FACULTY OF MANAGEMENT AND COMPUTING MANAGEMENT AND ORGANIZATION

MGT 115
Mid Term Examination, Term 2, MARKING GUIDE 31 st August 2013

Time allowed: Total Number of pages: General Instructions:

Two Hours (15 Minutes Reading Time) 08 Pages including the cover sheet 1. This paper has THREE SECTIONS: Section A, Section B and Section C. Section A Answer ALL the multiple choice questions. Copy the choices to the second page of the Answer Booklet provided. Section B: Question number 1 is compulsory and must be attempted. Answer either question 2 OR question 3 Section C: Answer all the questions. 2. Read the question carefully before answering. 3. Clearly write the question numbers and subpart numbers of the questions attempted. 4. Your handwriting should be clear and legible. 5. This paper carries 50 Marks.

THE EXAMINATION PAPER MUST BE COLLECTED IN WITH THE ANSWER SCRIPT

Section A Multiple Choice Questions (20 Marks)

Answer ALL the questions. Each question carries 1 mark 1. Doing things right describes the: A. Leadership of managers B. Efficiency of managers C. Effectiveness of managers D. Level of managers in the hierarchy 2. _________ are involved with managing the work of employees involved directly in production. A. First-line managers B. Front-line managers C. Middle managers D. Top managers 3. Which of the following is an example of a qualitative forecasting technique?
A. B. C. D.

Time series analysis done on tourist arrival to the Maldives. Jury of opinion given by experts of a particular domain. Regression models used in forecasting sales volume. Economic indicators such as exchange rate applied in swap contracts.

4. The assumption or belief that much of an organizations success or failure is due to external forces outside of managers control is:
A. B. C. D.

Omnipotent view of management The reality of work view of management. Symbolic view of management Contingency view of management

5. A system of shared meanings and common beliefs held by organizational members that determine, to a large degree, how they act toward each other is called:
A. B. C. D.

Organisational structure Power structure Rituals and routines Organisational culture

6. A manager has no idea what alternatives are available for new computer support systems and does not know how she can determine this information. This is a decision under:
A. B. C. D.

Constant preferences Conditions of risk Conditions of certainty Conditions of uncertainty

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7. George and Miranda are brainstorming possible solutions to a staffing problem. They are writing their ideas down without assessing their practicality or ability. George and Miranda are at what stage in the decision-making process?
A. B. C. D.

Setting decision criteria Analysing alternatives Developing alternatives Allocating weights to the criteria

8. Fixating on initial information and ignoring later information in decision-making is called:

A. B. C. D.

Anchoring effect Overconfidence bias Immediate gratification bias Availability bias

9. Today, the basic management functions have been condensed to ________.

A. B. C. D.

planning, organizing, commanding, and coordinating planning, organizing, coordinating, and controlling planning, organizing, commanding, and controlling planning, organizing, leading, and controlling

10. Bounded rationality is:

A. B. C. D.

conveying a decision to those affected and getting their commitment to it the withholding by group members of different views in order to appear in agreement behaviour that is rational but limited by an individual's ability to process information an unconscious process of making decisions

11. An increased commitment to a previous decision despite evidence that it may have been wrong.
A. B. C. D.

Framing bias Self-serving bias Escalation of commitment Overconfidence bias

12. When a business avoids social responsibility, engages in unethical and illegal behaviour, and try to hide that behaviour from organizational stakeholders and society at large, it is adopting a(an)
A. B. C. D.

Obstructionist approach to corporate social responsibility Defensive approach to corporate social responsibility Accommodative approach to corporate social responsibility Proactive approach to corporate social responsibility
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13. Combining operations with another competitor in the same industry to increase competitive strengths and lower competition among industry rivals is:
A. B. C. D.

Backward vertical integration Forward vertical integration Horizontal integration Diversification

14. Competitive strategy that seeks to attain the lowest total overall costs relative to other industry competitors is called:
A. B. C. D.

Cost leadership strategy Differentiation strategy Focus strategy Stuck in the middle (strategy?)

15. A system in which specific performance goals are jointly determined by employees and their managers, progress toward accomplishing these goals is periodically reviewed, and rewards are allocated on the basis of this progress is known as:
A. B. C. D.

Management by objective Tyrannical management Dictatorial management Autocratic management

16. Katz proposed that managers need ________ skills.

A. B. C. D.

technical, human, and financial human, empirical, and mechanical technical, interpersonal, and legal technical, human, and conceptual

17. Repetitive sequences of activities that express and reinforce the values of the organization
A. B. C. D.

Symbols Stories Rituals Language

18. In forecasting, the application of a set of mathematical rules to a series of hard data to predict outcomes is called
A. B. C. D.

Qualitative forecasting Quantitative forecasting Jury of opinion Customer evaluation

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19. The search for the best practices among competitors and non-competitors that lead to their superior performance is:
A. B. C. D.

SWOT analysis PESTEL analysis Porters five forces analysis Benchmarking

20. Which of the following is a characteristic of a contemporary (dynamic) organisation? A. Inflexible B. Command-orientation C. Team-orientation D. Hierarchical relationship

1. 2. 3. 4. 5.

B A B C D

11. 12. 13. 14. 15.

C A C A A

6. D 7. C 8. A 9. D 10. C

16. D 17. B 18. B 19. D 20. C

Section B (20 Marks)

Answer Two Questions (including Question 1) Question 1 is compulsory and must be attempted. Question 1 (Compulsory question) (a) Define who is a manager and explain the role of different levels of managers you may find in an organisation. (4 marks) Manager Someone who coordinates and oversees the work of other people so that organizational goals can be accomplished. First-line Managers Individuals who manage the work of non-managerial employees. Middle Managers Individuals who manage the work of first-line managers. Top Managers Individuals who are responsible for making organization-wide decisions and establishing plans and goals that affect the entire organization.

Definition 1 mark Explanation of levels 1 mark each (if only levels are mentioned, award a max of 1 mark) MAXIMUM OF 4 MARKS (b) Discuss the characteristics and importance of organizational culture from both managers and employees perspective. The seven dimensions of culture are attention to detail, outcome orientation, people orientation, team orientation, aggressiveness, stability, and innovation and risk taking. In organizations with strong cultures, employees are more loyal and performance tends to be higher. The stronger a culture becomes, the more it affects the way managers plan, organize, lead, and control. The original source of a culture reflects the vision of organizational founders. A culture is maintained by employee selection practices, the actions of top managers, and socialization processes. Also, culture is transmitted to employees through stories, rituals, material symbols, and language. These elements help employees learn what values and behaviours are important as well as who exemplifies those values. The culture affects how managers plan, organize, lead, and control. Dimensions of management mark per three dimensions up to 2 marks Strong versus weak cultures 1 mark per well explained point up to 3 marks Application to employees and managers perspective up to 2 marks MAXIMUM OF 6 MARKS

Question 2 (a) A managers decisions are influenced by the culture in which he or she operates. An organizations culture, especially a strong one, influences and constrains the way management functions are carried out. Discuss the ways in which the four managerial functions are influenced by the organizational culture. (4 marks) Planning The degree of risk that plans should contain Whether plans should be developed by individuals or teams The degree of environmental scanning in which management will engage Organizing How much autonomy should be designed into employees jobs? Whether tasks should be done by individuals or in teams The degree to which department managers interact with each other Leading The degree to which managers are concerned with increasing employee job satisfaction What leadership styles are appropriate? Whether all disagreementseven constructive onesshould be eliminated Controlling Whether to impose external controls or to allow employees to control their own actions What criteria should be emphasized in employee performance evaluations? What repercussions will occur from exceeding ones budget? Up to 1 mark per well explained point or a mark per each bullet point on each of the four functions. MAXIMUM OF 4 MARKS (b) Whether someone behaves ethically or unethically when faced with an ethical dilemma is influenced by several things: his or her stage of moral development and other moderating variables including individual characteristics, the organizations structural design, the organizations culture, and the intensity of the ethical issue. Explain how stage of moral development and individual characteristics such as ego strength and locus of control could affect the decisions taken by a manager when faced with an ethical dilemma. (6 marks) At the first level, the pre-conventional level, a persons choice between right and wrong is based on personal consequences from outside sources, such as physical punishment, reward, or exchange of favors. At the second level, the conventional level, ethical decisions rely on maintaining expected standards and living up to the expectations of others. At the principled level, individuals define moral values apart from the authority of the groups to which they belong or society in general.
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Two personality variables have been found to influence an individuals actions according to his or her beliefs about what is right or wrong: ego strength and locus of control. Ego strength measures the strength of a persons convictions. People with high ego strength are likely to resist impulses to act unethically and instead follow their convictions. That is, individuals high in ego strength are more likely to do what they think is right and be more consistent in their moral judgments and actions than those with low ego strength. Locus of control is the degree to which people believe they control their own fate. People with an internal locus of control believe they control their own destinies. Theyre more likely to take responsibility for consequences and rely on their own internal standards of right and wrong to guide their behavior. Theyre also more likely to be consistent in their moral judgments and actions. People with an external locus believe what happens to them is due to luck or chance. Theyre less likely to take personal responsibility for the consequences of their behavior and more likely to rely on external forces. Up to 1 mark for explaining each of the three levels of moral development TOTAL 3 MARKS Up to 1.5 marks per personal variable explained TOTAL 3 MARKS MAXIMUM OF 6 MARKS

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Question 3 (a) Corporate level strategies a company follows may include growth strategies, stability strategies or retrenchment strategies. Discuss the appropriateness of each of the strategies for a business, giving specific examples or situations in which these strategies may be essential for a business. Growth Strategy Seeking to increase the organizations business by expansion into new products and markets Types of Growth Strategies Vertical integration Horizontal integration Diversification Concentration Stability Strategy A strategy that seeks to maintain the status quo to deal with the uncertainty of a dynamic environment, when the industry is experiencing slow- or no-growth conditions, or if the owners of the firm elect not to grow for personal reasons
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Retrenchment Strategy Reduces the companys activities or operations Retrenchment strategies include: Cost reductions Layoffs Closing underperforming units Closing entire product lines or services

Up to 1 mark per explanation on each strategy 3 marks Up to 1 mark per relevant situation/example 3 marks MAXIMUM OF 6 MARKS (b) PESTEL factors influence all the organisations. Explain how any FOUR of the above factors may influence the airline industry in an economy such as Maldives. Political Policy on FDI and relationship with neighbours and the world community at large with the government of the day may influence the level of investment or development. Economical Status of the economy such as high inflation rate, exchange rate,...etc. Socio-cultural Xenophobia, Issues regarding migration, etc. Technological Security issues, software used (e.g. boarder control system, customs clearance?) Environmental Going carbon neutral, increased arrival of tourists on jets may go against the environmental goals Legal Laws such as Amendments to laws relating government finances Up to 1 mark per well explained point MAXIMUM OF 4 MARKS

Section C (10 Marks)

Answer all the questions

More Than a Good Story

Jake and Rocket, a cartoon guy and his cartoon dog, can be found on most of the apparel and other branded products sold by the Life is good company. With his perky beret (or other appropriate head gear), Jake has that contented look of being able to enjoy life as it is and finding reasons to be happy right now. And Rocket? Well, hes just happy to be along for the ride. And what a ride its been for the two! Theyve been a part of the companys growth to over $100 million in revenues. Company co-founders and brothers, Bert and John Jacobs have a personal and business philosophy much like Jake: simplicity, humor, and humility. However, both understand that even with this philosophy, they need to be good managers and they need good managers throughout the organization in order to stay successful.

Bert and John designed their first tee shirts in 1989 and sold them door-to-door in college dorms along the East Coast and in Boston where theyd set up shop using an old card table in locations on one-way streets so they could pick up and move quickly if they needed to. They used this simple sales approach because, like many young entrepreneurs, they couldnt afford required business licenses. Although they met a lot wonderful people and heard a lot of good stories during those early years, sales werent that great. As the company goes, the brothers lived on peanut butter and jelly, slept in their beat-up van, and showered when they could.

During one of their usual post-sales-trip parties, Bert and John asked some friends for advice on an assortment of images and slogans they had put together. Those friends (some of whom now work for the company) liked the Life is good slogan and a drawing of Jake that had been sketched by John. So Bert and John printed up 48 Jake shirts for a local street fair in Cambridge, Massachusetts. By noon, the 48 shirts were gone, something that had never happened! The brothers were smart enough to recognize that they might be on to something. And, as the old saying goes . . . the rest is history! Since that momentous day in 1994, theyve sold nearly 20 million Life is good tee shirts featuring Jake and Rocket. Bert attributes their success to his belief that the Life is good message, coupled with the carefree image of Jake, was simple enough to swallow, light enough not to be mistaken for preachy, and profound enough to matter. He goes on to say that, Note that we dont say Life is great! We say life is good, period. Three simple words. People connect with it instantly.

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Another important facet of Life is good is their commitment to good causes. And those arent just words to Bert and John; they act on their words. They are passionately involved with Project Joy, which is a nonprofit organization that fosters the development of at-risk children through the art of play. Bert says their partnership with Project Joy aligns with Life is goods whole philosophy. The financial commitment the company has made is supported by its Life is good Kids Foundation, which raises funds through the popular Life is good festivals and through sales of fundraising t-shirts and books at its retail stores.

Today, Life is good, based in Boston, has a product line of more than 900 items. The company continues to grow about 30 to 40 percent annually. Bert and Johns style of managing is guided by another of the companys mottoes, Do what you like. Like what you do. As the companys Web site states, In addition to knowledge, skills, and experience, we look to hire people who possess the same optimistic outlook on life that Jake has. Its an approach that seems to be working for Bert and John and for Rocket.

1. What approach to corporate social responsibilities is taken by Bert and John? Justify, by giving examples from the case study. ( 5 marks) Social Responsibility: a businesss obligation, beyond that required by law and economics, to pursue long-term goals that are good for society. Accommodative or proactive approach of corporate social responsibility is taken by Bert and John. Accommodative approach: going beyond legal requirements, choosing to support social responsibility in a balanced fashion. Accommodative managers try to balance the interests of shareholders with those of other stakeholders by making choices that appear reasonable to all members of society. Proactive approach: finds out about and meets the needs of different stakeholder groups. It promotes the interests of stockholders, shareholders, and stakeholders, using organizational resources to do so. These managers feel a responsibility to society as a whole.

Their view of CSR is that of socio-economic rather than the classical view. The Socio-economic View: Management should also protect and improve societys welfare Corporations are responsible not only to stockholders Firms have a moral responsibility to larger society to do the right thing Examples: Project Joy, Life is good Kids Foundation
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Up to 1 mark for defining CSR 1 mark Up to 2 marks for identifying the approach of CSR used by Bert and John 2 marks Up to 3 marks for examples and justifications 3 marks MAXIMUM OF 5 MARKS 2. Using descriptions from the case, describe Bert and Johns managerial style. Would this approach work for other organizations? Why or why not? ( 5 marks) Bert and John were good listeners and valued the input from non-managerial staff and saw friends as equals in their business by getting ideas and involving them in the business. Now, some of them who came up with the slogan Life is good are employees. It shows democratic style of management on the part of the brothers. Bert and John have an optimistic view of life and understood business as a social entity and focused on interests of all the stakeholders. Participative decision-making and possible use of Management by Objectives (MBO) might have contributed for their success. This style of leadership may not work in all organizations or relevant to all situations. For example, democratic style of leadership / management is most inappropriate for Army. Up to 1 mark per valid point on managerial style 3 marks Comment on appropriateness of the management style in other settings 2 marks Justification 1 MAXIMUM OF 5 MARKS

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