College: SVGP, Tirupathi(018)

Key Writer: Ms.P.Hemavathi (L-Mech), Key Moderator: Mr.MVCH Jagadeswarudu (Mech-HOD)

Sub Code: C-09-A-602/C-09-CHST-602/C-09-CM-602/C-09-IT-602/C-09-M-602/C-09-PKG-602

Sub Name: INDUSTRIAL MANAGEMENT AND ENTREPRENEURSHIP –Nov- 2014

Any relevant points other than mentioned below may be awarded marks.

--------------------------------------------------------------------------------------------------------------------------

1. Write about the functions of management (Any 3 functions 3X1=3M)

Ans: Various functions of management are:

1) Forecasting

2) Planning

3) Organizing

4) Staffing

5) Coordinating

6) Directing ---- a. Leadership

b. Communication

c. Motivation

d. Supervision

7) Decision making

8) Controlling

1. Forecasting: Assessment of future work with respect to type , quantity and quality as

regards to sales or production or any other aspect of industrial activities. Forecasting comes

before the planning. Forecasting begins with sales forecasting followed by production

forecasting, finance forecasting etc. and forecasts for costs, finance, purchase, profit or loss,

etc.

2. Planning: It is a process of thinking and deciding in advance for the future action. Planning

is the determination of a course of action to achieve the desired results. It means deciding

in advance what is to be done, how and where it is to be done, who will do it and how

results are to be evaluated. Planning aims at optimum utilization of human and material

resources, eliminating the wastage of time, money and materials to achieve the objectives

of the enterprise.

3. Organizing: It is the process by which the structure and allocation of jobs is determined. It

is the arrangement of men, machine, materials, and money for the execution of a product.

Organizing involves determining the activities to be one, grouping the activities, assigning

the grouped activities to individuals and creating a structure of authority and responsibility

among the people to achieve the objectives of enterprise.

4. Staffing: It is a process of recruiting, selecting and training the right people to fulfill the

requirements of an enterprise. It is a continuous process, because new jobs may be created

in the enterprise and existing employees may leave the concern.

5. Directing: It is a process by which actual performance of subordinated is guided towards

common goals of the enterprise.

Directing includes:

o Issuing of orders and instruction to the subordinates.

o Guiding and teaching the subordinates the proper method of doing work, and

o Supervising the subordinates to ensure that this work conforms to the plans.

Directing involves the following functions:

o Leadership

o Communication

o Motivation and

o Supervision

a) Leadership: It is the quality of the managers to inspire the subordinates, get maximum

cooperation from them and guide their activities to achieve the common objective.

b) Communication: It is the process by which ideas, instructions and information are

transmitted, received and understood by others for the purpose of effecting desired

results. It is a two-way process. It may be verbal or written orders.

c) Motivation: It means inspiring the subordinates to work and cooperate for the

achievement of common objectives. This is done by providing financial and non-financial

incentives to the sub ordinates.

d) Supervision: This is an essential element of direction process. Supervision is necessary in

order to ensure.

o That the work is going on as per the plan established.

o That the workers are doing as they were directed to do.

6. Coordinating: It means achieving harmony and integration of individual effort towards the

accomplishment of company objectives. Coordination involves making plans that coordinate

the activities of subordinates, regulate their activities on the job an regulate their

communications.

7. Controlling: It is the process that measures the current performance and guides it towards

some predetermined goal. It is necessary in order to ensure that everything is carried out as

per the plan. Controlling is a continuous process which measures the progress o f operation,

verifies their conformity with the predetermined plan and takes corrective action if

required.

2. Differentiate between line-type and functional type organization? (Any 3 points. 3x1 = 3M)

Ans:

Line-type org Functional org

1. Head of section is completely responsible for 1. There will not be much coordination among

the activities of his section; there will be greater coordination within the section.

various specialists.

2. Authorities and responsibilities of individuals are clearly defined it leads to disciplined work

2It is difficult to maintain discipline as each worker is responsible for various specialist

3.No chances of expansion 3. It makes possible for development and expansion of enterprise.

4.Top man is overloaded with too many duties 4. It provides relief to top executives.

5. It neglects specialists advice, due to which there is more wastage of materials and man hours.

5. Expert guidance reduces the number of accidents and wastage of materials, men and machine hours.

6. Every department is engaged in its work, the chance of new innovations does not arise.

6. It increases quality of work due to specialization.

It provides good communication and coordination among individuals, to get work done effectively

3. Differentiate between Leader and Boss? (ANY 3 DIFF, 3X1=3)

Leader Boss

1.He will be having willing followers 1He may not have wiling followers

2. He offers advices to the workers 2. He exhibits authority over workers for any work.

3.He need not be a manager 3.Manager must be a good leader

4.He inspires and creates enthusiasm in the workers

4. He creates fear and try to extract work by giving orders.

5.Dummy activity is not necessary 5.Dummy activities are required for representing the proper sequencing

6. He posses the technical knowledge 6. He won’t posses technical knowledge.

7.He is not well qualified person 7. He is a well qualified person.

4. What are the advantages of CPM? (ANY 3 ADV, 3X1=3) Ans:

1. Management control becomes easy. 2. It makes better and detailed planning possible 3. It encourages discipline. 4. It provides a standard method for communicating project plans, schedules and cost

performance 5. It identifies most critical elements and thus more attention can be paid on those activities. 6. Allows tracking of critical activities 7. Provides visual presentation of the project.

5. Define Inventory. (3M)

Ans: It is a detailed list of movable goods such as raw materials, materials in process finished products,

general supplies and equipments, which are necessary to manufacture a product and to maintain the

equipment and machinery in good working order. The quantity and the value of every item is also

mentioned in the list.

6. Write the Advantages of ABC analysis. (ANY 3 ADV, 3X1=3)

Ans: Advantages of ABC Analysis are:

1. It becomes possible to concentrate all efforts in areas which need genuine efforts.

2. It is most effective and economical method as it is based on selective approach

3. It helps in placing the orders, deciding the quantity of purchase, safety stock, etc. thus saving

unnecessary stock-outs or surpluses.

4. Helps in reducing the clerical cost.

5. Increased productivity and decreased rejections.

6. Results in better planning and improved inventory turnover.

7. Avoids the equal attention to A,B and C items and there by reduces the cost.

8. By controlling the A items and doing a proper inventory analysis, obsolete stocks are automatically

pin pointed.

9. By concentrating in A items, the Material manager is able to control inventories and show visible

results in a short span of time.

7. What are the duties of Salesman? (ANY 3 points, 3X1=3M)

Ans:

1. Selling company products

2. Providing service to different customers

3. Handling customers complaints

4. Communicating information regarding companys products and services to existing and potential

consumers

5. He has to search for additional business.

6. Conducting market research and supplying regular reports on his findings to the company.

8. What is Demand survey? (3M)

Ans: Demand survey can be defined as “an estimate of the future demand of a particular product for a

specific period in a particular market.”

Demand survey is finding out the demand for a particular product. It is a must and carried out for

formulating a project. Accurate demand survey is essential for an entrepreneur to produce required quantities

at right time and arrange well in advance for various factors of production.

Information gathered from demand survey is:

Demand in the past and present

Price statistics

Consumers

Supply and competition

Govt. policy.

9. What is Quality? Bring out various Quality standards? (1.5M)

(Different investigators defined Quality in different ways… (Any related definition can be

awarded marks)

As per ISO 9000, Quality is defined as “the totality of features and characteristics of a product or service

that bear on its ability to satisfy stated or implied needs.

Quality standards: (1.5M)

ISO 9001

ISO 9002

ISO 9003

ISO 9004

10. What are the causes of accidents in Industries? (ANY 3 causes: 3X1=3M)

Ans:

• To check migration of rural and tribal population to urban areas

• Fatigue of the worker

• Moving and falling objects come in contact with worker

• Poor guarded machinery and lack of fencing

• Improper disposal of waste products

• Bad environmental conditions, due to inadequate temperature, humidity, lighting,

ventilation and presence of dust, fumes and smoke.

PART – B

11. (a)State any five principles of management as listed out by Henry Fayol. Explain them briefly?

(Any 5 principles- 6M)

Ans:

1. Division of work or labour:

It means dividing the work on the principle that different workers are best fitted for different jobs

depending upon their aptitude and skill.

Division of work leads to specialization at all levels and gives higher productivity.

2. Authority and Responsibility:

These two are interrelated and should go together. Authority is the power of the manager to delegate

and control the subordinates.

Responsibility is the duty of the manager to implement the policies of the management. A manager can

do justice with his responsibility only when he has the proper authority. Responsibility without

authority or vice-versa is meaningless.

3. Discipline:

It is obeying and working according to instructions and orders of superiors. This is absolutely

necessary for efficient functioning of all enterprises.

4. Unity of Command:

It means employees should receive orders and instructions from one boss only. In other words,

a worker should not be under the control of more than one superior.

Unity of command avoids confusion, mistakes and delays in getting work done

5. Unity of Direction:

It deals with the functioning of the organization. Unity of direction implies that there should be

one plan and one head for each group of activities having the same objective.

In other words, the whole enterprise should be directed to work for achieving one common plan

or its desired target.

6. Subordination of Individual Interest to General Interest:

This means that, the interests of an individual person should not be given more priority than the general

(common) interests (opinion) of the enterprise. This is necessary to maintain unity and to avoid friction

among the employees

7. Remuneration: The salaries and wages paid to the employees for their services should be fair,

and bring maximum satisfaction to both employees and employer

8. Centralization of Authority:

It means that, the authority is in the hands of a single person or few persons. The degree of

centralization is decided by keeping in view the nature, size and complexity of the business.

9. Scalar Chain: This is an unbroken line of authority and command from the highest(GM) to lowest

ranks(employee) to facilitate communication. Sometimes, thic chain may be short-circuited, for

avoidance of delay.

10. Order: This principle is concerned with materials and persons. It means that, materials and

human beings should be arranged such that “right material and right person is in the right place”, which

ensures effective utilization of available resources.

11. Equity of Treatment: This means that all subordinates should be treated equally with kindness

and justice by the Manager. This will make employees more loyal and devoted towards the

management.

12. Stability: Stable and secure work is an asset to the enterprise, because unnecessary labour

turnover is costly. An avg employee who stays with the industry is much better than outstanding

employees who merely come and go. Instability is the result of bad mgt.

13. Initiative: Initiative is freedom to think out new plan. Encouragement should be given to the

workers who come forward voluntarily to propose new method, idea or change.

14. Esprit de corps: This is a French word which means “Union is Strength”. This principle implies that

there should be co-operation and team work among the members of the organisation. This creates

harmony and understanding among workers.

(b) Define share and list different types of share. (Def:2M+Types:2M)

Share: It is the amount received from the public at a specified rate, at Rs. 10, 100, 1000 etc. If the

authorized capital is Rs. 2 crores and if it is collected by 20 lakhs shares then value of each share will be

Rs. 10/-. Those who contribute this amount of Rs. 10/- Are share holders. The share holders are eligible

to get their shares of profits. The share holders are real owners of the company and these shares are

transferable.

Types of shares:

1. Preference shares 2. Ordinary or Equity shares 3. Deferred shares

12. Explain the types of cooperative society. State the advantages and disadvantages of cooperative

societies. (Any 3 Societies-6M,Adv-2M,Dis adv- 2M)

Ans: The various types of Co-operative societies are

1. Industrial or Producers Co-operative society: This is the form of association in which persons

combine together to form a society for the purpose of mfg goods. This is useful where neither large

capital is necessary or much technical and expert knowledge of management is needed.

Eg: Dairy products, grains, fruits, sugar mills, rice mills.

2. Consumers Co-operative society: These are formed by ordinary people to obtain their daily req of

goods at cheaper process. The members of the society are the consumers at that society. The society

purchases the articles in bulk directly from the manufacturers and sells them to members at low

marginal profits.

Eg: Super bazaars

3. Housing Co-operative society:

Any citizen of India of any place may conceive to construct a house of his own. Such people may

join together from the housing society procure a site, and with the help of the society they can build

a colony of their own with loans offered by the society or housing loans from LIC,HDFC etc., They also

procure site and building materials at cheaper rates.

4. Cooperative farming: Some of the small agriculturists combine together to cultivate their lands in

co-operative basis and get loans from the Govt to purchase agriculture implements, tractors,

fertilizers, etc., with low interest and the yield can be distributed among themselves.

5. Cooperative credit society: It is an association of borrowers residing in the same locality. These

societies are formed to give financial help to small farmers and other weaker sections of the society

with low rate of interest.

Eg: Urban cooperative banks

Advantages:

• Common man is benefited.

• Sells products of daily needs at cheaper rates

• No one person can make huge profits

• It promotes co-operation, mutual assistance and the idea of self help

• Service motto, not profit motto

Disadvantages:

• Only suitable for small and medium orgs

• Finance being limited, specialists service cannot be taken.

• Capital is limited so it is limited to small business only.

• Secrecy cannot be maintained.

13.Ans: (NET WORK DIAGRAM :3 M, CRITICAL PATH = 3M, PROJECT COMPLETION TIME= 2M,SLACK: 2M)

Net work Diagram: (3M)

Paths:

1-2-5-6 6+5+6 = 17

1-2-4-6 6+3+8 = 17

1-3-6 8+12 = 20

1-4-6 5+8 = 13

Critical path = 1-3-6 (3M)

Project completion time : 20 days (2M)

Slack: (2M)

Activity 1 2 3 4 5 6

Slack 0 3 0 3 3 0

14. Explain Break Even analysis with the aid of neat sketch. (6M FOR EXPLANATION + 4 M FOR DIA)

Ans:

• BEA is a very important and useful tool of management.

• BEA is presented on a Break Even Chart.

• Technique for studying relationship between cost, volume and profit.

• Indicate level of output to be produced to generate planned level of profit

• Two elements to consider one is the level of breakeven point and other one is the rapidity with

which profit change in relation to output.

• BEA also examines the effect of change in cost, volume and price on profit. Hence this analysis is

also called as Cost Volume Profit (CVP) analysis.

• Break even analysis is represented by Break Even Chart.

• A Break-even chart given in fig is used to determine break-even point and amount of profit or

loss under varying conditions of output and costs.

• Sales or expenditure in rupees is represented on vertical axis, while output is represented on

horizontal axis.

• Line A represents the fixed cost, line B represents variable cost, line C represents total cost or

total expenses(A+B), while line D represents sales revenue and indicate income at various levels

of output. The points where lines C and D intersect each other, is breakeven point.

• The space between lines C and D to the right of the Breakeven point represents potential loss.

The amount of loss or profit can be measured on vertical scale.

Break Even Point indicate

• Total cost of product is equal to total revenue generated by sales. i.e

Total cost (expenses) = Total sales (Revenue)

• Indicate level of output or sales at which no profit or loss is made

• Total income of business equal to total expenditure

• .

1. Fixed Cost:

• Irrespective of level of out put they are fixed

• Eg: Depreciation, Insurance, Rent, salaries of officers

2. Variable Cost:

• As the output increases variable cost increases

• Eg: Raw material cost, Direct wages, commission rates on sales

3. Angle of Incidence (θ):

• Angle at which sales revenue line cuts total cost line

• If angle is large, profits are made at a high rate

• If angle is small less profits are made

4. Margin of Safety:

• Difference between actual sales & break even sales

• Larger the margin of safety, safer & profitable the business

5. Contribution:

• Difference between selling price & variable cost

C = ( S – V)

6. Profit-Volume (P/V) Ratio:

• P/V Ratio = Contribution / Selling Price

= (S-V) / S

15. What is feasibility report? Explain the details of major contents of feasibility report:

(Def: 2M+8M)

Ans: Feasibility Report: After making feasibility study for any project, the data collected or the

information gathered from this survey should be consolidated in a prescribed format called “feasibility

study report”. This gives the operating document of any project. This report is useful for getting loans

from financial institutions, assistance in getting raw materials, subsidies and tax exemptions given for

the product by government, any marketing assistance given etc.

Major contents of the report are: (8M)

1. Name of the Industry to be started

2. Address of the unit

3. Product to be manufactured

4. Target of production-monthly, quarterly, etc.

5. Raw materials, machinery and man power, required.

6. Production process selected.

7. Capital requirements and means of finance.

8. Cost of production and profitability.

9. Cash flow statements

10. Break even analysis.

11. Help expected.

16. (a)List out the safety measures provided in the Factories Act. in any industry. (Any 5 points,5 M)

(b) What are the benefits and Drawbacks of Trade unions

Ans (a)

Ensure Proper Fencing of machinery.

Work on or near machinery in motion to be avoided

Proper Casing of machinery to be ensured

Hoists and liftways shall be sufficiently protected by an enclosure.

All parts including the working gears, lifting machines, chains, ropes or lifting tackles shall be of

good construction and of adequate strength.

Care should be taken care near the Revolving machinery

No Excessive weights should be employed so heavy as to be likely to cause him injury.

Ensure proper Protection of eyes

Precautions should be taken against dangerous fumes

Precautions should be taken against fire.

(b) Benefits of Trade Unions: (Any 3 points, 2.5M)

The trade unions protect the labour from managements exploitation

They help to improve bargaining power by collective bargaining

They reduces industrial disputes, by establishing good employee-employer relations.

They help in providing labour welfare measures.

They educate the workers about their rights and responsibilities.

They create sense of self confidence and self respect among workers

They create co-operation and team-spirit among workers

They create good industrial relations which results higher and better production at lower rate.

They improve the working conditions in the industry.

Disadvantages of Trade Unions: (Any 3 points, 2.5M)

Lack of financial resources

Lack of unity and awareness among workers

Lack of efficient workers and delicate trade union leaders.

Illiteracy of workers.

Confined to city workers only.

Lack of full time leaders

Inter-rivalry of Trade unions

Domination of political parties

17. Discuss briefly the workability of TQM in business organization. (10M)

Ans:

Total Quality Management means quality in every aspect of companys operation.

TQM involves effective decision making, problem solving, and quality implementation and

quality improvement strategies of all the departments of an organization. In TQM concept, the

word quality has a wider meaning; it means quality of output of every department and by every

employee, cleanliness, orderliness, punctuality, customer service, standardization of works and

continuous efforts for their improvement. In TQM, the needs of customers are constantly

monitors to improve the products and processes to meet their requirements.

Effective TQM results in greater customer satisfaction, fewer defects, less waste, reduced costs,

improved profitability and increased productivity.

Following elements have to be properly implemented by the industries, if they have to achieve

TQM: They are:

Customer satisfaction

Employees involvement

Control of Production

Quality of planning

Quality improvement

Quality implementation

Customer relationship management

Quality education and training

Leadership

Participative management

.

18. Explain different types of self-employment schemes. (Any 5, 5X2=10M)

Ans:

1. Prime Ministers Rozgar Yojana: Under the scheme

Announced by the Prime Minister to provide self-employment to one million educated unemployed

youth in the country.

Any unemployed educated person living in any part of the country will be eligible for loan.

Candidate’s age shall be between 18-35 years with 10 years relaxation for SC/ST, exservice men,

physically handicapped and women.

Beneficiary has to repay the loan within 3 to 7 years.

2. National Equity Fund Scheme:

The main objective of this scheme

Is to provide equity type of support to small entrepreneurs’ tiny or small sector for setting up of new

units and for rehabilitation of viable sick units.

3. Single window scheme:

• This scheme is eligible for new units whose project cost does not exceed Rs 10 lakhs

• Under this scheme Rs 5 lakhs working capital loan is granted

• This scheme is operated by both banks and financial institutions under this scheme provide

working capital loan along with the term loan for fixed assets to new tiny and small scale units

so as to overcome the initial difficulties and delays faced by them to start production.

• Permissible term loan for fixed assets can also be provided.

4. Mahila udyama nidhi Scheme:

• The women % in the population of India is high, but women entrepreneurs are very less.

• With a view to encourage women entrepreneur in India certain schemes are introduced.

• To set up small sectors like cottage, village and tiny industries

• Upto 51% share in equity are eligible for loan.

• Cost should not exceed Rs. 10lakhs.

• Repayment period can be 5 to 10 years.

5. Self employment scheme for ex serviceman:

• Separate self employment schemes are designed exclusively for ex-servicemen candidates

• If the total project cost does not exceed 15 lakhs then state financial corporations will provide

75% of project cost and promoters’ contribution shall be at least 10%.

• Repayment can be a period of 10 years with initial moratorium period upto 2 years.

Physically:

• Financial assistance is extended to the entrepreneurs of these categories under different

schemes with relaxed margins.

• 100% financial assistance will be extended for equipment or working capital or both, provided

the max amt of loan does not exceed Rs 50,000.

• 5% of project cost is limited to 5 lakhs will be provided as seed (initial) capital investment.

6. Self employment scheme for Unemployed:

Aimed at providing self employment opportunities to the group of 20-40 years to the above, whose

parental income does not exceed 12,000 per annum.

• Total project cost shall not exceed 5 lakhs.

• State govt provide money assistance at 20% project cost or Rs 50,000 whichever is less.

• Repayment period is 8 years.

• Qualification: 10th pass or prescribed ITI course

7. Self employment Scheme for Physically Handicapped:

For physically handicapped entrepreneurs IDBI provides 100% finance in respect of loans upto Rs.50000

with a interest rate of 10% without any contribution of margins by entrepreneurs.

8. Refinance Scheme for Modernization of SSIs:

Under this scheme, a reoriented programme of modernization and technology up gradation aimed at

improving efficiency and cost effectiveness in the SSI had been provided.

It identifies a few industries which requires modernization, and provides financial support to these

industries on priority basis.

There is no limit for financial assistance under this scheme.