Questionnaire

Questionnaire*
Reform of Public Sector Undertakings (PSUs)

in India Today: A Study based on a Survey of
Top and Middle Level PSU Managers
for middle and top level managers of PSUs in India
The study is being carried out by Profs. Sebastian Morris and SK Barua
of the Indian Institute of Management, Ahmedabad
and is supported by the Shastri Indo-Canadian Institute, New Delhi
Please do read the instructions carefully and after filling in the

schedule kindly mail to
Prof. Sebastian Morris Ph: 079-6306896 (FAX)

Indian Institute of Management, Ahmedabad 079-6307241 (PBX)
Vastrapur 079-6306380 (D)
AHMEDABAD 380015 079-6308093 (R)
email: morris@iimahd.ernet.in
* website of IIMAs SOE REFORM STUDY

http://www.iimahd.ernet.in/psuindia
You may download this schedule from http://www.iimahd.ernet.in/psuindia/shastri/questionnaire.pdf
Survey of PSU Managers, December 2000 1

INSTRUCTIONS
Dear Manager,
Since the ‘liberalisation’ of the economy, the environment of PSUs has undergone substantial change. Given the
stated objectives of government to divest and privatise, entry of private firms into markets earlier reserved for
public sector, many PSUs would have responded to these changes in some manner. Currently the government is
pursuing disinvestment, which is driven more by budgetary considerations. It is not yet clear as to how strong is
the intention of the government to improve the task orientation and performance of PSUs through increased
autonomy to the managers.
This study is focussed on managers of PSUs, with a view to understand how they have understood, and interpreted
the changes. Managers’ views and diagnoses as regards the public sector situation and the remedies have not yet
been a focus of serious analyses. As a result, little is known about this aspect in a formal and statistically reliable
manner. As academics in the field of management we do think that your views and opinions are most important
in the construction of an overall strategy of reform and change. We are therefore concerned with your views,
feelings and opinions, however different they may be from conventional wisdom or from those of your organisation
or government. The study is motivated by the belief that true change can occur only when a critical mass of top
and middle level managers internalise a particular form of change and push it through. Such change would of
course presume that managers have the autonomy or the space to push through the changes.
We urge you to respond freely. Your response would be kept completely confidential. It would be used only for
academic purposes, and never in way that reveals either the identity of the company or the individual.
The survey is planned to cover a fairly large number of managers and board members in PSUs, and we hope that
the analysis would be useful to the government and policy makers in their design of programs for change including
privatisation and disinvestment. The analyses and findings would also be useful in our research and training.
The schedule of questions and issues that we have raised in the survey would require about an hour of your time.
We have gone ahead with a rather detailed schedule, so that we can understand your responses holistically. Your
cooperation is the key to the success of the study, and we thank you in advance for your response.
We promise to make available the findings of this study as soon as we are ready. The study has the formal
approval of the government of India, and is being sponsored by the Indo-Shastri Canadian Institute. The project
team consists of S. K. Barua, and Sebastian Morris (coordinator).
We have set up a website, which ought to evolve into a resource for those concerned with the reforms pertaining
to SOEs. Please do visit the site: http://www.iimahd.ernet.in/psuindia. We will be putting the principal tabulations
on this site for your convenience. We would be obliged for your comments. Our deepest thanks for taking time off
to respond to this schedule.
Sebastian Morris
SK Barua
2 Indian Institute of Management, Ahmedabad

Reform of PSUs in India Today:
A Study based on a Survey of Top and Middle Level PSU Managers
(QUESTIONNAIRE)
1. Your name
2. Organisation where
you work presently
3. Years of work in the 4. Description of

Line Staff other
present organisation present position (a)
5. Description of CEO board member/ top middle

present position (b) director management management
6. How many years have you been

in your current position?
7. Functional experience in middle management levels and above. Based on your own assessment and past
experience, in which of the following areas have you had adequate experience? (You may encircle /tick more
than one option if you think you have diverse experience).
General Finance/audit/ Production/ Commercial/ HRD/personnel/

management acounting engineering marketing and labour
advertising management
Purchase/ R&D/design Computers/ Law/ any

vendor and MIS company other
development development secretaryship
8. Your background. Please feel free to encircle/ tick as many of the items below as apply to you.
graduate/ doctoral other belonged at belonged at one

post graduate degree in Engg./ doctoral one time to the time to the
in Engg. Science degree IAS/Central Indian Manage-
services cadre ment Pool
continue to be management/ Chartered have other have significant

part of IAS/ MBA degree Accountant technical/ experience
central services degree/ professional in the
cadre ICWA etc degree private sector
any other aspect? (Please write)

worked in have significant worked
three or more experience of only
organisations working in in the
government PSUs

Please read all the options under a topic and then tick in the appropriate column to reflect your
view/opinion/feeling. You may avoid answering some of the options only if you have absolutely no
familiarity with the underlying issue.
Objectives
Objectives of an enterprise go far beyond those that are actually stated, many may not be truly intended and
the top management could deviate from them with time. How important are the following objectives in actual
practice (as you have inferred or sensed)? (Tick any of the options from very important to Not at all)
In what manner have the following objectives changed over the nineties: Has the importance attached to each of
the following increased (+), remained unchanged (0) or decreased (-)? (Please use the last column marking +, 0,
or - as your response may be).
Very Quite A little Hardly Not at all +/0/-
1. Financial performance
2. Achieving dominant position through higher market share
3. Being in the forefront of technology
4. Maximizing shareholders value
5. Providing employment
6. Serving the needs of the governing political masters
7. Serving the needs of the governing bureaucracy
8. Serving the needs of the top management
Functioning of the board

We would like to have your impressions about the working of the boards of PSUs. It is not necessary that you
should have been part of the board of any PSU at any point of time. Rather, your impressions and feelings are
important. How do you feel about the following statements? (Tick any of the options from strongly agree to
strongly disagree)
Strongly Agree Neither Dis- Strongly
Agree agree disagree
1. The boards of PSUs have little independence.
2. The government nominees on the board, in a situation of conflict be-

tween the government and the company, would typically go against
the interests of the company.
3. Appointment of independent external directors has served a very use-

ful purpose.
4. The nominees of financial institutions and joint venture partners play a

positive role, which is in the interest of the company.
5. The board is only a mask and the real power lies elsewhere with the
concerned ministry.

The PSU as State
Some observers have argued that entities with major government ownership being treated as State constitutes
a major drag on the performance of PSUs. (Tick any of the options from strongly agree to strongly disagree)

1. Although courts have ruled PSUs to be state, there is scope for com-
mercial orientation within this constraint
2. The status of state constrains PSUs in the settlement of labour related

disputes in relation to similarly placed large private corporations
3. Observers contend that disinvestment below 50% will free the PSU of
this constraint and would bring autonomy in decision making. Do you
agree?
The Bureau of Public Enterprise(BPE)/Dept of Public Enterprise(DPE)

Your impressions about the influence of BPE/DPE on the working of PSUs. It is not necessary that you should have
personally dealt with BPE/DPE at any point of time. But impressions and feelings are important. (Tick any of the
options from strongly agree to strongly disagree)

1. While the BPE/DPE has no authority, its involvement in a staff capacity

in activities like project clearance and the MoUs result in delays in
decision making.
2. Cash rich and large PSUs, PSUs with greater bargaining power or with
a powerful CEO were never constrained by the BPE guidelines.
3. There is no justification now for BPEs role in an advisory or policy-

making capacity, since most large PSUs have boards with external
directors
Vigilance
Your impressions about the vigilance inquiries faced by managers in the PSUs. How do you react to the following
statements? (Tick any of the options from strongly agree to strongly disagree)

1. A vigilance inquiry adversely affects a managers self esteem even

when he/she is not corrupt.
2. Vigilance inquiries on managers are part of the routine, and they need
not affect careers of managers if they have not deliberately made a
mistake.
3. Vigilance inquiries are sometimes politically motivated to punish par-

ticular managers and could derail the careers of bright managers.

4. Fear of vigilance increases risk-avoiding behaviour of managers.
5. Many PSU managers use vigilance as an excuse for their own lack of
initiative and dynamism.
6. Most vigilance inquiries have proven to be correct ex-post, in the sense

that the concerned managers were corrupt or had gained personally.
7. Most vigilance inquiries look into situations of oversight or neglect of

rules and procedures rather than intention to defraud or gain person-
ally.
8. Many vigilance inquiries are pointless in the sense that many manage-
rial decisions could result in superficial loss, which the vigilance may
fail to understand.
9. Vigilance has rarely uncovered any important case of fraud and cor-
ruption by powerful managers and civil servants.
10. Fear of vigilance in restricting managerial performance has declined in

the 90s
11. Politically motivated vigilance inquiries have declined in the 90s.
12. The number of vigilance cases has increased in the 90s.
The Auditor and the PSU

Your impressions about the appraisal of companies by the Auditor. How do you feel about the following? (Tick any
of the options from strongly agree to strongly disagree)

1. Statutory Audit (SA) exists only to appraise the PSUs performance.
2. SA is the only way by which moral hazard or adventurous behaviour

in PSUs can be curbed.
3. SA has been able to prevent corruption in PSUs.
4. SA is entirely ex-post hoc, so it is not useful to management in decision

making.
5. In many PSUs there is a supra-CEO authority in the Statutory Auditor.
6. Audit queries lead to risk-avoiding behaviour of managers.
7. Audit constraint does not exist for the truly dynamic managers who
can always work around audit with appropriate explanations.
8. The fear of audit has declined in the 90s

The Concerned Administrative Ministry
Your impressions about the influence of the concerned ministries on PSUs. It is not necessary that you should
have been personally interacting with the ministry officials rather your feelings about them are important. How do
you feel about the following: (Tick any of the options from strongly agree to strongly disagree)
1. Administrative ministries wield much power over PSUs.
2. Administrative ministries are generally staffed with people who do not

have the requisite skills or experience to deal with PSUs.
3. The administrative ministry also interferes in administrative and op-

erational decisions, employment rules, labour relations.
4. The concerned ministry interferes much more today in the working of

the PSUs than what it did in yesteryears.
5. The ministrys involvement in PSUs has become far more functional

and restrained in the nineties
The PSU and Parliament

Questions about the working of PSUs are often raised in the Parliament. How would you react to the following
statements? (Tick any of the options from strongly agree to strongly disagree)
1. Parliament is truly concerned with the functioning and efficiency of the

PSUs
2. Top management has to devote considerable time and resources trying

to provide answers for the frequent questions raised by the parliament.
3. The administrative ministry/holding company usually answers all ques-

tions on behalf of the PSU.
4. Many of the questions raised by Parliament are part of routine and call
for information, which is anyway publicly available/or made available
with little effort.
5. With proper information gathering and retrieval systems, as well as

Management Information Systems (MIS), parliamentary questions
should not take up much time.
6. Without the pressure of parliamentary questions, many PSUs would

drift away from their social goals.
7. Parliamentary questions do not directly affect managers, so they dont

have to worry about them.
8. Parliament is today concerned more with debating privatisation rather

than worrying about performance improvement.
9. The fear of Parliament questions can be used by managers to thwart

dysfunctional interference by politicians and civil servants.

CEOs of PSUs
The question of what type of CEOs have been able to deliver thus far in the Indian public sector system remains
little known and is controversial. How would you respond to the following statements? (Tick any of the options
from strongly agree to strongly disagree)
1. CEOs have to be very politically savvy to be able to manage civil ser-

vants politicians and board members.
2. CEOs have a great deal of responsibility without having the requisite
power to deliver.
3. The task of PSU CEOs is typically more challenging than that of simi-
larly placed private sector CEO.
4. The power the CEO commands vis-à-vis the government depends a
great deal on the performance of his/her company.
5. The power the CEO commands vis-à-vis the government depends a
great deal on the size of his/her company.
6. Managing the external boundary of the organisation (esp. with the
Administrative Ministry) becomes the chief task ot the CEO.
Privatisation
There is a lot of debate amongst policy makers, managers, government on the advantages and disadvantages of
privatisation. How do you feel about the process of privatisation? (Tick any of the options from strongly agree to
strongly disagree)
1. Privatisation will result in efficient and effective use of resources.

2. Proposal of divestment is meant only for increasing the revenue of the
government and not for any serious operational improvements.
3. MoUs or contract plans could have worked well had government given
the PSU the required autonomy.
4. Government will never really give the PSUs requisite autonomy.
5. Privatisation is the only option which will result in greater autonomy
and responsibility at all levels.
6. But it might take away job security.
7. Work culture will change drastically with Privatisation.
8. PSU are inefficient because they are cash strapped. Instead of
Privatisation availability of more funds will increase their efficiency.
9. Social objectives of the PSUs will be ignored .
10. Prices of goods and services provided by PSUs will increase with
privatisation.
11. Monitoring by shareholders will be more effective with Privatisation.
12. The existing monitoring system is adequate enough although it some-
times leads to delays.
13. PSUs are not particularly slow in decision-making and also implemen-
tation compared to leading large private corporations.

14. Involvement of external consultants (to benchmark functioning of the
PSUs and to determine strategies) will be more effective than any change
in ownership
15. It is important that the correct mode of Privatisation be pursued for it
to lead to better performance
16. Without Privatisation PSUs will not be able to respond to the chal-
lenges of Globalisation.
Sources of Constraints Today

Since the many changes in policy and environment in the nineties, the constraints to good performance and
growth could possibly have changed. What are the constraints today? How significant are the following in con-
straining PSUs today? (Tick any of the options from very important to not at all important)
A relaxation or loosening of the constraint over the nineties we would call improvement (+), no change (0), and
a tightening of the constraint (-). Please respond in the last column bringing out the change in the constraint over
the last few years. (Please write in the last column +, 0 or -)
Very Quite some- Hardly Not at +/0/-
imp. imp. what all a
const. const. imp. const.
1. Internal procedures and processes
2. Procedures insisted upon by Government
3. Interface with the bureaucracy
4. Interface with the administrative ministry
5. Politicians and powerful civil servants
6. Vigilance
7. Statutory Audit
8. Parliament (Committees and Questions)
9. Legal status of PSUs being State
10. Labour inflexibility
11. Quality of management
12. Lack of resources to modernise
13. Lack of resources in general
14. Continuing price controls
15. Corruption within the organisation
16. Govt policies /controls
17. Inability to retain highly skilled managers and technicians
18. Any other? (Please mention if selected)
19. Any other? (Please mention if selected)
If you were forced to pick the two most important constraints that effects most PSUs First Second
today then what would those be? (Please enter serial no from the previous question)

Dimensions of Autonomy
Rate the folllowing aspect /dimensions of decision making in terms of the autonomy that managers of PSUs
actually have today. (Please tick selecting from a great deal to nothing at all).
Also indicate whether on that aspect there has been an improvement (+), no change (0), or a deterioration, over
the nineties, in the autonomy that managers have over that particular aspect. (Please use the last column to enter
+, 0 or -).
a great much some hardly nothing +/0/-
deal auto- any at all
nomy
1. Recruitment of managerial staff
2. Recruitment at senior top management levels
3. Labour administration in general
4. Performance incentives for labour
5. Performance incentives for management
6. Pricing
7. Financing in general
8. Raising capital from the market
9. Technology and equipment choice
10. Joint ventures and tie-ups
11. Investments and projects
12. Locational choice of projects
13. Contracts and purchase
14. Managerial remuneration
15. Workers remuneration
16. Diversification, expansion
17. Disinvestment decision N. A.
18. Any other? (Please mention)
Ownership Structure and Management Control

What in your view is the desirable ownership structure in general after reform? (Please encircle /tick at best two
options)
majority with majority with govt; with bare majority with govt; bare majority with
govt; with little significant ownership with the rest largely govt; with the rest
disinvestment by other parastatals disbursed among largely held by a
of govt. and FIs small shareholders private partner
large minority govt. large minority with very little govt very little govt
holding with sign. govt; with much of the holding; and holding but rest with
holding by rest disbursed among generally single/ few large
private groups small shareholders disbursed private parties

In a situation where the majority of PSUs are privatised, in your view it would be desirable (in most cases) to
(choose from the options below any one):
retain retain dominant govt holding such that it govt holding small so
govt holding of govt so that would necessarily have that it has to give up
majority govt has veto to share power/control nearly all
power with other groups control
Please choose one of yes, no or cant say to the questions /statements below: (Please chose cant
say only if you really cannot chose either of yes or no)
Non govt. shareholding in PSUs after disinvestment should be sufficiently dis-

persed /held by FIs /workers such that the threat of management takeover is yes no cant say
minimised. Do you agree?
Shares at discounted prices should be sold to workers and employees to create a

yes no cant say
positive interest among them towards privatisation.
A golden share for government would become necessary in many cases. yes no cant say
A golden share for government would arise only in a rare situation. yes no cant say
Multinationals must be kept out from the disinvestment process. yes no cant say
Multinationals must not be allowed to control PSUs after they are privatised. yes no cant say
While MNCs should be allowed to participate in disinvestment, but a handicap

yes no cant say
should be provided for domestic buyers.
There should be no restriction on MNCs buying up stock of privatising PSUs. yes no cant say
The surpluses from divestment of profitable PSUs should be used to pay off em-
yes no cant say
ployees in other firms for which only asset sales are possible.
In disinvestment, the entire portfolio of PSUs should be considered, so that the

yes no cant say
value realised for the portfolio as a whole is maximised.
In many sectors lack of regulatory institutions and policy (especially with regard
yes no cant say
to competition) stand in the way significant disinvestment.
Profitability and current cash flows should be the principal basis in valuation for
yes no cant say
offloading the shares.
Capital market valuations of the stock should be an important guide in pricing of

yes no cant say
shares offered for sale.
Govt should go ahead with disinvestment without waiting for a clear cut and
yes no cant say
acceptable policy for labour especially as regards retrenchment.
No serious restructuring is possible without a clear cut retrenchment policy that

yes no cant say
has the acceptance of unions.
For significant and transparent privitisation it would be necessary to set up a

yes no cant say
constitutional and expert authority.

Government has to keep itself off from the operational aspects of privaisation,
yes no cant say
once it defines the strategy and policy
Privatisation in India would only progress in fits and starts yes no cant say
Today there is a consensus among the elite for privatisation yes no cant say
Privatisation in India has little chance of taking place in a transparent and corrup-
yes no cant say
tion free manner
Your own statements on disinvestment:
1.
2.
3.
Groups /forces for disinvestment or privatisation

From which quarters /factors do the pressures for disinvestment and privatisation arise? Please rate the following
factors /quarters: (Please tick choosing from predominantly from to never from against each group of force).
predomi- very in some hardly never

nantly much manner from from
from from from
Workers and unions
Junior managers
Supervisors
White collar workers
All empoyees
Administrative Ministry
Politicians and senior civil servants
Top management
Middle level management
Dependent businesses like subcontractors, dealers etc
Mass media
Foreign Financial Institutions
Multilateral Agencies
Finance Ministry
Declining budgetary resources
Low internal generation of resources

Groups /forces acting against disinvestment /privatisation
From which quarters /factors do the pressures against disinvestment and privatisation arise? Please rate the
following factors /quarters: (Please tick choosing from predominantly from to never from against each group of
force).
predomi- very in some hardly never
nantly much manner from from
from from from
Workers and unions
Junior managers
Supervisors
White collar workers
All empoyees
Administrative Ministry
Politicians and senior civil servants
Top management
Middle level management
Dependent businesses like subcontractors, dealers etc
Mass media
Foreign Financial Institutions
Multilateral Agencies
Finance Ministry
Declining budgetary resources
Low internal generation of resources
We would like to have your response to the following questions/ statements which finally confirm and summarise
your views.
a) There is no need for privatisation of most PSUs agree disagree
b) Reform and restructuring by giving more autonomy to PSUs is politically,

agree disagree
legally and administratively possible
c) Labour retrenchment is the problem/s

most important one of the many not significant
in the reform of PSUs
d) Significant privatisation would require

agree disagree cant say
setting up of a special constitutional body.

e) The particular privatisation
process followed by the most to a large to some
marginally not at all
government would necessarily certainly extent extent
be in the national interest
f) Would you like to receive a copies of the studies based on this survey ? yes no
g) Any other comments / statements thay you would like to make?
Thanking you
Professor Sebastian Morris

Professor SK Barua
Indian Institute of Management
Ahmedabad

Indian Institute of Management, Ahmedabad (IIMA) was set up by the Government of India in
collaboration with the Government of Gujarat and Indian Industry as an autonomous institution in 1961.
The Institute provides education, training, consulting and research facilities in management. The major
programmes conducted by the Institute are as follows:
Two-Year Post-Graduate Programme in Management (equivalent to MBA)
Fifteen-month Post-Graduate Programme in Agri-Business Management
Fellow Programme in Management (equivalent to Ph.D.)
Management Development Programmes (MDPs) for industry, business, agriculture and rural sectors,
and public systems covering health, education, transport and population. In the last 36 years, over
30,000 persons have participated in these MDPs
Faculty Development Programme for teachers in universities and colleges
Disciplinary Areas : Business Policy, Communications, Economics, Finance and Accounting, Marketing,
Organizational Behaviour, Personnel and Industrial Relations, Production and Quantitative Methods
Interdisciplinary Centres and Groups : Centre for Management of Agriculture, Centre for Regional
Management Studies, Computer and Information Systems Group, International Management Group,
Public Systems Group, Ravi Mathai Centre for Educational Innovation
Shastri Indo-Canadian Institute

The Shastri Indo-Canadian Institute (SICI) is a unique educational enterprise that promotes understanding
between India and Canada, mainly through facilitating academic activities. The Institute funds research,
links institutions in the two countries, and organizes seminars and conferences. It is named after Lal
Bahadur Shastri, the Prime Minister of India from 1964 to 1966 and a distinguished mediator and statesman.
Founded in 1968 with a grant from the Indian government, the Institute began by encouraging Canadian
teaching and research on India. Focussing on the humanities and the social sciences, it funded fellowships
and distributed books and journals to the libraries of its Canadian member institutions. The Institutes
success in sparking interest in India studies among Canadian academics led to a greater interest in
Canada among Indian scholars. In the early 1980s, SICI began to promote Canadian studies in India
and, in the late 1980s, it expanded its activities into development studies.
Shastri membership has expanded from four to twenty-one Canadian universities and the Canadian
Museum of Civilization; its scope has expanded as well to include law, management, education, and the
arts. Recognizing the importance of reaching a broader public, the Institute has launched summer
programmes for Canadians in India, binational conferences, a project for microfilming historical and
cultural documents in India, and a programme that sends distinguished speakers to both countries and
more recently an International youth Internship programme as well as programme which brings members
of the media from India to Canada and from Canada to India.

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Questionnaire*

Reform of Public Sector Undertakings (PSUs)

for middle and top level managers of PSUs in India

Please do read the instructions carefully and after filling in the

Prof. Sebastian Morris Ph: 079-6306896 (FAX)

* website of IIMAs SOE REFORM STUDY

Survey of PSU Managers, December 2000 1

2 Indian Institute of Management, Ahmedabad

3. Years of work in the 4. Description of

5. Description of CEO board member/ top middle

6. How many years have you been

General Finance/audit/ Production/ Commercial/ HRD/personnel/

Purchase/ R&D/design Computers/ Law/ any

graduate/ doctoral other belonged at belonged at one

continue to be management/ Chartered have other have significant

any other aspect? (Please write)

Survey of PSU Managers, December 2000 3

2. Achieving dominant position through higher market share

3. Being in the forefront of technology

4. Maximizing shareholders value

6. Serving the needs of the governing political masters

7. Serving the needs of the governing bureaucracy

8. Serving the needs of the top management

Functioning of the board

1. The boards of PSUs have little independence.

2. The government nominees on the board, in a situation of conflict be-

3. Appointment of independent external directors has served a very use-

4. The nominees of financial institutions and joint venture partners play a

4 Indian Institute of Management, Ahmedabad

Strongly Agree Neither Dis- Strongly

2. The status of state constrains PSUs in the settlement of labour related

The Bureau of Public Enterprise(BPE)/Dept of Public Enterprise(DPE)

Strongly Agree Neither Dis- Strongly

1. While the BPE/DPE has no authority, its involvement in a staff capacity

3. There is no justification now for BPEs role in an advisory or policy-

Strongly Agree Neither Dis- Strongly

1. A vigilance inquiry adversely affects a managers self esteem even

3. Vigilance inquiries are sometimes politically motivated to punish par-

Survey of PSU Managers, December 2000 5

4. Fear of vigilance increases risk-avoiding behaviour of managers.

6. Most vigilance inquiries have proven to be correct ex-post, in the sense

7. Most vigilance inquiries look into situations of oversight or neglect of

10. Fear of vigilance in restricting managerial performance has declined in

11. Politically motivated vigilance inquiries have declined in the 90s.

12. The number of vigilance cases has increased in the 90s.

The Auditor and the PSU

Strongly Agree Neither Dis- Strongly

1. Statutory Audit (SA) exists only to appraise the PSUs performance.

2. SA is the only way by which moral hazard or adventurous behaviour

3. SA has been able to prevent corruption in PSUs.

4. SA is entirely ex-post hoc, so it is not useful to management in decision

5. In many PSUs there is a supra-CEO authority in the Statutory Auditor.

6. Audit queries lead to risk-avoiding behaviour of managers.

8. The fear of audit has declined in the 90s

6 Indian Institute of Management, Ahmedabad

1. Administrative ministries wield much power over PSUs.

2. Administrative ministries are generally staffed with people who do not

3. The administrative ministry also interferes in administrative and op-

4. The concerned ministry interferes much more today in the working of

5. The ministrys involvement in PSUs has become far more functional

The PSU and Parliament

1. Parliament is truly concerned with the functioning and efficiency of the

2. Top management has to devote considerable time and resources trying

* website of IIMAs SOE REFORM STUDY

4. Maximizing shareholders value

3. There is no justification now for BPEs role in an advisory or policy-

1. A vigilance inquiry adversely affects a managers self esteem even

1. Statutory Audit (SA) exists only to appraise the PSUs performance.

2. SA is the only way by which moral hazard or adventurous behaviour

5. The ministrys involvement in PSUs has become far more functional

7. Parliamentary questions do not directly affect managers, so they dont

9. Legal status of PSUs being State

While MNCs should be allowed to participate in disinvestment, but a handicap