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UNIT – 15: PUBLIC SECTOR
PUBLIC RELATIONS
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Contents
15.0 Objectives
15.1 Introduction
15.2 Concept of Public Sector
15.2.1 Public
Sector Unit’s Objectives
15.2.2 Policy
announcement of Public Sector units
15.2.3 Types
of Public Sector Units
15.3 Public Sector and Public Accountability
15.3.1 Concept
of Memorandum of Understanding
15.3.2 Disinvestment
policy
15.3.3 Interaction with Public Sector Forum
15.3.4 Global
competition
15.3.5 Corporate
Social Responsibility
15.3.6 Company
Act
15.4 Organizational structure of Public Sector
15.4.1 Management
levels & Departments
15.4.2 Personnel Management
15.4.3 Work
culture and Ethics in Public Sector Units
15.5 Public Relations structure in Public Sectors
15.5.1 Functions
of Public Relations
15.5.2 Internal
& External PR Process
15.5.3 Specialized
Role of Public Relations in Public Sector Unit
15.5.4 Public
Relations person in Public Sector
15.5.5 Concern for environment
15.5.6 Public
Sector Unit image
15.6 Public Relations in Major Public Sector
undertakings
15.6.1 BHEL
15.6.2 Indian
Oil Corporation
15.7 Summary
15.8 Model Examination Questions
15.9 Glossary
15.10 References
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15.0 OBJECTIVES
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After
reading the unit, you will be able to -
· Explain the objectives, policies, role
and responsibilities of Public Sector Unit.
· Describe the concept of Public Sector,
types of public sector units and their organizational structure
· Explain
public accountability, disinvestment policy and global competition of a
public sector
· Analyze the specialized role of Public
Relations in a Public Sector
· Define the tasks involved in undertaking
an effective PR campaign for a Public Sector.
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15.1 INTRODUCTION
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After the Independence, India started
her quest for an overall industrial development. The Industrial Policy
Resolution of 1948 made a beginning of the evolution of Indian Industrial
Growth. This resolution had outlined the role of the State in industrial
development both as an Entrepreneur and as a controller. This approach was a right step to build the
economy of the country particularly the infrastructural base, which is so
essential for industrial growth. India was also able to develop heavy
industries during this period. The
Industrial Policy Resolution of 1956 gave further impetus to the public sector
in the Indian economy which envisaged mixed economy where both public and
private sectors could progress hand in hand. Nationalization of General
Insurance Companies in 1956 and of Banks in 1969 and the mixed economy policy
led to the growth of public sector in Central and State Governments. Thus, successive
policy resolutions reiterated the basic tilt in favor of the public sector. During
the eventful 67 years of our independence, the Public Sector enterprises have
been playing a key role to strengthen Indian economy.
The basic concept of public sector is to
provide suitable conditions for agricultural, industrial, economic growth and
development. Public Sector Undertakings or Corporations are constituted either
under Central or State Legislature as the case may be. Thus they are broadly
divided into two categories: Central Public Sector Enterprises and State level
Public Enterprises. The huge investment and the pivotal role of PSUs call for
public and social accountability. Disinvestment policy or micro privatization
refers to accepting public investment from markets by way of selling shares
thus keeping a substantial amount of funds in Government investment. With the 1991 economic policy of Liberalization,
Privatization and Globalization there was a sudden shift of focus to profitability.
This led to reduction in workforce. Thus the PSUs had to face competition with
their equals globally and also with private sector enterprises, locally. Structurally,
every PSU will have 3 levels of management viz Top Management, Middle level
Management and Subordinate level executives. Broadly there will be mainly 4
Departments namely Finance, Production, Marketing and Public Relations in every
Enterprise, but PR plays a pivotal role due to its functions as mouthpiece and
antennae in dissemination of information and handling both internal and
external communication.
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15.2 CONCEPT
OF PUBLIC SECTOR
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Public Sector Undertaking is defined
as a “legal entity created by the Government but exterior to Government
organization, functionally and financially independent for carrying on specific
activities prescribed in the law creating it”. Thus, the term public sector is
generally to refer to Government owned enterprises. It is also defined as “a
Corporate body created by public authority, with defined powers and functions
and financially independent. It is
administered by a Board appointed by the public authority to which it is
answerable. Its capital structure and
financial operations are similar to those of public company, but stock holders
retain no quality of interest and are deprived of voting rights and power of
appoint of the Board”.
As stated earlier, when our country
became independent, our planners chose to adopt the concept of mixed economy to
ensure all round social benefits. What
is mixed economy? It is the existence of
private and public sectors side by side.
The ownership of public sector units rests with the Government while the
ownership of enterprises in private sector rests with private persons. The
basic concept of public sector is to provide suitable conditions for
agricultural, industrial, economic growth and development.
15.2.1 Public
Sector Unit’s Objectives
The Public Sector was launched to check the concentration of wealth in the hands of a few capitalists and to maintain a balanced economic development. Other objectives are -
·
Adopting strategic options for implementing the national objective of creating a socialistic pattern of society and adopting modern technology to increase production;
Adopting strategic options for implementing the national objective of creating a socialistic pattern of society and adopting modern technology to increase production;
· Achieving
organizational excellence as a model employer and achieving self-reliance in
critical areas of defense and development;
· Providing
massive employment opportunities and ensuring workers’ participation in
management;
· Generating
internal resources in re-investment and fulfilling social responsibilities
15.2.2 Policy announcements of Public Sector units
As stated earlier, in 1948, the Industrial
Policy Resolution accepted the concept of mixed economy and divided the
industrial sector into four broad categories
1. The
first category included strategic industries like defense, arms and ammunition,
atomic energy, river valley projects and railways.
2. The
second category was reserved for basic and key industries like Coal, Iron and
Steel, Aircraft, Ship Building, Communication equipment and mineral oils
3. The
third category included important industries like cotton, textiles, sugar etc.
These industries although private were subject to State control.
4. The
remaining industries were reserved for private enterprises.
In 1956 the Industrial Policy
Resolution gave further impetus to the public sector by bringing industries of
basic importance under its purview. With
the report of the Parliamentary Committee on Public Undertakings, the scope of
the Public Sector expanded into the area of consumer articles too. This
resolution was a landmark policy statement and it formed the basis of
subsequent policy announcements.
Industrial Policy Measures of 1960s and
1970s led to setting up Monopolies Inquiry Commission (MIC) to review various
aspects pertaining to concentration of economic power and operations of
industrial licensing under the IDR Act, 1951. While emphasizing that the
planned economy contributed to the growth of industry, the Report by MIC
concluded that the industrial licensing system enabled big business houses to
obtain disproportionately large share of licenses which had led to pre-emption
and foreclosure of capacity. Subsequently, the Industrial Licensing Policy
Inquiry Committee (Dutt Committee), constituted in 1967, recommended that
larger industrial houses should be given licenses only for setting up industry
in core and heavy investment sectors, thereby necessitating reorientation of
industrial licensing policy.
In 1969, the monopolies and restrictive
Trade Practices (MRTP) Act was introduced to enable the Government to
effectively control concentration of economic power. The Dutt Committee had
defined large business houses as those with assets of more than Rs.350 million.
The MRTP Act, 1969 defined large business houses as those with assets of Rs.200
million and above. Large industries were designated as MRTP companies and were
eligible to participate in industries that were not reserved for the Government
or the Small scale sector.
As per the Industrial Policy Statement 1973,
the preference has gone to small and medium entrepreneurs over the large houses
and foreign companies in setting up of new capacity particularly in the
production of mass consumption goods with a view to prevent excessive
concentration of industrial activity in the large industrial houses. Undertakings
of up to Rs.10 million by way of fixed assets were exempted from licensing
requirements for substantial expansion of assets. This exemption was not
allowed to MRTP companies, foreign companies and existing licensed or
registered undertakings having fixed assets of Rs.50 million and above.
In the Industrial Policy Statement 1977,
the principal thrust was on the development of small industries i.e. effective
promotion of cottage and small scale industries.
The industrial Policy Statement of 1980
placed accent on promotion of competition in the domestic market, technological
up-gradation and modernization of industries. Some of the socio-economic
objectives spelt out in the Statement were i) optimum utilization of installed
capacity, ii) higher productivity, iii) higher employment levels, iv) removal
of regional disparities, v) strengthening of agricultural base, vi) promotion
of export oriented industries and vi) consumer protection against high prices
and poor quality. Policy measures were announced to revive the efficiency of
public sector undertakings (PSUs) by developing the management cadres in
functional fields viz., operations, finance, marketing and information system.
An automatic expansion of capacity up to five per cent per annum was allowed,
particularly in the core sector and in industries with long-term export
potential. Special incentives were granted to industrial units which were
engaged in industrial processes and technologies aiming at optimum utilization
of energy and the exploitation of alternative sources of energy. In order to
boost the development of small scale industries, the investment limit was
raised to Rs.2 million in small scale units and Rs.2.5 million in ancillary
units. In the case of tiny units, investment limit was raised to Rs.0.2
million.
With the introduction of Industrial Policy
1991 substantial programme of deregulation has been undertaken. The policy
admitted that Governmental interference through MRTP had retarded industrial
growth. Industrial licensing had been abolished for all projects except for a
short list of 15 industries related to security, strategic or environmental
concerns. They are coal and lignite, petroleum [other than crude] electronic
aerospace and defense equipment, industrial explosives including detonative
fuse etc. A significant number of industries had earlier been reserved for the
public sector. Now, no manufacturing sector is so reserved except for petroleum
and defense equipment. The areas reserved for the public sector are: Arms and
ammunition; defense aircrafts and warships; atomic energy; railway transport.
Even in these areas private sector participation can be invited on a
discretionary basis. The public Sector now is facing competitive environment
both from Indian and foreign industries. This new Industrial Policy sought to
drastically liberalize the economy and redefine the role of the Public
Sector. This was done to free the Indian
economy from unnecessary bureaucratic controls. Key industrial activities like
power, telecommunication, steel etc are open to the private sector. For PSUs, this policy ushered increased
management freedom, greater productivity, market-friendly approach and a new
work culture.
15.2.3 Types of Public Sector Units
Public Sector Undertakings or Corporations are constituted either under Central or State Legislature as the case may be.
Thus they are broadly divided into two categories: Central Public Sector Enterprises and State level Public Enterprises. In 1951, the public sector had only five enterprises with a total investment of just Rs.29 crores. The number rose to 249 Central PSEs providing employment to more than 21 lakh individuals. Out of these 249 PSUs, 217 were in operation till 2010. 10 have been privatized recently. There are about 1100 State Level Public Enterprises constituted by different State Governments.
Public Sector Undertakings or Corporations are constituted either under Central or State Legislature as the case may be.
Thus they are broadly divided into two categories: Central Public Sector Enterprises and State level Public Enterprises. In 1951, the public sector had only five enterprises with a total investment of just Rs.29 crores. The number rose to 249 Central PSEs providing employment to more than 21 lakh individuals. Out of these 249 PSUs, 217 were in operation till 2010. 10 have been privatized recently. There are about 1100 State Level Public Enterprises constituted by different State Governments.
The growth of CPSEs and their investment
Year
|
No of Units
|
Investment (in crores)
|
1951
|
5
|
29.00
|
1961
|
47
|
950.00
|
1980
|
179
|
18,150
|
1990
|
244
|
99,330
|
2001
|
242
|
2,74,198
|
2007
|
247
|
4,21,089
|
2008
|
214
|
7,63,815
|
2009
|
213
|
7,93,096
|
2010
|
217
|
9,08,842
|
Source: Public Enterprises Survey 2009-10
These enterprises could be further
divided into manufacturing units, such as Steel, Minerals, Metals etc and those
rendering services in trading, marketing, transportation, construction,
industrial development etc.
Broadly
speaking public enterprises are of four types:
1.
Enterprises
under a system of price control: When prices are fixed by the government
as a result of conscious national policy and applied in equal measure to all
units in public sectors. Here the
profitability of an enterprise depends upon productive efficiency. For e.g.
Fertilizer Corporation of India, Indian Oil Corporation, Cement Corporation of India
etc
2.
Enterprises
selling the entire products to Central Government: For e.g. Hindustan
Aeronautics Limited, Indian Telephone Industries Ltd., Hindustan Cables Ltd.
3.
Enterprises
whose products are sold to State Government Enterprises or to its own branches: For eg. Bharat
Heavy Electricals Limited for steel plants.
4.
Enterprises
whose products are sold in international market: For e.g.
Shipping Corporation, State Trading Corporation, Steel Authority of India
Limited etc
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15.3 PUBLIC
SECTOR AND PUBLIC ACCOUNTABILITY
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The huge investment and the pivotal
role of PSUs call for public and social accountability. With the expanded role of the public sector
for the development of the country and due to the pursuance of a number of
objectives by them, some of which are mutually conflicting, no single yardstick
can be applied for measuring their performance.
15.3.1 Concept of Memorandum of Understanding
The concept of Memorandum of
Understanding (MoU) was evolved to overcome the difficulty of social
accountability. Memorandum of
Understanding is therefore a contract signed between the public sector and its
administrative ministry. It specifies
obligations of the PSU, its targets and the Government’s role, such as
expediting policy clearance, release of foreign exchange, financial aid and
delegation of powers. This contract
leaves the PSU functionally autonomous and more accountable. Memorandum of Understanding spells out:
Ø
Mission
and objectives of the Public Sector unit
Ø
Targets
of the Organisation
Ø
Strategies
for accomplishing them
Ø
Criteria
for performance evaluation
Ø
Obligations
of the Government
Ø
Detailed
plans for periodic review of performance
Ø
Readjustment
of strategies and targets if necessary.
Since every PSU has different
objectives and targets for e.g. for a manufacturing enterprise, evaluation
targets will be different from that of a trading one; or a loss making
organisation’s strategies will be different from a profit making
organisation’s: It becomes necessary for each MOU to have a different frame
work. The final MoU is a result of
careful scrutiny by the Department of Public Enterprises, Adhoc Task Force
(ATF), 3rd Party evaluation and finally the high-power committee
(headed by the Cabinet Secretary)
15.3.2 Disinvestment policy
Disinvestment policy or micro
privatization refers to accepting public investment from markets by way of
selling shares thus keeping a substantial amount of funds in Government investment. Public enterprises are disposed of by public
sale of shares. This process of
disinvestment is expected to
· Generate
additional funds from public/market sources thus relieving the Government from
financial burden
· Be
more accountable to the public and also to the share holders. It should lead to
competitive selling and marketing
· Improve
productivity and profitability
· Generate
profits by improving quality of products and increasing customers’
satisfaction.
15.3.3 Interaction
with Public Sector Forum
Apart from the Government control or
the public sector organization, there is DPE (Department of Public Enterprises)
which is coordination and evaluating enterprise for the public sector. It appraises performance, encourages
coordination and renders expert advice to the public enterprises. Another forum is SCOPE (Standing Conference
on Public Enterprises) set up in 1970, which is the unofficial organization of
a public sector undertaking. The SCOPE
is an effective consultation forum for central public sector enterprises. In addition to this, is the parliamentary
control through COPU (Parliamentary Committee on Public Undertakings) which was
set up in 1964 and comprises of 22 members 15 from the Lok Sabha and 7 from the
Rajya Sabha. These Public Sector Fora organize periodical seminars and
conferences to evaluate the activities and assist the PSUs in improving their
total performance.
The public sector functions within
the rules and regulations prescribed by the Government and are thus subject to
more public scrutiny than the private sector.
It is against these facts that a public sector has to promote its image
while preserving its commitment to the Government rules.
15.3.4 Present scenario in Global competition
Global
competition: Competitiveness refers to the ability of an entity to operate
efficiently and productively in relation to other similar entities.
Competitiveness could be of a company, a group of companies or
nations. Competitiveness has been used most recently to describe the
overall economic performance of a nation, particularly its level of
productivity, its ability to export its goods and services, and its maintenance
of a high standard of living for its citizens. Globalization has brought
new opportunities to the industry and firms. Simultaneously it has also brought
new threats to many industries and firms. Many of the enterprises have made
attempts to survive in the changed environment. Most of the efforts have been
implicit, informal, diffused and hence less effective. The dynamics of the new
economic milieu provide that only competitive firms may finally survive and the
non-competitive firms may disappear.
PSUs or CPSUs are also called as CPSEs
[Central Public Sector Enterprises] as explained earlier. The term ‘Industry’
is also referred to as ‘Enterprise’. The public sector no longer enjoys
monopoly. In the era of economic
liberalization (1991), Public Sector Undertakings had to face new challenges
such as competition with multinationals, globalization of market, technological
up gradation, high productivity with reduction in cost of production,
improvement in communication with stakeholders, customers’ satisfaction. As a result, there has been an upswing in
communication activities of public sector to meet the growing competitive
marketing environment. Thus, invariably, the PSUs had to face competition with
their equals globally and also with private sector enterprises, locally.
15.3.5 Corporate Social Responsibility
Corporate
social responsibility is the responsibility of a Corporate towards the
Community, Society and the Environment at large. It is also called corporate
conscience, corporate
citizenship or sustainable
responsible business/ Responsible Business. CSR policy functions as a
self-regulatory mechanism whereby a business monitors and ensures its active
compliance with the spirit of the law, ethical standards and
international norms. With some models, a firm's implementation of CSR goes
beyond compliance and engages in "actions that appear to further some
social good, beyond the interests of the firm and that which is required by
law. CSR aims to embrace responsibility for corporate actions and to encourage
a positive impact on the environment and stakeholders including
consumers, employees, investors, communities, and others. The term
"corporate social responsibility" became popular in the 1960s and has
remained a term used indiscriminately by many to cover legal and moral
responsibility more narrowly construed.
Political sociologists became
interested in CSR in the context of theories of globalization, neoliberalism and late capitalism. Some sociologists viewed CSR as a
form of capitalist legitimacy and in particular point out that what began as a
social movement against uninhibited corporate power was transformed by
corporations into a 'business model' and a 'risk management' device, often with
questionable results. CSR is titled to aid an organization's mission as well as
a guide to what the company stands for to its consumers. Business
ethics is the part of applied
ethics that examines ethical
principles and moral or ethical problems that can arise in a business
environment. ISO 26000 is
the recognized international standard for CSR.
15.3.6 Company Act
The Ministry of Corporate Affairs,
Government of India has recently notified the Section 135 of the Companies Act,
2013 along with Companies (Corporate Social Responsibility Policy) Rules, 2014
which makes it mandatory (with effect from 1st April, 2014) for certain
companies who fulfill the criteria as mentioned under Sub Section 1 of Section
135 to comply with the provisions relevant to Corporate Social Responsibility. Now,
CSR is not
charity or mere donations. CSR is a way of conducting business, by which corporate
entities visibly contribute to the social good. Socially responsible companies
do not limit themselves to using resources to engage in activities that
increase only their profits. They use CSR to integrate economic, environmental
and social objectives with the company's operations and growth.
The following activities can be undertaken by the
Companies as a part of their CSR initiatives.
The companies having
Networth of INR 500 crore or more; or Turnover of INR 1000 crore or more; or
Net Profit of INR 5 crore or more during any financial year shall be required
to spend 2% of the net profit on CSR activities.
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15.4 ORGANIZATIONAL
STRUCTURE OF P.S.Us
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The usual organizational structure
of a major PSU is as given below. This is the flow chart of authority/hierarchy
available with BHEL.
15.4.1 Management levels & Departments
However, a typical public sector
enterprise will have the following:
At the top management level:
a)
The
Board of Directors
b)
Chief
Executive Officer or Chairman/Managing Director
c)
Chief
Financial Officer
d)
Production
Manager and
e)
Personnel
Director
In the middle management
a)
Production
Planning Director
b)
Sales
Director
c)
Regional
Sales Manager and
d)
Public
Relations Manager
and in the subordinate level
a)
Marketing
Executives
b)
Supervisor
of the Industry
c)
Training
Officer
d)
Controller
e)
Treasurer
f)
Accountant
and
g)
Other
Staff
Mainly, there are four departments with
different functions. They are –
Finance
Department:
It is custodian of the Company’s money. It estimates costs and projects profits
Production
Department:
This sets targets for production, reviews for production vis a vis targets,
locates possible flaws and evolves measures for optimum utilization of capacity
Marketing
Department:
This looks after the sales of products or services and makes marketing
decisions. This department must have the vision to cope with the ever changing
market conditions.
Public Relations
Department:
This projects the public sector in a correct perspective to its various
publics. It helps to foster good
inter-personnel relations between different departments within the
organisation. All these departments must
function in close coordination so
as to create a winning team and to generate a good work culture.
15.4.2 Personnel Management
“Personnel Management is an integral
part of the management process”. What is personnel management? Simply stated,
it is managing the Personnel. ‘Personnel’
is a word of French origin meaning the ‘staff’ or ‘people’ working/employed in
any service. This is the plural of
‘personal’ so to say. Well, the purpose
of ‘Personnel Management’ is getting the best returns from an organization’s
investment on its employees. The
functions include:
·
supply
of expert and up-to-date advice
·
interpretation
and support on managing people
·
provision
of expert recruitment support
·
training
to the employees
·
job
evaluation
·
framework
for assessing staff performance
· consistent
development and implementation of remuneration and benefit policies
·
provision
of social benefit schemes to employees
· solving
disputes of legal or financial nature between the employees and management
15.4.3 Work
culture and Ethics in Public Sector Unit
Work culture can be defined as the
prevailing attitude and perception that employees have of the organisation in
which they are working. Workers can
function best, in a conducive work culture which is possible if the
organisation:
1.
Has
a confident and trust-worthy management
2.
Has
a participative style of functioning
3.
Is
quick and efficient in decision making
4.
Keeps
philanthropic missions in perspective while taking any decision
5.
Is
autonomous and gives adequate responsibilities to its workers
6.
Has
risk-taking capabilities
Among the various factors that have
been identified as bottlenecks in the effective functioning of PSUs is the
formation of the Trade Unions on militant lines. Another is the poor work culture of employees
and lack of responsibility on the part of the management. A strong need has been felt, to make the
employees change their approach to work, for which, management have a
responsibility. As a result, a new work
culture is emerging in Public Sector Units.
It has led to a constant dialogue between PSU management and its
employees for minimizing wage disparities, working towards productivity
etc.
The incentives, bonus, rewards and suggestion schemes have paved the way for better motivation and morale. It is here that PR effort has to ensure interaction from shop floor level to the Board room to facilitate a participative management style. To inform, to motivate and to instill commitment to the organisation, communication links with the employees have to be established using a variety of media like house journals, booklets, manuals, circulars, bulletin boards, direct mail, lectures, meetings with trade union leaders, direct interaction with supervisors, films etc
The incentives, bonus, rewards and suggestion schemes have paved the way for better motivation and morale. It is here that PR effort has to ensure interaction from shop floor level to the Board room to facilitate a participative management style. To inform, to motivate and to instill commitment to the organisation, communication links with the employees have to be established using a variety of media like house journals, booklets, manuals, circulars, bulletin boards, direct mail, lectures, meetings with trade union leaders, direct interaction with supervisors, films etc
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15.5 PUBLIC
RELATIONS STRUCTURE IN PUBLIC SECTORS
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"Public
Relations is a strategic communication process that builds mutually beneficial
relationships between organizations and their publics." “Public Relations
is the way organizations, companies and individuals communicate with the public
and media”. “Public Relations is the management function that
establishes and maintains mutually beneficial relationships between an
organization and the publics”. While Public Relations stand thus, the basic objective
of public sector is to provide suitable conditions for agricultural, industrial,
economic growth and development. In order to realize this objective, public
sector corporates have to establish and maintain relations with various
segments of targeted public. Thus practice of Public Relations is an important
task in Public Sector.
Critics
say that the public sector was launched in the country without properly defining
its basic concept. Its performance was
measured by its immediate profitability.
Hence, it came to acquire a negative image right from the start. The under-utilization of capacity, excess
staffing, large gestation period and lack of professionalism are some of the
ills pointed out by the media. In short,
public sector, in the eyes of the common man was synonymous with inefficient
production and a loss-making organization. Whatever is the criticism; Public
Sector units exist for public good and are not run on commercial lines. Therefore, it is a challenging role for the
PR setup in the Public Sector to counter the negative aspects and public
criticism. PR person, instead, project
its socially responsible role to promote the faith of the people in Public
Sector.
The PR structure
in a Public Sector Bank is as follows: (e.g. State Bank of India)
15.5.1 Functions of Public Relations
Whatever is the
organizational structure and the PR set up,
the functions of Public Relations in a Public Sector are :
Employee Relations
Dealing and communicating with the employees of
an organization. This can include team building and employee empowerment.
Shareholders’
relations
Dealing and communicating with the shareholders
of the organization. This include editing and production of corporate
literature
Customers’
relations
Dealing and communicating with the customers
that consume/avail the goods / services of the public sector undertaking.
Community Relations
Active and continuing participation with and
within a community to maintain and enhance its environment to the benefit of
both the organization and the community. This can involve partnerships, volunteer
activities, philanthropic contributions and public participation.
Government Relations
Dealing and communicating with legislatures and
government agencies on behalf of the organization.
Financial Relations
Dealing and communicating with firms and
interest groups within the organization’s industry.
Communication
about environmental protection
Educating the society on environmental
protection through various methods and the media
Promotion
of reputation
Design and run a communication campaign that
promote the reputation of the public sector
Corporate
advertising
Drawing attention of all the concerned towards
the social objective as well as economic objective of the public sector
Management
of crisis communication
Handle the internal vis a vis external
communication and also dealing and communicating with the Media
Media Relations
Dealing and communicating with the news media
when seeking publicity or responding to reporters’ questions. It also involves
setting up and maintaining a professional and mutually beneficial working
relationship with news gatherers and gatekeepers, in part by becoming known as
a credible source and as a provider of factual, expert information whether or
not that information results in media coverage. This also includes media
monitoring and feedback information management
Public Affairs
Dealing and communicating with government and
groups with regard to societal (public) policies, action and legislation.
Unlike government relations, where the practitioner works strictly on behalf of
an organization, public affairs also is concerned with the effect of public
policies, actions and legislation on its publics.
15.2.2 Internal
and External PR process
A.
Internal Public of Public Relations: Internal publics
are people employed by a firm or members of an organization and they are
intimately related with the functioning of the organization. Internal public
relations is a special PR discipline which concentrates on enhancing companies
relationships with the employees by facilitating good communication among the
management and the employees, boosting their morale and giving them the right
information at the right time. Internal Public of Public Relations includes
Shareholders or Investors, Employees, Suppliers, Distributors, Retailers/
Dealers and Other business associations
Shareholders/owners/investors
relations
Shareholder is the
legal owner of the company. He provides finances to the company either as
shareholder or as a long-term or short-term creditor. They are entitled to
dividend, rights shares, bonus shares, discount coupons for purchase of
companies’ products or concessional usage of its services and gifts on special
occasions like annual conference, anniversary or celebration. Shareholders
deserve fair treatment, get statutory information, transfer of shares to them,
information on change of address or non-receipt of dividend.
Employees
Relations
Employees are the hands
and feet of the company. It is through them that the company fulfills its
objectives. It needs their cooperation and understanding on a continuous basis
in all its activities including the public relations activities. The principle
of self-respect, self-determination and self-judgment are to be applied when
dealing with employees. If the company is able to communicate well with the
employees and seek their participation and cooperation, they can act as the
best public relations agents of the company while dealing with their friends,
relations, neighbors, and business associates.
Suppliers
Relations
Suppliers are the
business associates of the company who provide all types of raw material for
the business activities of the company. Suppliers have a direct and crucial
role in the functioning and profitability of the company. They have to supply
the right quality and quantity of materials for the company. Suppliers need the
company and the company need the suppliers. A good company cannot be happy if
its suppliers are not happy because they are its business associates and they
also have to make profit.
Distributors/Dealers/Retailers Relations
“Distributors are the
face of the company”. They are the link between the company and its dealers.
The success of the business of a company heavily depends on the performance of
the distributors/ dealers, more so in Indian economy where the knowledge of the
consumer about the company and its product is relatively poor.
Retailer/Distributers/ Traders are the friend, philosopher, and guide of the
customers or clients.
B.
External
Public of Public Relations: External
publics are people and organizations that are clients doing business with
a firm or agency or company. The subject matter of External Publics is that it
concentrates on issues pertaining the values, policies, procedures and attitude
of the company towards various groups of people in society. External Publics of
Public Relations includes Consumers/Customers, Community, Mass Media,
Government, Financial Institutions, Action Groups and General Publics
Consumer/Customer
Customer is the centre
of today’s business activity. A consumer is a person who purchases goods and
services for personal use. An External PR needs to educate the audience
pertaining the product or about the organization and then get the suggestions
of the audience. Present era of management belongs to marketing where every
happening in the company revolves around the customer. Mahatma Gandhi , the
father our nation, a very simplistic man in his lifestyle and who does
not involve much in business yet understood the important of customers deeply.
He said, “A customer or consumer is not a means of business, but he is the
purpose of business. He is not an intruder on our premises, he is our quest. He
is the last inspector of our quality and he is always right”.
Community
Relations
Looking after and
protecting the interest of the community is the essence of community relations.
Community represents that public which stays in the close vicinity of the
company, its office, plants and godown, warehouse etc. Therefore it becomes a
social and moral obligation of the industry to compensate community for these
losses by making its humble contribution. In gratitude to public companies need
to provide various types of services like education service, sewage and sanitation
facilities, employment facilities and health services and others.
Media
Relations
Mass media gives mass
exposure to company’s activity. It includes Print Media and Electronic Media.
With the improvement in transportation system, technology and increase in the
literacy rate, newspapers, magazines, story books, comics, weekly newspapers,
Radio, TV, and Internet are becoming more and more popular. Mass media have
always remained a very strong source of voicing opinion, building propaganda
and influencing masses.
Government
Relations
The purpose of the
relationship with government seems to be disappearing because of vested
interest of Individual or corporate. From the point of view of public
relations government and its machinery can be divided into two categories
depending on their characteristics. i.e. peoples representatives and
bureaucrats. The public relation professionals will have to ensure that without
hurting the feelings of either of them and equally balancing their relationship
with them, they have to pursue the objectives of their company, department and
the profession.
Relationship
with Financial Institutions
“Finance is the life
blood of business”. Financial institutions have very important role in all
commercial transactions of the company, commencement of business, its expansion
and growth and even in retardation. Visit site and plant of the company,
giving details of their projects, technical and financial collaboration and
market projection helps the financial institutions to understand the company’s
plan better and thus gain more confidence. Timely submission of progress
reports, payment of principal and interest amount and keeping financial
institution abreast with the latest relevant information further helps the
company to strengthen its credibility and goodwill with financial institution.
Relations
with Action Groups
Action Group is a group
of people that work together to try to achieve changes relating to a particular
situation or in order to help a particular group of people. The enactment of
Consumer Protection Act, 1986, and the framing of the rules in 1987 have been a
major milestone in the role of Action group. It is small in number but
very high in terms of their potential in building or exposing malpractices or
inflict setback to the image and reputation of the company.
Relationship
with General Public
General public is the
ultimate judge of all the activities of the company, based on which it will
survive or die. They are the largest of all the external publics of a company and
probably the most tolerant of all the public’s. Interaction with general public
is through Radio, Television, exhibitions, banners, hoardings, leaflets etc. is
very important because they are the ones who will buy the product of the
company.
15.5.3 Specialized
Role of Public Relations in Public Sector Unit
It is against the above mentioned
backdrop that we must examine the role of public relations in the Indian Public
Sector. The PR activity has the function
of projecting the other, less known, but positive macro image of the public
sector that it
·
Contributes
to national economy
·
Is
it profitable and productive core sector
·
Has
social commitment
·
Contributes
to revival of sick units
·
Is
self-reliant in the key sector of economy
In addition the individual
enterprises activity must also be highlighted about the policies, programmes,
targets, capacity utilization, achievements and socially beneficial
schemes. These facts can be used to
counter any adverse criticisms and they influence public opinion in favor of
public sector enterprises.
15.5.4 Public Relations person in Public Sector
The PR person must be a dedicated
professional who is well aware of the concept of the public sector. He/She must
have direct access to the Chief Executive, attend all meetings and be fully
involved in the task of creating understanding between the enterprise and
public. He/She has, therefore, to be a
skilled communicator, besides having a good grasp of publicity techniques.
It is his efforts that can keep the
Trade Union in touch with the management and ensure harmony. Communicating with the Press and the public
both internal and external is important.
The responsibilities include issuing of press releases arranging press
conferences, writing articles, institutional advertising, supervising
photography, arranging press visits, recording and filing all press cuttings to
evaluate media coverage. The PR person
being the source of information must also answer queries, telephonic or in
person, make speeches, arrange visual aids, exhibits, slides and also be
responsible for the company’s internal and external publications like house
journals, pamphlets, annual reports, brochures etc.
15.5.5 Concern for environment
In addition to social welfare
issues, environment protection has acquired importance for any
organisation. Social and political
pressures are put on PSUs to recognize their obligations and act in a socially
responsible manner. They need to be
sensitive to the environment as the general publics are more educated, have
broader perception and have become more environment conscious.
The public and media attention was
very recently focused on the damage caused to the environment by chemical gases
emitted by some factories. The damage to
the Taj Mahal by noxious gases from Mathura Refineries has not been forgiven by
the people. CFC (Chlorofluoro Carbons) which is used in aerosols,
refrigerators, air conditioners, plastic foam etc is seen as a potential danger
to the Earth’s ozone layer. Every
organisation has to have regard for the environment and take adequate
precautionary measures to avoid any possible ecological damages. Adequate steps taken by an organisation for
environment protection include:
·
Effective
discharge channels for effluents
·
Proper
treatment of toxic gases
·
Water
and air purifying installations
·
Recycling
of industrial waste
·
Prevention
of all types of pollution
·
Periodic
audits to ensure efficient and pollution-free functioning
15.5.6 Image of a Public Sector Unit
Public Sector for Public Good:
Although public sector units have been criticized for some lapses, the PR
person in the public sector has a lot to say in its defense by promoting
positive aspects. Public sector has assumed
great importance in its role of fulfilling a social need. It provides employment and takes care of its
employees by providing subsidized education, canteen, water, electricity and
other welfare services. Besides, it
plays a socially responsible role by preventing concentration of wealth in a
few hands alone. The PR campaigns can
highlight this role of public sector for Public Good.
There is also a need to develop a
good image. What is this image? How is it acquired and sustained by a Public
Sector Unit?
A Public Sector Unit, as we know,
deals with several publics. In course of
its dealings, the public like employees, dealers, suppliers, media, community
leaders come to acquire a certain impression of the organisation in their
minds. The way the various publics’ view
the organisation, becomes the corporate image.
Hence, every corporation has to worry about its multifaceted image or
the total image. This is not at all an
easy task.
Further, a company is evaluated not
only by its financial performances but also on other factors like its treatment
of its employees, its philanthropy, general public welfare etc. However, performance is very important. Publicity can only follow performance.
Institutional advertisements greatly contribute to image-building.
--------------------------------------------------------------------------
15.6 PUBLIC RELATIONS
IN MAJOR PUBLIC SECTOR UNDERTAKINGS
--------------------------------------------------------------------------
15.6.1 BHEL
BHEL was established in 1964. Heavy Electricals (India)
Limited was merged with BHEL in 1974. In
1982, it entered into power equipments, to reduce its dependence on the power
sector. It developed the capability to produce a variety of electrical,
electronic and mechanical equipments for all sectors, including transmission,
transportation, oil and gas and other allied industries. In 1991, it was converted into a
public limited company. By the end of 1996, the company had handed over 100
Electric Locomotives to Indian Railway and installed 250 Hydro-sets across India. Embarking upon the 50th
Golden Year of its journey of engineering excellence, BHEL is an integrated
power plant equipment manufacturer and one of the largest engineering and
manufacturing company of its kind in India engaged in the design, engineering,
manufacture, construction, testing, commissioning and servicing of a wide range
of products and services for the core sectors of the economy, viz. Power,
Transmission, Industry, Transportation (Railway), Renewable Energy, Oil &
Gas and Defence with over 180 products offerings to meet the needs of these
sectors.
Establishment of BHEL in 1964 was a
breakthrough for upsurge in India’s Heavy Electrical Equipment industry.
Consistent performance in a highly competitive environment enabled BHEL attain
the coveted ‘Maharatna’ status in 2013. BHEL as a part of Pt. Jawaharlal
Nehru’s vision was bestowed with the onus to make the country self-reliant in
manufacturing of heavy electrical equipment. Today, with 20,000 MW per annum
capacity for power plant equipment manufacturing, BHEL’s mammoth size of
operations is evident from its widespread
With a widespread network of 17
manufacturing units, 2 repair units, 4 regional offices, 8 service centers, 8
overseas offices, 15 regional centers, 7 joint ventures, and infrastructure to
execute more than 150 project sites across India and abroad, BHEL provides
products, systems and services to customers efficiently and at competitive
prices. The company has established capability to deliver 20,000 MW p.a. of
power equipment to address the growing demand for power generation equipment.
BHEL has retained its market
leadership position during 2013-14 with 72% market share in the Power Sector,
even while operating in a difficult business environment. Improved focus on
project execution enabled BHEL record highest ever
commissioning/synchronization of 13,452 MW of power plants in domestic and
international markets in 2013-14, marking a 30% increase over 2012-13. The
company has added more than 1,24,000 MW to the country's installed power
generating capacity so far. It also has been exporting its power and industry
segment products and services for over 40 years. BHEL's global references are
spread across over 76 countries across all the six continents of the world. The
cumulative overseas installed capacity of BHEL manufactured power plants
exceeds 9,000 MW across 21 countries including Malaysia, Oman, Iraq, UAE, Bhutan, Egypt and New Zealand.
Their physical exports range from turnkey projects to after sales services.
PR/Corporate
Communication structure in BHEL
Bharat Heavy Electricals Limited has
an exclusive corporate communication department headed by an Addl General
Manager with the required managerial staff at its corporate office in New
Delhi. There is a communication and public relations division at unit level in
Bhopal, Hyderabad, Tiruchy, Bangalore offices. Public Relations division is
headed by Asst General Manager, Dy General Manager or Senior Dy General Manager
as the case may be. Corporate communication department is responsible for
policy formulation, budgeting, programme coordination and managing corporate
communication activity for BHEL nationally and globally. Unit level
communications and public relations divisions take care of this activity in
their respective regions with a close link with Corporate office in New Delhi.
This set up is also a pace setter for others in public and even in private
sector organizations.
CSR activities: Some of the recent CSR activities of
BHEL are -
1. Community Development: ‘Anhad
Gram’ in 25 villages of the backward district of Munger in Bihar with 4
objectives - ¢
Dairy development ¢
Bio-mass fuel ¢
Women Health & Hygiene ¢ Food Processing & Preservation Unit.
2. ‘Technology based advanced
agricultural interventions’ in tribal dominated Khargone district for economic
empowerment of marginalized farmers through nursery/crop/pest management and
post-harvest efforts.
3. Provided relief and succor to
Uttarakhand flood victims by way of food, water, medicines and Mobile Medicare
Units.
4. ‘Adoption of 15 Villages for
Sustainable use of rain water harvesting to enhance livelihood of poor small
farmers’ in Bijawar block of Chhatarpur District (M.P.)
5. Supported
‘Construction of tribal welfare school’ at Bhubaneswar Nagar, Assam to provide
education facilities to tribal, rural and slum children of the area
6. Supported
a project through NGO ‘DISHA’ to promote education and skill development of
disadvantaged children and youth by imparting non-formal education to 1260
street/ slum children including skill training to 240 youth living in 10 slum
clusters of Delhi
7. Continued
with vocational training programs viz. ‘Cutting & Tailoring’ and ‘Beauty
Culture’ for women from weak economic background thereby providing them with
self-employment opportunities
8. BHEL-FAEA (Foundation for Academic
Excellence and Access) Education scholarship programme provided scholarships to
150 BPL candidates.
9. Provided
scholarships to pursue higher education to 100 undergraduate girls from
economically weaker sections in Haridwar, Uttarakhand
10. UDAAN: Provided intensive training
of nine months to 87 Engineering Degree & Diploma candidates of J&K at
ATI, Chennai,
11. Sustained Graded Value Education
Programmes (SGVEP): BHEL has entered into an agreement with highly esteemed organization
R.K. Mission to facilitate their mission of providing value based education to
students of Delhi-based schools (Grade VII Grade XI)
12. Financial support to an NGO named
‘Sane & Enthusiast Volunteers Association of Calcutta’ for construction of
a Mental Health Care facility at Thakurpukur, Kolkata.
15.6.3 Indian Oil Corporation
Indian Oil Corporation Limited, or Indian
Oil, is the country’s flagship national oil company and highest
ranked (96th) Indian corporate in the prestigious Fortune ‘Global 500’ listing
in the year 2014 and the largest
public corporation in India when ranked by revenue. Indian Oil has been
meeting the energy needs of the country for more than five decades now. A
strong workforce of about 33,800 employees has been instrumental in achieving
such glorious milestones.
Indian
Oil began operations in 1958 as Indian Oil Company Ltd. The Indian Oil
Corporation was formed in 1964, with the merger of Indian Refineries Ltd.
The company’s operations are
strategically structured along the core business areas viz. Refineries,
Pipelines, Marketing, and Research & Development. Additionally, to keep up
with the rapid changes in business environment, Business Development group was
formed with a mandate to expand the existing portfolio through backward and
forward integration such as embarking into Exploration & Production and
venturing into Petrochemicals and Natural Gas business. Refineries Indian Oil
and its subsidiary company, Chennai Petroleum Corporation Ltd., together own
and operate 10 of India’s 22 refineries with a total refining capacity of 65.7
MMTPA accounting for 30.54 percent of country’s refining capacity.
The company is mainly controlled by Government of India which owns approx. 79% shares in the
company. Indian Oil is one of the seven Maharatna status
companies of India, apart from Coal India Limited, NTPC Limited, Oil and Natural Gas Corporation, Steel Authority of India
Limited, Bharat Heavy Electricals
Limited and Gas Authority of India Limited.
PR/Corporate
Communication structure in IOCL
Indian Oil Corporation Limited has an
exclusive corporate communication department headed by an Addl General Manager
with the required managerial staff at its corporate office in New Delhi. There
is a communication and public relations division at unit level offices. Public
Relations division is headed by Asst General Manager, Dy General Manager or Senior
Dy General Manager as the case may be. Corporate communication department is
responsible for policy formulation, budgeting, programme coordination and
managing corporate communication activity for IOCL nationally and globally.
Unit level communications and public relations divisions take care of this
activity in their respective regions with a close link with Corporate office in
New Delhi.
CSR activities: Some of the recent CSR activities of IOCL
are -
1. Indian Oil Sachal Swasthya Seva
(ISSS) offers free Mobile Healthcare Service
2.
Swarna Jayanti Samudaik Hospital,
Mathura is a 50-bed Swarna Jayanti Samudaik Hospital established in 1999 to
provide medical assistance to residents of nearby areas of Mathura Refinery.
3.
Assam Oil School of Nursing
(AOSN), Digboi offers professional nursing/ midwifery courses to unemployed
girls of the North East
4.
Indian Oil Education Scholarship
Scheme for the poor and deserving SC/ ST students was started in the year
1984-85
5.
Indian Oil Sports Scholarship
Scheme has been promoting Sports for over three decades now.
6.
MoU with TATA Medical Centre Trust
offer “Health & Medical Care” in Kolkata
7.
LPG Scheme of Government of India,
offered a one-time grant to Below Poverty Line (BPL) families in the rural
areas for release of new LPG connection.
8. Uttarakhand & Odisha Indian Oil
contributed 2 crores to Uttrakhand Chief Minister’s Relief Fund for relief and
rehabilitation of people affected by floods/cloud burst in Uttrakhand.
9. Shikshak Dakshyata Vikas Abhiyan to
improve soft skills of government school teachers.
10.
Sarve Santu Niramaya provides free
health consultation and medicines for both human beings and livestock
population.
11.
Drinking water projects near Guwahati
with 20 community stand-alone drinking water projects were implemented on
cost-sharing basis near Guwahati for 1,211 subscribing households.
12.
Indian Oil Foundation (IOF), a
non-profit Trust, was founded to protect, preserve and promote national
heritage in collaboration with Archaeological Survey of India (ASI) and
National Culture Fund (NCF) of the Government of India.
-----------------------------------------------------------------------
15.7 SUMMARY
----------------------------------------------------------------------
The concept of mixed economy adopted
by the nation resulted in the creation of Public Sector in India. With its ownership resting with the
Government, PSUs were set up to act as a catalyst for the overall development
in key sectors of the economy. The
objective was to lead the nation towards self reliance, to provide massive
employment and transform India into a welfare state.
Subsequent changes in industrial
policy helped these units to expand to other areas and compete with the private
sector. Today, public sector in India
has a dominant role to play in the nation’s economy.
PSUs have some unique features,
chief among them being, their multi-dimensional accountability to the
Government, to the Parliament and to the public in general. The image of PSU has always been negative
because of chronic losses, labor disputes etc.
The performance of the public sector has always been under the media
focus and hence the public scrutiny has been severe.
Thus against these factors, public
relations has a specialized role in promoting employee-management relations to
project public sector as a workers’ sector.
Besides, the public relations effort must be directed at projecting the
public sector as one for public good and national welfare because of the
corporate social responsibility discharged by these units.
Public image of public sector can be
tilted favorable using publicity, organizing visits, participating in community
activities and promoting oneself as being conscious of environment and
committed to national cause.
-----------------------------------------------------------------------
15.8 MODEL
EXAMINATION QUESTIONS
-----------------------------------------------------------------------
I. Answer the
following questions in about 40 lines each
1) What
is meant by Public Sector ? What is its importance in Indian economy and its
role in Indian industry?
2) What
is the concept of Public Sector ? Explain the objectives as well as Roles and
Responsibilities of a public sector unit.
II. Answer
the following questions in about 20 lines each
1. Describe
the organizational structure in a Public Sector undertaking and define the
importance of personnel management in ensuring work culture and ethics.
2. Describe
the role of Public Relations person in a Public Sector undertaking with special
reference to Community Relations, Concern for environment and Image building.
-----------------------------------------------------------------------
15.9 GLOSSARY
-----------------------------------------------------------------------
Accountability
|
:
|
Important method of bridging gaps between public demand and organizational performance by a system of checks and balances
|
Institutional Advertising
|
:
|
Also called ‘prestige’ advertising. It does not attempt to sell any product. Its aim is to create a favorable image of the organisation and is a part of PR activity
|
Campaign
|
:
|
An organized effort to poll, formulate or alter the opinion of any group or groups on a selected subject
|
Community
|
:
|
The adjacent geographical area or population influenced and affected by company policy or production
|
Corporate Culture
|
:
|
Unwritten sets of values and rules within an organisation that govern the behavior of those belonging to it and associated with it
|
House Journal
|
:
|
Periodic publication which establishes regular communication between an organization’s employees and its employers
|
Industrial Policy
|
:
|
Country’s official strategic effort to encourage the development and growth of the manufacturing & servicing sector of the economy.
|
MoU
|
:
|
Memorandum of Understanding. An agreement of contract signed between an organisation and its administrative ministry and specifies the obligations of both parties
|
Maharatna
|
:
|
It is a status given to 7 major CPSUs: Bharat Heavy Electricals Limited, Coal India Limited, GAIL (India) Limited, Indian Oil Corporation Limited, NTPC Limited, Oil & Natural Gas Corporation Limited & Steel Authority of India Limited are in this category
|
Miniratna
|
It is a status given to 72 CPSUs
| |
Navaratna
|
:
|
It is a status given to 17 CPSUs namely Bharat Electronics Limited and 16 others
|
Public Relations
|
:
|
The science and art of attitude control
|
Public Sector
|
:
|
Organizations owned primarily by the Government which run on business lines. These enterprises are set up to build sound infrastructure
|
CPSUs
|
:
|
Central Public Sector Undertakings or Central Public Sector Enterprises
|
SLPEs
|
:
|
State Level Public Enterprises
|
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15.10 REFERENCES
----------------------------------------------------------------------
Clarke
L. Caywood: The Handbook of Strategic Public Relations & Integrated
Communications - Mc Graw Hill
Doug
Newsom: This is PR – The realities of Public Relations – Wadsworth, USA
Dr
C V Narasimha Reddi: Public Relations & Communication Handbook – CVNPR
Foundation
Dr
C V Narasimha Reddi: Effective Public Relations & Media Strategy – Prentice
Hall of India
IGNOU
: Text Book “Public Relations in Government and Industry”
SVU
DDE: Text Book “Public Relations Management”
Journal:
“Public Relations Voice”- Volume 1; Issue No. 2; Apr–Jun, 1998: Dr CV Narasimha
Reddi
Source (web)
INDUSTRIAL
POLICY SINCE 1956 article by Dr Narendra Jadhav
www.drnarendrajadhav.info/drnjadhav_web_files
www.drnarendrajadhav.info/drnjadhav_web_files
Corporate
Social Responsibility: www.wikipedia.org
New
Companies Act mandating activities under CSR activities: http://www.mondaq.com/india
Public
Relations Specialised functions: http://www.mediamiser.com/
Internal
and External public of Public Relations : http://shaining.blogspot.in/
Annual
reports of BHEL & IOCl
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