2017

Principles of Management
MG 6851
2 Marks Question and Answers

Anand Jayakumar A
SVS College of Engineering
2/5/2017
 MG 6851 - PRINCIPLES OF MANAGEMENT

UNIT I: INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS

Definition of Management – Science or Art – Manager Vs Entrepreneur - types of managers

managerial roles and skills – Evolution of Management – Scientific, human relations , system and
contingency approaches – Types of Business organization - Sole proprietorship, partnership,
company-public and private sector enterprises - Organization culture and Environment – Current
trends and issues in Management.

PART - A
1. Define Management. Nov/Dec2012,14 May/Jun 2011
“Management is the art of knowing what you want to do in the best and cheapest way‖. –
F.W.Taylor
―Management is to forecast and plan, to organize, to command, to coordinate and to control‖ –
H.Fayol
―Management is the process of working with and through others to achieve organizational
objectives in a changing environment. Management utilizes the limited resources effectively and
efficiently‖ – Koontz and O’Donell
2. Name the different levels of Management. May/Jun 2012
Top Level
Manager
Middle Level
Manager
First Line Manager

Non-Management

First line managers are responsible for day-to-day operations. They supervise people those who
are performing the activities required to make goods or services.
Middle level managers supervise first-line managers. They are responsible to find the best way to
use departmental resources and to achieve organizational goals.
Top level managers are responsible for the performance of all departments and have cross
departmental responsibility. They establish organizational goals and monitor middle level
managers.
3. What are the functions performed by a low level manager? Nov/Dec 2013
Supervisory management (lower level management) consists of senior supervisor. Supervisor
management is above the operatives but below the middle level management in the organization.

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 The executives at this level are in direct touch with the rank and file of workers and have to see
that the work is properly carried out. The personnel employed at this level play an important role
in the organization. The effective implementation of the plans and polices, the quality of
workmanship quality of output and overall success of the organization very much depend on the
hard labor, discipline and loyalty of the personnel at this level of management. Further, this level
of management represents the workers before the higher management and the higher echelons of
management to the workers.
4. Specify the functions of Management. Nov/Dec 2012
(Or)
What are the various functions of Management? Nov/Dec 2011
(Or)
What are the various functions of Management? Nov/Dec 2016
Planning

Controlling Organising

Directing Staffing

Planning is the process of developing future frame of reference. Organizing is the process of
dividing duties, assigning duties, grouping tasks, delegation of authority, fixing responsibility and
allocating resources required to carry out a specific plan. Staffing is concerned with managing
human resources. Directing is the process of instructing, counseling, guiding, motivating and
leading the human factor to achieve organizational goals effectively. Controlling is a process by
which managers evaluate how well the organization is achieving its goals and take corrective
action to improve performance.
5. What is scientific management? Nov/Dec 2011, 2015
(Or)
Define ‘Scientific management’. May/Jun 2015
(Or)
Who is the father of scientific management Nov/Dec 2015
F.W.Taylor was acknowledged as ―The Father of Scientific Management‖. In scientific
management, the emphasis was placed on industrial technology and methods of production. He
made a systematic study of relationships between people and tasks to redesign the work for
higher efficiency. He sought to reduce the time a worker spent on each task by optimizing the
way the task was done.
6. What are the roles of a manager has to perform? May/Jun 2014
(Or)
Mention the role of managers. (any two) May/Jun 2011
(Or)
What is the basic role of managers? May/Jun 2015

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 Interpersonal

Role of
Managers

Decision Informational

Interpersonnel Roles
1. Figurehead role: Manager symbolizes the organization
2. Leader role: Manager trains and directs the subordinates
3. Liaison role: Managers link and coordinate people inside and outside the organization
Informational Roles
1. Monitor role: Managers collects information from the internal and external environment
2. Disseminator role: Manager transmits information to make changes in the attitude and
behavior of employees
3. Spokesperson role: Manager transmits information to outsiders
Decision Roles
1. Entrepreneur role: Manager decides upon new projects or programs to initiate and invest.
2. Disturbance handler role: Manager assumes responsibility for handling an unexpected
event or crisis
3. Resource allocator role: Manager assigns human and material resources between
functions and departments
4. Negotiator role: Managers deal with different people and groups at major negotiations.
7. Who is known as father of modern operations management theory? May/Jun 2012
Henry Fayol made effective contribution to the scientific management. He is known as the
―Father of Modern Management Theory‖. He identified fourteen principles of management.
1. Division of work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of direction
6. Subordination of individual interests to general interest
7. Remuneration
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Esprit de Corps
8. What is the necessity of Organization? Nov/Dec 2013

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 Organizing involves establishing a structure of roles for people to fill in an organization and
ensuring that all tasks necessary to accomplish goals are assigned to people who can do them
best. The purpose of an organization structure is to help in creating an environment for human
performance.
9. Distinguish between Administration and Management. May/Jun2014,Nov/Dec2014,15
The line of demarcation between administration and management is very thin and blur. They may
seem alike, but they are very different from each other. Administration means a process of
effectively administering the entire organization. Management is an act of getting work done
through others. However, the primary distinguishing point between the two is that management is
answerable to the administration.
10. Define Administration. May/Jun 2013
The administration of a business includes the performance or management of business operations
and decision making, as well as the efficient organization of people and other resources, to direct
activities toward common goals and objectives. In general, administration refers to the broader
management function, including the associated finance, personnel and MIS services. In some
analysis, management is viewed as a subset of administration, specifically associated with the
technical and operational aspects of an organization, distinct from executive or strategic
functions.
11. What is Globalization? May/Jun 2013
The term globalization is derived from the word globalize, which refers to the emergence of an
international network of economic systems.It is the process of world shrinkage, of distances
getting shorter, things moving closer. It pertains to the increasing ease with which somebody on
one side of the world can interact, to mutual benefit, with somebody on the other side of the
world.
12. Specify the effects of globalization.
Impact of Globalization
Positive Impact
 A better economy – it introduces rapid development of the capital market
 Introducing new technologies- the new technologies and progress in telecommunication,
introduction of satellites, mobiles etc are all results of globalization.
 Living standards are risen.
Negative Impact
 Because of too much flow of capital amongst countries, it introduces unfair and immoral
distribution of income.
 Another fear is loosing national integrity. Because of too much exchange of trade, money
etc independent domestic policies are lost.
13. What is Multinational Corporation (MNC)? May/Jun 2010
A multinational corporation is a business that has its facilities and other assets in at least one
country other than its home country. Such companies have offices and/or factories in different
countries and usually have a centralized head office where they co-ordinate global management.
14. Define Joint sector unit. Nov/Dec 2009, May/Jun 2010
The joint sector represents a new ideology of economic management geared to sub serve a new
economic system. The term is applied to an under-taking only when both its ownership and
control are effectively shared between public sector agen-cies on the one hand and a private

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 group on the other. Joint sector industries are owned jointly by the government and private
individuals who have contributed to the capital.
15. What is meant by Esprit de crops? May/Jun 2009
'ESPIRIT DE CORPS' here means team spirit and team work. This principle emphasizes on team
work. 'UNITY IS STRENGTH' is the essence of this principle. Fayol suggested that there should
be a team spirit in the organization and all the employees must consider themselves as member of
the organization. The organization should be considered as a team and all the employees as its
member. When the employees are considered as member, it develops a feeling of belongingness
among them and thus each of them contributes to the achievement of the organizational goal. This
sense of togetherness helps the employees to perform with greater efficiency and positive attitude
towards the work.
16. What is a social responsibility? May/Jun 2004
Social responsibility is an ethical framework and suggests that an entity, be it an organization or
individual, has an obligation to act for the benefit of society at large. Social responsibility is a
duty every individual has to perform so as to maintain a balance between the economy and the
ecosystems.

17. Is Management - an art or science?

Managing as practice is an art; the organized knowledge underlying the
practice is a science.
Managing has the following features that make it an art.
• Creative

• Individual approach

• Application and dedication

• Initiative and

• Intelligence.
The following features make it a science.
• Systematic decision making

• Universal management process

• Situational output and

• Universally accepted management.

Thus management can be called both as an art and science.
18. What are the essential skills of Managers?
The major skills required or expected out of managers are:-

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 o Technical skills – Pertaining to knowledge and proficiency in activities involving
methods and procedures;
o Human skills – Ability to work effectively with other persons and to build up
cooperative group relations to accomplish organizational objectives;
o Conceptual skills – Ability to recognize significant elements in a situation; and to
understand the relationship among those elements; and
o Design skills – Ability to solve problems in ways that will benefit the enterprise.
19. List the principles of Scientific Management.
Scientific management was introduced by F.W Taylor who is known as the Father
of Scientific Management. He adopted scientific methods to increase the productivity and
greater efficiency in production.
The principles of Scientific Management are:-
 Separation of planning and working
 Functional foremanship
 Job analyzer
 Time study
 Motion study
 Fatigue study
 Standardization
 Scientific selection of training
 Financial incentives and
 Economy and mental revolution.
20. List the contributions of Fayol towards Management.
Henry Fayol is a French industrialist whose contributions are termed as
operational management or administrative management. He followed ‗The Classical
Approach‘ to the evolution of management thought. His contributions are given as
follows:-
• Grouping of activities of an industrial organization into six groups, namely-
Technical, commercial, financial, security, accounting and managerial;
• Identified six types of qualities of a manager are- Physical, mental, moral,
educational, technical and experience;
• Fourteen principles of Management namely- Division of Work, Authority and
responsibility and so on; and
Five elements/functions of management- Planning, organizing, commanding,
coordinating and controlling.
21. Define ‘Sole proprietorship’.
A Business unit that is owned and controlled by a single individual is known as sole
trading or sole proprietorship concern. He uses his own savings for running the business. The
sole trader makes all purchases and sells on his own and maintains all the accounts. He alone
enjoys all the profits and bears all the losses.

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 Ex: A Fancy store.
22. What do you mean by a ‘Partnership firm’?
A partnership is an association of two or more persons to carry on business and to
share its profit and losses. The relation of a partnership arises from contract. The
maximum number of partners is limited to 10 in the case of banking business and 20 in
the case of other business.
Ex: Chand & Co.
23. What do you understand by the term ‘Joint Stock Company’?
―By a Company we mean an association of many persons who contribute money
or money‘s worth to a common stock and employs it in some trade or business and also
shares the profit and loss as the case may be arising there from‖.
There are two types of Joint stock companies:-
* Private Limited company – Ex: M/s Key Media Pvt. Ltd.
* Public Limited company – Ex: M/s Pearl credits Ltd.
24. Who is (i) an active partner (ii) a sleeping partner?
Active partner: Any partner who is authorized by others to manage the business is
known as active partner.
Sleeping partner: Any partner who does not express his intention to participate in the
business can be called as a sleeping partner. He will be just an investor who has a right to
share profits.
25. What is a Co-operative Enterprise?
A Co-operative enterprise is a voluntary association of persons for mutual benefit and its
aims are accomplished through self-help and collective effort. It may be described as a
protective device used by the relatively less strong sections of society to safeguard their
economic interests in the face of exploitation by producers and sellers working solely for
maximizing profits.
Ex: AAVIN Milk Federation Cooperative Society.
26. Define Corporate Social Responsibility. Give an example May/June 2016
Corporate social responsibility (CSR) is a business approach that contributes to sustainable
development by delivering economic, social and environmental benefits for all stakeholders. CSR
is a concept with many definitions and practices. Corporate social responsibility (CSR) refers to
business practices involving initiatives that benefit society. A business's CSR can encompass a
wide variety of tactics, from giving away a portion of a company's proceeds to charity, to
implementing "greener" business operations.
27. State any four managerial skills. May/June 2016
Much like a professional basketball player needs to know how to dribble and shoot a basketball,
or how a home builder understands the process of framing a house, managers also need to have a
specific set of skills in order to effectively perform their jobs. Managerial skills are what the
manager uses to assist the organization in accomplishing its goals. Specifically, a manager will
make use of his or her own abilities, knowledge base, experiences, and perspectives to increase
the productivity of those with whom they manage. Three most common skills include: 1) human
skills - the ability to interact and motivate; 2) technical skills - the knowledge and proficiency in

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 the trade; and 3) conceptual skills - the ability to understand concepts, develop ideas and
implement strategies.
28. Give the current trend in Management Nov/Dec 2016
Globalization
The melting of barriers among nations and their increasing interconnectedness, accelerated by
technology, has led to a change in the world order that has had a profound impact on global
business.
Technology
If the current wave of globalization has been the driving force behind the most far-reaching and
powerful changes in business, then information technology has indisputably been the facilitator.
Sustainability and Corporate Social Responsibility
For business to be sustainable, and even profitable, our planet has to be sustainable - this
realization has hit businesses perhaps the hardest in recent times.
The Study of Psychology
Speaking of interdisciplinary influences on business, the study of human psychology - probing
into cognition, motivation, behavior and performance - has become a key pillar of organizational
management.
Business Ecosystems
One of the most notable trends in management has been the rise of business ecosystems - defined
as groups of firms which together provide complex products and related services to meet end-to-
end requirements of users across the value chain.

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 UNIT II: PLANNING

Nature and purpose of planning – planning process – types of planning – objectives – setting
objectives – policies – Planning premises – Strategic Management – Planning Tools and
Techniques – Decision making steps and process.

.
PART - A
1. Define planning. May/Jun 2004,Nov/Dec 2008
Management planning is the process of assessing an organization's goals and creating a realistic,
detailed plan of action for meeting those goals. Much like writing a business plan, a management
plan takes into consideration short- and long-term corporate strategies. The basic steps in the
management planning process involve creating a road map that outlines each task the company
must accomplish to meet its overall objectives. Planning means looking ahead and chalking out
future courses of action to be followed. It is a preparatory step. It is a systematic activity which
determines when, how and who is going to perform a specific job. Planning is a detailed
programme regarding future courses of action.
2. What are the objectives of planning? Nov/Dec2013,May/Jun 2013
(Or)
What is the main purpose of planning? May/Jun 2015
Objectives are really the heart of a business plan. They give a clear indication of the where the
business is heading and what it is striving to achieve. Your business plan should contain strategies
than can be turned into objectives. A business plan is best served by making these goals clear.
The objectives should be SMART:
 Specific
 Measurable
 Achievable
 Realistic
 Timed
3. List the different types of plans. Nov/Dec 2012
(Or)
List the different types of planning. May/Jun 2012
Business plans guide owners, management and investors as businesses start up and grow through
stages of success. A business owner or prospective business owner writes a business plan to
clarify each aspect of his business. A business plan includes objectives to anticipate and prepare
for growth. Savvy business owners write a business plan to guide management and to promote
investment capital. Types of business plans include, but are not limited to, start-up, internal,
strategic, feasibility, operations and growth plans
4. State any four limitations of planning.
Planning is needed both in the business and non-business organizations. Some people think that
planning is based on the future anticipations and nothing can be said with certainty about future.
Therefore, it is a useless process. In fact, these people point towards the difficulties in the way of
planning. If planning has to be successful and purposeful, the managers should be aware of these
difficulties and limitations of planning. Following are the limitations of planning:

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  Planning Creates Rigidity
 Planning Does Not Work in a Dynamic Environment
 Planning Reduces Creativity
 Planning Involves Huge Costs
 Planning is a Time-consuming Process
 Planning Does Not Guarantee Success
5. What are the advantages of planning? Nov/Dec 2008
 Planning facilitates management by objectives.
 Planning minimizes uncertainties.
 Planning facilitates co-ordination.
 Planning improves employee‘s moral.
 Planning helps in achieving economies.
 Planning facilitates controlling.
 Planning provides competitive edge.
 Planning encourages innovations.
6. Define Planning premises. Nov/Dec 2015
According to Dr.G.R.Terry ,‖planning premise are the assumptions providing a background
against which the estimated events affecting the planning will take place‖. The process of
planning is based upon estimates of future. Though past guides the plans in present, plans are
made to achieve the goals in future. Therefore, forecast of future events leads to efficient plans.
Since future events are not known accurately, assumption is made about these events. Though
these assumptions are primarily based on scientific analysis and models, managers also use their
intuition and judgment to make assumptions about future events. Identifying the factors
(assumptions) that affect plans is called premising and the methods used for making premises are
called forecasting.
7. Define MBO. May/Jun2011,May/Jun 2012
(Or)
Define MBO. May/June 2016, Nov/Dec 2016
Management by objectives (MBO) is a management model that aims to improve performance of
an organization by clearly defining objectives that are agreed to by both management and
employees. Management by objectives is the process of defining specific objectives within an
organization that management can convey to organization members, then deciding on how to
achieve each objective in sequence. This process allows managers to take work that needs to be
done one step at a time to allow for a calm, yet productive work environment. This process also
helps organization members to see their accomplishments as they achieve each objective, which
reinforces a positive work environment and a sense of achievement.
8. Explain the term decision and decision making. May/Jun 2004,Nov/Dec 2006
Though the words are used interchangeably, there's a slight difference between the two. The word
choice creates a mental picture of a fork in a path; it is the selection from options. Choices are
opportunities and we make choices based on our beliefs, and our estimation of where the choice
will lead is not always possible to conduct a proper analysis of the available options, and some
choices may be instinctive. A decision, on the other hand, is an analytic method to eliminate

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 options. It is a thoughtful, thorough process. It is a direction you choose after beginning with
choices and opportunities, and considering past experiences.
9. Mention any two features of decision making. May/Jun 2011
Characteristics or Features of Decision-Making:
The important characteristics of decision-making are as follows:
1. Decision-making is a selective process in which only the best possible alternative is chosen.
2. Decision-making involves careful evaluation and analysis of all the possible alter-natives.
3. Decision-making is the responsibility of the management executives at all levels.
4. It is a continuous process which goes on throughout the life of an organisation.
5. It is a mental process which involves deep thinking and foreseeing things.
6. It may be positive to do a certain thing or negative not to do a certain thing.
7. Decisions are normally taken on the basis of past experiences and present circumstances for a
future course of action.
8. It is not an end in itself but a means to reach the goal.
9. If necessary experts and specialists should be consulted before making a particular decision.
10. Decisions exert great influence on the success or failure of an organisation. Therefore, they
should not be made in a hurry or without close security and thinking.
10. List the steps in the decision making process. Nov/Dec 2013
Step 1: Identification of the purpose of the decision
Step 2: Information gathering
Step 3: Principles for judging the alternatives
Step 4: Brainstorm and analyze the different choices
Step 5: Evaluation of alternatives
Step 6: Select the best alternative
Step 7: Execute the decision
Step 8: Evaluate the results
11. What are programmed decisions? Nov/Dec 2013
A routine or repetitive decision that can be handled by established business rules or procedures.
These types of decisions are often called for at certain points in a standard process, and are
decided based on recognized and easily identifiable factors. For example, when handling
customer-service complaints, the decisions provide solutions that have been proven to be helpful
before. They also used for routine disciplinary actions to deal with common misconduct in the
workplace. When handling technical issues, they follow a standard, proven routine.
12. List down the decision making under different conditions.
Everyday a manager has to make hundreds of decisions in the organization. Managers do not
function in a theoretical world but they function within the reality that many thongs are not
known. There are three conditions that managers may face as they make decisions. They are (1)
Certainty, (2) Risk, and (3) Uncertainty.
13. Define strategy. Nov/Dec 2012
A method or plan chosen to bring about a desired future, such as achievement of a goal or
solution to a problem. The art and science of planning and marshalling resources for their most
efficient and effective use. The term is derived from the Greek word for generalship or leading an
army.
14. What is strategic planning? Give an example. May/Jun 2014

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 Strategic planning is an organizational management activity that is used to set priorities, focus
energy and resources, strengthen operations, ensure that employees and other stakeholders are
working toward common goals, establish agreement around intended outcomes/results, and assess
and adjust the organization's direction in response to a changing environment. It is a disciplined
effort that produces fundamental decisions and actions that shape and guide what an organization
is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic
planning articulates not only where an organization is going and the actions needed to make
progress, but also how it will know if it is successful. An example would be a smaller
organization that is facing the departure of a member of senior management. The organization
needs to determine how this departure will affect future direction and develop a plan for either
maintaining the current course or setting a new vision statement and objectives.
15. What do you mean by policy? Give an example. May/Jun 2014, Nov/Dec 2016
A policy is a statement of intent, and is implemented as a procedure or protocol. Policies are
generally adopted by the Board of or senior governance body within an organization where as
procedures or protocols would be developed and adopted by senior executive officers.Policies
imposed in the area of human resources address issues such as hiring and termination, benefits,
promotion and salary increase and discipline. For example, a typical human resources policy
addressing hiring might read: ―New hires shall be subject to a three month probationary period
during which employment is 'at-will.'‖
16. Name any four quantitative forecasting techniques. May/Jun 2013
Using quantitative approach, a company forecasts based on:
a. Historical data forecasts – Grouped under historical data forecasts are the followings:
Naive methods
Moving average
Exponential smoothing
Trend analysis
Decomposition of time series
b. Associative (causal) forecasts – Grouped under the acsociative forecasts are the followings:
Simple regression
Multiple regression
Econometric modeling
17. Distinguish strategic planning and tactical planning. May/Jun 2015
Basic differences between strategic planning and tactical planning:
 Since upper managers generally have a better understanding of the organization as a whole
than lower level managers do, upper management generally develops the strategic plans and
because lower level managers generally have better understanding of the day to day
organizational operations, generally the lower level managers develop the tactical plans.
 Because Strategic Planning emphasizes analyzing the future and tactical planning emphasizes
analysing the everyday functioning of the organization, facts on which to base strategic plans
are usually more difficult to gather than are facts on which to base tactical plans.
 Because strategic plans are based primarily on a prediction of the future and tactical plans on
known circumstances that exist within the organization, strategic plans are generally less
detailed than tactical plans.

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  Because strategic planning focuses on the long term and tactical planning on the short term,
strategic plans cover a relatively long period of time whereas tactical plans cover a relatively
short period of time.
18. What is the difference between strategy and policy Nov/Dec 2015
Basis for
Strategy Policy
Comparison
Strategy is a comprehensive plan, Policy is the guiding principle, that
Meaning made to accomplish the organizational helps the organization to take logical
goals. decisions.
What is it? Action plan Action principle
Fixed, but they allow exceptional
Nature Flexible
situations
Orientation Action Decision
Top Level Management and Middle
Formulation Top Level Management
Level Management
Approach Extroverted Introverted
19. Define corporate planning. Nov/Dec 2014
Corporate plans are essentially business plans that seek to make improvements and generate
profits by making internal operations more effective and productive. Many corporate plans have
specific action steps that must be taken to achieve certain objectives. These steps are clearly
defined in the corporate plan and can be used as markers to check on a periodic basis to determine
whether or not sufficient progress is being made.
20. Write short notes on policy making. Nov/Dec 2014
Policy at one time was the term used to describe top-level decision making in organizations. In
recent years, however, this managerial function has been extended and refined in both the
academic and practitioner literature and taken on more elegant designations, such as strategy
formulation and implementation or strategic management. Policy making now, more aptly,
simply describes the development of organizational policies. Some policies appertain at the
highest levels and are essential elements of the organization's strategy. But, the vast majority of
policies apply at lower levels and are operational in nature.
21. Name any four qualitative forecasting techniques
Using qualitative approach, a company forecasts based on judgment and opinion. Groupped under
this approach are:
Executive opinions
Delphi technique
Sales force polling
Consumer surveys
22. Define mission and vision?
Mission may be defines as a statement which defines the role that an organization
plays in the society. EG: Canara Bank ―Good People to Grow With‖.

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 A vision statement indicates how the organization should be, after a particular
time period.
23. Explain in brief about the two approaches in which the hierarchy of objectives can
be explained?

There are two approaches in which the hierarchy can be explained.

1. top-down approach
2. bottom-up approach
In the top-down approach, the total organization is directed through corporate objective
provided by the top-level management. In the bottom up approach, the top level
management needs to have information from lower level in the form of objectives.
24. What are the three approaches in selecting an alternative?
1. Experience
2. Experimentation
3. Research and Analysis
Experience:
Relying on post experience, the choice among alternatives is selected to avoid
mistakes.
Experimentation:
A firm may test a new product in a certain market before expanding its sale
nationwide.
Research and Analysis:
The trend in research and analysis is simulation i.e. to develop mathematical tools.
25. What is TOWS matrix?
The TOWS matrix is a conceptual frame work for a systematic analysis, which
facilitates matching the external threats and opportunities with the internal weakness &
strength of the organization. In the tows metrics ‗T‘ stands for threat‘s‘ stands for
opportunities ‗W‘ for weakness and ‗S‘ for strength.
26. Define DSS. May/June 2016
Decision support system is a set of related computer programs and the data required to
assist with analysis and decision-making within an organization.DSSs include
knowledge-based systems. A properly designed DSS is an interactive software-based
system intended to help decision makers compile useful information from a combination
of raw data, documents, and personal knowledge, or business models to identify and
solve problems and make decisions.

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 UNIT III: ORGANIZING

Nature and purpose – Formal and informal organization – organization chart – organization
structure – types – Line and staff authority – departmentalization – delegation of authority –
centralization and decentralization – Job Design - Human Resource Management – HR
Planning, Recruitment, selection, Training and Development, Performance Management ,
Career planning and management.

PART - A
1. What is functional Departmentation ? May/Jun 2012, Nov/Dec 2016
In functional departmentalization, an organization is organized into departments based upon the
respective functions each performs for the organization. For example, a manufacturing company
may create a production department, sales and marketing department, an accounting department,
and a human resources department. Functional departmentalization may be advantageous because
it can increase efficiency and expertise since all related activities are performed in one place by
one group of people that specialize in that activity.
2. Define the term scalar chain. May/Jun 2010
Scalar chain is the formal line of authority which moves from highest to lowest rank in a straight
line. This chain specifies the route through which the information is to be communicated to the
desired location/person. Fayol emphasized that every information in the organization must flow
according to this chain to facilitate clear communication of orders of the superiors and feelings of
the subordinates. This chain must be strictly followed in the organization. Fayol also stated that
there should be no overlapping of steps during the communication process.
3. What are the differences between formal and informal communication? Nov/Dec 2013
Another Name Official Communication Grapevine communication

Reliability More Comparatively less

Speed Slow Very Fast

As the communication is generally

Evidence No documentary evidence.
written, documentary evidence is present.

Time Consuming Yes No

Efficient because employees can discuss

Effective due to timely and systematic
Advantage work related problems, this saves time
flow of information.
and cost of the organization.

Distortion due to long chain of

Disadvantage Spread of rumors
communication.

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Secrecy Full secrecy is maintained. It is difficult to maintain the secrecy.

Flow of
Only through predefined channels. Can move freely.
Information

4. Define span of control. May/Jun 2014

Span of control is the term now used more commonly in business management, particularly human
resource management. Span of control refers to the number of subordinates a supervisor has.In the
hierarchical business organization of some time in the past it was not uncommon to see average spans of 1
to 4 or even less. That is, one manager supervised four employees on average. In the 1980s corporate
leaders flattened many organizational structures causing average spans to move closer to 1 to 10. That
was made possible primarily by the development of inexpensive information technology. As information
technology was developed capable of easing many middle manager tasks – tasks like collecting,
manipulating and presenting operational information – upper managers found they could hire fewer
middle managers to do more work managing more subordinates for less money.
5. List down the different types of training. May/Jun 2014
 Recruiting: Recruiting people is not an easy task from the get go, and it‘s not cheap either, so it‘s
very important that your HR team gets a handle on how they are going to screen people and
choose who and how to hire.
 Onboarding: This is the process in which you take the new hire and launch them into their hired
position.
 Talent Management: Finding the best talent is not that easy; if it was then every single company
would have the best talent in the world. The raw reality is that you have to be dedicated to talent
management in order to be successful.
 Learning Management: With blended learning taking the lead in our culture today, we are seeing
more engagements from employees and the overall success of businesses. Current learning
already integrates mobile applications and cloud-based services into its training. Blended training
takes this to a new level with online technology, social media and more.
 Performance Management: Everyone wants to be recognized for their hard work. It makes them
feel like all of the work and dedication was worth it. In your company, performance management
is a must. If you are not doing annual evaluations of employees, you are neglecting your part as
the employer for recognizing individuals that make your business successful.
 Employee Offboarding: Offboarding is just as important to the company as onboarding, yet only
29 percent of companies actually have an offboarding program in place for employees who on
their way out. Employees leaving the company are just as valuable as people coming in, and
should be treated with respect and gratitude.
6. Define organizing. May/Jun2013,May/Jun 2011
Organizing is a systematic process of structuring, integrating, co-ordinating task goals, and activities
to resources in order to attain objectives.The following are the important characteristics of
organization.
 Specialization and division of work.
 Orientation towards goals.

17
  Composition of individuals and groups.
 Continuity.
7. What are the advantages of decentralization? May/Jun 2013
Decentralization is a type of organizational structure in which daily operations and decision-
making responsibilities are delegated by top management to middle and lower-level mangers
within the organization, allowing top management to focus more on major decisions. For a small
business, growth may create the need to decentralize to continue efficient operations.
Decentralization offers several advantages, though relinquishing control may be difficult for a
business owner accustomed to making all the decisions.
8. What is decentralization? Nov/Dec 2012
Decentralization is the process of redistributing or dispersing functions, powers, people or things
away from a central location or authority. While centralization, especially in the governmental
sphere, is widely studied and practiced, there is no common definition or understanding of
decentralization. The meaning of decentralization may vary in part because of the different ways
it is applied. Concepts of decentralization have been applied to group dynamics and management
science in private businesses and organizations, political science, law and public administration,
economics and technology.
9. What are the sources of recruitment? Nov/Dec 2012
The searching of suitable candidates and informing them about the openings in the enterprise is
the most important aspect of recruitment process. The candidates may be available inside or
outside the organisation. Basically, there are two sources of recruitment i.e., internal and external
sources.

10. Mention any two merits of performance appraisal. May/Jun 2011

(OR)
What is meant by performance appraisal? Nov/Dec 2016
A performance appraisal is an evaluation done on an employee‘s job performance over a specific
period of time. It is the equivalent of a report card on an employee and how their manager
assessed their performance over the prior year.
 They provide a document of employee performance over a specific period of time.

18
  They provide a structure where a manager can meet and discuss performance with an
employee.
 They allow a manager the opportunity to provide the employee with feedback about their
performance and discuss how well the employee goals were accomplished.
 They provide a structured process for an employee to clarify expectations and discuss issues
with their manager.
 They provide a structure for thinking through and planning the upcoming year and
developing employee goals.
 They can motivate employees if supported by a good merit increase and compensation
system.
11. What is division of labour? Nov/Dec 2011
The division of labour is the separation of tasks in any economic system so that participants may
specialize. Individuals, organizations, and nations are endowed with or acquire specialized
capabilities and either form combinations or trade to take advantage of the capabilities of others
in addition to their own. Specialized capabilities may include equipment or natural resources in
addition to skills and training and complex combinations of such assets are often important, as
when multiple items of specialized equipment and skilled operators are used to produce a single
product. The division of labour is the motive for trade and the source of economic
interdependence.
12. Define the term functional authority. Nov/Dec 2011
Functional authority is the right which is delegated to an individual or a department to control
specified processes, practices, policies, or other matters relating to activities undertaken by
persons in other departments. If the principle of unity of command were followed without
exception, authority over these activities would be exercised only by their line superiors.
13. Enumerate the advantages of functional organization. May/Jun 2005
Organizations may choose from a number of common operating structures. One popular structure
is the functional organization, where the company is divided into separate units based on role,
such as accounting, marketing, research and development or distribution. The functional structure
offers a number of potential advantages as to specialization and productivity and efficiency.
14. What do you understand by effective span of organizing? Nov/Dec 2005
The span of management can be determined on the basis of a number of relationships that a
manager can manage. These are:

19
 Capacity
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15. Define Authority. Nov/Dec 2014

Authority is the right to perform or command. It allows its holder to act in certain designated
ways and to directly influence the actions of others through orders. It also allows its holder to
allocate the organization's resources to achieve organizational objectives.
16. What is meant by Delegation? May/Jun 2012, Nov/Dec 2015
Delegation is the assignment of any responsibility or authority to another person (normally from a
manager to a subordinate) to carry out specific activities, such as starting on proper tires during a
wet race. It is one of the core concepts of management leadership. However, the person who
delegated the work remains accountable for the outcome of the delegated work. Delegation
empowers a subordinate to make decisions, i.e. it is a shifting of decision-making authority from
one organizational level to a lower one. Delegation, if properly done, is not abdication. The
opposite of effective delegation is micromanagement, where a manager provides too much input,
direction, and review of delegated work. In general, delegation is good and can save money and
time, help in building skills, and motivate people. On the other hand, poor delegation might cause
frustration and confusion to all the involved parties.
17. What do you understand by assessment centers? May/Jun 2015
An assessment centre is a process where candidates are assessed to determine their suitability for
specific types of employment, especially management or military command. The candidates'
personality and aptitudes are determined by a variety of techniques including interviews, group
exercises, presentations, examinations and psychometric testing. Companies use this method to
recruit for their graduate programmes by assessing the personality and intellect of potential
employees who have recently graduated from university and have nil or limited work history. The
big four accountancy firms conduct assessment centre days to recruit their trainees. 68% of
employers in the UK and USA now use some form of assessment centre as part of their
recruitment/promotion process.
18. Give an example of how functional authority works in an organization. May/Jun 2015

20
 Functional organization has been divided to put the specialists in the top position throughout the
enterprise. This is an organization in which we can define as a system in which functional
department are created to deal with the problems of business at various levels. Functional
authority remains confined to functional guidance to different departments. This helps in
maintaining quality and uniformity of performance of different functions throughout the
enterprise. The concept of Functional organization was suggested by F.W. Taylor who
recommended the appointment of specialists at important positions. For example, the functional
head and Marketing Director directs the subordinates throughout the organization in his particular
area. This means that subordinates receives orders from several specialists, managers working
above them.
19. What are the limitations of line and staff authority? Nov/Dec 2015
1. Confusion: If the pattern of authority relationship between line and staff executives is not
clearly indicated, there may be considerable confusion throughout the organisation.
2. Advice Ignored: As the staff officers lack authority to put their recommendations into practice,
their advice may be ignored by the line executives.
3. Encourages Carelessness: As the staff officer is not concerned with the execution of the plan,
he may not take proper precautions and care before he advises the line officer. Thus, this system
may encourage carelessness on the part of the staff officer.
4. Expensive: This type requires the appointment of a large number of experts involving heavy
expenditure. Hence, it is quite expensive and small and medium-sized concerns cannot afford it.
5. Conflict between Line and Staff: One more important disadvantage is the conflict between the
line and staff officers.
20. What is staffing ? Nov/Dec 2014
The selection and training of individuals for specific job functions, and charging them with the
associated responsibilities. Staffing is the process of hiring, positioning and overseeing
employees in an organization. Staffing, like all other managerial functions, is the duty which the
apex management performs at all times. In a newly created enterprise, the staffing would come as
a. third step—next to planning and organizing—but in a going enterprise the staffing process is
continuous.
21. What are the types of departmentation?
(a)Functions, e.g., sales, production, personnel, planning, transport, etc.
(b)Products, e.g., air-conditioners, accounting machines, electronic calculators, etc.
(c)Territory, region, or geographical area, e.g., Northern Railway, Western Railway, N.E.
Railway, etc.
(d)Customer, e.g., wholesaler, retailer, government.
(e)Process.
(f)Appropriate combination of any of these types.
22. List the steps involved in the process of delegation
 Prepare in advance.
 Discuss the task to be delegated.
 Identify the deadline for completion.
 Outline the level of authority.
 Build in checkpoints or progress reports.
 Conduct a final debriefing.

21
23. State the kinds of organizational charts
Hierarchical: In a hierarchical organization structure, employees are grouped with every
employee having one clear supervisor.
Matrix: In a Matrix organizational structure, the reporting relationships are set up as a grid, or
matrix, rather than in the traditional hierarchy. It is a type of organizational management in which
people with similar skills are pooled for work assignments, resulting in more than one manager to
report to.
Horizontal/flat: This is an organizational chart type mostly adopted by small companies and start-
ups in their early stage. It‘s almost impossible to use this model in larger companies with many
projects and employees.
24. What is job analysis?
Job Analysis is a process to identify and determine in detail the particular job duties and
requirements and the relative importance of these duties for a given job. Job Analysis is a process
where judgements are made about data collected on a job. An important concept of Job Analysis
is that the analysis is conducted of the Job, not the person. While Job Analysis data may be
collected from incumbents through interviews or questionnaires, the product of the analysis is a
description or specifications of the job, not a description of the person.
25. What is job design?
Job design (also referred to as work design or task design) is a core function of human resource
management and it is related to the specification of contents, methods and relationship of jobs in
order to satisfy technological and organizational requirements as well as the social and personal
requirements of the job holder.Its principles are geared towards how the nature of a person's job
affects their attitudes and behavior at work, particularly relating to characteristics such as skill
variety and autonomy.The aim of a job design is to improve job satisfaction, to improve through-
put, to improve quality and to reduce employee problems (e.g., grievances, absenteeism).

26. State the principle of span management May/June 2016

Span of management means the number of people managed efficiently by a single officer in an
organization. This is also called span of management, span of authority, span of supervision, span
of authority, span of responsibility or levels of organization. This principle is based on the
principle of relationship.Span of control refers to the maximum numbers effectively supervised
by a single individual. The number of members may be increased or decreased according to the
nature of work done by the subordinate or the ability of the supervision.
27. Define the process of decentralization. Give an example May/June 2016
Decentralization is the process of redistributing or dispersing functions, powers, people or things
away from a central location or authority. While centralization, especially in the governmental
sphere, is widely studied and practiced, there is no common definition or understanding of
decentralization. The meaning of decentralization may vary in part because of the different ways
it is applied. Concepts of decentralization have been applied to group dynamics and management
science in private businesses and organizations, political science, law and public administration,
economics and technology. The Internet: This is the classic decentralized organization.

22
 UNIT IV: DIRECTING

Foundations of individual and group behaviour – motivation – motivation theories –

motivational techniques – job satisfaction – job enrichment – leadership – types and theories
of leadership – communication – process of communication – barrier in communication –
effective communication – communication and IT.
PART - A
1. Mention the elements of directing. May/Jun 2012
It has been made clear in the nature of leading that it is not a single activity but a group of
functions. On the same basis, the following functions are included in its scope:
(1) Supervision:It refers to monitor the progress of routine work of one‘s subordinates and
guiding them properly.
(2) Communication:It refers to an art of transferring facts, ideas, feeling, etc. from one person to
another and making him understand them.
(3) Leadership:It refers to influence others in a manner to do what the leader wants them to do.
(4) Motivation:It refers to that process which excites people to work for attainment of the desired
objective.
2. List the components of communication process. May/Jun 2012, Nov/Dec 2014
The communication process consists of several components.
1. A sender encodes information
2. The sender selects a channel of communication by which to send the message
3. The receiver receives the message
4. The receiver decodes the message
5. The receiver may provide feedback to the sender
3. Define effective communication. May/Jun 2007
Effective communication is defined as verbal speech or other methods of relaying information
that get a point across. An example of effective communication is when you talk in clear and
simple terms. A two way information sharing process which involves one party sending a
message that is easily understood by the receiving party. Effective communication by business
managers facilitates information sharing between company employees and can substantially
contribute to its commercial success.
4. Define noise in communication. May/Jun 2008
Communication is the process of transmitting information from one person to another. Noise is
any type of disruption that interferes with the transmission or interpretation of information from
the sender to the receiver. Physical noise is any external or environmental stimulus that distracts
us from receiving the intended message sent by a communicator. Examples of physical noise
include: others talking in the background, background music, a startling noise and acknowledging
someone outside of the conversation.
5. What is non-verbal communication? Nov/Dec 2011
Nonverbal Communication has been defined as communication without words. It includes
apparent behaviors such as facial expressions, eyes, touching, and tone of voice, as well as less
obvious messages such as dress, posture and spatial distance between two or more people.
6. What are the limitations of matrix organization structure? Nov/Dec 2013

23
 The matrix organizational structure is atypical because it brings together employees and managers
from different departments to work toward accomplishing a goal. The matrix structure is a
combination of the functional and divisional structures. The former divides departments within a
company by the functions performed, while the latter divides them by products, customers or
geographical location. Small business owners should understand the benefits and limitations of
the matrix structure before implementing it in their businesses.
 Internal Complexity
 Expensive to Maintain and Internal Conflict
7. Who is leader? Nov/Dec 2012
A leader is "a person who influences a group of people towards the achievement of a goal". A
mnemonic for this definition would be 3P's - Person, People and Purpose. A leader by its
meaning is one who goes first and leads by example, so that others are motivated to follow him.
This is a basic requirement. To be a leader, a person must have a deep-rooted commitment to the
goal that he will strive to achieve it even if nobody follows him!
8. Mention any two leadership qualities. Nov/Dec 2005
Focus, Confidence, Transparency, Integrity, Inspiration, Passion, Innovation, Patience, Stoicism,
Wonkiness, Authenticity, Open-mindedness, Decisiveness, Personableness, Empowerment,
Positivity, Generosity, Persistence, Insightfulness, Communication, Accountability, Restlessness
9. What are the different types of management strategies involved in leadership? May/Jun 2013
Strategic leader influences ―the organization by aligning their systems, culture, and organizational
structure to ensure consistency with the strategy.‖. Influencing employees to voluntarily make
decisions that enhance the organization is the most important part of strategic leadership.
1. Make Your Culture a Priority
2. Share a Positive Vision
3. Develop a Fleet of Bus Drivers
4. Fill the VOID…Often
5. Turn Negative Energy into Positive Solutions
10. Distinguish between creativity and innovation. May/Jun 2014
Basis for
Creativity Innovation
Comparison

Creativity is a act of creating new ideas, Innovation is the introduction of something

Meaning
imaginations and possibilities. new and effective into the market.

Process Imaginative Productive

Quantifiable No Yes

Related to Thinking something new Introducing something new

Money
No Yes
Consumption

24
 Basis for
Creativity Innovation
Comparison

Risk No Yes

11. Define Motivation. May/Jun 2014, May/Jun 2011, Nov/Dec 2012

Internal and external factors that stimulate desire and energy in people to be continually interested
and committed to a job, role or subject, or to make an effort to attain a goal. Motivation results
from the interaction of both conscious and unconscious factors such as the (1) intensity of desire
or need, (2) incentive or reward value of the goal, and (3) expectations of the individual and of his
or her peers. These factors are the reasons one has for behaving a certain way. An example is a
student that spends extra time studying for a test because he or she wants a better grade in the
class.
12. Distinguish motivation and hygiene factors. Nov/Dec 2009
Frederick Herzberg's Two-Factor Theory, also known as Motivation-Hygiene Theory or intrinsic
vs. extrinsic motivation, concludes that there are certain factors in the workplace that can cause
job satisfaction and a separate set of factors that can cause dissatisfaction.
Extrinsic Motivators (Hygiene Factors)
Extrinsic motivators tend to represent more tangible, basic needs—i.e., the kinds of needs
identified in McClelland's "existence" category of needs in his ERG Theory or in the lower levels
of Maslow's Hierarchy of Needs. Extrinsic motivators include status, job security, salary, and
fringe benefits.
Intrinsic Motivators (Motivation Factors)
Intrinsic motivators tend to represent less tangible, more emotional needs—i.e., the kinds of
needs identified in McClelland's "relatedness" and "growth" categories of needs in his ERG
Theory and in the higher levels of Maslow's Hierarchy of Needs. Intrinsic motivators include
challenging work, recognition, relationships, and growth potential.
13. What is meant by Brainstorming? May/Jun 2013
Brainstorming is a group creativity technique by which efforts are made to find a conclusion for a
specific problem by gathering a list of ideas spontaneously contributed by its members.
Brainstorming combines a relaxed, informal approach to problem solving with lateral thinking. It
encourages people to come up with thoughts and ideas that can, at first, seem a bit crazy. Some of
these ideas can be crafted into original, creative solutions to a problem, while others can spark
even more ideas. This helps to get people unstuck by "jolting" them out of their normal ways of
thinking. Therefore, during brainstorming sessions, people should avoid criticizing or rewarding
ideas. You're trying to open up possibilities and break down incorrect assumptions about the
problem's limits. Judgment and analysis at this stage stunts idea generation and limit creativity.
Evaluate ideas at the end of the session – this is the time to explore solutions further, using
conventional approaches.
14. What is organizational culture? May/Jun 2011 Nov/Dec 2015
Organizational culture works a lot like this. Every company has its own unique personality, just
like people do. The unique personality of an organization is referred to as its culture.
Organizational culture is a system of shared assumptions, values, and beliefs, which governs how
people behave in organizations. These shared values have a strong influence on the people in the

25
 organization and dictate how they dress, act, and perform their jobs. Every organization develops
and maintains a unique culture, which provides guidelines and boundaries for the behavior of the
members of the organization.
15. Define job enlargement. Nov/Dec 2011, May/Jun 2015
Job enlargement means increasing the scope of a job through extending the range of its job duties
and responsibilities generally within the same level and periphery. Job enlargement involves
combining various activities at the same level in the organization and adding them to the existing
job. It is also called the horizontal expansion of job activities.This contradicts the principles of
specialisation and the division of labour whereby work is divided into small units, each of which
is performed repetitively by an individual worker and the responsibilities are always clear. Some
motivational theories suggest that the boredom and alienation caused by the division of labour
can actually cause efficiency to fall. Thus, job enlargement seeks to motivate workers through
reversing the process of specialisation. A typical approach might be to replace assembly lines
with modular work; instead of an employee repeating the same step on each product, they
perform several tasks on a single item. In order for employees to be provided with Job
Enlargement they will need to be retrained in new fields to understand how each field works.
16. List the steps involved in directing. Nov/Dec 2013
Directing others can be challenging. Using a structured, four-step approach can help you direct
others effectively and achieve organizational goals.
 Set goals: First you need to set a team goal that supports organizational goals.
 Create objectives: In line with the goals set for the team, you need to create objectives to
make sure the team achieves those goals.
 Define a plan of action: Once you've set goals and objectives, you have to specify what must
be done to accomplish them.
 Follow up: After providing direction in the form of an action plan, you need to monitor
progress.
17. How does leadership differ from management. May/Jun 2015
#1 A leaders invents or innovates while a manager organizes. The leader in the team comes up
with the new ideas and kick starts the organization‘s shift or transition to a forward-thinking
phase. By contrast, a manager is someone who generally only maintains what is already
established.
#2 A manager relies on control whereas a leader inspires trust. A leader is a person who pushes
employees to do their best and knows how to set an appropriate pace and tempo for the rest of the
group. Managers, on the other hand, are required by their job description to establish control over
employees which, in turn, helps them develop their own assets and brings out the best in them.
#3 A leader asks the questions ‗what‘ and ‗why‘ whereas a manager leans more towards the
questions ‗how‘ and ‗when‘. Good leadership thus requires a great deal of good judgment, and
the ability to stand up to senior management over a point of concern or if there is an aspect in
need of improvement. Managers, however, are not required to assess and analyze failures.
18. Name any four leadership styles. Nov/Dec 2015
 Autocratic Leadership: In this leadership the leader holds all authority and responsibility.
 Democratic Leadership: In this leadership style, subordinates are involved in making
decisions.

26
  Strategic Leadership Style: The strategic leader fills the gap between the need for new
possibility and the need for practicality by providing a prescriptive set of habits.
 Transformational Leadership: Transformational leaders motivate others to do more than they
originally intended and often even more than they thought possible.
 Team Leadership: Team leadership is about working with the hearts and minds of all those
involved.
 Cross-Cultural Leadership: Organizations, particularly international ones require leaders who
can effectively adjust their leadership to work in different environs.
 Facilitative Leadership: An effective facilitative leadership involves monitoring of group
dynamics, offering process suggestions and interventions to help the group stay on track.
 Laissez-faire Leadership: Laissez-faire leadership gives authority to employees.
 Transactional Leadership: This is a leadership that maintains or continues the status quo.
 Coaching Leadership: Coaching leadership involves teaching and supervising followers.
 Charismatic Leadership: In this leadership, the charismatic leader manifests his or her
revolutionary power.
 Visionary Leadership: This form of leadership involves leaders who recognize that the
methods, steps and processes of leadership are all obtained with and through people.
19. Write short notes on laissez faire leader. Nov/Dec 2014
Laissez-faire leadership, also known as delegative leadership, is a type of leadership style in
which leaders are hands-off and allow group members to make the decisions. Researchers have
found that this is generally the leadership style that leads to the lowest productivity among group
members.
20. List the different types of communication flows.
 Downward Flow of Communication: Communication that flows from a higher level in an
organization to a lower level is a downward communication.
 Upward Flow of Communication: Communication that flows to a higher level in an
organization is called upward communication.
 Lateral / Horizontal Communication: Communication that takes place at same levels of
hierarchy in an organization is called lateral communication, i.e., communication between
peers, between managers at same levels or between any horizontally equivalent
organizational member.
 Diagonal Communication: Communication that takes place between a manager and
employees of other workgroups is called diagonal communication.
 External Communication: Communication that takes place between a manager and external
groups such as - suppliers, vendors, banks, financial institutes etc.
21. What are the various communication networks
A communication network refers to the method that employees pass on information to other
employees in an organization.
 A wheel network is a style of communication where the leader is the only one to receive or
give communication.
 In a chain network individuals communicate in a set sequence. Communication starts at the
top, like from a CEO, and works its way down to the different levels of employees.
 The vertical network is usually between the superior and subordinate and vice versa.

27
  Circuit Network: Under this network two persons communicate with each other. So
communication takes the form of a circuit. Therefore it is known as circuit network. It is
similar to vertical network but in circuit network ‗A‘ and ‗B‘ are not necessarily superior and
subordinates.
 Chain Network: This network of communication follows the organisational hierarchy and
chain of command.
 Under star communication network all members of the group communicate with each other
and exchange information. This network is a must for group communication or where
teamwork is involved.
22. What are the barriers to effective communication?
 The use of jargon. Over-complicated, unfamiliar and/or technical terms.
 Emotional barriers and taboos. Some people may find it difficult to express their emotions
and some topics may be completely 'off-limits' or taboo.
 Lack of attention, interest, distractions, or irrelevance to the receiver. (See our page Barriers
to Effective Listening for more information).
 Differences in perception and viewpoint.
 Physical disabilities such as hearing problems or speech difficulties.
 Physical barriers to non-verbal communication. Not being able to see the non-verbal cues,
gestures, posture and general body language can make communication less effective.
 Language differences and the difficulty in understanding unfamiliar accents.
 Expectations and prejudices which may lead to false assumptions or stereotyping. People
often hear what they expect to hear rather than what is actually said and jump to incorrect
conclusions.
 Cultural differences. The norms of social interaction vary greatly in different cultures, as do
the way in which emotions are expressed. For example, the concept of personal space varies
between cultures and between different social settings.
23. What are the psychological theories of motivation to increase productivity?
 Hertzberg‘s Two-Factor Theory
 Maslow‘s Hierarchy of Needs
 Hawthorne Effect
 Expectancy Theory
 Three-Dimensional Theory of Attribution
24. Name the steps involved in motivation process?
Following are the basic phases of the process of motivation.
Need Identification
Exploring Ways to Fulfill the Need
Selecting Goals
Performance of Employee
Rewards/Punishments as Consequences of Performance
Reassessment of Deficiencies of Need
25. What are the types of motivation?
 A form of motivation that involves rewards, both monetary and nonmonetary is often called
incentive motivation.

28
  Fear motivation involves consequences.
 Achievement motivation is also commonly referred to as the drive for competency.
 Growth: The need for self-improvement is truly an internal motivation.
 The motivation of power can either take the form of a desire for autonomy or other desire to
control others around us.
 Many people are motivated by social factors.
26. State the different psychological needs. May/June 2016
After a person meets the basic physiological needs required for living, next come the needs for
security, love/belonging, esteem and self-actualization, according to Psychology Today. Security
of body, employment, resources, morality, health, family and property are considered
psychological needs in addition to love, family, friendship and sexual intimacy. Esteem, while
less important than the others, is still a motivating factor in human behavior. Self-esteem,
confidence, achievement, respect for others and respect by others all are driving factors in human
motivation.
27. Mention some communication barriers. May/June 2016
The use of jargon. Over-complicated, unfamiliar and/or technical terms.
Emotional barriers and taboos. Some people may find it difficult to express their emotions and
some topics may be completely 'off-limits' or taboo.
Lack of attention, interest, distractions, or irrelevance to the receiver.
Differences in perception and viewpoint.
Physical disabilities such as hearing problems or speech difficulties.
Physical barriers to non-verbal communication. Not being able to see the non-verbal cues,
gestures, posture and general body language can make communication less effective.
Language differences and the difficulty in understanding unfamiliar accents.
Expectations and prejudices which may lead to false assumptions or stereotyping. People often
hear what they expect to hear rather than what is actually said and jump to incorrect conclusions.
Cultural differences. The norms of social interaction vary greatly in different cultures, as do the
way in which emotions are expressed. For example, the concept of personal space varies between
cultures and between different social settings.
28. What are the elements in the Maslow‟s hierarchy of needs? Nov/Dec 2016
Maslow's hierarchy of needs is a theory in psychology proposed by Abraham Maslow in his 1943
paper "A Theory of Human Motivation" in Psychological Review.Maslow subsequently extended
the idea to include his observations of humans' innate curiosity. His theories parallel many other
theories of human developmental psychology, some of which focus on describing the stages of
growth in humans. Maslow used the terms "physiological", "safety", "belonging" and "love",
"esteem", "self-actualization", and "self-transcendence" to describe the pattern that human
motivations generally move through.
29. What is effective communication? Nov/Dec 2016
Listening is not the same as hearing; learn to listen not only to the words being spoken but how
they are being spoken and the non-verbal messages sent with them.
Be sympathetic to other people's misfortunes and congratulate their positive landmarks.
Empathy is trying to see things from the point-of-view of others.
Offer words and actions of encouragement, as well as praise, to others.

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 UNIT V: CONTROLLING

System and process of controlling – budgetary and non-budgetary control techniques – use of
computers and IT in Management control – Productivity problems and management –
control and performance – direct and preventive control – reporting.

PART - A
1. List the four types of control. May/Jun 2013
(Or)
List the basic types of control. Nov/Dec 2011, May/Jun 2015
Control
Behavioral control Outcome control
Proactivity
Feedforward
Organizational culture Market demand or economic forecasts
control
Concurrent Hands-on management supervision The real-time speed of a production
control during a project line
Qualitative measures of customer Financial measures such as
Feedback control
satisfaction profitability, sales growth

2. Define preventive control. May/Jun 2012

Steps taken before an emergency, loss, or problem occurs. These include use of alarms and locks,
segregation of duties (to prevent recorders of cash from controlling cash and inventory personnel
from controlling inventory) plus other general and specific authorization policies.
3. What is meant by budget? May/Jun 2012
A budget is a quantitative expression of a financial plan for a defined period of time. It may
include planned sales volumes and revenues, resource quantities, costs and expenses, assets,
liabilities and cash flows. It expresses strategic plans of business units, organizations, activities or
events in measurable terms. A budget is the sum of money allocated for a particular purpose and
the summary of intended expenditures along with proposals for how to meet them.
4. What are the different types of budget? May/Jun 2014
Budgets help businesses track and manage their resources. Businesses use a variety of budgets to
measure their spending and develop effective strategies for maximizing their assets and revenues.
The following types of budgets are commonly used by businesses:
 Master Budget: A master budget is an aggregate of a company's individual budgets designed
to present a complete picture of its financial activity and health.
 Operating Budget: An operating budget is a forecast and analysis of projected income and
expenses over the course of a specified time period.
 Cash Flow Budget: A cash flow budget is a means of projecting how and when cash comes in
and flows out of a business within a specified time period.

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  Financial Budget: A financial budget presents a company's strategy for managing its assets,
cash flow, income, and expenses.
 Static Budget: A static budget is a fixed budget that remains unaltered regardless of changes
in factors such as sales volume or revenue
5. What are the three potential pitfalls of budgets? Nov/Dec 2011, May/Jun 2015
Budgeting doesn‘t usually make the top of anyone‘s want to do list. But having a budget is an
important part of managing your money. Budgeting is the best, most practical way to keep track
of your spending—and more important, to keep a grip on it.
 Unrealistic expectation
 Mistaking luxuries for necessities
 Expecting windfalls
 Buying before trying
6. Define budgetary and non budgetary control.
(Or)
Define the terms budget and Non budgetary control. Nov/Dec 2012
Budgetary control refers to how well managers utilize budgets to monitor and control costs and
operations in a given accounting period. In other words, budgetary control is a process for
managers to set financial and performance goals with budgets, compare the actual results, and
adjust performance, as it is needed.
The Non-Budgeting Control Device are as follows: They are statistical data, special reports and
analysis, breakeven analysis, internal audit, standard costs, ratio-analysis etc.
7. Mention any two advantages of budgetary control system. May/Jun 2011
Benefits of budgetary control include encouraging management to think about the future,
improving coordination and communication, defining areas of responsibility and finding ways to
allocate scarce resources. Budgetary control is a good way to give a business purpose and
direction.
8. What are the various types of functional budgets? Nov/Dec 2007
A functional budget is a budget which relates to any of the functions of an undertaking, e.g.,
sales, production, research and development, cash etc.Following functional budgets are generally
prepared:
(i) Sales Budget: This budget is a forecast of quantities and values of sales to be achieved in a
budget period.
(ii) Production Budget: Production budget is a forecast of the total output of the whole
organisation broken down into estimates of output of each type of product with a scheduling of
operations (by weeks and months) to be performed and a forecast of the closing finished stock.
(iii) Cost of Production Budget: This budget is an estimate of cost of output planned for a budget
period and may be classified into material cost budget, labour cost budget and overhead budget
because cost of production includes material, labour and overheads.
(iv) Labour and Personnel Budget:
(v) Manufacturing (or Production) Overheads Budget: This budget gives an estimate of the works
overhead expenses to be incurred in a budget period to achieve the production target.
(vi) Administration Expenses Budget: This budget covers the expenses incurred in framing
policies, directing the organisation and controlling the business operations.

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 (vii) Plant Utilisation Budget: This budget lays down the requirements of plant capacity to carry
out the production as per the production programme.
(viii) Capital Expenditure Budget: The capital expenditure budget gives an estimate of the
amount of capital that may be needed for acquiring the fixed assets required for fulfilling
production requirements as specified in the production budget.
(ix) Research and Development Cost Budget: While developing research and development cost
budget, it should be clear in mind that work relating to research and development is different
from that relating to the manufacturing function.
(x) Cash (or Financial) Budget: This budget gives an estimate of the anticipated receipts and
payments of cash during the budget period.
9. What do you understand by flexi-budgets? Nov/Dec 2009, May/Jun 2010
A flexible budget is a budget that adjusts or flexes for changes in the volume of activity. The
flexible budget is more sophisticated and useful than a static budget, which remains at one
amount regardless of the volume of activity. A flexible budget calculates different expenditure
levels for variable costs, depending upon changes in actual revenue. The result is a budget that
varies, depending on the activity levels experienced. You input the actual revenues or other
activity measures into the flexible budget once an accounting period has been completed, and it
generates a budget that is specific to the inputs.
10. What is Zero base budgeting? May/Jun 2009 Nov/Dec 2015
Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for
each new period. Zero-based budgeting starts from a "zero base," and every function within an
organization is analyzed for its needs and costs. Budgets are then built around what is needed for
the upcoming period, regardless of whether the budget is higher or lower than the previous one.
11. Define productivity. List the types of productivity. May/Jun 2014
Productivity is a classic economic metric that measures the process of creating goods and
services. Productivity is the ratio of the amount of output from a team or organization per unit of
input.The four types are:
 Labor productivity is the ratio output per person.
 Capital productivity is the ratio of output (goods or services) to the input of physical capital.
 Material productivity is the ratio of output to the input of materials (also known as natural
resources).
 Total Factor productivity (TFP) is not a simple ratio of output to input, but rather it is a
measure that captures everything that is not captured as labor, capital or material productivity.
12. What are the benefits of increasing productivity for workers? May/Jun 2010
Higher productivity benefits all. These direct beneficiaries are the workers of the company, the
company itself and its customers. Productivity growth leads to lower costs which in turn enable:
(a) Higher wages, larger bonuses and better benefits for workers
(b) Greater competitiveness and higher profitability for companies
(c) Cheaper and better quality goods and services for customers.
13. Define IMS. May/Jun 2013
Information Management System (IMS) is a general term for software designed to facilitate the
storage, organization and retrieval of information.IMS is also the name of IBM‘s mammoth
software program developed in the 1960s to support NASA's Apollo space program. This IMS
version was the precursor to IBM's premier hierarchical database management system

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 (DBMS).IMS consists of two major components, the IMS Database Management System (IMS
DB) and the IMS Transaction Management System (IMS TM). In IMS DB, the data is organized
into a hierarchy. The data in each level is dependent on the data in the next higher level. The data
is arranged so that its integrity is ensured, and the storage and retrieval process is optimized. IMS
TM controls I/O (input/output) processing, provides formatting, logging, and recovery of
messages, maintains communications security, and oversees the scheduling and execution of
programs. TM uses a messaging mechanism for queuing requests.
14. What is quality control? May/Jun 2011, Nov/Dec 2012,15
Quality control, or QC for short, is a process by which entities review the quality of all factors
involved in production. ISO 9000 defines quality control as "A part of quality management
focused on fulfilling quality requirements".
This approach places an emphasis on three aspects:
 Elements such as controls, job management, defined and well managed
processes,performance and integrity criteria, and identification of records
 Competence, such as knowledge, skills, experience, and qualifications
 Soft elements, such as personnel, integrity, confidence, organizational culture, motivation,
team spirit, and quality relationships.
15. What is a Critical point control? May/Jun 2009
Critical control point (CCP) is the point where failure of standard operation procedure (SOP)
could cause harm to customers and to the business, or even loss of the business itself. It is a point,
step or procedure at which controls can be applied and a food safety hazard can be prevented,
eliminated or reduced to acceptable (critical) levels. The most common CCP is cooking, where
food safety managers designate critical limits.
16. Define purchase control. Nov/Dec 2014
A manufacturing company is required to invest a huge amount of money in purchasing materials.
It is, therefore, essential to exercise a proper material and purchase control. Purchase control
refers to the purchase of materials of right quality in a right quantity at a reasonable price and at a
right time. It requires a good amount of attention to the purchasing procedures of materials
relating to cost, quality, volume, time, and delivery of materials. Purchase control starts with the
issue of materials requisition and ends with the receipt of materials and payment of the cost of the
materials.
17. What are the budgetary controls. Nov/Dec 2014
Budgetary control refers to how well managers utilize budgets to monitor and control costs and
operations in a given accounting period. In other words, budgetary control is a process for
managers to set financial and performance goals with budgets, compare the actual results, and
adjust performance, as it is needed.
18. Define control
A management function aimed at achieving defined goals within an established timetable, and
usually understood to have three components: (1) setting standards, (2) measuring actual
performance, and (3) taking corrective action.
A typical process for management control includes the following steps: (1) actual performance is
compared with planned performance, (2) the difference between the two is measured, (3) causes
contributing to the difference are identified, and (4) corrective action is taken to eliminate or
minimize the difference.

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19. What are the characteristics of control?
 Controlling is a Fundamental Management Function
 Essential Function of Every Manager
 Controlling is a Continuous Activity
 Controlling is Both the Beginning and the End of the Process of Management
 Controlling is related to Results
20. What are the disadvantages of control?
 Difficulty in Setting Qualitative Standards
 No Control over External Factors
 Resistance from Employees
 Costly Affair
21. What is feedback control?
This type of control focuses on the outputs of the organization after transformation is complete.
Sometimes called postaction or output control, fulfils a number of important functions. For one
thing, it often is used when feedforward and concurrent controls are not feasible or are to costly.
22. What are the requirements of effective control?
 Objectivity: Controlling system must have certain objectives.
 Suitability: Control system should be suitable to the nature, size, culture and needs of the
organization.
 Timeliness: Management should get information in proper time so that corrective actions can
be taken in time.
 Simplicity: Control system must be based on the principle of simplicity.
 Economy: Controlling system should be economical because expensive controlling system
gives over financial burden to the organization which may affect profit.
 Span of control: Span of control refers to the total number of subordinates supervised by a
superior.
 Flexibility: Control system should be able to cope with the changing environment.
 Acceptable: Control system must be acceptable to all the concerned members and
stakeholders.
 Corrective: A good control system should be able to take proper corrective actions to avoid
the gap between standard and actual performance.
 Linked with planning: Controlling function is the basic tool to implement planning with the
purpose of achieving predetermined goals.
23. What are the steps involved in zero based budgeting?

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 • Identifying the decision units
1

• Making decision packages

2

• Ranking decision packages

3

• Allocating available resources

4

• Controlling and monitoring

5

24. What is internal audit?

Internal audit is a dynamic profession involved in helping organisations achieve their objectives.
It is concerned with evaluating and improving the effectiveness of risk management, control and
governance processes in an organisation.
25. Define productivity
Productivity is defined as a total output per one unit of a total input. In control management,
productivity is a measure of how efficiently a process runs and how effectively it uses resources.
At the plant level, common input statistics are monetary units, weights or volumes of raw or
semi-finished materials, kilowatt hours of power, and worker hours.
Output is simply the rate of which goods are being produced and readied for sale. Managing
production levels is part of the control process.
Productivity growth is important to a business because it controls the real income means needed
to meet obligations to customers, suppliers, workers, shareholders, and governments (taxes and
regulation).
26. When do you require PERT May/June 2016
During project execution, however, a real-life project will never execute exactly as it was planned
due to uncertainty. This can be due to ambiguity resulting from subjective estimates that are
prone to human errors or can be the result of variability arising from unexpected events or risks.
The main reason that PERT may provide inaccurate information about the project completion
time is due to this schedule uncertainty. This inaccuracy may be large enough to render such
estimates as not helpful.
One possible method to maximize solution robustness is to include safety in the baseline schedule
in order to absorb the anticipated disruptions. This is called proactive scheduling. A pure
proactive scheduling is a utopia; incorporating safety in a baseline schedule which allows for
every possible disruption would lead to a baseline schedule with a very large make-span. A
second approach, termed reactive scheduling, consists of defining a procedure to react to
disruptions that cannot be absorbed by the baseline schedule.
27. Define budgeting. Give examples. May/June 2016
Budgeting for a business is a process. It is the process of preparing a detailed statement of
financial results that are expected for a given time period in the future. There are two keywords in
that statement. The first keyword is "expected." Expected means something that is likely to
happen. The second keyword is "future" which is a period in the time to come. So, budgeting is

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 the process of preparing a detailed statement of financial results that are likely to happen in a
period in a time to come.
28. What are the uses of computers in management control? Nov/Dec 2016
The use of computers for management controls poses an entirely new set of requirements on the
system designers. Tied into automating information processing is the question of an adequate
understanding of the control problem itself. For example, measurement or management reporting
is often confused with the control process. Although information processing is an integral aspect
of a management control system, nonetheless there are other considerations which should be
taken into account such as, interdependencies of system components, response characteristics,
adaptive capability, decision rules, feedback mechanisms, etc. Furthermore, current methods of
measurement are based on historical averages of past performance, whereas what is needed is
timely information which reflects actual performance. Finally, the computer, through the use of
simulation models, provides the capability of pretesting system designs and the basis for eventual
real-time control.
29. Discuss the productivity problems in a management. Nov/Dec 2016
Meetings Free-For-All – Meetings are the biggest time waster in many companies. Anyone can
call one. They are too long. Most have no agendas. Nor is there any follow-up. Most companies
would be better off without them.
Email Chaos – Do your employees live in their inboxes? Do they spend the majority of their day
shuffling through email? The email game has become the modern age version of ―paper pushing.‖
Send enough emails and people will assume that you are getting work done.
No Deadlines – Are deadlines more like ―guidelines‖ in your workplace? Project extensions are
the norm. Nothing is really delivered on time. And there are no repercussions for late work.
No Work-Life Boundaries – Do your employees know where their job ends and their life begins?
If not, they will endure unneeded stress, interruptions, eventual burn-out. To make this worse,
many companies recognize those who sacrifice their personal life, even if it destroys them.
Rewarding Busyness Instead of Productivity – Many companies reward busyness. Why? Because
it is easy. It is simple to reward movement, busyness, even commotion. It takes actual effort to
determine who is actually having an impact and delivering value to the business.
Accepted Lateness – Meetings are expected to start late. The 9AM meeting becomes known as
the 920 meeting. (Because that is when it actually starts…) People don‘t give a second thought to
those that traipse in 10, 20, or 40 minutes late to a meeting.
Work Environment – Where your employees work great impacts their ability to get work done.
Too many companies ignore this. Noise, clutter, inadequate facilities. All of these reduce your
team‘s effectiveness.
Misguided Policies – Senior leadership (and HR) loves to implement policies without regard as to
the productivity impacts they create. No offices. No closed door policies, etc. One company I
worked with eliminated all offices to encourage team unity. Within 3 months, no one could get
any work done because they were all over each other. Team members couldn‘t even hold a
conversation because they had eliminated all the office walls.
Restrictive Tech – Technology is supposed to be a work enabler. It is supposed to allow workers
to get more done, not to hinder them. Yet, many companies continue to struggle with technology.
Needless restrictions. Inadequate tools. And simply non-working systems.

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 Rework – ―If you don‘t do it right the first time, you will end up doing it over.‖ This applies from
the smallest status update to multi-million dollar corporate projects. Unfortunately, many
companies do not learn this until after spending the millions.

"Successful people get up everyday for a reason - their

purpose. They know what they want to accomplish, and
will stop at nothing until their mission is complete." Ben
Gothard, Achieve Greatness: How to Find Your Purpose

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