2 Marks Question & Answer

UNIT I
1. Define: Management. [May 2011, Nov 2012]
According to Knootz and Weihrich Management is the process of designing
and maintaining of an environment in which individuals working together in groups
efficiently accomplish selected aims.
2. What are management levels? [May 2012]
1) Top level management.
2) Middle level management.
3) Lower level management.
3. Write the functions or role of management? [May 2011, Nov 2012]
Planning.
Organizing.
Staffing.
Coordinating.
Controlling.
UNIT II
1. What is the main objective of planning? [May 2013]

Planning is a primary function of organization. It helps in achieving objectives.

It done to cope with uncertainty and change. It helps in facilitating control. It helps in
coordination planning increases organization effectiveness. Planning guides in decision
making.
2. What is MBO? [May 2012, 2011]

MBO is a process whereby the superior and the superior and the subordinate
manager of an enterprise jointly identify its common goals, define each individuals major
areas of responsibility in terms of result expected of him, and use these measures as
guides for operating the unit and the contribution of each of its members is assessed.
3. What is meant by strategy? [Nov 2012]

A strategy may also be defined as a special type of plan prepared for

meeting the challenge posted by the activities of competitors and other
environmental forces.

4. How would you evaluate the importance of a decision? (Or) Mention any 2

features of decision making. [May 2011]

1) Decision making is a selection process. The best alternative is selected out of many
available alternatives.
2) Decisionmaking is a goaloriented process. Decisions are made to achieve some goal
or objective.
3) Decision making is the end process. It is preceded by detailed discussion and
selection of alternatives.
4) Name any four quantitative forecasting techniques. [May 2013]
1)
2)
3)

Time series methods/ analysis

Econometric forecasting.
Technological forecasting.

5) List the different types of planning. [May 2012, Nov 2012] Plans:
1.
a)
b)
c)
d)
e)
f)

Standing plans:
Mission or purpose
Objectives
Strategies
Policies
Procedures
Rules

2.
a)
b)
c)
d)
e)

Single use plans:

Programmes
Budgets
Schedules
Methods
Projects.

UNIT III
1. Define Organizing. [May 2011, 2013]
Organizing is the process of identifying and grouping of activities required to attain
objectivities, delegating authority, creating the responsibility and establishing relationship for the
people to work effectively.
2. Mention any two merits of performance appraisal. [May 2011]
1. Improve the management development.
2. Improve the employees performance.
3. Find out individual potential identification.

3. What is decentralisation?[What are the advantages of Decentralization? [Nov 2012] [May

2011]
Authority to be dispersed by extension & delegation through all levels of management. It applies
to the systematic delegation of authority in an organisation-wide context.
It reduces the burden of the management so that it can focus more attention and
strategic management.
It encourages decision making & assumption of authority & responsibility.
It enables the department staff members to complete work early.
4. What is functional departmentation? [May 2012]
The activities are grouped on the basis of functions which are to be performed.
5. What is meant by delegation? [May 2012]
It is a process which enables a person to assign works to others & delegate them with
adequate authority to do it.
6. What are the sources of recruitment? [Nov 2012]
The sources of recruitment may be classified into,
1. Internal sources:
Present permanent employees.
Retired employees.
Present temporary/ casual employees
2. External sources:
Educational & training institutes.
Private employment agencies.
Public employment exchange.
UNIT IV
1. What is meant by Brain storming? [May 2013]

Brain storming is an excellent way of developing many creative solutions to a

problem. It works by focusing on a problem, and then coming up with very many radical
solutions to it. The essence of brainstorming is a creative conference, ideally of a to 8 to12
people meeting for less than an hour to develop along listed without criticism on a backboard or
newsprint as they are offered ;one visible idea leads to others. At the end of this session,
participants are asked how the ideas could be combined or improve.
2. Define motivation. [May 2011, Nov 2012]

According to koonts and ODonnell Motivation is a general terms applying to the

entire class of drives, desires, needs wishes and similar forces that induce an individual or a group
of people to work
3. What is organizational culture? [May 2011]

The basic pattern of values & assumptions shared by employees within an Organization.
4. Who is a leader? [Nov2012]

Leader is one who makes his subordinates to do willingly what he wants.

5. What are the different types of management strategies involved in leadership?

[May 2013]
1.
2.
3.
4.

Exploitative- autocratic
Benevolent-autocratic
Consultative-democratic
Democratic-participative

6. Mention the elements of directing. [May 2012]

a.
b.
c.
d.

Supervision
Communication
Leadership &
Motivation.

7. List the components of communication process. [May 2012]

a.
b.
c.
d.
e.

Sender
Communication channels
Symbols
Receiver
Noise & feedback in communication.

UNIT V
1. What are the types of control? [May 2013]
1. Feedback control.
2. Concurrent control.
3. Feed forward control.
2. Define budgetary control. Mention any two advantages of budgetary control system.
[May 2012] [May 2011]
According to J. Batty A system which uses budgets as a means of planning and
controlling all aspects of producing and or selling commodities and services.

3. Define MIS. [May 2013]

A system of obtaining abstracting , storing and analyzing data, to productions
information for use in planning, controlling and decision making by managers at the time they can
most effectively use it.
4. Define budget & budgetary control. [Nov 2012]
According to J. Fred Meston A budget is the expression of a firms plan is financial
form for a period of time in to the future.
According to J. Batty A system which uses budgets as a means of planning & controlling
all aspects of producing & or selling commodities & services.
5. Define quality control. [Nov 2012, May 2011]
It is a process by which entities review the quality of all factors involved in production.

16 Marks Question & Answer

UNIT I
1. Explain the principle of F.W.Taylor theory. [MAY 2012]
Fayolism is one of the first comprehensive statement of a general theory of management,
developed by the French management theorist Henri Fayol (18411925): one of the most
influential contributors to modern concepts of management,
Fayol has proposed that there are five primary functions of management: (1) planning, (2)
organizing, (3) commanding, (4) coordinating, and (5) controlling (Fayol, 1949, 1987).
Controlling is described in the sense that a manager must receive feedback on a process in
order to make necessary adjustments.
Fayol's work has stood the test of time and has been shown to be relevant and appropriate
to contemporary management. Many of todays management texts including
Daft (2005) have reduced the five functions to four: (1) planning, (2) organizing, (3) leading,
and (4) controlling. Daft's text is organized around Fayol's four functions.
The 6 types of Operations
For Fayol any Organisation can be subdivided into six types of Operations. Each
Operation being fulfilled by its corresponding Essential Function:
1. Technical Operations (production, manufacturing, transformation)
2. Commercial Operations (purchases, sales, exchanges)
3. Financial Operations (seek for capital and finance management)
4. Security Operations (protection of goods and people)
5. Accounting Operations (balance, P&L, cost control, statistics, etc)
6. Administrative' Operations (Management)
In 1925 six month before Henri Fayols death Verney helped Fayol redefine The
function of
administration
(Administration
Industrielle
et Generale).

The old definition went as follows: The activities involved in businesses can all be classified
under one of the following six headings: TECHNICAL, COMMERCIAL, FINANCIAL,
SECURITY, ACCOUNTING, ADMINISTRATIVE organization, command, coordination and
control. Compared with the new definition: The activities involved in businesses can all be
classified under one of the following five headings: TECHNICAL, COMMERCIAL,
FINANCIAL, SECURITY, ACCOUNTING These activities must be planned, organized,
directed, coordinated and controlled, in a word: administered. The removal of the distinction
between management and administration and the re-definition of administration, it appears that
Fayol had finally synthesized these two concepts. Therefore the previous difficulties with this
distinction no longer exist(Breeze, J., & Miner Jr., F.)
The 9 Levels
Fayol was representing an organisation like a living body ( corps social , ie.
"social body") with main organs hierarchically structured as follow:
1.
Shareholders,
2.
Board of Administration,
3.
General Direction and its General staff (advisors),
4.
Regional/local Directions,
5.
Main Engineers,
6.
Services Managers,
7.
Workshops Managers,
8.
Foremen,
9.
Workers.
The 5 Elements of Administration
Popularized by Fayol with the acronym of POCCC:
1.
Planning' (to foresee/anticipate and make plans)
2.
Organisation (to provide the Function with all is needed for its smooth
running: Supplies, Tools, Funding, Employees)
3.
Commandment (to lead the people employed by the organisation)
4.
Coordination (to harmonise all actions of an Organisation in order to
facilitate its smooth running and success)
5.
Control (to verify if everything happens in accordance with defined plans,
orders given, and accepted principles)
The word Control clearly provoked some misunderstanding by English-readers because its
1st meaning in French is "to check" and its 2nd meaning is "to have a grip over". And it is the
other way round in English. So for the French-reader Fayol clearly meant "Check everything!".
For Fayol, "The Art of Commanding relies upon certain personal qualities and upon the
knowledge of management general principles. (...) It has, like all other arts, its degrees. (...) The
manager in charge of a commandment must:
1.
have a deep knowledge of his staff;
2.
cull the incapables;

3.
4.
5.
6.

well know the conventions binding the organisation and its members;
give the good example (by his attitude);
conduct regular inspections of the corps social ;
get together his main partners in conferences (meetings) where are prepared
the Unity of Direction and the Focus of Efforts;
7.
not be distracted by details;
8. aim to make prevalent among his staff, energy, initiative and
dvouement."
The 14 Principles of Administration
1.
Division of work: Reduces the span of attention or effort for any one
person or group. Develops practice or routine and familiarity.
2.
Authority: "The right to give orders. Should not be considered without
reference to responsibility."
3.
Discipline: "Outward marks of respect in accordance with formal or
informal agreements between a firm and it's employees."
4.
Unity of command: "One man one superior!"
5.
Unity of direction: "One head and One plan for a group of activities with
the same objective."
6.
Subordination of Individual Interests to the Common Interest:
"The interests of one individual or group should not prevail over the
general or common good."
7.
Remuneration of personnel: "Pay should be fair to both the worker as
well as the organization."
8.
Centralisation: "Is always present to a greater or lesser extent, depending
on the size of the company and the quality of its managers."
9.
Scalar chain: "The line of authority from top to bottom of the
organization."
10.
Order: "A place for everything and everything in its right place; ie. the
right man in the right place."
11.
Equity: "A combination of kindness and justice towards employees."
12.
Stability of personnel tenure: "Employees need to be given time to settle
in to their jobs, even though this may be a lengthy period in the case of
some managers."
13.
Initiative: "Within the limits of authority and discipline, all levels of staff
should be encouraged to show initiative."
14.
Esprit de corps (Union is strength): "Harmony is a great strength to an
organization; teamwork should be encouraged."
Fayol suggested that it is important to have unity of command: a concept that suggests
there should be only one supervisor for each person in an organization. Like
Socrates, Fayol suggested that management is a universal human activity that applies equally well
to the family as it does to the corporation.
2. Explain the Henry Fayol management theory. [May 2012, 2013]

The principles of management are given below:

1. Division of work: Division of work or specialization alone can give maximum productivity
and efficiency. Both technical and managerial activities can be performed in the best manner only
through division of labour and specialization.
2. Authority and Responsibility: The right to give order is called authority. The obligation to
accomplish is called responsibility. Authority and Responsibility are the two sides of the
management coin. They exist together. They are complementary and mutually interdependent.
3. Discipline: The objectives, rules and regulations, the policies and procedures must be honoured
by each member of an organization. There must be clear and fair agreement on the rules and
objectives, on the policies and procedures. There must be penalties (punishment) for nonobedience or indiscipline. No organization can work smoothly without discipline preferably
voluntary discipline.
4. Unity of Command: In order to avoid any possible confusion and conflict, each member of an
organization must received orders and instructions only from one superior (boss).
5. Unity of Direction: All members of an organization must work together to accomplish
common objectives.
6. Emphasis on Subordination of Personal Interest to General or Common Interest: This is
also called principle of co-operation. Each shall work for all and all for each. General or common
interest must be supreme in any joint enterprise.
7. Remuneration: Fair pay with non-financial rewards can act as the best incentive or motivator
for good performance. Exploitation of employees in any manner must be eliminated. Sound
scheme of remuneration includes adequate financial and nonfinancial incentives.
8. Centralization: There must be a good balance between centralization and decentralization of
authority and power. Extreme centralization and decentralization must be avoided.
9. Scalar Chain: The unity of command brings about a chain or hierarchy of command linking all
members of the organization from the top to the bottom. Scalar denotes steps.
10. Order: Fayol suggested that there is a place for everything. Order or system alone can create
a sound organization and efficient management.
11. Equity: An organization consists of a group of people involved in joint effort. Hence, equity
(i.e., justice) must be there. Without equity, we cannot have sustained and adequate joint
collaboration.
12. Stability of Tenure: A person needs time to adjust himself with the new work and
demonstrate efficiency in due course. Hence, employees and managers must have job
security.Security of income and employment is a pre-requisite of sound organization and
management.
13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organization. Union is
strength. But unity demands co-operation. Pride, loyalty and sense of belonging are responsible
for good performance.
14. Initiative: Creative thinking and capacity to take initiative can give us sound managerial
planning and execution of predetermined plans.

3) Discuss the role of manager. [May 2012]

Mintzbers a management thinker identified ten roles & classified them within
three broad categories.
1. Interpersonal roles:

a)

b)

Figure head role:

In this role a manager performs symbolic duties required by status of his office.
His activities include to greet the visitors attends employee family functions.
Leader:
Responsible for the motivation & activation of subordinates.
Responsible for staffing, training & associated duties.

c)

Liasin:
It describes a managers relationship with the outsiders.
A manager maintains smooth relation with other organisation governments industry
groups etc.

2.
a)

Informational roles:
Monitor:
A manager scans the environment & collects internal & external informations.
b) Disseminator:
Manager distributes the information to his subordinated in order to achieve
organizational objectives.
c)
Spokes person:
Transmits the informations to the outside of the organisation.
3.
a)
b)
c)
d)

Decisional roles:
Entrepreneur:
Initiates & supervises design of organizational improvement projects.
Disturbance handler:
Responsible for corrective action when organisation faces on expected problems.
Resource allocator:
Manager responsible to allocation of human, monetary & material resources.
Negotiator:
As a manager bargains with suppliers, dealers, trade union, agents etc.

4) Trends and Challenges Of Management In Global Scenario

The management functions are planning and decision making, organizing. leading, and
controlling are just as relevant to international managers as to domestic managers.
International managers need to have a clear view of where they want their firm to be in the future;
they have to organize to implement their plans: they have to motivate those who work lot
them; and they have to develop appropriate control mechanisms.
a) Planning and Decision Making in a Global Scenario
To effectively plan and make decisions in a global economy, managers must have a broadbased
understanding of both environmental issues and competitive issues. They need to understand local
market conditions and technological factor that will affect their operations. At the corporate level,
executives need a great deal of information to function effectively. Which markets are growing?
Which markets are shrinking? Which are our domestic and foreign competitors doing in each
market? They must also make a variety of strategic decisions about their organizations. For
example, if a firm wishes to enter market in France, should it buy a local firm there, build a plant,
or seek a strategic alliance? Critical issues include understanding environmental circumstances,

the role of goals and planning in a global organization, and how decision making affects the
global organization.
b) Organizing in a Global Scenario
Managers in international businesses must also attend to a variety of organizing issues. For
example, General Electric has operations scattered around the globe. The firm has made the
decision to give local managers a great deal of responsibility for how they run their business. In
contrast, many Japanese firms give managers of their foreign operations relatively little
responsibility. As a result, those managers must frequently travel back to Japan to present
problems or get decisions approved. Managers in an international business must address the basic
issues of organization structure and design, managing change, and dealing with human
resources.

c) Leading in a Global Scenario

We noted earlier some of the cultural factors that affect international organizations. Individual
managers must be prepared to deal with these and other factors as they interact people from
different cultural backgrounds .Supervising a group of five managers, each of whom is from a
different state in the United States, is likely to be much simpler than supervising a group of five
managers, each of whom is from a different culture. Managers must understand how cultural
factors affect individuals. How motivational processes vary across cultures, how the role of
leadership changes in different cultures, how communication varies across cultures, and how
interpersonal and group processes depend on cultural background.
d) Controlling in a Global Scenario
Finally, managers in international organizations must also be concerned with control. Distances,
time zone differences, and cultural factors also play a role in control. For example, in some
cultures, close supervision is seen as being appropriate, whereas in other cultures, it is not
Likewise, executives in the United States and Japan may find it difficult to communicate vital
information to one another because of the time zone differences. Basic control issues for the
international manager revolve around operations management productivity, quality, technology
and information systems.
5) Evolution Of Management Thought
The practice of management is as old as human civilization. The ancient civilizations of Egypt
(the great pyramids), Greece (leadership and war tactics of Alexander the great) and Rome
displayed the marvelous results of good management practices.
The origin of management as a discipline was developed in the late 19th century. Over time,
management thinkers have sought ways to organize and classify the voluminous information
about management that has been collected and disseminated. These attempts at classification have
resulted in the identification of management approaches. The approaches of management are
theoretical frameworks for the study of management. Each of the approaches of management are
based on somewhat different assumptions about human beings and the organizations for which
they work.
The different approaches of management are
a) Classical approach,

b) Behavioral approach,
c) Quantitative approach,
d) Systems approach,
e) Contingency approach.
The formal study of management is largely a twentieth-century phenomenon, and to some degree
the relatively large number of management approaches reflects a lack of consensus among
management scholars about basic questions of theory and practice.
a) The Classical Approach:
The classical approach is the oldest formal approach of management thought. Its roots pre-date
the twentieth century. The classical approach of thought generally concerns ways to manage work
and organizations more efficiently. Three areas of study that can be grouped under the classical
approach are scientific management, administrative management, and bureaucratic management.
(i) Scientific Management.
Frederick Winslow Taylor is known as the father of scientific management. Scientific
management (also called Taylorism or the Taylor system) is a theory of management that
analyzes and synthesizes workflows, with the objective of improving labor productivity. In other
words, Traditional rules of thumb are replaced by precise procedures developed after careful
study of an individual at work.
(ii) Administrative Management.
Administrative management focuses on the management process and principles of management.
In contrast to scientific management, which deals largely with jobs and work at the individual
level of analysis, administrative management provides a more general theory of management.
Henri Fayol is the major contributor to this approach of management thought.
(iii) Bureaucratic Management.
Bureaucratic management focuses on the ideal form of organization. Max Weber was the major
contributor to bureaucratic management. Based on observation, Weber concluded that many early
organizations were inefficiently managed, with decisions based on personal relationships and
loyalty. He proposed that a form of organization, called a bureaucracy, characterized by division
of labor, hierarchy, formalized rules, impersonality, and the selection and promotion of employees
based on ability, would lead to more efficient management. Weber also contended that managers'
authority in an organization should be based not on tradition or charisma but on the position held
by managers in the organizational hierarchy.
b) The Behavioral Approach:
The behavioral approach of management thought developed, in part, because of perceived
weaknesses in the assumptions of the classical approach. The classical approach emphasized
efficiency, process, and principles. Some felt that this emphasis disregarded important aspects of
organizational life, particularly as it related to human behavior. Thus, the behavioral approach
focused on trying to understand the factors that affect human behavior at work.
(i) Human Relations.
The Hawthorne Experiments began in 1924 and continued through the early 1930s. A variety of
researchers participated in the studies, including Elton Mayo. One of the major conclusions of the
Hawthorne studies was that workers' attitudes are associated with productivity. Another was that
the workplace is a social system and informal group influence could exert a powerful effect on
individual behavior. A third was that the style of supervision is an important factor in increasing
workers' job satisfaction.
(ii) Behavioral Science.

Behavioral science and the study of organizational behavior emerged in the 1950s and 1960s. The
behavioral science approach was a natural progression of the human relations movement. It
focused on applying conceptual and analytical tools to the problem of understanding and
predicting behavior in the workplace.
The behavioral science approach has contributed to the study of management through its focus on
personality, attitudes, values, motivation, group behavior, leadership, communication, and
conflict, among other issues.
c) The Quantitative Approach:
The quantitative approach focuses on improving decision making via the application of
quantitative techniques. Its roots can be traced back to scientific management.
(i) Management Science (Operations Research)
Management science (also called operations research) uses mathematical and statistical
approaches to solve management problems. It developed during World War II as strategists tried
to apply scientific knowledge and methods to the complex problems of war. Industry began to
apply management science after the war. The advent of the computer made many management
science tools and concepts more practical for industry
(ii) Production And Operations Management.
This approach focuses on the operation and control of the production process that transforms
resources into finished goods and services. It has its roots in scientific management but became an
identifiable area of management study after World War II. It uses many of the tools of
management science.
Operations management emphasizes productivity and quality of both manufacturing and service
organizations. W. Edwards Deming exerted a tremendous influence in shaping modern ideas
about improving productivity and quality. Major areas of study within operations management
include capacity planning, facilities location, facilities layout, materials requirement planning,
scheduling, purchasing and inventory control, quality control, computer integrated manufacturing,
just-in-time inventory systems, and flexible manufacturing systems.
d) Systems Approach:
The simplified block diagram of the systems approach is given below.

The systems approach focuses on understanding the organization as an open system that
transforms inputs into outputs. The systems approach began to have a strong impact on
management thought in the 1960s as a way of thinking about managing techniques that would
allow managers to relate different specialties and parts of the company to one another, as well as
to external environmental factors. The systems approach focuses on the organization as a whole,
its interaction with the environment, and its need to achieve equilibrium.
e) Contingency Approach:
The contingency approach focuses on applying management principles and processes as dictated
by the unique characteristics of each situation. It emphasizes that there is no one best way to

manage and that it depends on various situational factors, such as the external environment,
technology, organizational characteristics, characteristics of the manager, and characteristics of
the subordinates. Contingency theorists often implicitly or explicitly criticize the classical
approach for its emphasis on the universality of management principles; however, most classical
writers recognized the need to consider aspects of the situation when applying management
principles.
UNIT II
1. Give an account of various steps involved in planning?
[May 2011, 2013, Nov 2012,]
Steps in Planning:
1. Identification of opportunities. - SWOTanalysis

2. Establishing objectives.
3. Developingpremises
i) Planning premises are forecasts, applicable basic policies, and existing
company plans.
ii) They are assumptions about the environment in which plan is to be carried out.
iii) Forecasting is important for premising.
iv) Premises should be making practical what volume of sales? What price?
4. Determining alternative courses of action
5. Evaluating alternative course of action
- Operation Research
Decision tree
6. Selectingacourseof action - Decision making
7. FormulatingDerivativeplans - Supporting plans for basic
plan
8. Numerating plans by budgeting - Income and expenses

2) Explain briefly the benefits and weakness of MBO? Or Mention any four
advantages and four limitations of planning. [May 2011]
Benefits of MBO:
1. Improvement of managing:
MBO forces managers to think of planning for end results rather than merely planning

activities or work. MBO produces clear & measurable performance goals. A network of goals is
created & appropriate action plans are formulated for goal achievement.

2. Clarification of Organization:
Another major benefit of MBO is that it forces managers to clarify organizational roles,
the authority & responsibilities.
3. Encouragement of Personal commitment:
MBO provides greatest opportunity for personnel satisfaction. This is possible for 2
reasons.
a) participation in objective setting, &
b) Rational performance appraised.
When the individuals are involved in setting goals, they feel satisfaction that they are
important for the organization.
4. Development of Effective control:
MBO not only provides better planning, but also aids in developing effective control. Control
involves measuring results & taking action to correct any deviations from plans. Objectives
serve as the standards for appraising performance. Actual performance is compared with the
objectives; any deviation is identified & corrected. It ensures that goals are achieved. MBO also
allows employees to monitor & control their own performance.
5. Fast decision making:
Decision is taken by the manager very quickly. The reason is that each worker
knows the purpose of taking the decision & does not oppose the decision.
Weakness of MBO:
1. Failure to teach the philosophy of MBO:
MBO fails to explain the philosophy. Most of the executives do not know what is MBO,
how MBO works & why is MBO necessary & how participants can benefit by MBO.

2. Failure to give guidelines to goal setters:

MBO does not provide any guidelines for setting goals. Therefore, often
managers are neither taught how to set the objectives nor familiarized with the various
plans & policies of the organization. In such cases, each department ends up going its
own way, & the results are counterproductive to the overall organization.
3. Difficulty of setting goals:
MBO requires verifiable objectives against which performance can be measured.
However, setting of objectives is more difficult in some areas especially where they cannot
be presented in quantitative form. Objectives are more in the form of statement rather than
in quantitative form. Of course, some objectives can be quantified & can be broken in terms
of time period but others lack this characteristic for further course of action.
4. Emphasis on short run goals;
MBO emphasis only on short-term objectives & does not consider the long-term
objectives. By emphasizing short range objectives, performance appraisal becomes
easier, but there is always a danger in emphasizing short-term objectives at the cost of
long-term objectives. Sometimes, an organizations short-term & long term objectives may
be incompatible because of certain specific problems.
5. Danger of Inflexibility:

MBO is rigid one. Objectives should not be changed under MBO. Thus, it
introduces inflexibility in the organization. In present situation, an objective cannot be valid
forever. It needs change with the change in environment. But once goals are set down,
the superior may not like to change them due to fear of resistance from the
subordinate. Thus, inflexibility created by applying MBO may cause harm than what it
may contribute.

6. Time consuming:
MBO is a time consuming process. Much time is needed by senior people for
framing the MBO. Particularly at the initial stage, several meetings may have to be held to
instill confidence in subordinates. The formal periodic reviews & final appraisal sessions
also consume a lot of time.
7. Increased paper work:
MBO contains many newsletter, instruction booklets, training manuals,
performance appraisal reports etc. this increased paper work reduces the effectiveness of
MBO in many organizations.

3) Define decision making process. Explain the process followed while taking a
decision in normal situation. [May 2011, 2013]
Decision making Process
1. Defining the problem
2. Analyzing the problem
3. Developing alternative solutions
4. Evaluating the Alternatives
5. Selecting the best alternatives
6. Implementing the decision
4) Explain the principle of planning.
The 5 Principles of Planning for Managers (and Explorers)

[May 2012]

1.

Set goals

It might seem to some obvious but this step is so often not done well. The first step
in the planning process is to determine with absolute clarity what you want to achieve. The
goal must be specific - you and others will need to recognise if and when it is achieved.
2.
Clarify the tasks
Once you have defined your goal you will need to do the hard work of establishing
what to do to achieve it. The list of tasks might be relatively short for some undertakings,
for others the list of tasks can be exceptionally long and take considerable time and effort
to create.
3.

Agree responsibilities

A plan is a tool that enables people to achieve a given aim. Each task needs to
be owned by someone, and importantly they need to know that they own it.
You might find that an odd comment - how can someone own a task and not
know it? In organizations this happens all too often, at all levels in the organization.
Recently we heard a manager in a large bank complaining that a senior executive did
not appreciate they were the designated 'senior executive responsible' - a specific role
in their governance model - for a large and strategically important supplier relationship.
The executive was relatively new to the role and had not been told!
For the plan to work it is key that every task is owned, and that all owners know
what they are responsible for and have agreed to owning the task.
4.

Schedule

This means establishing some time scales. By when is the goal to be achieved? If
you work back, when will the tasks need to be completed to ensure the goal is achieved
within the planned timescale? In complex scenarios of course this might result in the
creation of any number of plans that all come together to achieve the main goal. Linking all
this activity together is key, and highlights the importance of a clear plan effectively
communicated to all who contribute, and to those who have an interest in the plan's
achievement.
5.

Learn

It was US President Eisenhower who said, "In preparing for battle I have always
found that plans are useless, but planning is indispensable." He was making the point that
effective plans are not static but dynamic. They are frameworks for action, which help us
to make decisions about what needs to be done in an efficient way. We need to capture
our experiences as the plan unfolds and feed them back into the planning process - a
continuous feedback loop, making changes where necessary.
5) Describe the various types of decision. [May 2012]

Managerial decisions may be classified into the following categories:

1. Programmed & non-programmed decisions:
Programmed decisions are otherwise called routine decisions or structured
decisions. The reason is that these types of decisions are taken frequently & they are
repetitive in nature. Such decisions are generally taken by the middle or lower level
managers, & have a short term impact. This decision is taken within the preview of the
policy of the organization. For example making purchase order sanctioning of different
types of leaves, increments in salary, placing purchasing order standard inventory terms,
etc. managers dealing with such issues of routine nature usually follow the established
clear-cut procedure. Managers know in advance what decisions he has to take in a
particular set of conditions. They need not ask anything from their superiors.
Non-programmed structures are otherwise called strategic decisions or basic
decisions or policy decisions or unsaturated decisions. This decision is taken by top
management people whenever the need arises. These decisions deal with unique or
unusual or non-routine problems. Such problems cannot be tackled in a predetermined
manner. There are no established methods or readymade answers for such problems. A
careful analysis is made by the management before taking a decision. For example,issues
related to industrial relations problem, declining market share, increasing competition,
problems with the collaborator, starting new business, acquisition of a business etc. this
decision has a long-term impact on business.
The following table gives the distinguishing between programmed & non-programmed
decisions.
S.No.
1.
2.
3.
4.
5.

Programmed decisions
It deals with routine or repetitive
type of problem.
Highly certain conditions.
There are established procedures
to take decision.
Middle or low level executives
take this type of decision
It requires little judgement &
deliberation.

Non-Programmed decisions
It deals with unique or unusual or
non-routine problems.
Highly uncertain conditions
There are no established procedures
This type of decision is taken by top
level executives.
It involves much thought &
judgement.

2. organizational & personal decisions:

Organizational decisions are decisions taken by an individual in his official capacity
to further the interest of the organization known as organizational decisions. These
decisions are based on rationality, judgment & experience. For example, regarding
decision is introducing a new incentive system, transferring an employee, reallocation or
redeployment of employees etc. such decisions affect the functioning of the organization
directly.
6) With the help of block diagram, explain the process of management by

objectives (MBO). [May 2012, Nov 2012]

The Process of Management by Objectives (MBO)
MBO programs can vary enormously. Some are designed for use in a subunit,
while others are used for the organization as a whole. The particular methods and
approaches that managers use in an MBO program will differ. There also may be wide
differences in emphasis. Therefore the MBO process requires rigorous analysis, clarity
and balance of objectives and participation of managers with accountability for results.
This process has the following steps:
1. Setting of Objectives: The first step of MBO process is to establish verifiable objectives
for the organization and for various positions at various levels. Without having a clear
objective no group or individual can perform effectively or efficiently. One of the major criteria
to set clear objectives is the scope of measuring it. Therefore, objectives should be set in
such a way that they provide a clear direction to the people who have to contribute and
perform for achievement of the same. It is always desirable to have a participatory approach
to set objectives. However, management aspirations and expectations should be kept in
view while adopting a participatory approach to set objectives.

Setting precise, measurable, and well-defined objectives is indeed a difficult task. It

requires an intelligent input from superiors and practice and team effort on the part of
subordinates. Objectives should:
1)

Be verifiable;

2) Indicate the time frame within which they are to be achieved;

3) Indicate associated cost involved;
4)

Indicate quantity and quality aspects of the expected achievements;

5)

Help in promoting personal and professional growth and development;

6)

Get duly communicated to all who are concerned with it;

7)

Align short-term objectives to medium and long-term objectives; and

8) Give due importance to the views of individuals expected to contribute in the

achievement of objectives at the time of setting objectives.
2. Key Result Areas: Organisational objectives and planning premises together provide
the basis for the identification of key-result areas. Key-result areas are derived from the
expectations of the various stake holders and indicate priorities for organisational
performance. They indicate top management perspectives for the future and the present
state of health of the organisation. These are the areas in reference to which
organisational health may be measured or appraised for example: (i) profitability, (ii)
market standing, (iii) innovation, (iv) productivity, etc. These areas are not the same for
every organisation.
They differ from organisation to organisation, depending upon various internal
and external environmental factors.

3. Setting of Subordinates Objectives: Organisational objectives are achieved through

individuals. Therefore, every individual must know in advance what he is expected to
achieve. Objectives for each subordinate should be set in consultation between that
subordinate and his or her supervisor. A degree of recycling is required in setting of
objectives. This means that a degree of interaction, consultation, and discussion among
top level managers, departmental heads, superiors and subordinates is necessary. In such
joint consultations, subordinates help managers develop realistic objectives since they
know best what they are capable of achieving. Managers help subordinates "raise their
sights" toward higher objectives by showing willingness to help them overcome obstacles
and confidence in subordinates' abilities.
4. Revision of Organizational Structure: When the goals for each individual are reset under
MBO there is a considerable change in the job description of various positions. This may call
for a revision of the existing organization structure. The organization charts

and manuals should be suitably amended to depict the change brought about by the
introduction of management by objectives. The job description of various jobs must be
defined with their objectives, responsibilities, and authorities. They must clearly lay down
the relationship with other job positions in the organization.
5. Matching Objectives and Resources: It should be noted that without a proper balance
between the objectives and resources, the achievement of goals will be difficult. Hence, the
superiors must ensure combination of goals with available resources. All managers at
various levels require these resources to accomplish their goals. By relating these
resources to the goals themselves, superiors can better see the most effective and most
economical way of allocating them.
6. Conducting Periodic Progress Reviews: Management by objectives ensures
periodic meetings between the superior and the subordinate to review the progress
towards the goal attainment. For this the superior must establish check points or
standards of performance for evaluating the progress of the subordinate. The reviews
should be held monthly or quarterly. These reviews serve as a built-in feedback
mechanism for an MBO system. Since individual or group goals are specifically defined,
usually in quantifiable terms, employees can compare their progress at review time
against the specified goals. This periodic check-up allows managers and employees to
see whether they are on targets or whether some change is necessary. During the review,
managers and employees decide what problems exist and what they can do to resolve
them.
7. Performance Appraisal: While informal performance appraisal of a subordinate is
done by his immediate superior almost every day, formal appraisal at periodic interval,
usually once or twice a year, does ensure that a thorough evaluation of a manager's
performance is done and his achievements are carefully analyzed against the
background of prevailing circumstances and given objectives. The design and format of
the performance review form will depend on the nature of the enterprise.
Performance appraisal can serve three purposes:

1)

Feedback to employees concerning their actual performance;

2)

Provide the basis for identifying more effective job behaviour;

3)

Supply information to managers relevant to future job assignments and to

compensation decisions.

8. Feedback: On the basis of overall evaluation, the feedback is provided to higher level of
hierarchy. Feedback information helps in taking decisions to make necessary changes in
MBO programme and to shape goals for the next year. The MBO cycle repeats itself on
an annual basis.

UNIT III
1) Mention the factors which are responsible for the emergence of
informal organizations. [May 2011]
Informal organization which established the relationship on the basis of members
interaction, communication, personal likings and disliking and social contacts within a well as
outside the organization.
It arises naturally on the basis of friendship or some common interest which may or
may not be relocated with work. The following factors are responsible for the emergence of
informal organization.
Origin: It is created spontaneously and naturally
Purpose: It is created for social and psychological
Nature: Unplanned and unofficial works.
Size: For a smaller groups alone.
Authority: Flow will be from any direction
Communication: It will be through informal channels
Control Process: Group norms and values.
2) What are the steps involved in the process of delegation? [May 2011]
Process of Delegation
1. Determination of results expected:
The delegator has to define the results expected from his subordinates for the
achievement of organizational objectives. Results expected from the position must be
very clear to make delegation effective.
2. Assignment of duties
The delegator first tries to define the task & duties to the subordinate. He also has
to define the result expected from the subordinates. Clarity of duty as well as result

expected has to be the first step in delegation.

3. Delegation of authority:

4. Creating accountability for performance:

3) State and explain the basic steps involved in a typical selection procedure.
[May 2011, Nov 2012]
Selection is a process of choosing right person for the right job. The selection
process consists of a series of steps or techniques as follows:
1. Screening application forms
Information on application form is used for selection purposes. Sometimes,
detailed information is sought for the prospective employees. The criteria for the
contents of the application form are generally to get data that are primarily factual.

2. Selection tests:
Generally tests are to measure the intelligence, ability, aptitude, physical &
mental abilities of an individual applicant. There are many types of tests may be
conducted such as personality test, aptitude test, interest tests. These tests are
very helpful in rejecting some undesirables.
3. Preliminary Interview
Preliminary or initial interview is often held in case of "at the gate" candidates. This
interview is usually of a short duration and is aimed at obtaining certain basic information with
a view to identifying the obvious misfits or unqualified. If the candidate seems to be
possessing the basic minimum requirements for efficient job performance, he is given an
application form for being filled out by him.

4. Reference Checks
Reference checks serve as an important selection technique, if conducted
properly. The applicant is asked to mention the names and addresses of his former
employers and also of two or three persons known but not related to him. If
references are checked in the correct manner, a great deal can be learned about a
person that an interview or tests cannot elicit. Referees may be called upon to give

detailed informations about candidate's capabilities.

4. Medical Check :
Medical examination of the candidates is undertaken before they join the firm in order
to
Find out whether the candidate is physically fit to carry out duties and responsibilities
effectively,
Ensure the health and safety of other employees,
Find out whether the candidate is sensitive to certain work place such as in a
chemical factory.
5. Final Interview :
Before making a job offer, the candidates may be subjected to one more oral
interview to find out their interest in the job and their expectations. At this stage,
salary and other perks may be negotiated.
6. Approved by appropriate authority:
On the basis of the above steps suitable candidates are recommended for
selection by the selection committee or personal department. Thus for top level
managers board of directors are approving authority. When the approval is received,
the candidates are informed about their selection & asked to report duty to specified
persons.
7. Placement:
After all the formalities are completed the candidates are placed on their
jobs initially on probation basis. During probation period they are observed keenly
& when they complete this period successfully they become the permanent
employees of the organization.
4) What is meant by Departmentation? Explain the needs and importance
of departmentation. [May 2013]
Departmentation is a process of horizontal clustering of different types of functions &
activities on any one level of the hierarchy. Departmentation is conventionly based on
purpose, product, process, function, personal things & place.
Need & importance:
1. Departmentation increases the operating efficiency of the workers by providing
specialization of work. Departments are created to look after one major function,
specializes in it & thus it increases the operational efficiency.
2. Departmentation helps in fixing the responsibility to various executives of the
organization. As one department looks after only set of activities, the duties &
responsibilities can be defined precisely. It makes the executive to be alert & efficient
in his duties.
3. Grouping of activities & personnel into departments makes it possible for the
enterprise to expand & grow.
4. Departmentation provides the managers an opportunity to take iunitiative in
completing job effectively & to make independent decisions related to the
department. It also provides on the job training to the managers.
5. By assigning specific tasks to the departmental personnel,it is easier for appraisal
of managerial performance.
6. Besides, departmentation gives other advantages such as facilitating budget
preparation, effective control of expenditure, attaining specialization, better
coordination among the managerial personal.

5) Explain the importance & process of performance appraisal or explain appraisal

process or explain the methods of performance appraisal. [May& Nov 2012]

Importance of performance appraisal:

1. Before an appraisal system the objectives should be communicated to all the employees.
The objectives may be promotion, pay increase, training & development.

2. The raters should be carefully selected & trained. They must be familiar with the job
& the person to be rated.
3. Cordial relationship is essential between superiors & subordinates.
4. The rating should be discussed with the person concerned. This will help him to know his
strengths & weakness & what steps he should take to improve performance.

5. Employees often feel feedback becomes threatening. The manager should realize
that performance appraisal is not just a fault-finding system but it is meant for
improving performance.
6. Follow up is important for effective appraisal.
Process of performance appraisal:

UNIT IV
1) Write short note on Maslows hierarchy of needs. Compare & discuss Maslows
Herzbergs theory of motivation. [May 2013]
Hierarchy of Needs (a.k.a. Maslow's Pyramid)

Physiological

Includes hunger, thirst, shelter, sex and other bodily needs

Safety

Includes security and protection from physical and emotional harm

Social

Includes affection, belongingness acceptance, and friendship

Esteem

Includes internal esteem factors such as self-respect, autonomy, and achievement; and
external esteem factors such as status, recognition, and attention

Self-actualization
The drive to become what one is capable of becoming; includes growth, achieving ones
potential, and self-fulfillment

Theory X and Theory Y

Douglas McGregor proposed two distinct views of human beings: one basically
negative, labeled Theory X, and the other basically positive, labeled Theory Y.

Theory X
i

The assumption that employees dislike work, are lazy, dislike responsibility, and must be
coerced to perform. (Lower order needs dominate)

Theory Y
The assumption that employees like work, are creative, seek responsibility, and can
exercise self-direction. (Higher order needs dominate)
McGregor believed Theory Y assumptions were more valid than Theory X and proposed such
ideas as participative decision making, responsible and challenging jobs, and good group
relations as approaches that would maximize an employee's motivation.
**Question = what type of manager will you be (or are you)? One who believes in Theory X or
Theory Y? Be honest! Do you think this is important? Why? Why not?
Two-Factor Theory
Intrinsic

factors are related to job satisfaction, while extrinsic factors are related to job
dissatisfaction.
Hygiene factors = when these are adequate, workers feel OK (i.e. they are NOT dissatisfied).
Examples include quality of supervision, company policies and administration.
Motivators

= examines factors contributing to job satisfaction. Thus there are factors which
lead to job satisfaction and things that dont (i.e. notice there is a difference between nonsatisfying and dissatisfying factors)
2) Explain different styles of leadership based on authority. Explain them critically.
[May 2011]
Leadership Styles:
1. Autocratic Leader:
Commands and expects compliance, is dogmatic and positive, and leads by the ability to
withhold or give rewards and punishment.
2. Democratic or Participative:
Consults with subordinates on proposed actions and decision and encourage
participation from there.
3. Free-rein leader/laissez-faire Leadership:
Uses his or her power very little, giving a high degree of Interdepence in their operations.

Leaders depend largely on subordinates to set their own goals and the means of achieving them,
and they see their role as one of aiding the operation of followers by furnishing them with.
Information and acting primarily as a contact with the groups external environment.
4. Paternalistic Leadership:
Serves as the head of the family and treats his followers like his family members. He assumes a
paternal or fatherly role to help, guide and protect the followers.

3) Explain the qualities required for effective leadership [Nov 2012]

Definitions
Leadership is defined as influence, the art or process of influencing people so that
they will strive willingly and enthusiastically toward the achievement of group goals.
Qualities:
1. The ability to use power effectively and in a responsible manner
2. The ability to comprehend that humanbeings have different
motivation forces at different times and in different situations

3. The ability to inspire

4. The ability to act in a manner that will develop a climate
conductive to responding to and arousing motivations.
5. Fundamental understanding of People
6. Ability to inspire followers to apply their full capabilities to a project.
4) Discuss the importance of communication in a modern industrial organization.
[May 2012]
Communication is one of the most important facilitators of modern business. In its
broadest sense, the importance of modern business is to effect change, to influence, action
toward the welfare of the organization. It is essential in business, govt., military organizations,
hospitals, schools, committees homes; anywhere people deal with one another. The importance
of communication in modern business may be stated follows:
Basis of effective leadership: Communication transmits the leaders idea and opinions to the
followers. Think about political leaders who lead and guide the people for the betterment of the
society or to fulfill any specific purpose.
Basis for the movement of ideas and information: It helps to move ideas and information
from one person to another person. It can develop a chain of understanding through two-way
communication. If there exists no communication media, technique or process then there would
be no sharing of any idea or information.
Provision for data for decision making: it helps the manager to obtain data for decision
making, to assist in searching problem, and to know what action are needed. Therefore,
communication acts like a storehouse where data, idea or information are available to deal with.

Smooth and efficient functioning: It helps in all managerial function, such as planning,
organizing, directing, motivating and controlling. It server as a fuel to managerial operation and
function. Therefore, it makes a chain between past, present and future and helps for effective
performance.
Delegation of authority and responsibility: It helps in decentralization of authority and
delegation of responsibility to right person. Through downward communication, superior
delegates authority and responsibility to the subordinates. Proper assignment of job and division
labor calls for better output.
Increase in managerial competence: It helps to improve managerial competence and
efficiency. Manager use various techniques or tools to command or control over resources.
Continues tracking is possible in terms of communication.
Minimization of cost and time: Efficient communication attempts to minimize time and cost in
case of exchange of information. If any message is required to be communicated to thousands
of people then we have to think about Newspaper, Television, or Radio which are strong media
for communicating any message around the globe.
Basis information: It acts as a basis of information to each department and helps the
employees to perform their respective jobs. So, any action to be taken requires a basisand
communication between organization or within organization provides such basis.
Fulfillment of Organizational objectives: It fulfills the organizational objectives by cooperation and co-ordination among the managerial and working staffs.
Efficient Human Resources Management: Human resources are recruited, trained and
motivated through effective communication. Recruitment involves circular by the organization
towards general people. Then interested candidates apply and on the basis of their merit, they
are recruited by the respective organization and transformation according to their skillness. The
whole activities involve verbal or non-verbal communication.
Creation of Employee motivation and moral: Managers provide incentives to motivate their
subordinates and maintain strong invisible chain. Motivation is based on situation and therefore
what should be the way of motivation required judgement by the superior.
Establishment of public Relation: The management can create cordial relations with govt.
customers, creditors, shareholders, regulatory bodies, trade unions and the society as a whole. It
ensures sound relation
5) Name the motivation theories. Explain any 2 of them.
[May 2011, Nov-2012, May-2012]
1.
2.
3.
4.
5.
6.

Carrot & stick approach of motivation.

Mc-Gregors theory X & theory Y
Dual-model theory (mills theory).
Hierarchy of needs Maslows theory.
Herzbergs theory Hygiene approach to motivation
Vrooms expectancy theory.

7. Porter & Lawler expectancy theory

8. Equity theory.
9. McClelland needs theory.
Hierarchy of Needs (a.k.a. Maslow's Pyramid)

Physiological
Includes hunger, thirst, shelter, sex and other bodily needs
Safety
Includes security and protection from physical and emotional harm
Social
Includes affection, belongingness acceptance, and friendship
Esteem

Includes internal esteem factors such as self-respect, autonomy, and achievement; and
external esteem factors such as status, recognition, and attention

Self-actualization
The drive to become what one is capable of becoming; includes growth, achieving ones
potential, and self-fulfillment
Theory X and Theory Y
Douglas McGregor proposed two distinct views of human beings: one basically
negative, labeled Theory X, and the other basically positive, labeled Theory Y.

Theory X
The assumption that employees dislike
work, are lazy, dislike responsibility, and must be coerced to
perform. (Lower order needs dominate)

Theory Y

The assumption that employees like work,

are creative, seek responsibility, and can exercise selfdirection. (Higher order needs dominate)

McGregor believed Theory Y assumptions were more valid than Theory X and proposed such
ideas as participative decision making, responsible and challenging jobs, and good group
relations as approaches that would maximize an employee's motivation.
**Question = what type of manager will you be (or are you)? One who believes in Theory X or
Theory Y? Be honest! Do you think this is important? Why? Why not?
Two-Factor Theory
Intrinsic

factors are related to job satisfaction, while extrinsic factors are related to job
dissatisfaction.
Hygiene factors = when these are adequate, workers feel OK (i.e. they are NOT dissatisfied).

Examples include quality of supervision, company policies and administration.

Motivators

= examines factors contributing to job satisfaction. Thus there are factors which
lead to job satisfaction and things that dont (i.e. notice there is a difference between nonsatisfying and dissatisfying factors)
2. McClelland's Need for Achievement Theory is one of content theories of motivation
emphasising that human needs and incentives cause human behaviour. McClelland has
identified three types of basic motivating needs:
4. Need for Power
5. Need for Affiliation
6. Need for Achievement.
(1) Need for Power or Power Motive (n/PWR):The ability to induce or influence behaviour is power. The individual's life style is
characterised by striving to compensate for the feelings of inferiority which are combined with
the innate drive for power. People with a high power need have a great concern for exercising
influence and control. Such individuals are generally seeking positions of leadership; they are
forceful, outspoken, hard headed and demanding.
(2) Affiliation Motive or Need for Affiliation (n/AFF):
Since people are social animals, most individuals are generally like to interact and be
with others in situations where they feel they belong and are accepted. According to this
theory, people with high need for affiliation usually derive pleasure from being loved and tend
to avoid the pain of being rejected. They are concerned with maintaining pleasant social
relationships, enjoying a sense of intimacy and understanding, and enjoy consoling and
helping others in trouble.
(3) Need for Achievement or Achievement Motive:
Some people have an intense desire to achieve. According to this theory, the need for
achievement is a distinct human motive that can be distinguished from other needs. This theory
has identified four basic characteristics of high achievers.
(a) Moderate risks:
Taking moderate risks is the simple most descriptive characteristic of the person
possessing high achievement need.
(b) Immediate feedback:
Person with high need for achievement desires activities which provide immediate and
precise feedback information how he is progressing toward a goal.
(c) Accomplishment:
Person with high need for achievement finds accomplishing a task intrinsically satisfying in
and of itself, or he does not expect or necessarily want the accompanying material rewards.
(d) Preoccupation with the tasks:
Once a high achiever selects a goal, he tends to be totally preoccupied with the task until
it is successfully completed. He will not feel satisfied unless he has put his maximum effort in
completing the task.
According to this theory managers show high on achievement and power and low on affiliation.
Chief executives of smaller companies show higher achievement motive as compared to those
of large companies. Need for achievement can also be developed by training people in the

various elements of the achievement syndrome. Managers do not need high achievement
motivation.
6) Discuss on the components of organizational culture. [May 2011]
1. Vision: A great culture starts with a vision or mission statement. These simple turns of
phrase guide a companys values and provide it with purpose. That purpose, in turn, orients
every decision employees make. When they are deeply authentic and prominently displayed,
good vision statements can even help orient customers, suppliers, and other stakeholders.
Nonprofits often excel at having compelling, simple vision statements. The Alzheimers
Association, for example, is dedicated to a world without Alzheimers. And Oxfam envisions a
just world without poverty. A vision statement is a simple but foundational element of culture.
c) Values: A companys values are the core of its culture. While a vision articulates a companys
purpose, values offer a set of guidelines on the behaviors and mindsets needed to achieve that
vision. McKinsey & Company, for example, has a clearly articulated set of values that are
prominently communicated to all employees and involve the way that firm vows to serve clients,
treat colleagues, and uphold professional standards. Googles values might be best articulated
by their famous phrase, Dont be evil. But they are also enshrined in their ten things we know
to be true. And while many companies find their values revolve around a few simple topics
(employees, clients, professionalism, etc.), the originality of those values is less important than
their authenticity.
d) Practices: Of course, values are of little importance unless they are enshrined in a companys
practices. If an organization professes, people are our greatest asset, it should also be ready to
invest in people in visible ways. Wegmans, for example, heralds values like caring and
respect, promising prospects a job [they'll] love. And it follows through in its company
practices, ranked by Fortune as the fifth best company to work for. Similarly, if an organization
values flat hierarchy, it must encourage more junior team members to dissent in discussions
without fear or negative repercussions. And whatever an organizations values, they must be
reinforced in review criteria and promotion policies, and baked into the operating principles of
daily life in the firm.
e) People: No company can build a coherent culture without people who either share its core values
or possess the willingness and ability to embrace those values. Thats why the greatest firms in the
world also have some of the most stringent recruiting policies. According to Charles Ellis, as noted in
a recent review of his book What it Takes: Seven Secrets of Success from the

Worlds Greatest Professional Firms, the best firms are fanatical about recruiting new
employees who are not just the most talented but also the best suited to a particular corporate

culture. Ellis highlights that those firms often have 8-20 people interview each candidate. And
as an added benefit, Steven Hunt notes at Monster.com that one study found applicants who
were a cultural fit would accept a 7% lower salary, and departments with cultural alignment had
30% less turnover. People stick with cultures they like, and bringing on the right culture
carriers reinforces the culture an organization already has.
7. Narrative: Marshall Ganz was once a key part of Caesar Chavezs United Farm Workers
movement and helped structure the organizing platform for Barack Obamas 2008 presidential
campaign. Now a professor at Harvard, one of Ganzs core areas of research and teaching is
the power of narrative. Any organization has a unique history a unique story. And the ability to
unearth that history and craft it into a narrative is a core element of culture creation. The
elements of that narrative can be formal like Coca-Cola, which dedicated an enormous
resource to celebrating its heritage and even has a World of Coke museum in Atlanta or
informal, like those stories about how Steve Jobs early fascination with calligraphy shaped the
aesthetically oriented culture at Apple. But they are more powerful when identified, shaped, and
retold as a part of a firms ongoing culture.
8. Place: Why does Pixar have a huge open atrium engineering an environment where firm
members run into each other throughout the day and interact in informal, unplanned ways? Why
does Mayor Michael Bloomberg prefer his staff sit in a bullpen environment, rather than one of
separate offices with soundproof doors? And why do tech firms cluster in Silicon Valley and
financial firms cluster in London and New York? There are obviously numerous answers to each
of these questions, but one clear answer is that place shapes culture. Open architecture is more
conducive to certain office behaviors, like collaboration. Certain cities and countries have local
cultures that may reinforce or contradict the culture a firm is trying to create. Place whether
geography, architecture, or aesthetic design impacts the values and behaviors of people in a
workplace.
There are other factors that influence culture. But these six components can provide a
firm foundation for shaping a new organizations culture. And identifying and understanding
them more fully in an existing organization can be the first step to revitalizing or reshaping
culture in a company looking for change.
7) What is organizational culture? Explain the types of organizational culture.
[May 2013]
The basic pattern of values & assumptions shared by employees within an organization.

Normative Culture
In a normative organization, the organization stresses on implementing the organizational
procedures in the correct manner, and according to the norms and rules defined. This kind of
culture is perceived to portray a high standard of business ethics.
Pragmatic Culture
In contrast to normative cultures, stress is laid on satisfying the wish of their clients. In this type
of organizational structure, the client is virtually deified. The prime concern of every employee is
to cater to the needs of the client, attain, and retain the business they may invite through the
clients.
Academy Culture
In this kind of culture, employees are highly skilled, and the organization provides an
environment for the development, and honing of employee skills. Examples of this kind of
culture are hospitals, universities, and large corporations. Employees tend to stay with the
organization, and grow with(in) it.
Collaborate Work Culture
Often referred to as clan culture, an organization that adopts a collaborate culture offers a
congenial and amiable environment to work in. The feeling one derives while working in this type
of organization is that of comfort and coercive motivation. This organization consists of superiors
who provide more of guidance, and less of governance. The organization is based on workerwelfare, where you have the employees' interest in the foreground with his skills valued, and
performances handsomely rewarded. Insinuating and developing teamwork is the most vital
element of the organization.
Adhocracy Work Culture
It is a type of organization that is altered to provide an environment to accrue one's creative
acumen. Ideas are encouraged, and out-of-the-box thinking is an appendage-cum-motto.
Dynamism is defined best when the workforce has the free will to conceive an out-of-theordinary idea; the development of which, may lead to success; inadvertently, to higher levels of
morale, and monetary incentives.
Baseball Team Culture
In this kind of culture, the employees are 'free agents', and are highly prized. These employees
find employment easily in any organization, and are highly in demand. There is, however, a
considerable amount of risk attached to this culture, as it is very fast-paced. Examples of this
kind of culture are advertising, and investment banking, to name a few.
Club Culture
Usually, the employees stay with the organization for a long time, and get promoted to a senior
post, or level. These employees are hand-picked, and it is imperative that they possess the
specific skills required and desired, by the organization. Examples of this kind of organization
are law firms, the military, etc.
Fortress Culture

Employees are not sure if the will be laid off or not by the organization. Very often, this
organization undergoes massive changes. Few examples of this type of culture are loans and
savings, large car companies, etc.
Macho Culture
The most important aspect of this kind of culture is big rewards, and quick feedback. This kind
of culture is mostly associated with quick financial activities; like, brokerage, and currency
trading. It can also be related to activities, like, a sports team, a police team, or branding of an
athlete. This kind of culture is does not eschew high levels of stress; instead they are known to
reach the apotheosis of efficiency. The employees are expected to possess a strong mentality
for survival in the organization.
Work Hard/Play Hard Culture
This type of organization does not involve much risk, as the organizations, already, consist of a
firm base coupled with a strong client relationship. This kind of culture is predominantly opted by
the large-scaled organizations that have gained their customers' trust and support; subsequently
rolling out a steadfast customer help service. The organization, with this kind of culture, is
equipped with specialized jargon, and is qualified with multiple-team meetings.
Bet Your Company Culture
In this kind of culture, the company makes big, and important decisions over high stake
endeavors. It takes time to see the consequence of these decisions. Companies that postulate
experimental projects, and researches as their core business proposition, adopt this kind of
culture; for instance, a company designing experimental military weapons may implement the
said type of culture.
Process Culture
This type of culture does not include the process of feedback. In this kind of culture, the
organization is extremely cautious about the adherence to laws, and prefers to abide by them.
This culture bestows consistency upon the organization, predominantly meant for public
services.

UNIT V
1) Explain the steps in the process of controlling. [May 2013, Nov 2012, May 2011]
5 main steps in control process in management are:
Control as a management function involves the following steps:
1. Establishing standards:
Standards are criteria against which results are measured. They are norms to achieve the
goals. Standards are usually measured in terms of output. They can also be measured in nonmonetary terms like loyalty, customer attraction, goodwill etc. Some of the standards are as.

a. Time standards:

The goal will be set on the basis of time lapse in performing a

task. b. Cost standards:
These indicate the financial expenditures involved per unit, e.g. material cost per
unit, cost per person, etc.
c. Income standards:
These relate to financial rewards received due to a particular activity like sales
volume per month, year etc.
d. Market share:
This relates to the share of the company's product in the
market. e. Productivity:
Productivity can be measured on the basis of units produced per man hour
etc. f. Profitability:
These goals will be set with the consideration of cost per unit, market share, etc.
2. Measuring performance
Measurement involves comparison between what is accomplished and what was
intended to be accomplished. The measurement of actual performance must be in the
units similar to those of predetermined criterion. The unit or the yardstick thus chosen be
clear, well-defined and easily identified, and should be uniform and homogenous
throughout the measurement process.
The performance can be measured by the following steps:
(a) Strategic control points:
It is not possible to check everything that is being done. So it is necessary to
pick strategic control points for measurement. Some of these points are:
(i) Income:
It is a significant control point and must be as much per unit of time as was expected.
If the income is significantly off form the expectation then the reasons should be investigated
and a corrective action taken.
(ii) Expenses:
Total and operational cost per unit must be computed and must be adhered to.
Key expense data must be reviewed periodically.
(iii) Inventory:
Some minimum inventory of both the finished product as well as raw materials must
be kept in stock as a buffer. Any change in inventory level would determine whether the
production is to be increased or decreased.
(iv) Quality of the product:
Standards of established quality must be maintained especially in food processing,
drug manufacturing, automobiles, etc. The process should be continuously observed for
any deviations.
(v) Absenteeism:
Excessive absenteeism of personnel is a serious reflection on the environment
and working conditions. Absenteeism in excess of chance expectations must be
seriously investigated.
(b) Meclzanised measuring devices:
This involves a wide variant of technical instruments used for measurement of
machine operations, product "quality for size and ingredients and production processes.
These instruments may be mechanical, electronic or chemical in nature.
(c) Ratio analysis:
Ratio analysis is one of the most important management tools. It describes
the relationship of one business variable to another.

The following are some of the important

ratios: i) Net sales to working capital:
The working capital must be utilised adequately. If the inventory turnover is rapid
then the same working capital can be used again and again. Hence for perishable goods,
this ratio is high. Any change in ratio will signal a deviation from the norm.
ii) Net sales to inventory:
The greater the turnover of inventory, generally, the higher the profit on
investment. iii) Current ratio:
This is the ratio of current asset (cash, receivables etc.) to current liabilities, and is
used to determine a firm's ability to pay the short term debts.
iv) Net profits to net sale:
This ratio measures the short-run profitability of a
business.
v) Net profits to tangible net worth:
Net worth is the difference between tangible assets (not good will, etc) and total liabilities.

This ratio of net worth is used to measure profitability over a long period.
vi) Net profits to net working capital:
The net-working capital is the operating capital at hand. This would determine the
ability of the business to finance day-to-day operations.
vii) Collection period on credit sales:
The collection period should be as short as possible. Any deviation from
established collection period should be promptly investigated.
viii) Inventory to net working capital:
This ratio is to determine the extent of working capital tied up in inventory. Generally, this
ratio should be less than 80 per cent, ix) Total debt to tangible net worth: This ratio would determine
the financial soundness of the business. This ratio should remain as low as possible.

(d) Comparative statistical analysis:

The operations of one company can be usefully compared with similar operations of
another company or with industry averages. It is a very useful performance measuring device.

(e) Personal observation:

Personal observation both formal and informal can be used in certain situation as a
measuring device for performances, specially, the performance of the personnel. The
informal observation is generally a day-to-day routine type. A manager may walk through a
store to have a general idea about how people are working.
3. Comparing the actual performance with expected performance
This is the active principle of the process. The previous two, setting the goals and the
measurement format are the preparatory parts of the process. It is the responsibility of the
management to compare the actual performance against the standards established.

This comparison is less complicate if the measurement units for the standards set and
the performance measured are the same and quantified. The comparison becomes
more difficult when these require subjective evaluations
Ralph C. Davis identifies four phases in the comparison.
1. Receiving the raw data.
2. Accumulation, classification and recording of this information.
3. Periodic evaluation of completed action to date.
4. Reporting the status of accomplishment to higher line authority.
At the third phase, deviations if any are noted between standards and performance. If
clear cut deviations are there, then management must study the:(i) Causes for deviation
(ii) Effect of deviation
(iii) Size of deviation

(iv) Positive or negative deviation.

4. Correcting Deviations:
The final element in the process is the taking corrective action. Measuring and
comparing performance, detecting shortcomings, failures or deviations, from plans will be of
no avail if it does point to the needed corrective action.
Thus controlling to be effective, should involve not only the detection of lapses but also
probe into the failure spots, fixation of responsibility for the failures at the right quarters,
recommendation of the best possible steps to correct them. These corrective actions must
be applied when the work is in progress. The primary objective should be avoidance of such
failures in future.
The required corrective action can be determined from the qualified data as per
the standards laid out and the performance evaluation already done. This step should be
taken promptly, otherwise losses may be cumulative and remedial action will be all the
more difficult to take. Corrective action must be well balanced, avoiding over controlling
and at the same time letting not things to drift.
5. Finding out deviations:

An efficient manager easily find out locating the deviation points properly.

To find out
the cause of deviations the manager will have to depend on proper accurate & timely
information
The deviation between standard & actual performance is
beyond the prescribed limit an analysis
of deviations is made to identify the causes of deviation.

2) Explain the steps involved in the implementation of budgetary control. [May 2013]
1. Planning-programme budgetary systems (PPBS):
Features of PPBS:
1. Analysing the basic objectives policies of each activity in the organisation.
2. Analysing the each activity of the programme in the organisation.
3. Measuring the total costs of the programme.
2. Zero-based budgeting is an approach to planning and decision-making which reverses
the working process of traditional budgeting. In traditional incremental budgeting (Historic
Budgeting), departmental managers justify only variances versus past years, based on the
assumption that the "baseline" is automatically approved. By contrast, in zero-based
[1]
budgeting, every line item of the budget must be approved, rather than only changes.

During the review process, no reference is made to the previous level of expenditure. Zerobased budgeting requires the budget request be re-evaluated thoroughly, starting from the
zero-base. This process is independent of whether the total budget or specific line items
are increasing or decreasing.
The term "zero-based budgeting" is sometimes used in personal finance to
describe "zero-sum budgeting", the practice of budgeting every unit of income received,
and then adjusting some part of the budget downward for every other part that needs to
be adjusted upward.
Zero based budgeting also refers to the identification of a task or tasks and then
funding resources to complete the task independent of current resourcing.
Advantages
Efficient allocation of resources, as it is based on needs and benefits rather than history.
1. Drives managers to find cost effective ways to improve operations.
2. Detects inflated budgets.
3. Increases staff motivation by providing greater initiative and responsibility in
decision-making.
4. Increases communication and coordination within the organization.
5. Identifies and eliminates wasteful and obsolete operations.
6. Identifies opportunities for outsourcing.
7. Forces cost centers to identify their mission and their relationship to overall goals.
8. Helps in identifying areas of wasteful expenditure, and if desired, can also be
used for suggesting alternative courses of action
Disadvantages
1. More time-consuming than incremental budgeting.
2. Justifying every line item can be problematic for departments with intangible outputs.
3. Requires specific training, due to increased complexity vs. incremental budgeting.
4. In a large organization, the amount of information backing up the budgeting process
may be overwhelming.
3) Human Resource Accounting is the process of identifying and reporting the
Investments made in the Human Resources of an Organisation that are presently not
accounted for in the conventional accounting practices. In simple terms, it is an
extension of the Accounting Principles of matching the costs and revenues and of
organising data to communicate relevant information.
Advantages of Budget Control
The major strength of budgeting is that it coordinates activities across departments.
Budgets translate strategic plans into action. They specify the resources, revenues,
and activities required to carry out the strategic plan for the coming year.
Budgets provide an excellent record of organizational
activities. Budgets improve communication with employees.
Budgets improve resources allocation, because all requests are clarified and justified.
Budgets provide a tool for corrective action through reallocations.
Disadvantages of budgets are:
The major problem occurs when budgets are applied mechanically and rigidly.
Budgets can demotivate employees because of lack of participation. If the budgets

are arbitrarily imposed top down, employees will not understand the reason for
budgeted expenditures, and will not be committed to them.
Budgets can cause perceptions of unfairness.
Budgets can create competition for resources and politics.
A rigid budget structure reduces initiative and innovation at lower levels,
making it impossible to obtain money for new ideas.

3) Give an account of some popular non- budgetary control techniques, with

special reference to break-even analysis &ratio analysis. [May 2012, May 2011]
The break-even level or break-even point (BEP) represents the sales amountin
either unit or revenue termsthat is required to cover total costs (both fixed and variable).
Break-even analysis
Break-even analysis is a graphical technique of control. By this technique business can
identify an appropriate number of units to be produced to generate maximum revenue to cover the
Cost. By this technique a point is located where the total cost is equal to the total revenue. By the use
of this technique production and sales volume can be controled to avoid loss.

By inserting different prices into the formula, you will obtain a number of breakeven points, one for each possible price charged. If the firm changes the selling price for
its product, from $2 to $2.30, in the example above, then it would have to sell only
1000/(2.3 - 0.6)= 589 units to break even, rather than 715.

To make the results clearer, they can be graphed. To do this, you draw the total cost curve (TC in the
diagram) which shows the total cost associated with each possible level of output, the fixed cost
curve (FC) which shows the costs that do not vary with output level, and finally the various total

revenue lines (R1, R2, and R3) which show the total amount of revenue received at each
output level, given the price you will be charging.
The break-even points (A,B,C) are the points of intersection between the total cost curve (TC) and a
total revenue curve (R1, R2, or R3). The break -even quantity at each selling price can be read off
the horizontal axis and the break-even price at each selling price can be read off the vertical axis.
The total cost, total revenue, and fixed cost curves can each be constructed with simple formulae.
For example, the total revenue curve is simply the product of selling price times quantity for each
output quantity. The data used in these formulae come either from accounting records or from

various estimation techniques such as

Limitations
Break-even analysis is only a supply-side (i.e., costs only) analysis, as it tells you nothing
about what sales are actually likely to be for the product at these various prices.

It assumes that fixed costs (FC) are constant. Although this is true in the short
run, an increase in the scale of production is likely to cause fixed costs to rise.
It assumes average variable costs are constant per unit of output, at least in the
range of likely quantities of sales. (i.e., linearity).
It assumes that the quantity of goods produced is equal to the quantity of goods sold
(i.e., there is no change in the quantity of goods held in inventory at the beginning of
the period and the quantity of goods held in inventory at the end of the period).
In multi-product companies, it assumes that the relative proportions of each product
sold and produced are constant (i.e., the sales mix is constant).
Ratio analysis :- Ratio anaysis is the most important method of interpretation the financial
statement. A financial ratio implies a relationship between two variable of financial
statements of an organisation. Generally the variables for ratio analysis are taken from both
profit and loss account and balance sheet. Ratio may be expressed in three ways, such as
percentage (25%), a proportion (1:4) and a fraction ().