The success of a venture depends to a great extent on the competence of management. A project which is considered technically feasible, economically viable & financially sound may run into difficulties, if it is not backed by sound & efficient management. If the management is incompetent, even a good project may fail. It is rightly pointed out that if the project is weak, it can be improved upon. But if the promoters are weak & lack in business acumen, it is difficult to reverse the situation. Therefore, it is natural that financial institutions very carefully appraise the managerial competency before sanctioning assistance for a project.