Questionnaire

Survey of PSU Managers, December 2000 1

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 Baruaof 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 theschedule 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: [email protected]

* website of IIMA�s SOE REFORM STUDYhttp://www.iimahd.ernet.in/psuindiaYou may download this schedule from http://www.iimahd.ernet.in/psuindia/shastri/questionnaire.pdf

Indian Institute of Management, Ahmedabad2

INSTRUCTIONS

Dear Manager,

Since the ‘liberalisation’ of the economy, the environment of PSUs has undergone substantial change. Given thestated objectives of government to divest and privatise, entry of private firms into markets earlier reserved forpublic sector, many PSUs would have responded to these changes in some manner. Currently the government ispursuing disinvestment, which is driven more by budgetary considerations. It is not yet clear as to how strong isthe intention of the government to improve the task orientation and performance of PSUs through increasedautonomy to the managers.

This study is focussed on managers of PSUs, with a view to understand how they have understood, and interpretedthe changes. Managers’ views and diagnoses as regards the public sector situation and the remedies have not yetbeen a focus of serious analyses. As a result, little is known about this aspect in a formal and statistically reliablemanner. As academics in the field of management we do think that your views and opinions are most importantin 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 organisationor government. The study is motivated by the belief that true change can occur only when a critical mass of topand middle level managers internalise a particular form of change and push it through. Such change would ofcourse 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 foracademic 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 thatthe analysis would be useful to the government and policy makers in their design of programs for change includingprivatisation 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. Yourcooperation 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 formalapproval of the government of India, and is being sponsored by the Indo-Shastri Canadian Institute. The projectteam 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 pertainingto SOEs. Please do visit the site: http://www.iimahd.ernet.in/psuindia. We will be putting the principal tabulationson this site for your convenience. We would be obliged for your comments. Our deepest thanks for taking time offto respond to this schedule.

Sebastian MorrisSK Barua


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 whereyou work presently

3. Years of work in the 4. Description of Line Staff otherpresent organisation present position (a)

5. Description of CEO board member/ top middlepresent position (b) director management management

6. How many years have you beenin your current position?

7. Functional experience in middle management levels and above. Based on your own assessment and pastexperience, in which of the following areas have you had adequate experience? (You may encircle /tick morethan 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/ anyvendor 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 onepost 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 significantpart of IAS/ MBA degree Accountant technical/ experience

central services degree/ professional in the cadre ICWA etc degree private sector

worked in have significant workedthree or more experience of onlyorganisations working in in the

government PSUs

any other aspect? (Please write)


Please read all the options under a topic and then tick in the appropriate column to reflect yourview/opinion/feeling. You may avoid answering some of the options only if you have absolutely nofamiliarity with the underlying issue.

Objectives�Objectives� of an enterprise go far beyond those that are actually stated, many may not be truly intended andthe �top management� could deviate from them with time. How important are the following objectives in actualpractice (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 ofthe 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 boardWe would like to have your impressions about the working of the boards of PSUs. It is not necessary that youshould have been part of the board of any PSU at any point of time. Rather, your impressions and feelings areimportant. How do you feel about the following statements? (Tick any of the options from strongly agree tostrongly disagree)

Strongly Agree Neither Dis- StronglyAgree 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 againstthe 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 apositive role, which is in the interest of the company.

5. The board is only a mask and the real power lies elsewhere � with theconcerned ministry.


The PSU as �State�Some observers have argued that entities with major government ownership being treated as �State� constitutesa 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 relateddisputes in relation to similarly placed large private corporations

3. Observers contend that disinvestment below 50% will free the PSU ofthis constraint and would bring autonomy in decision making. Do youagree?

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 havepersonally dealt with BPE/DPE at any point of time. But impressions and feelings are important. (Tick any of theoptions from strongly agree to strongly disagree)


1. While the BPE/DPE has no authority, its involvement in a staff capacityin activities like project clearance and the MoUs result in delays indecision making.

2. Cash rich and large PSUs, PSUs with greater bargaining power or witha powerful CEO were never constrained by the BPE guidelines.

3. There is no justification now for BPE�s role in an advisory or policy-making capacity, since most large PSUs have boards with externaldirectors

VigilanceYour impressions about the vigilance inquiries faced by managers in the PSUs. How do you react to the followingstatements? (Tick any of the options from strongly agree to strongly disagree)


1. A vigilance inquiry adversely affects a manager�s self esteem evenwhen he/she is not corrupt.

2. Vigilance inquiries on managers are part of the routine, and they neednot affect careers of managers if they have not deliberately made amistake.

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 ofinitiative and dynamism.

6. Most vigilance inquiries have proven to be correct ex-post, in the sensethat the concerned managers were corrupt or had gained personally.

7. Most vigilance inquiries look into situations of oversight or neglect ofrules 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 mayfail 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 inthe 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 PSUYour impressions about the appraisal of companies by the Auditor. How do you feel about the following? (Tick anyof the options from strongly agree to strongly disagree)


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

2. SA is the only way by which �moral hazard� or adventurous behaviourin 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 decisionmaking.

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 whocan always work around audit with appropriate explanations.

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



The Concerned Administrative MinistryYour impressions about the influence of the concerned ministries on PSUs. It is not necessary that you shouldhave been personally interacting with the ministry officials rather your feelings about them are important. How doyou 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 nothave 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 ofthe PSUs than what it did in yesteryears.

5. The ministry�s involvement in PSUs has become far more functionaland restrained in the nineties

The PSU and ParliamentQuestions about the working of PSUs are often raised in the Parliament. How would you react to the followingstatements? (Tick any of the options from strongly agree to strongly disagree)


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

2. Top management has to devote considerable time and resources tryingto 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 callfor information, which is anyway publicly available/or made availablewith little effort.

5. With proper information gathering and retrieval systems, as well asManagement Information Systems (MIS), parliamentary questionsshould not take up much time.

6. Without the pressure of parliamentary questions, many PSUs woulddrift away from their social goals.

7. Parliamentary questions do not directly affect managers, so they don�thave to worry about them.

8. Parliament is today concerned more with debating privatisation ratherthan worrying about performance improvement.

9. The fear of Parliament questions can be used by managers to thwartdysfunctional interference by politicians and civil servants.


CEOs of PSUsThe question of what type of CEOs have been able to deliver thus far in the Indian public sector system remainslittle known and is controversial. How would you respond to the following statements? (Tick any of the optionsfrom 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 requisitepower 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 agreat deal on the performance of his/her company.

5. The power the CEO commands vis-à-vis the government depends agreat deal on the size of his/her company.

6. Managing the external boundary of the organisation (esp. with theAdministrative Ministry) becomes the chief task ot the CEO.

PrivatisationThere is a lot of debate amongst policy makers, managers, government on the advantages and disadvantages ofprivatisation. How do you feel about the process of privatisation? (Tick any of the options from strongly agree tostrongly disagree)


1. Privatisation will result in efficient and effective use of resources.

2. Proposal of divestment is meant only for increasing the revenue of thegovernment and not for any serious operational improvements.

3. MoUs or contract plans could have worked well had government giventhe 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 autonomyand 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 ofPrivatisation 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 withprivatisation.

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 thePSUs and to determine strategies) will be more effective than any changein ownership

15. It is important that the correct mode of Privatisation be pursued for itto lead to better performance

16. Without Privatisation PSUs will not be able to respond to the chal-lenges of Globalisation.

Sources of Constraints TodaySince the many changes in policy and environment in the nineties, the constraints to good performance andgrowth 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), anda tightening of the constraint (-). Please respond in the last column bringing out the change in the constraint overthe 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 AutonomyRate the folllowing aspect /dimensions of decision making in terms of the autonomy that managers of PSUsactually 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, overthe 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 ControlWhat in your view is the desirable ownership structure in general after reform? (Please encircle /tick at best twooptions)

majority with majority with govt; with bare majority with govt; bare majority withgovt; with little significant ownership with the rest largely govt; with the restdisinvestment 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 govtholding with sign. govt; with much of the holding; and holding but rest with

holding by rest disbursed among generally single/ few largeprivate 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 sogovt holding of govt so that would necessarily have that it has to give up

majority govt has veto to share power/control nearly allpower with other groups control

Please choose one of yes, no or can�t say to the questions /statements below: (Please chose can�tsay 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 isminimised. Do you agree?

Shares at discounted prices should be sold to workers and employees to create apositive interest among them towards privatisation.

A golden share for government would become necessary in many cases.

A golden share for government would arise only in a rare situation.

Multinationals must be kept out from the disinvestment process.

Multinationals must not be allowed to control PSUs after they are privatised.

While MNCs should be allowed to participate in disinvestment, but a �handicap�should be provided for domestic buyers.

There should be no restriction on MNCs buying up stock of privatising PSUs.

The surpluses from divestment of profitable PSUs should be used to pay off em-ployees in other firms for which only asset sales are possible.

In disinvestment, the entire portfolio of PSUs should be considered, so that thevalue realised for the portfolio as a whole is maximised.

In many sectors lack of regulatory institutions and policy (especially with regardto competition) stand in the way significant disinvestment.

Profitability and current cash flows should be the principal basis in valuation foroffloading the shares.

Capital market valuations of the stock should be an important guide in pricing ofshares offered for sale.

Govt should go ahead with disinvestment without waiting for a clear cut andacceptable policy for labour especially as regards retrenchment.

No serious restructuring is possible without a clear cut retrenchment policy thathas the acceptance of unions.

For significant and transparent privitisation it would be necessary to set up aconstitutional and expert authority.

can�t saynoyes

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Government has to keep itself off from the operational aspects of privaisation,once it defines the strategy and policy

Privatisation in India would only progress in fits and starts

Today there is a consensus among the elite for privatisation

Privatisation in India has little chance of taking place in a transparent and corrup-tion free manner

Your own statements on disinvestment:

1.

2.

3.

Groups /forces for disinvestment or privatisationFrom which quarters /factors do the pressures for disinvestment and privatisation arise? Please rate the followingfactors /quarters: (Please tick choosing from predominantly from to never from against each group of force).

predomi- very in some hardly nevernantly much manner from fromfrom 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

can�t saynoyes

can�t saynoyes

can�t saynoyes

can�t saynoyes


Groups /forces acting against disinvestment /privatisationFrom which quarters /factors do the pressures against disinvestment and privatisation arise? Please rate thefollowing factors /quarters: (Please tick choosing from predominantly from to never from against each group offorce).

predomi- very in some hardly nevernantly much manner from fromfrom 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 summariseyour views.

a) There is no need for privatisation of most PSUs

b) Reform and restructuring by giving more autonomy to PSUs is politically,legally and administratively possible

c) Labour retrenchment is thein the reform of PSUs

d) Significant privatisation would requiresetting up of a special constitutional body.

disagree

one of the many problem/s

agree

disagreeagree

most important not significant

disagree can�t sayagree


e) The particular privatisationprocess followed by thegovernment would necessarilybe in the national interest

f) Would you like to receive a copies of the studies based on this survey ?

g) Any other comments / statements thay you would like to make?

Thanking you

Professor Sebastian MorrisProfessor SK BaruaIndian Institute of ManagementAhmedabad

not at all

noyes

marginallyto someextent

to a largeextent

mostcertainly


Indian Institute of Management, Ahmedabad (IIMA) was set up by the Government of India incollaboration 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 majorprogrammes 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 RegionalManagement Studies, Computer and Information Systems Group, International Management Group,

Public Systems Group, Ravi Mathai Centre for Educational Innovation

Shastri Indo-Canadian InstituteThe 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 fellowshipsand distributed books and journals to the libraries of its Canadian member institutions. The Institute�s

success in sparking interest in India studies among Canadian academics led to a greater interest inCanada 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 thearts. 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 andcultural 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 membersof the media from India to Canada and from Canada to India.

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