drill
in managements profit is predicted or when there is a cut in production due to any other
reason, managements resort to lay off its workers. This layoffs lead to industrial dispute.

Hours of Work: There are legal provisions and remedies about hours of work and overtime
pay. When workers are employed beyond the regulated hours of work, there are
accepted practices to pay remuneration for such extra work at higher rates. Sometimes
managements refuse to comply with such norms, or where there is no clearly defined
norm managements refuse workers demand as excessive. This lead to industrial
dispute.

Leave Annual and Casual: Not allowing leaves have not been so important causes of
industrial disputes. During 2010, 0.05% of the disputes were because of not granting
leave.

Indiscipline and violence: The number of disputes caused by indiscipline has shown an
increasing trend. In 2010, 29.9% of disputes were caused because of indiscipline,
which rose up to 36.9% in 2012.

Lockout caused by a Strike: A strike for any reason unacceptable to employer leads to
corresponding lockout by employer. This is a situation of industrial dispute.

Management Practices: Management practices also leads to industrial disputes:

Management sometimes use threats and coercion regarding terms and conditions of
employment and sometimes refusal to comply with settlements and awards arrived at
before. Management sometimes refuse to recognize majority trade union, discuss
matters with representative trade union and act in arbitrary manner. Management
sometimes dismiss workers in arbitrary manner, discriminate, victimize, etc.

Trade Union Practices: There are trade union practices also, which causes industrial dispute.
Multiplicity of trade unions is a thing, in which management choose to discuss with
some unions and the other unions refuse to accept that the settlement. This often leads
to industrial disputes. Handling disciplinary action is a very critical task to be
performed by the senior managers.
METHOD OF SETTLING DISPUTES
There are two broad categories for settling disputes between labour and management :-
a) Self settlement
b) Assisted (External ) Settlement.
a) Self Settlement: - In self Settlement method , the two parties settle their internal
quarrel themselves, without the assistance of any outside third party.
b) Assisted (External ) Settlement:- In assisted settlement method, settlement between
two parties is reached with assistance of an outside third party, such as minister or
govt.
The various common method of settling industrial disputes are :-
1. Collective bargaining
 2. Conciliation
3. Arbitration
4. Adjudication

1. Collective Bargaining: - is a self settlement method by direct negotiation between the

representative of the employers and the employees. It is a process of negotiation
between company and union representatives in an attempt to reach an agreement on
the terms and conditions of employment such as wages, hours of work , working
conditions, bonus, health, safety etc.

2. Conciliation:- is a process by which representations of workers and employers are

brought together before a third party with a view to persuading them to arrive at an
agreement by mutual discussion between them. The Industrial Dispute Act 1947, and
other state enactment authorise the government to appoint conciliators charged with
the duty of mediating in and promoting the settlement of industrial dispute. If
conciliation fails the next stage is compulsory adjudication or parties may take their
own decision. The parties can accept or reject the decision. In case settlement is
arrived they can record the settlement or send a failure report to the government.

3. Adjudication :- means a mandatory settlement of industrial dispute by labour court

or industrial tribunal or national tribunal under the industrial dispute act.

4. Arbitration:-It is a semi judicial type of assisted settlement in which the third party
i.e. the arbitrators decision has a legal compulsion. It is accepted and implemented by
disputing parties. The third person arbitrator is chosen by agreement between the
employer and employees.
Q3. What is workers participation in management? State the factors influencing the
participation. (20)
[10](B.E VII/12(A) -241913/ Odd Sem)

Solution:- Workers participation in Management is a process by which subordinate

employees, either individually or collectively, become involved in one or more aspects of
organizational decision making within the enterprises in which they work. Workers
participation is also known as labour participation or employee participation in
management. Workers participation in management implies mental and emotional
involvement of workers in the management of Enterprise. It is considered as a mechanism
where workers have a say in the decision.

According to Keith Davis, Participation refers to the mental and emotional involvement of a
person in a group situation which encourages him to contribute to group goals and share the
responsibility of achievement.

According to Walpole, Participation in Management gives the worker a sense of importance,

pride and accomplishment; it gives him the freedom of opportunity for self-expression; a
feeling of belongingness with the place of work and a sense of workmanship and creativity.

The objectives of workers participation in management are as follows:

To raise level of motivation of workers by closer involvement.
To provide opportunity for expression and to provide a sense of importance to
workers.
To develop ties of understanding leading to better effort and harmony.

To act on a device to counter-balance powers of managers.

To act on a panacea for solving industrial relation problems.

Levels of Participation

There are following five levels of participation.

1. Information participation: It ensures that employees are able to receive information and
express their views pertaining to the matters of general economic importance.
2. Consultative participation: Here works are consulted on the matters of employee welfare
such as work, safety and health. However, final decision always rests at the option of
management and employees views are only of advisory nature.
3. Associative participation: It is extension of consultative participation as management here
is under moral obligation to accept and implement the unanimous decisions of employees.
4. Administrative participation: It ensure greater share of works in discharge of managerial
functions. Here, decision already taken by the management come to employees, preferably
with alternatives for administration and employees have to select the best from those for
implementation.
5. Decisive participation: Highest level of participation where decisions are jointly taken on
the matters relation to production, welfare etc. is called decisive participation.

Factors influencing participation

1. Reduced industrial unrest: Industrial conflict is a struggle between two organized

groups which are motivated by the belief that their respective interests are endangered
by the self-interested behavior of the other. Participation cuts at this very root of
industrial conflict.
2. Reduced misunderstanding: Participation helps dispelling employees
misunderstanding about the outlook of management in industry.

3. Increased organization balance: If worker are invited to share in organizational

problems, and to work towards common solutions, a greater degree of organizational
balance occurs because of decreased misunderstanding of individual and group
conflict. Participation leads to increased understanding throughout the organization.
People learn that others have problems beside themselves.

4. Higher productivity: Increased productivity is possible only when there exists fullest
co-operation between labor and management. It has been empirically tested that poor
labor management relations do not encourage the workers to contribute anything
more than the minimum desirable to retain their jobs. Thus, participation of workers
in management is essential to increase industrial productivity.

5. Increased Commitment: An important prerequisite for forging greater commitment

is the individuals involvement and opportunity to express himself. Participation
allows individuals to express themselves at the work place rather than being absorbed
into a complex system of rules, procedures and systems. If an individual knows that
he can express his opinion and ideas, a personal sense of gratification and
involvement takes place within him. This, in turn, fortifies his identification with the
organization resulting in greater commitment.

6. Industrial democracy: Participation helps to usher in an era of democracy in

industry. It is based on the principle of recognition of the human factor. It tends to
reduce class conflict between capital and labor. It also serves as a support to political
democracy.

7. Development of Individuals: Participation enhances individual creativity and

response to job challenges. Individuals are given an opportunity to direct their
initiative and creativity towards the objectives of the group. This facilitates individual
growth.

8. Less resistance to change: When changes are arbitrarily introduced from above
without explanation, subordinates tend to feel insecure and take counter measures
aimed at sabotage of innovations. But when they have participated in the decision
making process, they have had an opportunity to be heard. They know what to expect
and why. Their resistance to change is reduced