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Part - A: NOV/DEC-'06/MG1351 - Answer Key
Part - A: NOV/DEC-'06/MG1351 - Answer Key
Part - A: NOV/DEC-'06/MG1351 - Answer Key
PART – A
1. Distinguish between management & administration?
Management is a generic term that includes administration and it has two
subdivisions namely, administrative management, Operative management. It brings the policies
to effect.
Administration lists out the required policies.
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PART – B
By far the most influential person of the time and someone who has had an
impact on management service practice as well as on management thought up to the present day,
was F. W. Taylor. Taylor formalized the principles of scientific management, and the fact-
finding approach put forward and largely adopted was a replacement for what had been the old
rule of thumb. He also developed a theory of organizations which altered the personalized
autocracy which had only been tempered by varying degrees of benevolence, such as in the
Quaker family businesses of Cadbury's and Clark's.
Taylor was not the originator of many of his ideas, but was a pragmatist with the
ability to synthesize the work of others and promote them effectively to a ready and eager
audience of industrial managers who were striving to find new or improved ways to increase
performance. At the time of Taylor's work, a typical manager would have very little contact with
the activities of the factory. Generally, a foreman would be given the total responsibility for
producing goods demanded by the salesman. Under these conditions, workmen used what tools
they had or could get and adopted methods that suited their own style of work.
11. (b) Explain the fourteen principles of management, as advocated by Henry fayol.
Division of Work -
The specialization of the workforce according to the skills a person , creating specific personal
and professional development within the labour force and therefore increasing productivity;
leads to specialization which increases the efficiency of labour. By separating a small part of
work, the workers speed and accuracy in its performance increases. This principle is applicable
to both technical as well as managerial work.
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The issue of commands followed by responsibility for their consequences. Authority means the
right of a superior to give order to his subordinates; responsibility means obligation for
performance. This principle suggests that there must be parity between authority and
responsibility.. They are co-existent and go together, and are two sides of the same coin.
Discipline-
Discipline refers to obedience, proper conduct in relation to others, respect of authority, etc. It is
essential for the smooth functioning of all organizations.
Unity of Command -
This principle states that every subordinate should receive orders and be accountable to one and
only one superior. If an employee receives orders from more than one superior, it is likely to
create confusion and conflict.
Unity of Direction -
All those working in the same line of activity must understand and pursue the same objectives.
All related activities should be put under one group, there should be one plan of action for them,
and they should be under the control of one manager.
The management must put aside personal considerations and put company objectives first.
Therefore the interests of goals of the organization must prevail over the personal interests of
individuals.
Remuneration -
Workers must be paid sufficiently as this is a chief motivation of employees and therefore
greatly influences productivity. The quantum and methods of remuneration payable should be
fair, reasonable and rewarding of effort.
The amount of power wielded with the central management depends on company size.
Centralization implies the concentration of decision making authority at the top management.
Sharing of authority with lower levels is called decentralization. The organization should strive
to achieve a proper balance.
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Scalar Chain -
Scalar Chain refers to the chain of superiors ranging from top management to the lowest rank.
The principle suggests that there should be a clear line of authority from top to bottom linking all
managers at all levels. It is considered a chain of command. It involves a concept called a "gang
plank" using which a subordinate may contact a superior or his superior in case of an
emergency,defying the hierarchy of control.However the immediate superiors must be informed
about the matter
Order -
Social order ensures the fluid operation of a company through authoritative procedure. Material
order ensures safety and efficiency in the workplace.
Equity -
Employees must be treated kindly, and justice must be enacted to ensure a just workplace.
Managers should be fair and impartial when dealing with employees.
The period of service should not be too short and employees should not be moved from positions
frequently. An employee cannot render useful service if he is removed before he becomes
accustomed to the work assigned to him.
Initiative -
Using the initiative of employees can add strength and new ideas to an organization. Initiative on
the part of employees is a source of strength for the organization because it provides new and
better ideas. Employees are likely to take greater interest in the functioning of the organization.
Esprit de Corps -
This refers to the need of managers to ensure and develop morale in the workplace; individually
and communally. Team spirit helps develop an atmosphere of mutual trust and understanding.
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12 (b) What are objectives? How will you set objectives for a manufacturing organization?
The term “objective” or “goals” are often used interchangeably. Objective are the
end results towards which the activities of attain its objectives.
To set objectives it should cover the main features of the job, it must be clearly
specified in writing, list of objectives should not be too long, it must be set by considering
various factors affecting their achievement, it should be verifiable, it should clearly indicate the
organizational mission, it should be challenging and reasonable, it should yield specific results
when achieved, it should be coordinated with these of other managers and organizational units, it
should provide timely feedback so that the necessary corrective action can be taken, it should be
consistent with long term objectives, it should be periodically reviewed.
Nature of organization
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improves efficiency. Thus, organisation helps in division of work and assigning duties to
different people.
Every organisation has its own purposes and objectives. Organizing is the function employed to
achieve the overall goals of the organisation. Organisation harmonies the individual goals of the
employees with overall objectives of the firm.
Individuals form a group and the groups form an organisation. Thus, organisation is the
composition of individual and groups. Individuals are grouped into departments and their work is
coordinated and directed towards organizational goals.
Differentiated functions
The organisation divides the entire work and assigns the tasks to individual in-order to achieve
the organizational objectives each one has to perform a different task and tasks of one
individuals must be coordinated with the tasks of others.
Continues process
An organization is a group of people with defined relationship to each other that allows them to
work together achieve the goals of the organisation. This relationship do not come to end after
completing a task. Organisation is a never ending process.
To make optimum use of resources such as men, material, money, machine and method, it is
necessary to design an organization properly. Work should be divided and right people should be
given right jobs to reduce the wastage of resources in an organization.
Planning, Organizing, Staffing, Directing and Controlling cannot be implemented without proper
organization.
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A good organization structure is essential for expanding business activity. Organization structure
determines the input resources needed for expansion of a business activity similarly organization
is essential for product diversification such as establishing a new product line.
Organization has to operate for the betterment of employees an must not encourage monotony of
work due to higher degree of specialization. Now, organization has adapted the modern concept
of systems approach based on human relations and it discards the traditional productivity and
specialization approach.
Jury of executive opinion – The executive of the organization each provides an estimate of
future volume, and the president provides a considered average of these estimates. Experts
possess privileged information; Experts receive accurate and well-summarized feedback about
their forecasts. This method is inexpensive and quick and may be entirely acceptable if the future
conforms to the assumptions the executives have used in estimating.
Delphi method – It is a group decision process about the likelihood that certain events will
occur. It makes use of a group of experts, selected based on the areas of expertise required. It is
an exercise in group communication among a panel of geographically dispersed experts. It
comprises a series of questionnaires sent either by mail or via computerized systems. It is also
used for environmental, marketing and sales forecasting. The technique allows experts to deal
systematically with a complex problem or task. Steps for the Delphi method are formation of a
team to undertake and monitor a Delphi on a given subject, Selection of one or more panels to
participate in the exercise. Customarily, the panelists are experts in the area to be investigated.
Development of the first round Delphi questionnaire.
Testing the questionnaire for proper wording (e.g., ambiguities. vagueness),
Transmission of the first questionnaires to the panelists, Analysis of the first round responses,
Preparation of the second round questionnaires, Transmission of the second round questionnaires
to the panelists, Analysis of the second round responses (Steps 7 to 9 are reiterated as long as
desired or necessary to achieve the stability in results.) Preparation of a report by the analysis
team to present the conclusions of the exercise.
Consumer market survey - This method is mainly useful for predicting the sales forecast when
it is introduced in the market. For a new product, there will be no historic or past data available
to forecast. In this method, field surveys are conducted to gather information on the intentions of
the concerned people.
Sales force opinion composite - In this method, members of the sales force estimate sales in
their own territory. Regional sales managers adjust these estimates for their opinion of the
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optimism or pessimism of individual sales people, and the general sales manager “massages” the
figures to account for new products or factors of which individual salesman are unaware.
Features of MBO
MBO focuses attention on what must be accomplished and not how to accomplish the objectives.
It is a goal oriented rather work-oriented approach.
It is an attempt made by the management to integrate the goals of an organization and
individuals. It will lead to effective management.
MBO tries to combine the long range goals of organization with short range of organization.
MBO involves participation of subordinate managers in the goal setting process.
A high degree of motivation and satisfaction is available to employees through MBO.
Periodic review of performance is an important feature of MBO. The review is future-oriented
because it provides the basis planning and corrective actions.
MBO increases the organizational capability of achieving goals at all levels.
MBO’s emphasis is not only on goals but also on effective performance.
MBO provides better guidelines for appropriate systems and procedure to achieve the objectives.
MBO has an evaluative mechanism by which the contribution of each individual can be
measured.
MBO is not a set of rules, procedures or techniques; it is a particular way of thinking about
management. It is an overall philosophy of management that allows management to attain
maximum results from available resources.
Process of MBO
Management by objectives has been recognized as a system for achieving the
organizational objectives. The MBO process consists of the following steps:
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(ii) Market standing, (iii) Innovation, (iv)Productivity, (v) Market Performance, (vi) Public
responsibility, etc.
Recycling objectives
Under MBO goal-setting is not the direction from the top level management only. Rather it is a
two-way process in which superior suggests a goal that is acceptable to the subordinates. Thus,
setting bjectives are not only a joint process but also an interactive one.
Benefits of MBO:
Improvement of managing, clarification of organization, Personnel satisfaction, Team
work, Development of effective control, fast decision making.
Weakness of MBO:
Failure to teach philosophy of MBO, Failure to give guidelines to goal setters,
Difficulty of setting goals, danger of flexibility, time consuming, increased paper work.
Advantages:
The subordinates are motivated by participation in decision making process. This will
also increase job satisfaction. Absence of leader does not affect output. Labour absenteeism and
turn-over will be minimum. The quality of decision is improved. The leader multiplies his
abilities through the contribution of his followers.
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Limitations:
It is time consuming and may result in delays in decision-making. If subordinates are
lazy and avoid work, then controlling them is difficult. It cannot be successfully applied at lower
level of manager and in production activity.
14 (b) (i) Explain how job enrichment helps organizations to maintain competitiveness.
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l. Giving workers more freedom in deciding about such things as work, sequence and pace or the
acceptance or rejection of materials. 2. Encouraging participation of subordinates and interaction
between workers. 3. Giving workers feeling of personal responsibility for their tasks. 4. Taking
steps to make sure that worker can see how their tasks contribute to a finished product and the
welfare of an enterprise. 5. Giving people feedback on their job performance, preferably before
their superiors get it. 6. Involving workers in the analysis and change of physical aspects of the
work environment such as layout of plant, temperature, lighting and cleanliness.
The job enrichment program can only be initiated and implemented
successfully, if the conditions for such a program are highly adequate and receptive. It cannot
work in Vacuum. Its success is dependent upon the existing organizational structure, physical
and conceptual environment, technology etc. For example, if the jobs are already diverse and
challenging, and the workers have reasonable autonomy, further enrichment may not be
necessary. If the employees are not happy with other extrinsic rewards such as pay and fringe
benefits, they may not respond positively to the job enrichment program.
1. Physical barriers - These barriers are environment factors that reduce the sending
and receiving of communication. It includes physical distance, distracting noises and other
interferences. Difficulty in passing of message mainly increases with increase in physical
distance.
2. Personal or Socio-psychological barriers - It arises from motives, attitudes, judgment and
emotions. Finally, it leads to psychological distances. It may be caused due to problems in
encoding and decoding others sentiments, attitudes and motives. So, receptability and
creditability of messages are subjected to several mental and social barriers.
3. Organizational barriers - Usually, information flows through hierarchical structure in
organization downward communication. So, there may chances of information being filtered.
Example: The information received from the top to bottom may not reach in the same sense.
Sometimes, the information may be colored favorably according to his own situations, it is done
by intermediate person between top and bottom status is also a barrier of communication in a
formal organization. H.Kelley discovered a few interesting effects of status upon communication
as below:
I. Low status members communicate more task irrelevant information than high status members.
2. High status persons appear to be restrained from communication criticison, negative attitudes.
3. Communication with high status persons tends to serve as a substitute for upward locomotion
on the part of low status persons having no real possibility of upward locomotion. Poor
supervision also serves as a communication barrier.
4. Semantic barriers:
It refers to the relationship of signs to their reference. It arises due to limitations of the symbolic
system. Symbols may reach a person’s brain through any of the senses such as feeling or hearing.
Generally, symbols may be classified as language, picture or action.
Language - One of the statics report gives the information about the different time consumption
in communication such as first level supervisors spend 74% of their time in communication,
second level supervisors spend 81% and third level supervisor by 87%. Understanding of
language is a major or difficulty among labour. It leads to context to the receiver.
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Picture - Pictures are visual aids in communication e.g., blueprints, charts, maps, fitions, 3-D
models etc. Sometimes, pictures may create confusion in the mind of the receiver.
Action – It is also known as non-verbal communication. It speaks louder than words. The people
do not listen to what he does. So, it leads to credibility gap.
5. Mechanical barriers:
It includes inadequate arrangement for transmission of new, facts and figure, poor office layout,
defective procedure as and practices.
1. Stability:
A sound control system must suit the needs of the enterprise controls must be tailored to the need
of an organization.
2. Flexibility:
Controlling is a continuous activity, it should be flexible enough to be adopted to change
conditions of an organization.
3. Economical:
The control system should be less expensive. Expensive control should be avoided.
4. Simple:
A good control system should be to understand to the administrator.
5. Motivation:
A good control system should give attention to the human factors. A control system should
increase the performance of the members by motivating them.
6. Forward looking:
A good control system should be directed towards future.
7. Objective:
The good control system should be objective. It is clearly quantifiable and verifiable.
8. Controls should reflect the organization structure and needs:
Effective control system is that which reflects the organizations structure, position and needs and
plans.
9. Control should lead to corrective action:
A good control system must lead to appropriate corrective action. Control system must also
suggest the events of improving the performance.
Management needs more advance technology for solving its basic requirements. MIS is
used for decision making in the various functional areas of business. MIS is a new technique
which has brought accuracy and speed to the management. MIS can be defined as “A system of
obtaining, abstracting, storing and analyzing data to produce effective information for use in
planning, controlling and decision making process”. The man machine combination helps to
solve complex business and industrial problems and that too quickly.
Need of MIS
1. Internal factors:
Factor affecting productivity are technology, human resources, government policy, machinery
and equipment, skill of the workers – Well trained and experienced employees leads to effective
productivity. Capital - Increased capital investment results in increased productivity. This also
increases other factors like market share, low cost, high profit.
Research and Development - Research and development play a vital role in determining
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(ii) Explain the impact of liberalization quoting examples from software industry.
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