Question 1 (a)

List and explain the four Basic Functions of Management ?

Management has been described as a social process involving responsibility for

economical and effective planning & regulation of operation of an enterprise in the fulfillment
of given purposes. It is a dynamic process consisting of various elements and activities.
These activities are different from operative functions like marketing, finance, purchase etc.
Rather these activities are common to each and every manger irrespective of his level or
status.

Planning

Organizing

Leading

Controlling
Planning
involves the process of defining goals, establishing strategies for achieving those
goals, and developing plans to integrate and coordinate activities.

Organizing
involves the process of determining what tasks are to be done, who is to do them,
how the tasks are to be grouped, who reports to whom, and where decisions are
to be made.

Leading
when managers motivate subordinates, influence individuals or teams as they
work, select the most effective communication channel, or deal in any way with
employee behavior issues, they are leading.

Controlling
to ensure that work is proceeding as it should, managers must monitor and
evaluate performance. The process of monitoring, comparing, and correcting is
what is meant by the controlling function.

Question 1 (b)

List and explain the 3 levels of managers in an organization ?

 First level

Mid level Upper level

First-Level Managers

First-level managers, sometimes called lower-level managers, are at the bottom of the
managerial hierarchy. They are in contact with nonmanagement employees, often serving as
supervisors or retail managers, or in other capacities that involve the day-to-day business
operations. Their tasks often include scheduling, budgeting, human resources activities and
disciplinary measures.

Mid-Level Managers

Mid-level managers, or middle managers, are a step above the first-level managers. They
serve as intermediaries between lower-level managers and the highest level within the
management hierarchy. These managers may still be involved in the daily company
operations, but they often depend on the input of first-level managers. Mid-level managers
are generally operations managers or general managers, but they can also serve as regional
managers.

Upper-Level Managers

Upper-level managers are the top executives in a company. They rely on input from mid-
level managers to determine what direction the company is heading and if any changes
need to be made. Upper-level managers usually include chief executive officers, chief
financial officers and other top leaders responsible for developing the company's vision and
making the executive decisions that affect the organization's future.

Question 2 (a)
What is decision making? Explain 3 types of decision making.

Decision making can be defined as the process of making choices among possible
alternatives. The skills considered important to effective decision making are based on a
normative model of decision making, which prescribes how decisions should be
made. Decision making is the mental process of choosing from a set of alternatives. Every
decision-making process produces an outcome that might be an action, a recommendation,
or an opinion. Since doing nothing or remaining neutral is usually among the set of options
one chooses from, selecting that course is also making a decision. There are 3 types of
decision making, which is decisions level, styles and process.

Decisions level
The first of our types of decision making variables is the level of the decision.
When faced with a decision, try asking yourself questions such as:
How complex is the decision?
How important is the decision?
How strategic is the decision?

An Initial Decision Making Technique addresses these questions and more.

Use it to help you make an intial assessment of the level of decision youre
about to make. For example, the level of engagement you may need from
others or the level of risk possibly associated with making the decision. It will
help you to filter decision making variables before adopting an appropriate
decision making process.

Styles
These can be categorised by the degree to which other people participate in
the process. There is good evidence to support the argument for involving
others in decision making. However, participation can also be a time
consuming activity. Again, there are questions to be asked. Such as:
To what extent should you involve others in decision making?
In what conditions might participation techniques work best?
Decision Making Styles looks at two of the best known models relating to
participative decision making.

Process

Question 2 (b)

List and explain the steps in the decision making process?

1 Identify a problem or opportunity

The first step is to recognise a problem or to see opportunities that may be

worthwhile.
 Will it really make a difference to our customers?

How worthwhile will it be to solve this problem or realise this opportunity?

2 Gather information

What is relevant and what is not relevant to the decision?

What do you need to know before you can make a decision, or that will help you

make the right one?

Who knows, who can help, who has the power and influence to make this happen

(or to stop it)?

3 Analyze the situation

What alternative courses of action may be available to you?

What different interpretations of the data may be possible?

4 Develop options

Generate several possible options.

Be creative and positive.

Ask what if questions.

How would you like your situation to be?

5 Evaluate alternatives

What criteria should you use to evaluate?

Evaluate for feasibility, acceptability and desirability.

Which alternative will best achieve your objectives?

6 Select a preferred alternative

Explore the provisional preferred alternative for future possible adverse

consequences.

What problems might it create?

What are the risks of making this decision?

7 Act on the decision

Put a plan in place to implement the decision.

Have you allocated resources to implement?

Is the decision accepted and supported by colleagues?

Are they committed to making the decision work?

Question 3 (a)

Explain the steps in the control process ?

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
non-monetary 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.

c. Income standards:

These relate to financial rewards received due to a particular activity like sales volume per
month, year

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.
 Question 3 (b)

What is delegation? Give example of 5 barriers to delegation ?

Delegation is occurs when someone with authority confers upon another person the power to do

a particular task. Delegation is usually a one-way street - superiors delegate authority to

subordinates. However, ultimate responsibility for task completion usually remains the

responsibility of the person who delegated the authority to complete it. For example, if your boss

delegates a task to you, she is likely still ultimately responsible for making sure that task is

accomplished.

1. Reluctance to delegate: - In many cases managers will not be interested to delegate to

authority. They will not be willing to give authority to subordinates. They will not make any plan to
delegate authority. So, delegation of authority may be failure.

2. Fear of subordinates: - Managers in many cases fear from subordinates because they think
that when there is delegated authority their performance will be superior to the performance of
manager and subordinate may pose challenge to the manager.

3. Lack of trust: - Managers may lack confident or trust on subordinates. They do not think or
believe that after delegating authority, subordinates will do better or their performance will
improve. Hence, delegation of authority cannot take place.

4. Incompetence of subordinates: - Subordinates must be competent enough for effective

delegation of authority. Subordinate must be willing and competent to accept delegated authority.
In many organizations due to the incompetency of subordinates delegation of authority is
affected.
5. Lack of reward: - Delegation of authority also increases responsibility, commitment, duties, etc.
For increased responsibility reward must be increased. But, many managers delegate authority
to subordinate, increase duties and responsibilities but they do not increase reward.
Subordinates do not show any interest to accept authority because of lack of sufficient reward.
Question 4 (a)

Explain the following terms :

Chain of command

Chain of command is a hierarchy of authority where those at the top of the

organization direct and control the activities of the organizational members below them.The
rationale of chain of command is that it permits coordination of different individuals and
groups engaging in task specialization in order to accomplish organizational goals.
Individuals or groups engaged in specialized tasks do not always understand the big picture;
their efforts must be coordinated by management so that the overall goal is achieved. For
example, different employees are involved in putting together a car on an assembly line, but
no one employee knows how to put together the entire car. Management ensures that all the
tasks are performed such that a car is properly completed.

While a properly functioning chain of command can establish effective coordination,

accountability, and efficiency in organizational operation, there are some drawbacks as
noted by organizational behavior theorists, such as Chris Argyis. These theorists argue that
since a chain of command tends to give lower-level individuals little or no control, there may
be little job satisfaction, which may result in low motivation. Organizations often respond by
providing monetary rewards and encouraging competition for top-level positions. However,
according to Argyis, these solutions create problems of their own, such as low personal
involvement at work or destructive competition between employees.

Authority
Question 4 (b)

List and explain 4 common forms of organizational structure.

Organizational structure depends on the company and/or the project. The structure helps
define the roles and responsibilities of the members of the department, work group, or organization. It
is generally a system of tasks and reporting policies in place to give members of the group a direction
when completing projects. A good organizational structure will allow people and groups to work
effectively together while developing hard work ethics and attitudes. The four general types of
organizational structure are functional, divisional, matrix and project-based.

Functional Structure

People who do similar tasks, have similar skills and/or jobs in an organization are grouped
into a functional structure. The advantages of this kind of structure include quick decision
making because the group members are able to communicate easily with each other. People
in functional structures can learn from each other easier because they already possess
similar skill sets and interests.

Divisional Structure

In a divisional structure, the company will coordinate inter-group relationships to create a

work team that can readily meet the needs of a certain customer or group of customers. The
division of labor in this kind of structure will ensure greater output of varieties of similar
products. An example of a divisional structure is geographical, where divisions are set up in
regions to work with each other to produce similar products that meet the needs of the
individual regions.

Matrix Structure

Matrix structures are more complex in that they group people in two different ways: by the
function they perform and by the product team they are working with. In a matrix structure
the team members are given more autonomy and expected to take more responsibility for
their work. This increases the productivity of the team, fosters greater innovation and
creativity, and allows managers to cooperatively solve decision-making problems through
group interaction.
Project Organization Structure

In a project-organizational structure, the teams are put together based on the number of
members needed to produce the product or complete the project. The number of significantly
different kinds of tasks are taken into account when structuring a project in this manner,
assuring that the right members are chosen to participate in the project.

Question 5 (a)