C TER I1

ORGANISATIONAL ST'RUCTURE

2.1 Introduction

2.2 Public System - The

Organisational Pattern

2.3 Telecommunication - The

Public Utility Service

2.4 Madras Telephone Working

as a Public System

2.5 Structure and Functions of

Madras Telephones

2.6 Conclusion
 2.1 INTRODUCTION

The twentieth century has witnessed the growth of yet another device

of' administrative organisation. This new growth is "Public System". It has been

described by Prof.W.A.Robson as "the most important innovation in political

organisation and constitutional practice"'. This system arose in periods of

crisis in order to meet certain emergencies created by the Great war and the

Great Economic Depression. It arose, as Mr.T.H. 0' Brien remarks in his

British Experiments in Public Ownership and control "due more to accident

and the spirit of compromise than to any general parliamentary faith in, or

application of the working nature of, this type of institution". Marghall E.

Dimock, however, suggests that "the appeal of this idea arises partly from a

value feeling carried over from private enterprise of impropriety of

governmental interference in other people is businessH2.It is a sort of

compromise between laissez faire and strict bureaucratic control in public

administration and is usually employed in the revenue producing enterprises

which have assumed more or less public importance.

It is beyond doubt that the Public Enterprise has played a vital role in

the development of country's economy, but its meaning cont~nuest o remain

vague and varying. Sometimes, it covers the whole of public sector including

the public services and quite as often it is confined to Central Government

Industrial and Commercial enterprises organised a s autonomous Corporation

1
W.A. Robson : Public Enterprise (1937), p.357.

M.E. Dimock : British Public Utilities and National Development (London),

1933, p.153.
and Companies. some others do not consider Public Utilities under Public

Enterprise. It is, therefore, necessary to understand the meaning of the term

more clearly with the help of certain definitions.

Public Enterprise

By Public Enterprise is meant the industrial, commercial and economic

activities carried on by the Central Government, or by a State Government, or

jointly, by the Central Government and State Government and in each case

either solely or in association with private enterprises, so long as, it is

managed by self contained Management.
- S.S Kher

Public Corporation

According to Christine Ammer and Dean S.Arnmer, - a Corporation

formed for purposes of government and the administration of public affairs. In

the United States a city, for example, is a public Corporation acting under the

authority granted to it by the state. A private corporation, on the other hand,

is one established by private individuals, whether charitable purposes or for

profit.

Public Sector

In general usage, all economic activities mostly services - that are

carried out directly by government agencies (or outside the private sector),

largely for the public benefit rather than for profit. Included is the entire
machinery of government offices and agencies on the local state, and national

levels, and all the various enterprises they support (Police and fire protection,
military. hlghway maintenance, public education etc.).

Public Utility

A Private Industry whose services are considered of such public value

that it is given special status by the government usually that of a government

regulated monopoly. The most important public utilities are those supplying

water, electric power, gas, telephone and telegraph service, and local

transportation (subway, buses etc.). Some authorities also include common

carriers, which similarly operate under government franchise and are strictly

regulated.

In India, there is a feeling as though the public Sector arose entirely by

nationallsation and due to the socialistic policies of the Government of Pandit

Jawaharlal Nehru.

2.2 PUBLIC SYSTEM - THE ORGANISATIONAL PATTERN

The Government of India has adopted the Socialistic Pattern of Society

as its aim. The two Policy Resolutions adopted by the Parliament in 1948 and

1956 recognised the need of rapid industrialisation. The Public Enterprise was

given the key and decisive role in the rapid industrialisation of the country.

The form of public enterprise should be such as to provide it with the frame

work of overall policy and to avoid excessive centralisation and bureaucracy in

its operation. Keeping this in view, the public enterprise units have been
organised as distinct autonomous units with varying degree of legal a n d

operational ~ndependence.

Public enterprises, in India, have been organised in three principal

forms.

1. Government Company

2. Public Corporation

3. Departmental form of Organisation

Government Company

This form has most of the characteristics of private limited company, the

government being the major shareholder. It is a body corporate registered

under the Company Act, managed by its Board of Directors comprising of a

majority of Directors nominated by the Government unlike Statutory

Corporation. The positive side of company form of organisation is t h a t its

Management enjoys more autonomy because decisions are taken by its Board

of Directors under the Provisions of Companies Act, its memorandum and

Articles of Association. In India, most of the public enterprises have been

registered under this form of organisation. The prominent among them a r e the

Hindustan Machines Tools Ltd., the Heavy Electricals Ltd., the Hindustan

Steel Ltd., the Indian Refineries Ltd., the State Trading Corporation etc.
Public Corporation

A Public Corporation is a body corporate created by the special Act of

Parliament that states its powers, rights, duties and liabilities. It has this full

autonomy in operations within the frame work of the Act. Its capital is fully

subscribed by the Government. It may be referred to as clothed with the power

of government but possessed of the flexibility and initiative of a private

enterprise. As far as its organisation is concerned, it is governed through its

Board of Directors appointed under the provisions of the Act and answerable

to the Legislature. Sometimes, it is managed directly under the executive

authority of the Government. Financially, it is quite independent and manages

its financial operations without any departmental control. It is not subject to

any budget appropriations except to provide capital and t o cover losses. The

executive authority of the Corporation does not vest in the civil servants. It is

taken as a combination of departmental form and company form of

organisations. Being an autonomous body, it is free in its action and is not

subject to rigid administrative and auditory and financial control of the

government department. It is run on business lines to meet its objectives.

Departmental Form o f Organisation

This is the oldest form of organisation of public units. Most of the early

enterprises were organised, financed and controlled as a department of a

Government Ministry headed by the Minister and manned by civil servants.

Telecommunications is one of the important public enterprises under

departmental form of organisation. The other public units are Railways,

Electricity, irrigations Schemes, etc.

Enterprises run as a department of the government work under the

administrative machinery of the government can exercise maximum control.

The executive decisions of such units are taken at the departmental level and

watched and supervised and executed by the department. As there is strict,

financial and auditory control, there is no question of public money being

wrongly spent. Full accountability to parliament is ensured under this system.

Apart from these advantages, such organisations, as they are controlled

by government departments, are victims of red-tapism, bureaucracy and

excessive centralisation. The management is generally circumscribed by too

many rules and regulations, the decisions are delayed and opportunity lost.

The civil servants who are at the helm of affairs are generally over burdened

impairing their efficiency. These units generally run in loss which is not taken

seriously and met out of departmental funds.

Public Enterprises are primarily confined to public utilities, such as

Telecommunications, Water Works, Power Plants and Railways. Public utilities

are to be treated differently because of their peculiar characteristics, in

relation to social responsibility to the people.

In India, prior to the beginning of planning for economic development,

public sector activities were confined to Railways, Ports, Communications,

Broadcasting, Irrigation and Power and there were a few departmental

industrial undertakings such as ordinance factories, railway workshops and

post and telegraph. Today, they cover a vast and varied range of activities, and

now they even own and control consumer goods production..

In the past state monopoly was mainly in public utilities. Its importance
rapidly increased practically all over the world in all those industries which

were of "Public Interest", such as water, electricity, gas, transport and

communication etc. The general characteristic of public utilities was that they

were under public monopoly and were to supply mostly essential services of

public interest. They were subject to special State Regulations. The state was

obliged to supply special, regular and continuous service to the people. The

quality of service was judged by legal standards. In Telecommunication and

other public utilities rates were fixed by "rate schedules" and were said to be

"reasonable rates".

2.3 TELECORlMUNICATION - THE PUBLIC UTILITY SERVICE

The industrial Revolution created many problems of civic life like

problem of communication, transportation, electricity etc. The agencies

supplying the goods, services or conveniences are known as public utility

concern or public utilities. These utilities are the monopoly of a public

authority which is supposed to protect the common interest of the public.

These utilities are run in the public interest either by the local authority or an

agency of the state or central government. The main purpose of such utility

concerning is to provide these essentials to all consumers without any

discrimination and at reasonable prices. The services, generally included under

public utilities are supply of water, transport service, telephone service etc.

A public utility concern can be described as a n organisation which sells

or provides basic and essential goods and services without which it would be

nearly impossible for any modern industrial society to exist without much cost.

Such services relate to the provision of Railways, Public .Road Transport,

Water, Electricity, Posts and Telegraphs, Telephones, etc.

It may be defined as the form of business organisation basically to

arrange for the efficient and uninterrupted supply of such goods and services
as are absolutely indispendsible for a civilised community is referred to as a

public utility organisation. The main consideration in such services is not to

earn profit but to provide the services for the common goal of the people
without any discrimination and at reasonable prices. Telephone services, the

public utilities, are generally considered as natural monopolies in the sense

that by the very nature of the services, it is usually a n essential condition that

one should have monopoly right in providing such services in any particular

area. Such a public utility concern enjoys natural monopoly. Olie of the
distinguished feature of the public utility is that it is a natural monopoly and

its activities are, therefore, controlled and regulated by the government or the

authorised agency in the broader interest of the community a t large. In this

chapter, we deal with the various aspects of public utility services in Telecom.

Organisation.
Early History and Development

Since its inception in 1850, the telegraph service in India had been from

the start monopoly of the State and administered as government departmental

organisation, under Public Works Department. In 1883, arrangements,

however, were made to make the telegraphs on administrative annexe to the

Postal Department. In 1888, Posts and Telegraphs was combined as quasi-

commercial Department. On the 16th Feb'1888 the Indo-European Telegraph

Department, which was so far administered by a Director-in-Chief, was made

over the Director - General of Indian Telegraphs Department. Further, it was

decided that the Administration Reports of the two Departments, namely

Indian Telegraph and Indo-European Department should be seperated so as

to show how the finances of the country were affected by each unit. Opening

to the great expansion of the Department which has taken place since 1877,

an increase in the number of higher posts and also of the Divisional charges

had been admitted by the Government of India to be necessary for some time.

Therefore, during 1902-1903, the re-organisation of the superior establishment

took place. During the year 1905, control of Telegraph Department except as

regards connected with building and electricity was transfered from Public

Works Department of Government of India to the newly constituted

Department of Commerce and Industries with effect from 1st March 1905.
However, there was reversion of control of Posts and Telegraphs again to

Public Works Department. In 1910-1911, the re-organisation of the

Department took place and the Circle Scheme was introduced. In 1912-1914,

amalgamation of Posts and Telegraphs Department under a single Director-

General took place. It functioned under the Ministry of Communications which

was made into a seperate Ministry with the beginning of interim Government

formed in accordance with the basic lines of Federal Structure of' India as

proposed by the British Cabinet Delegation.

The Present Telecommunication Organisation - Structure and

Functions

Telecommunications which constitutes an essential infrastructure for

national development provides the key to connectivity, productivity and

efficiency in all social, political and business endeavours. The world has now

entered the information age.

With a view to promote rapid decision-making and development i n all

aspects of telecommunication including technology, production, service,

financing etc., the Govt. of India decided to establish a Telecom. Commission

with full executive, administrative and financial powers to deal with various

aspects of telecommunication. The commission's functions under the

communication Ministry which is headed by the Minister for Communications.

The Telecom, Commission is responsible for

i. Formulating the policy of the Department of Telecommunication.

..
11. Preparing the Budget for DOT., for each financial year and

getting it approved by the Govt. and

...
111. Implementation of the policy in all matters relating to

Telecommunications.
 The primary objective of the Telecom Commission is to provide better

customer service to the people and expand its reach to the common man.

The organisation of Telecom. Dept. as shown in Chart 2.1 consists of

Chairman, Members (Four), and Secretary. The organisation is structured in
such a way that the entire telecom activity can be divided into five areas:

* Technology

* Production

* Service-
* Finance
* Administration

Member (Technology) is responsible for developing the products and

technology needed for all telecom activities. He will have with him R&D
laboratories, training, quality assurance circles, and technology planning
related responsibilities. He will have Advisor (Technology)to assist him.

Member (Production)is responsible for producing all telecom equipment

in the country. Ke will have responsibility for arranging procurement and

supply of all telecom. equipment for development and planning in all the field
units. He will have with him the telecom factories, independent production
units, ITI, HTL, etc., in the public sector, other units in the joint private sector
as well as the stores organisation. He will have Advisor (Development) to
assist him.
CHART 2.1

TELECOM COMMISSION HEADQUARTER

MEMBER (T) EMBER

ADVISER
(P)

e MEMBER (F)

5, DOG
~Flnl

ODG

t:
(Rev1

,Prof &
t x fl,
DDG d ACC

t
(MIS) (TFP) (LTP)

onc
I.,

- GM (TELECOM FACTORY) - GCMIGM CIRCLES

FIELD UNITS - CGMIGM MAINTENANCE
- GM (TELECOM STORES)
- DDG (QA) - GM TRAINING (HRD), JB
- CGMlGM (PROJECTS)
- CGM (ALTTC) - CGM, T&D CIRCLE, JB
- GMIGMM

MTNL
AUTONOMOlJS H001FS T
VSNL
C DOT HIL
 Member (Services) is responsible for providing customer services and

satisfaction. He will have Advisor (Operations) and Advisor (HRD) to assist

him. All the telecom circles, MTNL,TClL and VSNL and Training Centre at
Jabalpur and T&D Circle, Jabalpur will report to him.

Member (Finance) is responsible for all the financial and accounting

operations, resource mobilisation, management of revenues and control of

expenditure with the ultimate objective of better financial returns, funding

future development and reduction of costs.

Secretary Telecommunications of the rank of Additional Secretary to the

Govt. of India will be responsible for administration, ~ i n i s t e r i ainterfaces

l and

Parliamentary Activities.

2.4 MADRAS TELEPHONES WORKING AS A PUBLIC SYSTEM

The Recent Past to the Present

(1943-1981) & (1981-1993)

The first April 1943 is a significant date in the history of Madras

Telephones. It was on that momentous day the ownership of the Madras

Telephones Company changed hands and Madras Telephone District was

formed as a n integral part of the Indian P&T Department. At that time there

were only 4,200 telephones in Madras. The progress made during the period

from 1943 to 1947 was also meagre. The war revaged economy could not afford

much except opening a small satellite exchange of 100 lines at St.Thomas

Mount and a small addition of 300 lines to Mount Road Exchange.

 The scope of Madras Telephones enlarged in 1946 when Madras Trunk

Exchange, till then under the control of PMG, Madras was transferred to the
Madras Telephones District.

History of Madras Telephones

History of Madras Telephones is part of the history of Madras city. The

city of Madras is the capital of Tamilnadu, the land of Temples. In it, we have

fine synthesis of all that is great, the old and new, Madras or

Chennaipattinam, as it is popularly known is a place of rather recent origin.

The Portuguese were the first to establish a settlement in Santhome on the

foreshore of Mylapore. Then, early in the 17th century the British East India

Company started a trading centre in the city. Francis Day of the East India

Company secured in 1639, a lease of "Madras Pattinam" from the Raja of

Chandragiri. Construction of Fort St.George took 14 years and was completed

in 1653. A few years later the corporation of Madras was established. From

these small beginnings a vast city has developed in the last centuries. It is now

the Fourth largest city in India. It hums with industrial activity! but it still
retains an old world charm.

Brief History of the growth of the Telephone System in Madras.

Madras Telephones is responsible for providing telecom facilities in the

city of Madras and adjoining areas. Total Area Served - 1105 Sq.Kms.
Population Served is about 6 Million. The density of Telephone varies from less

than 100 telephones per sq.km. The total area is served by 37 Telephone
Exchanges with a total equipped capacity of 2,26,100 lines (as per status report

Feb.1993, Madras Telephones) 34.3% of the capacity consists of Crossbar,

60.0% of Electronic and 5.7% of Strowger type exchanges.

First telephone exchange in the city of Madras was a 40 lines Magneto

Exchange opened in 1882. First automatic exchange was opened in 1926 (1500

lines central exchange) Mount Road, and Mambalam Exchange followed in

1937 and 1943.

P&T Department took over the administration of telephone in 1943. The

system gradually expended with the opening of St.Thomas Mount (19441,

Chrompet (19501, Kilpauk (19551, Mylapore (1955) and Kalmandapam (19621,

Ambattur (1963),Poonamallee (1953),Redhills (1963) and Central West (1965).

First Crossbar Exchange in the country was installed in Mambalam

(1967), other crossbar exchanges are Avadi (1974), Kodambakkam (1974),

Adyar (19741, Kellys (1974) and New Anna Road (1975), Harbour I (1984),

Mambalam I1 (1984), Ambattur (19841, Chrompet (1987), followed.

The first Electronic Exchange was installed in Haddows Road in October

1984 and the first digital Electronic Exchange was commissioned in Flower

Bazaar in March 1986. Other Electronic exchanges Madhavaram (1986),MEPZ

( 1987), New Anna Road I1 (1988), R.K.Nagar (1988j, Poonamallee (19881,

Manali (1988), Harbour I1 (1989), Ennore (1989), Ashok Nagar (19891,

Haddows Road I1 (1989),Anna Nagar (1989),Besant Nagar (1990), St.Thomas

Mount (19913, Red Hills (19911, Raj Bhman (1991),Kodambakkam I1 (19911,

Arnbattur RLU (19911, Porur RI,U (1991),and Kellys I1 (1992).Thiruvanmiyur

RLU (1992), K.K.Nagar RLU 11992j, Tambaram RLU (1992), Anna Nagar I
( 1992), followed.

The Area Madras Telephones Serves a t Present

Madras Telephones now covers an extensive area of approxlmately 1,105

sq.kms. The older parts of Madras city lie within a rectangular area of 129

sq.kms with its eastern edge along the Bay of Bengal. Later expansion

occurred in three directions - mainly westwards. More recently, the outlying

industrial townships having a high community of interest with commercial

centres in the city have been brought into the Madras Main System. The

potential for telephone development in the industrial townships is quite high.

According to the latest redemarcation of local area of the various exchanges

within the Madras Telephone District are grouped into exchange systems.

Madras Telephones System a t a Glance (28.02.93)

TABLE 2.1

Equipped 5% of Working
Type of No. of
Exchange Exchange Capacity capacity lines
No. of lines
1. Strowger 2 12,800 5.7% 12,234
2. Crossbar 10 77,550 34.3% 70,438
3. Electronics 25 1,35,75C 60.0% 1,21,796
Total 37 2,26,100 100.0% 2,04,468
Waiting List : (Combined for all exchanges)

OYT Special
OET General
NOYT Special
NOfiT SS
NOYT General

Telex

LocallSTD Public Call 0 , f l c e s (PCOS)

No. of Local PCOS 4,931

No. of STD PCOS 1,257
No, of Trunk PCOS 20

Madras Telephones - Staff Strength a s on 31.3.92

TABLE 2.2

Total No.of NO.of Employees NO.of

Cadre Employees Belonging to Women
as on 31.3.92 SC ST Employees I

Group 'A' 83 8 1 8
Group 'B' 354 33 22 15
Group 'C7 6,433 1,382 101 2,230
Group 'D' 2,283 64.5 62 252
Total 9,153 2,068 lS6 2,505
2.5 STRUCTURE AND FUNCTIONS OF LYZQDRASTELEPHONES

The organisationai form has an important bearing on the successfuu!

performance of an enterprise. In a right choice of organisation "Managers are

more bothered" for efficient services and production. Although orgnaisational

development is an important hall mark of a successful business, yet its forms

and methods vary from country to country and one enterprise to another. The

difference in organisational forms crop up on the basis that every country has

to follow industrial and economic development in accordance with the spirit of

constitutional system, Government Structure, Political Conditions, Economic

and Social Desires.

Madras Telephones follows the orgnaisational pattern similar to the type

followed by cther Metro Cities viz., Delhi, Bombay, Calcutta Telephones.

Like other Central Government Departments, Madras Telephone has

preferred Departmental form of Organisation. In the upper management

hierarchy, it has Chief General Manager, as its top, followed by General

Managers, Deputy General Managers. The Chief General Manager is assisted

by three General Managers. The Organisation Chart is as Follows:

 The Madras Telephones Organisation consist~ng of 37 Telephone

Exchanges with a total equipped capacity of 2,26,100 lines is spread over an

area of i.105 Sa.kms. The management, responsibility 1s vested with the Chief

General Manager, Madras Telephones. He is assisted by 3 General Managers

viz., G.M. (Operation), G.M. (Exchange), G.M. (Development) and 14 Deputy

General Managers in the common functions, 3 Area Managers in the field, 1

Director in the area of computerisation and 2 Directors in the area of Financial

Advice and Accounting. The exchanges and the external plants are maintained

by specially trained engmeers who receive purpose oriented training in the

Telecom. Training Centres situated in the different parts of the country. They

are also given refresher training from time to time to update their knowledge

and skills in the changing technologies increasingly brought into the Telecom.

Services.

2.6 CONCLUSION

The different stages through which the Madras Telephone Organisation

has climbed upto its commanding positlon makes interesting studies.

Telephone arrived in Madras in the beginning of 1882, through the Oriental

Telephone and Electric Company Limited which was incorporated in London,

to be operated in Madras, Calcutta and Bombay, first five years after

Alexander Graham Bell had invented the telephone. The first telephone

exchange was opened a t 37, Errabalu Chetty Street, on January 28, 1882 and

started serving 25 subscribers t o begin with. It was one of the most memorable

occasions that the city of Madras had acquired its first telephone service,

simultaneously with the great city of London. This is the birth of 'Madras
Telephone Company' through a seed of national movement. The natlve

coinpany started operating and then came the construction of a Telephone

House a t Esplande, the then China Bazaar. New Telephone Exchanges at

Central Exchange, Auto Exchange at Telephone House, Mount Road Exchange

and the Mambalam Auto Exchange (with 500 lines in 1937) were

commissioned. In 1943, the Government of India took over the Madras

Telephones Company which set the pace of introducing new modes of

communication and introduction of new technology and management. During

the quarter century from 1947 to 1972, the equipped telephone capacity has

increased from 5,100 to 57,340, an aggregate increase of 52,240 lines, which

works out t o an average of 2,090 additional lines per year. This pace of growth

was surpassed tremendously during the nine years af%er 1972. During this

period 1972-81, the average growth rate was 3,200 lines per year. With the

introduction of the deposlt system in 1975 for fresh applications, there has

been a slump in the demhnd for new telephones. The waiting list with demand

in 1975, dropped down to a mere 3,916 in 1976.

From a humble beginning of a manual telephone service using magneto

system, with hardly 25 subscribers, the telephone service in Madras had begun

to span over 110 years to grow into a multiexchange system incorporat~ngthe

latest technologies now available all over the globe, 39 telephone exchanges

spanning a stretch of 1,105 sq.kms. are now available to the 6 million people

of this great Madras City. The total equipped capacity is over 2.26 lakh lines
with 60% of the equipment served by the latest electronic technology and out

of the remaining 34.3% of the capacity are fed from the crossbar systems and
5.7% from the old type Strowger technology. Madras will be having the most

modern telecommunication network in the map of the country, within a few

years. This will unfold the beginning of the new era wherein computer

t e c h n o l o ~ e s are greatly proliferated, to give a thrust to the latest

developments in this system. Yet Madras Telephone District is having about

1.I lakh of waiting applications; some of them waiting from 1985 in one or two

areas under the Non-OYT (Rs.3,000 deposit category). Our endeavour is to

minimise the waiting time of the applicants and optimise the available

equipment and maximise the satisfaction of the subscribers/public.

Madras Telephone District is confident that the waiting period of

subscribers could be reduced to about one year under Non-OYT category and

will be almost current in all the exchange in the OYT Category. It is hoped

that i t will reach the level of satisfaction by the end of the 8th Five Year Plan.

The operational efficiency has further been enhanced by a closer

supervision and effective maintenance techniques which are possible due to the

skilled and understanding officials of the Madras Telephones, who are

motivated periodically by closer meetings and co-ordination.

Madras Telephones has got about 9,153 employees in its fold, out of

which 27.5% are women, 22.8% of the employees of this organisation are

hailing from SC and ST. In-service training is arranged for all the staff in

Regional Telecom Training Centre and District Telecom Training Centre to

disseminate latest information to the staff to keep them acquainted of the

latest skills and methods to keep pace with advancement in the communication
network. Madras Telephones strives its best to make the employee, a happy

worker and also to remain a competent and contented worker. We also believe

that it is not the master-servant relationship that, achieves the required outp1.t

in a public service, but i t is the best leader-subordinates relationship based on

mutual understanding only achieves better results.

With a view to gaining a n in sight into the problems of Madras

Telephones District and its style of functioning, the decision had been taken

to select Madras Telephones for this research study. The decislon to select

organisation for this study was based on two considerations namely,

Willingness on the part of the organisation to allow the researcher for a

convenient and free access to their executives and secondly, the suitability of

the setting from the point of view of research questions. Pilot study was

conducted so that further insight regarding the setting of the final study may

be developed. It was decided that the data for the final study were to be

collected from the various field units of Madras Telephones because these were
judged a s the most appropriate setting from the point of view of the leader-

subordinate interactions and job-characteristics.