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MG6851 Principles of Management Department of ECE 2018 - 2019
MG6851 PRINCIPLES OF MANAGEMENT LT P C 3 0 0 3

UNIT I INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS 9
Definition of Management – Science or Art – Manager Vs Entrepreneur - types of managers
-managerial roles and skills – Evolution of Management – Scientific, human relations , system and
contingency approaches – Types of Business organization - Sole proprietorship, partnership,
company-public and private sector enterprises - Organization culture and Environment – Current
trends and issues in Management.
UNIT II PLANNING 9
Nature and purpose of planning – planning process – types of planning – objectives – setting
objectives – policies – Planning premises – Strategic Management – Planning Tools and Techniques –
Decision making steps and process.
UNIT III ORGANISING 9
Nature and purpose – Formal and informal organization – organization chart – organization structure
– types – Line and staff authority – departmentalization – delegation of authority – centralization and
decentralization – Job Design - Human Resource Management – HR Planning, Recruitment, selection,
Training and Development, Performance Management , Career planning and management.
UNIT IV DIRECTING 9
Foundations of individual and group behavior – motivation – motivation theories – motivational
techniques – job satisfaction – job enrichment – leadership – types and theories of leadership –
communication – process of communication – barrier in communication – effective communication –
communication and IT.
UNIT V CONTROLLING 9
System and process of controlling – budgetary and non-budgetary control techniques – use of
computers and IT in Management control – Productivity problems and management – control and
performance – direct and preventive control – reporting.
TOTAL : 45 PERIODS
TEXTBOOKS:
1. Stephen P. Robbins & Mary Coulter, “Management”, Prentice Hall (India)Pvt. Ltd., 10th Edition,
2009.
2. JAF Stoner, Freeman R.E and Daniel R Gilbert “Management”, 6th Edition, Pearson Education,
2004.
REFERENCES:
1. Stephen A. Robbins & David A. Decenzo& Mary Coulter, “Fundamentals of Management” 7th
Edition, Pearson Education, 2011.
2. Robert Kreitner & Mamata Mohapatra, “ Management”, Biztantra, 2008.
3. Harold Koontz & Heinz Weihrich, “Essentials of Management”, Tata McGraw Hill, 1998.
4. Tripathy PC & Reddy PN, “Principles of Management”, Tata Mcgraw Hill, 1999
COURSE OUTCOMES
On completion of this course, the student will be able;
To understand about management , Roles of managers, environmental Factors for an
C309.1 organization , Strategies for international business
C309.2 To get an idea about the planning, MBO, Decision Making and Policies making.
Gain the knowledge about organization structure, Formal and Informal groups, Line and
C309.3 staff authority, Span of control, Centralization and decentralization, Staffing, Recruitment,
Career Development, Training and personal Appraisal
To understand about the Creativity an Innovation, Motivation and satisfaction, Leadership
C309.4
theories, communication, Elements and types of Culture.
Gain knowledge about the controlling process, types of control (Budgetary and non-
C309.5
budgetary control, Cost control, purchase control, Maintenance control, quality control)
St. Joseph’s Institute of Technology 1

MAPPING BETWEEN CO AND PO, PSO WITH CORRELATION LEVEL 1/2/3
PO PO PO PO PO PO PO PO PO PO PO PO PS PS PS PS
1 2 3 4 5 6 7 8 9 10 11 12 O1 O2 O3 O4
C309.1 - - 1 - - 2 3 2 1 1 2 2 - 1 - 3
C309.2 - - 1 2 - 2 2 2 3 2 3 2 - 1 - 3
C309.3 - - - 1 - 3 2 2 2 1 2 2 - 1 - 3
C309.4 - - - - - 3 2 2 3 2 1 2 - 1 - 3
C309.5 1 1 2 3 - 3 2 2 2 2 3 2 - 1 - 3
RELATION BETWEEN COURSE CONTENT WITH COs

UNIT I: INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS
Knowledge Course
S.No Course Content
level Outcomes
1. Definition of management & natural management
R
techniques, current issues & Trends in Management
2.
An,Ap Science or Art, management Vs. Administration
3.
R,An,Ap Manager Vs. Entrepreneur, Functions of management
4. Types of Manager, top level Management, lower level
R,U
management techniques
5. Managerial rules and skills, Importance of partnership C309.1
R,U,Ap
and features of partnership
6. Evolution of management- Scientific, Human relation,
U,An
system and antigency approaches
7. Types of business organization-Sole trading, Sole
R,U
proprietorship, partnership
8.
R Public and private sector entrepreneur
9.
R,U Organization culture and environment
UNIT II: PLANNING

S.No Knowledge Course
level
Course Content Outcomes
1. C309.2
R,U Nature and purpose of planning
2.
U,An Planning process and objectives of planning
3.
R,U Types of planning-Tactical planning
4.
R,U Objectives, goals, strategic Planning
5. Strategies and policies, Rules, procedures, programs, smart
R,U,Ap
objectives
6.
R,U,Ap Planning premises ,policy formulation process
7.
U,Ap Strategic Management effective implementation
8.
R Ap Planning tools and techniques, Forecasting
9. R,Ap Decision making steps & process, EVS scanning

10.
Ap,C Creativity& innovation, Qualitative method
11. Creative manager, Evaluation of alternatives, Quantitative
U,An
method, Decision Tree analysis
UNIT III: ORGANISING

Course Content
level Outcomes
1.
U,An, Nature and purpose of organization, processing analysis
2.
U, An Formal and informal organization and differences
3.
R,U Organization chart, Types, Advantages and disadvantages
4.
R,U Organization structure and types
5.
U Line and staff authority, functional authority
6.
U,An Departmentalization ,Needs and Types C309.3
7.
U,An Delegation of authority, features and importance
8.
U Centralization and decentralization
9.
U,Ap,An, Job design, Staffing and human resource delegation
10.
U Human resource management, HR planning
11. Recruitment, selection, training and development,
U,Ap
performance management and career planning
UNIT IV: DIRECTING

Course Content
level Outcomes
1. Foundation of individual and group behavior-Nature and
U,An,
its importance
2. Motivation and motivation theories, Trait approach and
U,An
behavioral theory
3.
U,An,Ap Motivational techniques, factors and measurement
4.
U,An,Ap Job satisfaction, effects and measures C309.4
5.
U,An Job enrichment and procedures
6.
R,U Leadership-Types and theories of leadership
7.
U Communication and barriers of effective communication
UNIT V: CONTROLLING
level
Course Content Outcomes
1. C309.5
U,An System and process of controlling
2. U,Ap Budgetary and non-budgetary control techniques

3.
U,An,Ap Use of computers and IT in management control
4.
An Productivity problem and factors affecting management
5.
U Quality control, Cast control and performance
6.
An,Ap Direct and preventive control objectives
7.
R,U Reporting essentials and classification
Ap – Apply; An – Analyze; U – Understand, E- Evaluate ,C-Create
UNIT – I: INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS

PART A - C462.1
1. Define Management. ( May 2016, April 2017, Nov 2017)
Management is the process of designing and maintaining an environment in which individuals, working
together in groups, accomplish their aims effectively and efficiently. According to Koontz and Weilhrich
"Management is process of designing and maintaining of an environment in which individuals working
together in groups, efficiently and efficiently attain the organizational goals."
2. Write the function of management. (May 2016)
Planning; Organizing; Staffing; Coordinating and Controlling.
3. State the Functions/role of Manager. Or List out the roles played by manager in an
organization. (Nov 2016, Nov 2017)

P – Planning; O – Organizing; S – Staffing; D – Directing; CO – Coordinating; R – Reporting; B – Budgeting

4. What are the various skills required by a manager?

Managers require three kinds of skills- Technical Skill – Knowledge of and proficiency in working with tools and
technology-Human Skill – Ability to work with people-Conceptual Skill – Ability to recognize important element
in a situation and understand its relationship
5. Write some characteristics of Management.
1) Management is a continuous process. 2) Managers use the resources of the organization both physical as well
as human to achieve the goals. 3) Management aims at achieving the organization goals by ensuring effective use
of resources.
6. Define Productivity.
It implies effectiveness and efficiency in individual and organisational performance (within a time period,
considering required quality in both operational and financial health of an organisation)
Productivity =
7. What is Effectiveness &Efficiency?
Effectiveness is the achievement of objectives and Efficiency is the achievement of the ends with the least amount
of resources. Effectiveness is doing right things & efficiency is doing things rightly.
8. What are management levels?
1) Top level management. 2) Middle level management. 3) Lower level management.
9. Write some important functions of top level management.
Formulate goals (long term and short term) and policies (quality policy and management policy) of the
organization; formulate budgets (financial and operational) and appoint top functional administrative executives.
10. What is social responsibility?
Social responsibility is the part of the management to initiate actions to protect the interest of the society.
Managing here implies monitoring of natural resources (preservation, adopting biodegradation technologies,
green concepts and recycling initiatives) and initiative towards green manufacturing.
11. Write Fayol's fourteen principles of management.
1) Division of work. 2) Authority and Responsibility. 3) Discipline. 4) Unity of command. 5) Unity of direction.
6) Subordination of Individual interest to general interest. 7) Remuneration. 8) Centralization 9) Scalar chain.
10) Order. 11) Equity. 12) Stability of Tenure. 13) Initiative. 14) Esprit de Corps.
12. What is scalar chain?
The instructions and orders should be sent from the top management to the lower management. The chain of
command is well defined for achieving operational excellence on par with quality performance. The directions for
the financial year is communicated effectively using the chain of command such that the entire organization
travels with the same or common vision and mission towards achieving excellence
13. Explain: Management is both —a science and an art.
Management is a science because it contains general principles. It is also an art because it requires certain
personal skills to achieve desired results.
14. What is Esprit-de-corps?
It means ‘Unity is strength’. In an organization, amongst the employees there should be harmony and unity. The
morale of the team will enhance team work and result in productivity improvement of the organization.
15. List out the claimants of the business enterprise.
1) Shareholders. 2) Employees. 3) Customers. 4) Creditors. 5) Suppliers. 6) Government
16. What are the major contributions of Taylor?
The major contributions of F.W.Taylor are as follows; He developed the principle of division of labor/work. He
developed method study; He advocated time study; He developed certain principles to breakup each job into small
independent elements; He developed the concept of fair day’s work; He proposed the concept of functional
organization
17. What is time study?
Time study refers to the measuring of (under controlled conditions) the time for completing a particular task
(process time) using specific Methods and Materials. This will be useful in arriving at a scientific standard for
each work task in the marketing process. The same will be used for arriving at the selling price of the product,
labor utilization, company improvement activities and setting benchmarks in functional streams of the
organization.
18. What is motion study?
Taylor suggested that eliminating wasteful movements and performing only necessary movements.
19. Define partnership.(Nov 2017)

Under the Indian Partnership Act of 1932, Partnership is defined as –“the agreed relation between persons who
have agreed to share the profits of a business carried on by all or by any one of them acting for all”.
20. What do you mean by ‘unity of command’?
Unity of command’ is an important principle proposed by Henry Fayol. This implies that an employee should
receive orders from one superior only. This is referred to as Chain of Command and always the direction or flow
of orders defines effective communication practices in an organization.
21. What is centralization?
The organization is centralized when the power is concentrated in the hands of few people. This will affect the
transparency and lacuna in decision making that will hamper the growth and development of an organization and
the pace with which the company compete with its competitors.
22. What is decentralization? (May 2016)
The organization is decentralized when the power is fully distributed to the subordinates of the organization. This
will increase the transparency and effective communication and eliminates chaos and confusion with data
disparity.
23. Write any two functions of middle level management.
To train, motivate and develop supervisory level; To monitor and control the operations performance.
24. What is ethics?
All individuals in business or non-business activities are concerned with some standardized form of behavior are
known as ethics.
25. What is an organization culture? (April 2017)
Organizational culture is a system of shared assumptions, values, and beliefs, which governs how people behave
in organizations. These shared values have a strong influence on the people in the organization and dictate how
they dress, act, and perform their jobs.
26. Give the current trends in management. (Nov 2016)
The current trends in management are globalization, technology, sustainability and corporate social responsibility,
integrating psychology theory and research into management practice, Business Ecosystems, Cross functional
teams, leveraging Social media
27. Distinguish between public and private limited companies. (April 2018)
The difference between public and private company can be drawn clearly on the following grounds:
1.The public company refers to a company that is listed on a recognised stock exchange and traded
publicly. A Private Ltd. the company is one that is not listed on a stock exchange and is held privately by
the members.
2.There must be at least seven members to start a public company. As against this, the private company
can be started with minimum two members.
3.The is no ceiling on the maximum number of members in a public company. Conversely, a private
company can have a maximum of 200 members, subject to certain conditions.
4.A public company should have at least three directors whereas the Private Ltd. company can have a
minimum of 2 directors.
5.It is compulsory to call a statutory general meeting of members, in the case of a public company,
whereas there is no such compulsion in the case of a private company.
6.In a Public Ltd. Company, there must be at least five members, personally present at the Annual
General Meeting (AGM) for constituting the requisite quorum. On the other hand, in the case of a
Private Ltd. Company, that number is 2.
7.The issue of prospectus/statement instead of the prospectus is mandatory in case of a public company,
but this is not the case with the private company.
8.To start a business, the public company needs a certificate of commencement of business after it is
incorporated. In contrast, a private company can start its business just after receiving a certificate of
incorporation.
9.The transferability of shares of a Pvt. Ltd. company is completely restricted. On the contrary, the
shareholders of a public company can freely transfer their shares.
10. A public company can invite the general public for subscribing shares of the company. As
opposed, a private company has no right to invite public for subscription.
PART B - C462.1
1. Explain the Functions of Management. (April 2017)
2. What are the managerial skills required at different levels of management.
3. Explain the importance of management. How Differentiate management with administration
4. Explain the Weber’s ideal bureaucracy.

5. Environmental factors affecting management policy making. Or Enlighten the relevance of environmental
factors that affects global business. (April 2018)
6. Discuss whether Management is a Science or Art. (May 2016)
7. Explain the Henry Fayol’s principles of management. Or Elucidate in detail the various principles of
management as advocated By Henry Fayol. (May 2016, Nov 2017)
8. Explain the contributions of FW Taylor. (April 2018)
9. Explain the role of managers in detail.
10. Discuss the management functions as related to trends and challenges in management of global scenario.
11. Explain the evolution of management in detail. (May 2016, Nov 2016)
12. Explain different types of business organization. (April 2017, Nov 2016)
13. Explain the current trends and issues in Management. (Nov 2017)
UNIT – II: PLANNING
PART A - C462.2
1. Definition of planning. (May 2016)
The determination of what is to be done, how and where it is t be done, who is to do it and how results are to be
evaluated. In manufacturing industries the project kick start will be done with a prepared TIME PLAN that
captures all the functional activities against time/target (Quality, Manufacturing, R&D, Purchase, Marketing)
pertaining to various departments, consolidated and submitted to the stakeholders for carrying out the activities
listed in the PLAN.
2. What are the types of planning?
Short range; long range; repeated; single use and functional planning
3. What are the Qualities of good plan?
Simple, logical, flexible, practical and stable. It must be complete and integrated.
4. What are Rules?
Statement of expected results expressed in quantitative terms. Rules are framed based on the management
objectives; project target and customer requirements. Actual vs. achieved matrix is plotted to analyze the project
shortcomings and will necessitate remedial measures/actions to avoid time delay.
5. Define Procedure.
It is a series of related task that up the chronological sequence and the established way of performing the work to
be accomplished. Procedure takes care of project shortcomings and accommodates flexibility in executing the
project time plan.
6. Define Budget.
Budget is termed as a financial plan for the current financial year, say 2014-2015, prepared by an organization
based on business forecast, customer demand, market fluctuations, administrative, overhead expenses and internal
objectives. This will give directions to the management to raise capital investment through various means to feed
the project thus aligning with the objectives and vision of the company. .
7. Define Objectives.
Objectives are set of goals that aligns with the MBO (management by objective) communicated across the
organization to guide the efforts of the company and each of its components, that will streamline the organization
giving definitive and clear cut directions with which the organization move forward
8. What is MBO? (Nov 2016)
MBO - Management by Objective. It is a process whereby the superior (management / board of directors) and
subordinate of an organization jointly identify common goal, define each individual’s major areas of
responsibility in terms of results expected of him and use this measures as guides for operating the unit/
organization and assessing the contribution of each if its members.
9. What is TOWS matrix?
It is a conceptual frame work for systematic analysis, which facilitates matching the external threats and
opportunities (SWOT-Strength; Weaknesses; Opportunity and Threats) with the internal weakness and strength of
the organization. This will facilitate check and balances that an organization or the project team needs to initiate
for hurdle free execution of the project/goals.
10. Define Strategy Planning.
Determination of basic long term objectives and of courses of action and allocation of resources to achieve these
objectives lay down by the Management. Strategy will be time based and measured for pros and cons to eliminate

hurdles or constraints that hamper the transformation process which will make the strategy into a workable
solution.
11. What are Policies? (Nov 2016)
Verbal, written, or implied overall guide setting up boundaries that supply the general limits and direction in
which managerial action will take place. The company policy is framed thinking upon the vision statement and
guided by definitive directions towards achieving the prime objectives like inclusive growth, financial stability
and market capitalization.
12. State different strategies of Porter’s generic strategy.
Overall cost leadership strategy, differentiation strategy and focused strategy
13. What are classifications of budget?
Functional classification- Sales, production, cash, capital and master budget; Time classification- Short term,
current and long term budget; Activity level- Fixed and flexible budget
14. Benefits of planning.
Emphasis on objectives, minimizes uncertainty, facilitates control, improves coordination, secure economy and
ensure healthy environment, encourage innovation and improve competitive strength.
15. Define Planning Premises. (April 2018)
Anticipated environment in which plans are expected to operate. They include assumptions or forecasts of the
future and known conditions that will affect the operation of plans. The environment here implies conducive
which will promote businesses and arena for new innovations that will bring brand equity and presence in the
domestic and international market
16. Define MIS.
MIS is more advance technology for solving its basic requirements. MIS used for decision making in the various
functional areas of business.MIS provides day to day operational data and schedules planned and achieved to the
management for taking rationalized decisions. Arbitrary decisions can be avoided and thus mitigate the risk of
wrong/implicit decision making.
17. Explain the terms decision-making. (May 2016)
It is a process of selection from a set of alternative courses of action which is thought to fulfill the objectives of
the decision problem more satisfactory than others. The risk involved in decision making or decisions made needs
mitigation plans to augur future delays and losses that may happen if the decision proves wrong. A risk mitigation
plan
18. What are zero base budgets?
Initially the budget is designed from a zero base. The main element is ZBB is future objective orientation.
This ZBB would provide elementary capital/investment projection that the management or board require to
arrange (through own, funded agencies, financial institutions, PSU and Banks) for supporting the business.
19. What is DSS?
DSS –use computers to facilitate the decision making process of semi structured tasks. This will be liked with
MIS and thus warrants for actions to be taken irrespective of priorities and will limit misunderstandings among
employees in carrying out the work based on priorities.
20. What are the purposes of planning? (April 2017)
To determine the direction (guidelines) of an organization; to minimize wastages; to reduce the risk or uncertainty,
to facilitate control over operations and finance of a company, manpower utilization and societal considerations.
21. List the planning tools in business management. (April 2017)
 SWOT Analysis. The SWOT analysis is a strategic management tool used to identify your business's place
in the market. ...
 Gap Analysis. A gap analysis monitors your progress toward strategic goals. ...
 PEST Analysis. ...
 Five Forces Analysis.
22. What is intuitive decision making? (April 2018)
Intuition is receiving input and ideas without knowing exactly how and where you got them from. You simply
know it is not from yourself. Like creativity, intuitive inspiration often happens when someone virtually
«fuses» in an activity, when one is highly focused on the respective activity in a state of joy and fulfilment.
Intuition can be trained and in its highest level leads into a conscious contact with non-incarnated beings, a
process usually called channelling.

Most of us are used to making intuitive decisions in our daily life: As soon as subjective judgement is
involved, rational reasoning is very difficult to apply. Typical examples where intuition can play an important
role in making decisions are: Choosing your life partner, selecting the right car to buy, evaluation of a job,
decision about an education, selecting a meal when eating out, selecting the next book to read, decide how to
dress for today, and so on.
Intuitive decision making is far more than using common sense because it involves additional sensors to
perceive and get aware of the information from outside. Sometimes it is referred to as gut feeling, sixth sense,
inner sense, instinct, inner voice, spiritual guide, etc. Many pages on this site are devoted to encourage and
help people to use these sensors for decision processes . It is related to developing a higher consciousness in
order to train these sensors and to make the process of receiving information intuitively a more conscious one.
People who can't accept the existence of such sensors may instead call it tapping into collective intelligence
"collective unconscious".
23. Distinguish between policy and rules. (Nov 2017)
Rules are clear instructions that must be followed by the entities. And in case if rules are not followed then
entity will have to face some legal action in the form of penalties, suspension etc. So basically rules are given
the ability to have the protection of their own.
Policies relates to how the rules are going to be implemented. Entities design their policies on the basis of
rules applied by regulatory authorities AND their business objectives. Policies basically give a direction to the
entity that is in line with both applicable laws and aims that business wants to achieve.
24. What do you understand by Strategic Management? (Nov 2017)
Strategic management is the continuous planning, monitoring, analysis and assessment of all that is necessary
for an organization to meet its goals and objectives. Fast-paced innovation, emerging technologies and
customer expectations force organizations to think and make decisions strategically to remain successful. The
strategic management process helps company leaders assess their company's present situation, chalk out
strategies, deploy them and analyze the effectiveness of the implemented strategies. The strategic management
process involves analyzing cross-functional business decisions prior to implementing them. Strategic
management typically involves:
 Analyzing internal and external strengths and weaknesses.
 Formulating action plans.
 Executing action plans.
 Evaluating to what degree action plans have been successful and making changes when desired results are
not being produced.
PART B - C462.2
1. Explain the Steps in Planning. (April 2017)
2. Explain in detail about the classification of planning practices.(Nov 2016)
3. Explain the TOW’s matrix with example.
4. Explain the various techniques of decision making. (May 2016, Nov 2016, April 2017)
5. Explain the steps involved in strategy formulation and implementation process.
6. Write a note on BCG Portfolio matrix.
7. What are the types of decisions?
8. Explain in detail the various types of planning. (Nov 2017)
9. List out the features of planning. (May 2016)
10. What is the importance of planning?

11. What are the steps involved in MBO process. Or Define MBO. Explain the process of MBO (April 2018,
Nov 2017)
12. Classify the types of goals organizations might have and the plans they use of accomplishment. (April 2018)
13. Is decision making rational process? Discuss. (Nov 2017)
UNIT III: ORGANIZING
PART A - C462.3
1. State the advantages of departmentation by function.
It is most logical, scientific, time proven and natural method of departmentation - It provides specialization of
work which makes maximum utilization of manpower and other resources - It ensures proper performance control -
It facilitates delegation of authority and therefore, reduces the burden of top executives.
2. Define Organizing. (May 2016)
Organizing is the process of identifying and activities required to attain the objectives, delegating, creating
responsibility and establishing relationships with people to work effectively.
3. Mention any four characteristics of an organization.
Common objectives; Specialization or Division of Labour; Authority of structure; Group of persons
4. List out the steps involved in organization process.
Determination of activities; Grouping of activities; Assignment of Duties; Delegation of authority
5. Mention the various principles involved in organization.
Principle of unity of objective, Principle of division of work or specialization,
Principle of efficiency & Principle of span of control.
6. Mention the three categories of relationships in span of management.
Direct single relationship; direct group relationships; Cross relationship
7. State the important factors in determining an effective span of management.
Capacity of superior, Capacity of subordinates, Nature of work, Type of technology, Delegation of authority and
Organizational Structure.
8. What are the types of departmentation?
Departmentation by function, departmentation by territory or geography, departmentation by customers,
departmentation by equipment or process and departmentation by product or service.
9. State the disadvantages of departmentation by function.
There is a tendency for overspecialization - The department managers are experts in handling the problems in their
department alone. They may not be able to understand the problem of other departments.
Functional departmentation discourages communication across functions so that the workers develop a narrow
technical point of horizontal conflicts- It increases the workload and responsibility of the departmental heads- It
does not offer any scope for training for the overall development of manager
10. Give a note on departmentation by customers.
This type of departmentation is preferred when the needs of customers are different in nature. Big organizations
provide special services to different types of customer. Categorization of customer needs based on domestic and
international market / demand and service requirements aided with knowledge based awareness to the user
community will be the fundamental basis for departmentation by customers.
11. What is departmentation by product?
Departmentation by Product or Service: In this case, the units are formed according to the product. It is more useful
in multi-line corporations where expansion and diversification, manufacturing and mark characteristics of the
product are of primary concern.
12. Define authority.
"Authority is the right to give orders and the power to exact obedience". It is termed as destined responsibility by
the management or board of directors to the top level executives.
13. List out the sources of authority.
Formal authority theory; Acceptance Authority Theory and Competence theory
14. What is line authority?
Line authority is the direct authority which a superior exercises over a number of subordinates to carry out orders
and instructions. In an organizing process, authority is delegated to the individuals to perform the activities.
15. Define recruitment.

B.Flippo defined recruitment as “the process of searching for prospective employees and simulating for jobs in the
organization”.
16. What is staff authority?
A staff person assists the line people in attaining their objectives. Staff authority is purely advisory. Types of staff
authority are a) Advisory staff authority, b) Compulsory staff authority and c) Concurrent staff authority.
17. What is departmentation by process?
Departmentation by Process or Equipment: Under this type of departmentation, activities are grouped on the basis
of production processes or equipment involved. In process centric manufacturing industries like Petrochemical,
FMCG, Power generation, Chemical and Fertilizers production plants the production process will be unique and
continuous.
18. What is Performance Appraisal? What are the different methods/techniques of Performance
appraisal?(Nov 2016, April 2017)
Performance Appraisal is evaluating the actual performance of the employee for determining the compensation and
identifying the potential of the employees. Methods/Techniques of Performance Appraisal:(i) Trait-based appraisal;
Graphic scale method, ranking method, grading system, forced distribution method, check list method, Critical
incident method, group appraisal (ii)Appraisal by results: MBO, Behaviorally Anchored Rating(BARS),
Assessment Centre, 360 degree performance appraisal.
19. State the types of organizational charts.
Vertical or Top-to-Bottom chart; Horizontal or Left-to-right chart; Circular or concentric chart. The organization
structure reveals the chain of command added with the authorization or power destined to individual member base
on the job profile and company directions.
20. Define “Departmentation”. (Nov 2016)
Departmentation is the foundation of organization structure. It means division of work into smaller units and their re
– grouping into bigger units (Departments) on the basis of similarity of features. Each department is headed by a
person known as departmental manager. Division of work into depts. Leads to specialization as people of one
department perform activities related to that department only.
21. What is delegation of authority?(April 2017)
The Delegation of Authority is an organizational process wherein, the manager divides his work among the
subordinates and give them the responsibility to accomplish the respective tasks.
22. What are various stages of staffing process?
External environment
Enterprise
plans
Organisation
plans External
sources
Recruitment Appraisal
Analysis of Selection Career
present and Placement Strategy
Number and kinds
future needs Promotion
of managers
for managers Separation Training
required
&Develop
Internal
ment
sources
Manager
inventory
23. What do you understand by organization chart? (Nov 2017)

An organizational chart is a diagram that shows the structure of an organization and the relationships and relative
ranks of its parts and positions/jobs. The term is also used for similar diagrams, for example ones showing the
different elements of a field of knowledge or a group of languages.
24. Define Carrer Management. (Nov 2017)

Career management is conscious planning of one’s activities and engagements in the jobs one undertakes in the
course of his life for better fulfilment, growth and financial stability. It is a sequential process that starts from an
understanding of oneself and encompasses occupational awareness.
25. What is Job Design? (April 2018)
Job design (also referred to as work design or task design) is a core function of human resource management and it is
related to the specification of contents, methods and relationship of jobs in order to satisfy technological and
organizational requirements as well as the social and personal requirements of the job holder or the employee. Its
principles are geared towards how the nature of a person's job affects their attitudes and behavior at work,
particularly relating to characteristics such as skill variety and autonomy. The aim of a job design is to improve job
satisfaction, to improve through-put, to improve quality and to reduce employee problems (e.g., grievances,
absenteeism).
26. Distinguish between authority and power? (April 2018)
The difference between power and authority can be drawn clearly on the following grounds:
1. Power is defined as the ability or potential of an individual to influence others and control their actions.
Authority is the legal and formal right to give orders and commands, and take decisions.
2. Power is a personal trait, i.e. an acquired ability, whereas authority is a formal right, that vest in the hands of
high officials or management personnel.
3. The major source of power is knowledge and expertise. On the other hand, position and office determine the
authority of a person.
4. Power flows in any direction, i.e. it can be upward, downward, crosswise or diagonal, lateral. As opposed to
authority, that flows only in one direction, i.e. downward (from superior to subordinate).
5. The power lies in person, in essence, a person acquires it, but authority lies in the designation, i.e. whoever
get the designation, get the authority attached to it.
6. Authority is legitimate whereas the power is not.
PART B - C462.3
1.Elucidate any four types of organization. (Nov 2017)
2.Discuss art of delegation of authority.

3.List the steps involved in recruiting a graduate engineer trainee.

4.Distinguish between training and development and explain the training methods in detail. (Nov 2017)
5.What are the types of organizational structure? Explain line and staff organization. List down its merits and
demerits. (May 2016, April 2017)
6.What are the types of departmentation? (Nov 2016)
7.Explain different methods of appraisal system.
8.What are the factors affecting organization structure.

9.What are the sources of recruitment?
RECRUITMENT PROCESS
Recruitment is the process of finding and attempting to attract job candidates who are capable of effectively
filling job vacancies. The recruitment process consists of the following steps • Identification of vacancy
• Preparation of job description and job specification
• Selection of sources
• Advertising the vacancy
• Managing the response
a) Identification of vacancy:
The recruitment process begins with the human resource department receiving requisitions for recruitment
from any department of the company. These contain:
• Posts to be filled
• Number of persons
• Duties to be performed
• Qualifications required
b) Preparation of job description and job specification:
A job description is a list of the general tasks, or functions, and responsibilities of a position. It may often
include to whom the position reports, specifications such as the qualifications or skills needed by the person
in the job, or a salary range. A job specification describes the knowledge, skills, education, experience, and
abilities you believe are essential to performing a particular job.
c) Selection of sources:
Every organization has the option of choosing the candidates for its recruitment processes from two kinds of
sources: internal and external sources. The sources within the organization itself (like transfer of employees
from one department to other, promotions) to fill a position are known as the internal sources of recruitment.
Recruitment candidates from all the other sources (like outsourcing agencies etc.) are known as the external
sources of the recruitment.
d) Advertising the vacancy:
After choosing the appropriate sources, the vacancy is communicated to the candidates by means of a
suitable media such as television, radio, newspaper, internet, direct mail etc.
e) Managing the response:
After receiving an adequate number of responses from job seekers, the sieving process of the resumes
begins. This is a very essential step of the recruitment selection process, because selecting the correct
resumes that match the job profile, is very important. Naturally, it has to be done rather competently by a
person who understands all the responsibilities associated with the designation in its entirety. Candidates
with the given skill set are then chosen and further called for interview. Also, the applications of candidates
that do not match the present nature of the position but may be considered for future requirements are filed
separately and preserved. The recruitment process is immediately followed by the selection process.
10. What are the factors affecting span of management.
Qualification and Qualities
If the superiors and subordinates are well-qualified, trained, experienced, and if they are experts in their jobs
then the span of control will be wide and vice-versa.
2. Level of Management
If the superiors are working at the top-level of management, then they have more responsibilities. Therefore,
their span of control will be narrow and vice-versa.
3. Nature of Work
If the work is difficult then the span of control is narrow and vice-versa.
4. Superior - Subordinates Relationship
If there are good relations between the superior and subordinates, then the span of control will be wide and
vice-versa.
5. Degree of Centralisation
Under decentralisation, the superior has to take fewer decisions. Therefore, he can have a wide span of
control. However, under centralisation, the superior has to take many decisions. Therefore, he should have a
narrow span of control.
6. Use of Communication Technology
If face-to-face communication is used, then the span of control will be narrow. However, if electronic
devices are used for communication then the span of control will be wide.
7. Financial position of the Prganisation
If the organisation has a good financial position, then it can have a narrow span of control. This is because a
narrow span requires more managers. More managers will increase the compensation or wage bill of the
organisation. However, if the organisation has a bad financial position, then it will be forced to have a wide
span of control.
8. Clearity of Plans and Responsibilities
If the plans are clear and if the responsibilities are well-defined, then the span of control will be wide. This
is because the subordinates will not have to go and consult their superior repeatedly for getting orders and
guidance.
9. Time available for Subordinates
If the superior is busy with another work, and if he has less time for his subordinates then his span of control
will be narrow and vice-versa.
10. Faith and Trust in Subordinates
If the superior has good faith, trust and confidence in his subordinates then the span of control can be wider.
11. Differentiate between formal and informal organization.

Formal Organization Formal Organization
Formal organization is established with the explicit Informal organization springs on its own. Its goals
aim of achieving well-defined goals. are ill defined and intangible.
Formal organization is bound together by authority Informal organization is characterized by a
relationships among members. A hierarchical generalized sort of power relationships. Power in
structure is created, constituting top management, informal organization has bases other than rational
middle management and supervisory management. legal right.
Formal organization recognizes certain tasks which . Informal organization does not have any well-
are to be carried out to achieve its goals. defined tasks.
The roles and relationships of people in formal In informal organization the relationships among
organization are impersonally defined people are interpersonal.
In formal organization, much emphasis is placed on Informal organization is characterized by relative
efficiency, discipline, conformity, consistency and freedom, spontaneity, by relative freedom,
control. spontaneity, homeliness and warmth.
In formal organization, the social and In informal organization the socio-psychological
psychological needs and interests of members of needs, interests and aspirations of members get
the organization get little attention. priority.
The communication system in formal organization In informal organization, the communication
follows certain pre-determined patterns and paths. pattern is haphazard, intricate and natural.
Formal organization is relatively slow to respond . Informal organization is dynamic and very
and adapt to changing situations and realities. vigilant. It is sensitive to its surroundings.
12. (i) Discuss the types of centralization.

Span of management, centralization and decentralization all comes under the heading of authority. It is a
range of subordinates who are given instructions to report directly to a particular top level manager. Span
of Management is also termed as Span of Control. As per precautions, managers should neither have few
subordinates nor too many subordinates. Many researches specify that there is not any entirely correct
span of management for managers of any sort. Further, the span of management may be broader or
narrower depending on the certain conditions of the managerial jobs. The following are a few features of
the entire process of span of management.
 The work of subordinate should have a little interaction with others.
 Managers and their subordinates are highly skilled.
 Subordinates perform similar work
 Infrequent Problems
 Close physical proximity of subordinates to one another
 Managers have to perform a few supervisory duties
 Managers possess further help like assistants or secretaries
 To motivate the subordinates for performing good job, because the work is challenging
Specifically, Span of Management ascertains the range of hierarchal levels in the organization. There are
two types of structures associated with the span of management.
Tall Structure: – It is such a structure that comprises a great range of hierarchal levels along with narrow
spans of control.
Flat Structure: – It is such a structure that comprises few hierarchal levels along with broader span of
control.
Centralization vs Decentralization
 Centralization
It is a rule which means that the power of decision making of the organization remains under control of
the top level management. It is also said that everything which decreases the role of subordinates can be
termed as centralization because top level management retains everything. There are three types of
centralization that are departmental centralization, centralization of performance and centralization of
management.
 Decentralization
It is a rule under which the power is deputed to the lower level management. More clearly, it can be
termed as the delegation of power to all levels of management across the organization. Everything that
enhances the role of subordinates is known as decentralization. In order to take major decision very
strictly, the power is retained by the top management.
The organizational structure will be termed as centralized if the decision that are made at lower levels are
supposed to pass the strict collection of rules, procedures, and policies and in case the decisions does not
give the desired outcome, then they are referred to the higher level management. While on the other hand,
an organizational structure is known as decentralized if the decisions that are made at lower levels and
passed through strict rules, procedures and policies, but still leave some of issues are left for lower-level
management.
Further below are a few advantages of centralization and decentralization, which will help the student,
point out how these terms differ from each other.
Advantages of Centralization
1. Centralization is convenient regarding coordination with different individuals and units.
2. Probably, the higher management might be extra professional and experienced that may lead to
effective and efficient decision making.
3. Regarding decision-making, the higher management possesses a broad perception as per various
situations.
4. It can help avoid the duplication of efforts performed different units across the organization.
5. The leadership that seems strong and efficient is promoted.
Advantages of Decentralization
1. The concentration of top managers stays on the major issues.
2. The job duties of lower-level staff are given the opportunity to improve decision-making.
3. The decision making process can become more fast.
4. The lower-level professionals might know the in-depth condition of the problem, which may
result in better decision making regarding the position of the lower-level employees.
5. Similar independent units or departments are merged as a division that allows a convenient
measurement of regular outcomes.
The movement of the organization should be towards the decentralized structure when certain conditions
are expected/happened that are stated below.
1. If the organization is extra large, whereas the higher-level managers don’t have such knowledge
or additional time to sort out all the matters.
2. A few operations are scattered geographically.
3. Top managers are not capable of surviving with complex technology.
4. The uncertain increase in the organizational environment.
(ii) Explain about the organizational culture. (Nov 2016)
Organization is the process of establishing relationship among the members of the enterprise. The
relationships are created in terms of authority and responsibility. To organize is to harmonize, coordinate
or arrange in a logical and orderly manner. Each member in the organization is assigned a specific
responsibility or duty to perform and is granted the corresponding authority to perform his duty. The
managerial function of organizing consists in making a rational division of work into groups of activities
and tying together the positions representing grouping of activities so as to achieve a rational, well
coordinated and orderly structure for the accomplishment of work. According to Louis A Allen,
"Organizing involves identification and grouping the activities to be performed and dividing them among
the individuals and creating authority and responsibility relationships among them for the accomplishment
of organizational objectives." The various steps involved in this process are:
a) Determination of Objectives:
It is the first step in building up an organization. Organization is always related to certain objectives.
Therefore, it is essential for the management to identify the objectives before starting any activity.
Organization structure is built on the basis of the objectives of the enterprise. That means, the structure of
the organization can be determined by the management only after knowing the objectives to be
accomplished through the organization. This step helps the management not only in framing the
organization structure but also in achieving the enterprise objectives with minimum cost and efforts.
Determination of objectives will consist in deciding as to why the proposed organization is to be set up
and, therefore, what will be the nature of the work to be accomplished through the organization.
b) Enumeration of Objectives:
If the members of the group are to pool their efforts effectively, there must be proper division of the major
activities. The first step in organizing group effort is the division of the total job into essential activities.
Each job should be properly classified and grouped. This will enable the people to know what is expected
of them as members of the group and will help in avoiding duplication of efforts. For example, the work
of an industrial concern may be divided into the following major functions – production, financing,
personnel, sales, purchase, etc.
c) Classification of Activities:
The next step will be to classify activities according to similarities and common purposes and functions
and taking the human and material resources into account. Then, closely related and similar activities are
grouped into divisions and departments and the departmental activities are further divided into sections.
d) Assignment of Duties:
Here, specific job assignments are made to different subordinates for ensuring a certainty of work
performance. Each individual should be given a specific job to do according to his ability and made
responsible for that. He should also be given the adequate authority to do the job assigned to him. In the
words of Kimball and Kimball - "Organization embraces the duties of designating the departments and the
personnel that are to carry on the work, defining their functions and specifying the relations that are to
exist between department and individuals."
e) Delegation of Authority:
Since so many individuals work in the same organization, it is the responsibility of management to lay
down structure of relationship in the organization. Authority without responsibility is a dangerous thing
and similarly responsibility without authority is an empty vessel. Everybody should clearly know to
whom he is accountable; corresponding to the responsibility authority is delegated to the subordinates for
enabling them to show work performance. This will help in the smooth working of the enterprise by
facilitating delegation of responsibility and authority.
ORGANIZATION STRUCTURE
An organization structure is a framework that allots a particular space for a particular department or an
individual and shows its relationship to the other. An organization structure shows the authority and
responsibility relationships between the various positions in the organization by showing who reports to
whom. It is an established pattern of relationship among the components of the organization.
March and Simon have stated that-"Organization structure consists simply of those aspects of pattern of
behavior in the organization that are relatively stable and change only slowly." The structure of an
organization is generally shown on an organization chart. It shows the authority and responsibility
relationships between various positions in the organization while designing the organization structure, due
attention should be given to the principles of sound organization.
Significance of Organization Structure

• Properly designed organization can help improve teamwork and productivity by providing a framework
within which the people can work together most effectively.
• Organization structure determines the location of decision-making in the organization.
• Sound organization structure stimulates creative thinking and initiative among organizational members
by providing well defined patterns of authority.
• A sound organization structure facilitates growth of enterprise by increasing its capacity to handle
increased level of authority.
• Organization structure provides the pattern of communication and coordination.
• The organization structure helps a member to know what his role is and how it relates to other roles.
13. Explain human resource management activities in business organization?(April 2017)
Human resources managers oversee the most important component of a successful business — a
productive, thriving workforce. The role of human resource management in organizations is to organize
people so that they can effectively perform work activities. This requires viewing people as human assets,
not costs to the organization. Looking at people as assets is part of contemporary human resource
management and human capital management.
Role of Human Resource Management
The human resources management team suggests to the management team how to strategically manage
people as business resources. This includes managing recruiting and hiring employees, coordinating
employee benefits and suggesting employee training and development strategies. In this way, HR
professionals are consultants, not workers in an isolated business function; they advise managers on many
issues related to employees and how they help the organization achieve its goals.
Working Together
At all levels of the organization, managers and HR professionals work together to develop employees'
skills. For example, HR professionals advise managers and supervisors how to assign employees to
different roles in the organization, thereby helping the organization adapt successfully to its environment.
In a flexible organization, employees are shifted around to different business functions based on business
priorities and employee preferences.
Commitment Building
HR professionals also suggest strategies for increasing employee commitment to the organization. This
begins with using the recruiting process or matching employees with the right positions according to their
qualifications. Once hired, employees must be committed to their jobs and feel challenged throughout the
year by their manager.
Building Capacity
An HRM team helps a business develop a competitive advantage, which involves building the capacity of
the company so it can offer a unique set of goods or services to its customers. To build the an effective
human resources, private companies compete with each other in a "war for talent." It's not just about
hiring talent; this game is about keeping people and helping them grow and stay committed over the long
term.
Addressing Issues
Human resource management requires strategic planning to address not only the changing needs of an
employer but also a constantly shifting competitive job market. Employee benefit packages must be
continually assessed for costs to the employer. Tweaking the packages also provides an opportunity to
increase employee retention through the addition of vacation days, flexible working arrangements or
retirement plan enhancements. For example, in recent years many human resource professionals have
oversaw the addition of preventative health components to traditional health plans for both employment
recruitment and retention efforts.
14. Describe six key elements in organizational design. (April 2018)
Organizational design is the process of creating the hierarchy within a company. The six elements of
organizational design help business leaders establish the company departments, chain of command and
overall structure. The aspects of organizational structure most notably reviewed is the organizational
chart. Consider these six key aspects when creating the design elements of an organization.
Work Specialization
Work specialization is the first of the elements of organization structure. Business leaders must consider
the job tasks and specific duties associated with given positions. Dividing work tasks among different jobs
and assigning them to definite levels, is the role of work specialization elements. An example would be
giving the first person in the assembly line the job of putting the first three components together. The
second person in the assembly line might then put the decals on the product, and the third would put the
item in the box.
Leaders should be careful to not overly specialize in any one job because this can lead to boredom and
fatigue. This results in slower work and even errors. Managers may have jobs assigned and adjust the
roles depending on how specialized the job in one area is.
Departmentalization and Compartments
Departmentalization and compartments are two other components of organizational design. Departments
are often a group of workers with the same overall functions. They are often broken down by broad
categories such as functional, product, geographical, process and customer. Common departments include
accounting, manufacturing, customer service and sales.
Compartments might have teams with different department members that are put together for efficiency.
For example, a company delivering IT services to other businesses might have teams assigned to each
company. Each team might have a project manager, a graphic designer, a coding specialist, a security
specialist, a client rep and service provider.
Chain of Command
The chain of command is what the organizational chart typically illustrates. It shows who reports to who
in the company's human resources structure. Some companies have a more traditional hierarchy with very
clear department leaders and executives in charge. Other companies use a more fluid chain of command
and structure where more people are considered part of the same level of command on a cross-functional
team.
There are pros and cons to any model. What is important is that employees know what is expected of them
and how they get information to flow to the proper channels. If an employee isn't sure who his direct
supervisor is due to an unclear chain of command, he might not properly relay the right information to the
right party.
Span of Control
The span of control is the organizational design element that considers the capacity of any manager. There
are limits to the number of people one person can oversee and supervise. The span of control addresses
this design element. If a manager has too many people to oversee, he might lose his effectiveness and not
recognize problems or successes.
A span of four means that for every four managers, sixteen employees can be effectively managed. Other
industries might use a span of eight or another number that describes how the human resources directors
need to disburse managers.
Centralization and Decentralization
Centralization and decentralization are organizational design elements deciding the degree which
decision-making is made at one central level or at various levels by employees. For example, all major
budget decisions would filter to the chief executive officer and chief financial officer in a centralized
fashion. Customer service decisions might be decentralized giving those interacting with customer
directions on how to handle issues but the authority to make certain decisions.
Formalization of Elements
Smaller organizations tend to have informal elements where large organizations formalize roles more
specifically. The reason smaller organizations use less formal standards is that employees may serve
multiple roles as necessary. Bigger organizations need to formalize elements to ensure the right stuff gets
done on time and correctly.
Formalization might also be seen with specific job duties. For example, there may be a very specific way
that payroll is done to ensure that everyone gets paid on time, with the correct withholding. The sales
department might not be very formalized, and might allow each representative to find his organic process
so that he may succeed.
15. Discuss the tasks associated with identifying and selecting competent employees. (April 2018)
Selecting a suitable candidate can be the biggest challenge for any organisation. The success of an
organization largely depends on its staff. Selection of the right candidate builds the foundation of any
organization's success and helps in reducing turnovers. Though there is no fool proof selection procedures
that will ensure low turnover and high profits, the following steps generally make up the selection
process)
Initial Screening
This is generally the starting point of any employee selection process. Initial Screening eliminates
unqualified applicants and helps save time. Applications received from various sources are scrutinized and
irrelevant ones are discarded.
b) Preliminary Interview
It is used to eliminate those candidates who do not meet the minimum eligibility criteria laid down by the
organization. The skills, academic and family background, competencies and interests of the candidate are
examined during preliminary interview. Preliminary interviews are less formalized and planned than the
final interviews. The candidates are given a brief up about the company and the job profile; and it is also
examined how much the candidate knows about the company. Preliminary interviews are also called
screening interviews.
c) Filling Application Form
An candidate who passes the preliminary interview and is found to be eligible for the job is asked to fill in
a formal application form. Such a form is designed in a way that it records the personal as well
professional details of the candidates such as age, qualifications, reason for leaving previous job,
experience, etc.
d) Personal Interview
Most employers believe that the personal interview is very important. It helps them in obtaining more
information about the prospective employee. It also helps them in interacting with the candidate and
judging his communication abilities, his ease of handling pressure etc. In some Companies, the selection
process comprises only of the Interview.
e) References check
Most application forms include a section that requires prospective candidates to put down names of a few
references. References can be classified into - former employer, former customers, business references,
reputable persons. Such references are contacted to get a feedback on the person in question including his
behaviour, skills, conduct etc.
f) Background Verification
A background check is a review of a person's commercial, criminal and (occasionally) financial records.
Employers often perform background checks on employers or candidates for employment to confirm
information given in a job application, verify a person's identity, or ensure that the individual does not
have a history of criminal activity, etc., that could be an issue upon employment.
g) Final Interview
Final interview is a process in which a potential employee is evaluated by an employer for prospective
employment in their organization. During this process, the employer hopes to determine whether or not
the applicant is suitable for the job. Different types of tests are conducted to evaluate the capabilities of an
applicant, his behaviour, special qualities etc. Separate tests are conducted for various types of jobs.
h) Physical Examination
If all goes well, then at this stage, a physical examination is conducted to make sure that the candidate has
sound health and does not suffer from any serious ailment.
i) Job Offer
A candidate who clears all the steps is finally considered right for a particular job and is presented with
the job offer. An applicant can be dropped at any given stage if considered unfit for the job.
16. Jacob, one of your assistants in a fire insurance company, is responsible for a group of clerical workers
who review changed policies, endorsements, and riders, calculate commissions, and maintain records. He is
very meticulous, and everything coming out of his group is perfect. He does not delegate authority and
responsibility but rechecks in detail all the work turned out by his faction. He keeps turning back to them
careless and inaccurate work until it is perfect. As a result he is busy from early morning until late at night
doing detail work and neglecting his role as supervisor. His workers have figured him out and taking it
easy. They do slap-dash work and correct it as often as he returns it. You are afraid about Jacob’s
workaholic behavior and heading for a nervous breakdown. You have told him in general terms to delegate
authority and responsibility and to discipline his group.
He says that you just can’t find people any more who have pride in their work or concern for the company
and that if he fires any of his people or they quit the replacements would most likely be more terrible.
1) Why people do not delegate authority and responsibility?
2) What are Jacob’s responsibilities as a supervisor?
3) Which can he delegate and how?
4) What are the leadership characteristics that Jacob lacks?
5) How can you go about developing them in him?
To answer the above questions follow the steps below:
 First, study the case carefully, identifying the management principles involved, where possible.
 Gain as sound an understanding as possible, within the time available, through private as study.
 Apply the systematic analysis methodology.
 Discuss your analysis and conclusions.
UNIT – IV: DIRECTING
PART A - C462.4
1. Define Leading.
It is a process of influencing people so that they will contribute to organisation and group goals. Leading by
example and directing the subordinates to be focused and aligned with the organisational goals and objectives.
2. Define Motivation.
It is a process of stimulating people to achieve/ accomplish desired goals. Motivation is defined as “those forces
operating within the individual employee or subordinate which impel him to act or not or to act in certain ways.
Motivation is mainly psychological. It acts as a driving force for successful implementation of the management
objectives eradicating psychological barriers.
3. What is the role of a Democratic leader?
He consults with subordinates on proposed actions and decisions and encourages participation from them. A
democratic leader listen to his subordinate view points and give opportunity for inclusive growth and will lead the
team from behind being a motivator and lead by example.
4. Define Job Enrichment. (April 2017, Nov 2017)
It attempts to make a job more varied by removing the dullness associated with performing /repetitive and
monotonous operations. A conducive work environment with aids for motivation, relaxation, taken care-off
attitude from management will make the employees feel good while during or executing work
5. What is QWL?
Main objective of QWL will be increasing productivity and reducing inflation and as a way of obtaining industrial
democracy and minimizing labor disputes.
6. Define Leadership as an Art.
Art or process of influencing people so that they will strive willingly and enthusiastically towards achievement of
the goal.
7. What are the Styles of Leadership?(May 2016)
Autocratic leadership; Democratic leadership and Free-reign leadership.
8. Define Communication.
Communication is the process of transmitting ideas, facts, opinions and feelings to others. Communication is a
mutual interchange process that occurs between two or more persons.
9. What are the various types of communication?
Formal, informal, vertical, horizontal, grapevine, written and oral communication.
10. What is Country club management?
In a country club management, the mangers have little or no concern for production, but are concerned for people
or the employees.
11. What are the types of needs?
Primary Needs: Physiological requirements such as food, sleep, water and shelter.
Secondary needs: Self-esteem status, affection, accomplishment and affiliation with others.
12. Explain - Maslow’s Needs. / Elements of Maslow’s hierarchy of needs. (Nov 2016)
Physiological needs, Safety needs, Social needs, Self- Esteem needs and Self- actualization needs.
13. Define Incentives.
An incentive is something which stimulates a person towards some determination. Incentives are a way of
motivation and termed as monetary benefits appraised for best or better performing employees by the
organisation.
14. What is Innovation?
Innovation is termed as generation of NEW ideas for existing products/problems and simpler and modified ways
of doing for an existing method. Innovation is a strategy, that every organization adopts for automation and
control over its process/system. Innovation is a key to successful branding of the company in international market
and be competitive. Innovation helps in up gradation and integration of technologies example: Mobile phones –
Smart phone, where integration of functions is available in a single system.
15. What are Job content factors?
Achievement, advancement, responsibility, Respect, growth and development.
16. Define Expectancy theory.
Force=Valance * Expectancy
17. What is an Equity theory.
Outcomes by a person Outcomes by another person
------------------------------------ = -----------------------------------
Inputs by a person Inputs by another person
18. Define Creativity.
Ability and power to develop new ideas. This is a virtual idealization of a system or concept and later develops
into a workable product.
19. Define Brainstorming. (April 2018)
Brainstorming is a problem solving technique. Improve problem solving by finding new ideas and unusual
solution. A team destined will sit and discuss about a problem and find out different solutions for solving it. A best
optimum solution to a problem can be found when different counterparts sit together and brainstorm on that
problem so that remote issues will be addressed and not missed out.
20. What is the importance of leadership?
Securing co-operation, creating confidence in the minds of employees, providing good working climate.
21. What is effective communication? (Nov 2016)
Effective communication is defined as verbal speech or other methods of relaying information that get a point
across. An example of effective communication is when you talk in clear and simple terms.
22. What is personality? (April 2017)
Personality is usually defined as the set of habitual behaviors, cognitions and emotional patterns that evolve from
biological and environmental factors.
23. What are the advantages of democratic leadership styles? (April 2018)
Solution for Complex Problems
Democratic leaders are typically excellent at solving complex issues. They have the ability to work
collaboratively, using a consensus of opinions to get things done the right way. The democratic leader often
thinks innovatively and encourages others to do the same, so that solutions to complex and strategic problems
can be found.
Good Business Fit
Solutions that are democratically derived generally last for the longest period of time. The democratic process
ensures that the solution is reviewed on a continuous basis. Additionally, engaging team members will enable
leaders to maintain effective processes that fit the business well. Democratic leaders ensure that team
members work well with other individuals, so that they are suitable to function in large corporate
environments in which co-operation and communication are crucial.
Strong Teams are Built by Democratic Leaders
Team members under democratic leadership tend to be supportive and strong. Honesty flourishes and more
collective working is done because the opinions of everyone are taken into consideration. Democratic leaders
are usually popular within the organization.
Foster Creative Environments
Democratic leaders effectively foster creative environments since they encourage the input and innovation of
team members. Creative designers succeed under democratic leadership because of the support and nurture
that is embodied in this leadership approach.
24. What is job satisfaction? (Nov 2017)
Job satisfaction is in regard to one's feelings or state-of-mind regarding the nature of their work. Job satisfaction
can be influenced by a variety of factors, eg, the quality of one's relationship with their supervisor, the quality of
the physical environment in which they work, degree of fulfillment in their work, etc.
PART B - C462.4
1. Write short notes on the managerial grid.
2. What are the steps in communication process?
3. Explain the motivation theories.(May 2016, April 2017, Nov 2017)

4. Explain the various types of leadership styles.(Nov 2016)
5. What are the various barriers to communication? How will you overcome them? (Nov 2016, April 2017, Nov
2017)
6. Explain trait approaches to leadership.
7. Explain various methods / types of communication.
8. List out the various communication networks in an organization.
9. What are the computer – based communications in the modern business era?(May 2016)
10. Explain the factors determining effective supervision.
11. What are the essential qualities of good leader?
12. Difference between motivation and satisfaction. (Nov 2016)
13. Compare and contrast early theories of motivation. (April 2018)
14. Identify barriers to effective interpersonal communication and how to overcome them. (April 2018)
UNIT – V: CONTROLLING
PART A - C462.5
1. What is control?
Control is the measurement and correction of performance in order to make sure the enterprise objectives and the
plans devised to attain them are accomplished. In a manufacturing company we have different control like
budgetary control, purchase control, quality control, vendor quality control and customer quality control etc.
2. State the difference between feedback and feed forward control technique.
Feedback Feed forward
It measures only the output of the process It measures the input of the process
It is submissive approach It is aggressive approach
Less benefit More benefit
3. What is concurrent control?

Concurrent control implies parallel monitoring and control over the process. This ensures speedy and precise
monitoring that eliminates rejections happening between stages and delay in detecting failures in a system or a
process. Concurrent control framework ensures overall health monitoring of the system that takes care the undue
occurrences that hamper the growth and development of the system.
4. Define Budget.
A Budget is the financial plan for the current fiscal year duly considering all aspects of business that will foster
growth and development of the firm. It estimates the spending plan and investment / capital required for the
current financial year and projection for the next to aid planning for capital investment by the management.
5. Define budgetary control. (Nov 2017)
A system which uses budgets as a means for planning and controlling all aspects of producing and selling
commodities and services. The CAPEX –capital expenditure is the term used in the industrial circle.
6. Write the objectives of budgetary control.
It aims at maximization of profits; to plan and control the income and expenditure of the organisation
To provide adequate working capital
7. What are classifications of budget?
Functional classification- Sales, production, cash, capital and master budget; Time classification- Short, current
and long term budget; Activity level- Fixed and flexible budget
8. What are the difference between PERT and CPM?
S. No. CPM PERT
1. It is activity oriented PERT is event oriented
2. CPM is planning device It is control device
3. It estimates only one time It estimates three times
4. It is a deterministic model It is probabilistic model
9. Define productivity. (Nov 2017)

Productivity is a measure of how much input is required to produce a given output. The output derived from the
inputs processed through series of operations. Productivity is an average measure of the efficiency of production.
It can be expressed as the ratio of output to inputs used in the production process, i.e. output per unit of input
10. Define OR.
OR-Operational Research coupled with Optimization techniques is a systematic analysis of a problem through
scientific methods, carried out by appropriate specialists, working together as a team, finding an optimum and the
most appropriate solution to meet the given objective under a given set of constraints. OR can be employed in
hospitality, manufacturing and service sectors.
11. Define Linear Programming.
It is a mathematical technique in operation research and a plan of action solve a given problem involving linearly
related variables in order to achieve the laid down objectives in the form of minimizing or maximizing the
objective function under given set of constraints.
12. What is Inventory Control?
Inventory control refers to the control of raw materials and purchased material in store and regulation of
investment in them. Inventory Control is the supervision of supply, storage and accessibility of items in order to
ensure an adequate supply without excessive oversupply. It can also be referred as internal control - an accounting
procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets
or avoid fraud and error etc.
13. What is JIT?
Just in time inventory system, in this method the supplier delivers the materials to the production shop just in time
required to be assembled. This method reduces the cost of inventory. JIT is also referred to as KANBAN/CARD
system that maintains 3 cards, one with end user, one with stores and one with supplier/vendor.
14. What are objectives of value engineering?
VAVE-Value added value engineering is a special type of cost reduction technique. The steps involved are listed
-Modify and improve product design; reduce the product cost; Increase the profit and simplify the product
functionality
15. What is MNC?
Multinational corporation is an enterprise which own or control production or service facilities outside the country
in which they are based. They have international reputation and recognition for their technology and brands.
16. Write some advantages of MNC’s.
It can promote quality product at low price; MNC leads to increase in production, aggregate employment, balance
in exports and imports of the required inputs (motivate SME’s and domestic manufacturers) and it increases the
government revenues and contribute to the state economy like GDP.
17. What is work simplification?
It is the process of obtaining the participation of workers in simplifying their work through time study, motion
study, work flow analysis and layout of work situation.
18. Define quality circles.
Quality circles are groups of people, from the same organisational area, who meet regularly to solve problems
they experience at work. Members are trained in solving problems, in applying statistical quality control and
working in groups.
19. Define Purchase control.
Purchase by definition of function is the procurement of materials (domestic and import) to cater the needs of
counter departments in an organisation adhering to the MRP –materials requirement plan from MPS-Master
production schedule. Purchase department sit with Marketing and Vendor quality in negotiating on price and
quality with the vendors/suppliers
20. Define Expense control.
Expense statement is the spending on materials, labor, maintenance, electric power, water and miscellaneous like
CSR initiatives, Labor welfare and medical insurance.
21.What is preventive control in management?(April 2017)
Preventative controls are designed to keep errors or irregularities from occurring in the first place. They are built
into internal control systems and require a major effort in the initial design and implementation stages.
22. What are the uses of computers in management control? (Nov 2016)
The use of computers for management controls poses an entirely new set of requirements on the system designers.
The computer, through the use of simulation models, provides the capability of pretesting system designs and the
basis for eventual real-time control.
23.Why controlling is important? (April 2017)
Control eliminates the risk of non-conformity of actual performance with the main goals of the organization.
24. Discuss the productivity problems in a management. (Nov 2016)
Productivity implies measurement, which in turn is an essential step in the control process. The various factors
include less-skilled workers with respect to the total labor force, immediate results, growing affluence of the
people which makes them less ambitious, breakdown in family structure, workers’ attitude, government policies
and regulations.
25. What is the characteristics of control function?(April 2018)
Control is a continuous process,
Control is a management process,
Control is embedded in each level of organizational hierarchy,
Control is forward looking,
Control is closely linked with planning,
Control is a tool for achieving organizational activities,
Control is an end process,
Control compares actual performance with planned performance,
Control point out the error in the execution process,
Control minimizes cost,
Control achieves the standard,
Control saves time,
Control helps management monitor performance
26. What is performance appraisal? (April 2018)
A performance appraisal, also referred to as a performance review, performance evaluation, (career) development
discussion, or employee appraisal is a method by which the job performance of an employee is documented and
evaluated. Performance appraisals are a part of career development and consist of regular reviews of employee
performance within organizations.
PART B - C462.5
1. List out the critical types of critical point standards.
Three types of control are distinguished according to when control is exerted.
The first of these is feed forward or steering control. In this type of control, the emphasis is in a future time
frame. With accurate forecasting of what will happen, we can take action before a total operation is complete
to ensure its success. Thus, for example, adjustments were made during the mission to the moon to help land
the astronauts on the moon. Sometimes these controls, which modern developments such as real-
time computers have made possible, are called process controls. The second kind of control has been called
the timed control. With this kind of control, work is stopped at various predetermined times or when certain
events take place and cannot continue without a screening decision to go ahead. Examples of such
controls include spending limits on projects and quality controls at various points in the operation process.
The final type of control is post action control with this type of control, when the operation is completed the
results are reviewed. Although nothing can be done about the cycle that was completed the review serves as a
guide to ways for preventing future mishaps.In practice, every board planning objective, every goal of the
many planning programs, every policy, every activity of these programs and every procedure becomes
standard against which actual or expected performance might be measured. Following are the main critical
standards generally used in practice:
1. Physical standards: These deals with non-monetary measurements and are common at the operating level
which materials are used, labor employed, services rendered and goods produced. They may reflect
qualitative performance, such as man hours per unit of output, funds or fuel per horsepower produced, ton-
miles of freight traffic carried, unit of production per machine hour quantity such as the hardness of bearings,
closeness, rate of climb of an airplane, durability of barbaric or fastness of a color. As Goetz has said these
standards are the ‘building blocks of planning’. Since whether management must choose between alternate
policies, organizational configuration procedure or resources, it must always analyze the rival program in
terms of physical elements determine the financial implications of these elements, integrates or synthesize the
elements into programs and select the best program it can devise. As physical standards, are the building
blocks of planning, they are also fundamental standards for control. [Critical Standards]
2. Cost standards: These deal with the monetary measurement and like physical standards, are common at the
operating level they attach monetary values to the costs of the operation. Illustrative of cost standards are such
widely used measures as direct and indirect cost per unit produced, labour cost per unit produced, labour cost
per unit or per hour, material cost per unit, machine hour costs, costs per plane reservation selling costs per
dollar or unit of sales and costs per foot of well drilled. [ Critical Standards ]
3. Capital standards: These are a variety of cost standards, arising from the application of monetary
measurements to physical items. But they have to do with the capital invested in the firm rather than with the
income statement, perhaps the most widely used standard for new investment. The typical balance sheet will
disclose other capital standards, such as ratios of current assets of a current liability, debt to net worth, fixed
investment to total investment, cash and receivables to payables, notes or bonds to stock and the size and
turnover of inventories. [Critical Standards ]
4. Revenue standards: These arise from attaching monetary values to sales. They may vary from such
standards as revenue per bus passenger mile and dollars per ton of steel shapes sold to cover sale per
customer, rules per capital in a given market area. [ Critical Standards ]
5. Programme standards: A manager may be assigned to install a variable budget programme, a programme
for formally following the development of new products, or a programme for improving the quality of a sales
force, while, some subjective judgement may have to be applied in appraising programme performance,
timing and other factors can be used as objective standards. [ Critical Standards ]
6. Intangible standards: More difficult to set are standards not expressed in either physical or monetary
measurement. What standard can a manager use for determining the competence of the divisional purchasing
agent or Personnel Director, what can be used for determining whether the public relations program is
successful? Are foremen loyal to the company’s objectives? Is the office boy alert? Such questions show how
difficult it is to establish standards for a goal that cannot be given clear quantitative or qualitative
measurement. [Critical standards ]. Many intangible standards exist in business because research into what
constitutes desired performance has not been done above the level of the shop, the district sales office, the
shopping room, or the accounting department. Perhaps a more important reason is that human relationships,
count in performance, as they do above the basic operating levels, it is very hard to measure what is good.
‘Effective’ or ‘Efficient’ Tests, surveys and sampling techniques developed by psychologists and sociometrists
have made it possible to probe human attitudes and drives, but many managerial controls over interpersonal
relationships must continue to be based upon intangible standards considered judgment, trial and error, and
even on occasion sheer hunch.
7. Goals for standards: However, with the present tendency for better-managed enterprise to establish an
entire network of verifiable qualitative or quantitative goals at every level of management, the use of
intangible standards, while still important, is diminishing in complex programme operations as well as in the
performance of managers themselves, modern managers are finding that through research and thinking it is
possible to define goals it is likely to take the form of standards. For example, if the program of district sales
office is spelled out to include such elements as training salesmen in accordance with a plan with specific
characteristics, the very fact of the plan and its characteristics, furnish standards which tend to become
objective and, therefore, ‘Tangible’.
2. Discuss the various budgetary and non - budgetary control techniques? (Nov 2016)
BUDGETARY CONTROL TECHNIQUES

The various types of budgets are as follows
i) Revenue and Expense Budgets:
The most common budgets spell out plans for revenues and operating expenses in rupee terms. The
most basic of revenue budget is the sales budget which is a formal and
detailed expression of the sales forecast. The revenue from sales of products or services furnishes the
principal income to pay operating expenses and yield profits. Expense budgets may deal with individual
items of expense, such as travel, data processing, entertainment, advertising, telephone, and insurance.
ii) Time, Space, Material, and Product Budgets:
Many budgets are better expressed in quantities rather than in monetary terms. e.g. direct-labor-
hours, machine-hours, units of materials, square feet allocated, and units produced. The Rupee cost would
not accurately measure the resources used or the results intended.
iii) Capital Expenditure Budgets:
Capital expenditure budgets outline specifically capital expenditures for plant, machinery,
equipment, inventories, and other items. These budgets require care because they give definite form to plans
for spending the funds of an enterprise. Since a business takes a long time to recover its investment in plant
and equipment, (Payback period or gestation period) capital expenditure budgets should usually be tied in
with fairly long-range planning.
iv) Cash Budgets:
The cash budget is simply a forecast of cash receipts and disbursements against which actual cash
"experience" is measured. The availability of cash to meet obligations as they fall due is the first requirement
of existence, and handsome business profits do little good when tied up in inventory, machinery, or other
noncash assets.
v) Variable Budget:
The variable budget is based on an analysis of expense items to determine how individual costs
should vary with volume of output.
Some costs do not vary with volume, particularly in so short a period as 1 month, 6 months, or a
year. Among these are depreciation, property taxes and insurance, maintenance of plant and equipment, and
costs of keeping a minimum staff of supervisory and other key personnel. Costs that vary with volume of
output range from those that are completely variable to those that are only slightly variable.
The task of variable budgeting involves selecting some unit of measure that reflects volume;
inspecting the various categories of costs (usually by reference to the chart of
accounts); and, by statistical studies, methods of engineering analyses, and other means, determining how
these costs should vary with volume of output.
vi) Zero Based Budget:
The idea behind this technique is to divide enterprise programs into "packages" composed of goals,
activities, and needed resources and then to calculate costs for each package from the ground up. By starting
the budget of each package from base zero, budgeters calculate costs afresh for each budget period; thus they
avoid the common tendency in budgeting of looking only at changes from a previous period.
Advantages
There are a number of advantages of budgetary control:
• Compels management to think about the future, which is probably the most important feature of a
budgetary planning and control system. Forces management to look ahead, to set out detailed plans
for achieving the targets for each department, operation and (ideally) each manager, to anticipate and
give the organization purpose and direction.
• Promotes coordination and communication.
• Clearly defines areas of responsibility. Requires managers of budget centre’s to be made responsible
for the achievement of budget targets for the operations under their personal control.
• Provides a basis for performance appraisal (variance analysis). A budget is basically a yardstick
against which actual performance is measured and assessed. Control is provided by comparisons of
actual results against budget plan. Departures from budget can then be investigated and the reasons
for the differences can be divided into controllable and non-controllable factors.
• Enables remedial action to be taken as variances emerge.
• Motivates employees by participating in the setting of budgets.
• Improves the allocation of scarce resources.
• Economises management time by using the management by exception principle.
Problems in budgeting
• Whilst budgets may be an essential part of any marketing activity they do have a number of
disadvantages, particularly in perception terms.
• Budgets can be seen as pressure devices imposed by management, thus resulting in:
a) bad labour relations
b) inaccurate record-keeping.
• Departmental conflict arises due to:
a) disputes over resource allocation
b) departments blaming each other if targets are not attained.
• It is difficult to reconcile personal/individual and corporate goals.
• Waste may arise as managers adopt the view, "we had better spend it or we will lose it". This is often
coupled with "empire building" in order to enhance the prestige of a department.
• Responsibility versus controlling, i.e. some costs are under the influence of more than one person,
e.g. power costs.
• Managers may overestimate costs so that they will not be blamed in the future should they
overspend.
NON-BUDGETARY CONTROL TECHNIQUES
There are, of course, many traditional control devices not connected with budgets, although some may be
related to, and used with, budgetary controls. Among the most important of these are: statistical data, special
reports and analysis, analysis of break- even points, the operational audit, and the personal observation.
i) Statistical data:
Statistical analyses of innumerable aspects of a business operation and the clear presentation of statistical
data, whether of a historical or forecast nature are, of course, important to control. Some managers can
readily interpret tabular statistical data, but most managers prefer presentation of the data on charts.
ii) Break- even point analysis:
An interesting control device is the break even chart. This chart depicts the relationship of sales and
expenses in such a way as to show at what volume revenues exactly cover expenses.
iii) Operational audit:
Another effective tool of managerial control is the internal audit or, as it is now coming to be called, the
operational audit. Operational auditing, in its broadest sense, is the regular and independent appraisal, by a
staff of internal auditors, of the accounting, financial, and other operations of a business.
iv) Personal observation:
In any preoccupation with the devices of managerial control, one should never overlook the importance of
control through personal observation.
v) PERT:
The Program (or Project) Evaluation and Review Technique, commonly abbreviated PERT, is a is a method
to analyze the involved tasks in completing a given project, especially the time needed to complete each
task, and identifying the minimum time needed to complete the total project.
vi) GANTT CHART:
A Gantt chart is a type of bar chart that illustrates a project schedule. Gantt charts illustrate the start and
finish dates of the terminal elements and summary elements of a project. Terminal elements and summary
elements comprise the work breakdown structure of the project. Some Gantt charts also show the
dependency (i.e., precedence network) relationships between activities.
3. What are the factors affecting control.
Qualification and Qualities
If the superiors and subordinates are well-qualified, trained, experienced, and if they are experts in their jobs
then the span of control will be wide and vice-versa.
2. Level of Management
If the superiors are working at the top-level of management, then they have more responsibilities.
Therefore, their span of control will be narrow and vice-versa.
3. Nature of Work
If the work is difficult then the span of control is narrow and vice-versa.
4. Superior - Subordinates Relationship
If there are good relations between the superior and subordinates, then the span of control will be wide
and vice-versa.
5. Degree of Centralisation
Under decentralisation, the superior has to take fewer decisions. Therefore, he can have a wide span of
control. However, under centralisation, the superior has to take many decisions. Therefore, he should have
a narrow span of control.
6. Use of Communication Technology
If face-to-face communication is used, then the span of control will be narrow. However, if electronic
devices are used for communication then the span of control will be wide.
7. Financial position of the Prganisation
If the organisation has a good financial position, then it can have a narrow span of control. This is because
a narrow span requires more managers. More managers will increase the compensation or wage bill of the
organisation. However, if the organisation has a bad financial position, then it will be forced to have a
wide span of control.
8. Clearity of Plans and Responsibilities
If the plans are clear and if the responsibilities are well-defined, then the span of control will be wide.
This is because the subordinates will not have to go and consult their superior repeatedly for getting
orders and guidance.
9. Time available for Subordinates
If the superior is busy with another work, and if he has less time for his subordinates then his span of
control will be narrow and vice-versa.
10. Faith and Trust in Subordinates
If the superior has good faith, trust and confidence in his subordinates then the span of control can be
wider.
4. Explain the role of operations research in business and management.
Operations research quantifies the relevant factors of an issue and uses mathematical techniques to arrive
at an optimal decision. That's the intimidating economic definition. For a better understanding, the
following example shows a practical application of operations research techniques.
The production supervisor at The Old Tyme Toy Company is planning his schedule for the week. He has
to decide how many units of wood soldiers and trains to make that maximizes profits. Each type of toy
requires two types of labor: carpentry and finishing. The relevant factors that the production supervisor
has to consider are as follows:
 Both types of toys make a profit of $3 per unit.
 The carpentry crew has a total of eight man-hours available.
 The finishers have a total of nine man-hours available.
 Making a train requires two hours of carpentry and one hour for finishing.
 A soldier needs one hour of carpentry work and three hours for the intricate painting of the
uniform.
Operations research solves this production dilemma with a technique known as linear programming. After
setting up the formulas for the production and labor constraints, the supervisor finds that the optimal
production schedule is to produce three trains and two soldiers. This product mix will yield a profit of
$15.
Advantages of Operations Research
Improved Decision Making: As the above example shows, operations research techniques can take a
muddle of factors and numbers and reduce them to simple formulas. These formulas will find the optimal
solutions within the constraints of the problem.
Better Control: OR techniques give managers the tools that provide better direction and control over
subordinates. A manager can use OR methods to set up performance standards for employees and identify
areas that need improvement.
Higher Productivity: A significant use of OR is the ability to identify optimal solutions. A few examples
are finding the best inventory mix, optimal utilization of manpower, most desirable use of plant machinery
and highest-producing marketing campaigns.
Better Departmental Coordination: When the optimal results from OR analysis are shared with all
departments, everyone works together toward the same goal. For example, the marketing department
might coordinate their efforts with the schedules laid out by the production supervisor.
Operations research is important because it is a helpful tool used to solve complex problems under
uncertainty. In business, very few things are certain, and managers must often make decisions based on
their instincts instead of being able to use reliable data. Operations research techniques fill this void with
methods that quantify issues and give business managers a better basis for making decisions.
5. What are the steps involved in planning and control. (April 2017)
Production planning is “the administrative process that takes place within a manufacturing business and
that involves making sure that sufficient raw materials, staff and other necessary items are procured and
ready to create finished products according to the schedule specified”, as defined by the Business
Dictionary.
A production plan serves as a guide for your company’s production activities. It establishes and
sequences activities which must be carried out to achieve a production target, so that all staff involved
are aware of who needs to do what, when, where and how.
A production plan will help you meet product demand while minimizing production time and cost by
improving process flow, reducing the waiting time between operations, and optimizing use of plant,
equipment and inventory. In order to do this, you must align your production plan to your business
strategy and business plan, and support production planning by coordinating with other departments,
such as procurement, finance and marketing.
STEP 1. Forecast the demand of your product
Estimate your demand, so that you know how many products you need to produce during a specific time
period. You may have already some confirmed orders for the next couple of month, but on top of that,
you need to predict how many more may come.
Different methods exist to forecast your product demand. A traditional technique to estimate product
demand is based on historical information (e.g. orders placed by your customers in the past). While this
is a very common method, you need to consider external and internal events in your business
environment that could alter past patterns. For example, new market trends, a slowdown in the economy,
or a new marketing campaign that could increase or decrease your product demand compared to what
happened in the past.
STEP 2. Determine potential options for production
Determine the different production options available to meet the forecasted demand of your product. For
example, if you want to produce 100 shirts, you need to use a certain number of machines, human
resources, materials, and time. Different combinations of these inputs can lead to different production
times and costs.
a. Start by mapping all the steps of your production process. When doing so, take into account if
tasks are sequenced or dependent on other tasks, or if they happen simultaneously or independently.
Below is an example of how a simple process-mapping flowchart could look. Each box represents a task
of your production process. The map of the production process will be different and unique to each
company. Think about how to improve process flow by eliminating bottlenecks.
b. Determine the resources needed to complete each task involved in your production process.
Look at how different combination of resources lead to different production times and costs:
 Human Resources. Determine the number of staff that will be involved in each phase of the
production process, their availability, and the cost. Make sure their time is well utilized.
 Machinery and Equipment. Identify the machines needed and their availability, including any
maintenance or replacement that may be needed.
 Materials. Make a list of all the materials needed for production and how you obtain them.
Assess the reliability of your suppliers, including delivery time. Having materials available when needed
is crucial for the production process.
 Inventory. It is important that you consider how to optimize your inventory. Keeping a large
inventory is expensive, but keeping a low inventory is risky if demand fluctuates on a regular basis.
Having a good inventory control system in place can help your firm accommodate variations in demand
and mitigate possible problems or delays that may occur during the production process. For more
information about how to manage your inventory, check out the video.
STEP 3. Choose the option for production that uses the combination of resources more effectively
Compare the cost and time of each potential production option and choose the option that uses the most
efficient combination of resources and that allows you to meet product demand. The chosen option
should maximize the operational capacity of your firm.
Always make sure you can cover the costs involved in the production process (purchase of materials,
office rent, payment of staff salary, leasing, etc.)
You need to share your production plan with all the departments and staff that contribute or interact with
the production process, including human resources, procurement, finances, marketing, etc. If everybody
knows what to do, and what materials and equipment should be used for each task of the production
process, operations will be smoother.
STEP 4. Monitor and control
You want to ensure that your plan is working in the way it is intended. Monitoring and controlling is
about comparing what is happening with what should be happening. Having a control system in place
helps you detect problems as soon as they occur, allowing you more time to correct before it is too late.
STEP 5. Adjust
Be prepared to adjust the plan if needed. The production plan needs to be flexible to accommodate
changes in customers’ demand (e.g. an important order that gets cancelled). Also, you need to take into
account possible risks that may arise during the production process (e.g. a machine breaks, a worker gets
sick or a supplier does not deliver on time) and have a risk mitigation plan.
6. What are the steps involved in standard purchasing procedure.
Purchase control is an element of material control. Material procurement is known as the purchase
function. The functional responsibility of purchasing is that of the purchase manager or the purchaser.
Purchasing is an important function of materials management because in purchase of materials, a
substantial portion of the company's finance is committed which affects cash flow position of the
company. Success of a business is to a large extent influenced by the efficiency of its purchase
organization. The advantages derived from a good and adequate system of the purchase control are as
follows:
a) Continuous availability of materials: It ensures the continuous flow of materials. so production
work may not be held up for want of materials. A manufacturer can complete schedule of production in
time.
b) Purchasing of right quantity: Purchase of right quantity of materials avoids locking up of working
capital. It minimizes risk of surplus and obsolete stores. It means there should not be possibility of
overstocking and understocking.
c) Purchasing of right quality: Purchase of materials of proper quality and specification avoids waste
of materials and loss in production. Effective purchase control prevents wastes and losses of materials
right from the purchase till their consumptions. It enables the management to reduce cost of production.
d) Economy in purchasing: The purchasing of materials is a highly specialized function. By
purchasing materials at reasonable prices, the efficient purchaser is able to make a valuable contribution
to the success of a business.
e) Works as information centre: It serves as a function centre on the materials knowledge relating to
prices, sources of supply, specifications, mode of delivery, etc. By providing continuous information to
the management it is possible to prepare planning for production.
f) Development of business relationship: Purchasing of materials from the best market and from
reliable suppliers develops business relationships. The result is that there may be smooth supply of
materials in time and so it avoid disputes and financial losses.
g) Finding of alternative source of supply: If a particular supplier fails to supply the materials in time,
it is possible to develop alternate sources of supply. the effect of this is that the production work is not
disturbed.
h) Fixing responsibilities: Effective purchase control fix the responsibilities of operating units and
individuals connected with the purchase, storage and handling of materials.
In short, the basic objective of the effective purchase control is to ensure continuity of supply of requisite
quantity of material, to avoid held up of production and loss in production and at the same time reduces
the ultimate cost of the finished products.
7. Explain the various methods of purchasing.
Some of the methods of purchasing are discussed as follows:
1. Purchasing by Requirement:
This method refers to those goods which are purchased only when needed and in required quantity. The
goods which are not regularly required are purchased in this way. On the other hand it refers to the
purchase of emergency goods. These goods are not kept in store. Purchasing department must be in
knowledge of the suppliers of such goods so that these are purchased without loss of time.
2. Market Purchasing:
Market purchasing refers to buying goods for taking advantages of favourable market situations.
Purchases are not made to meet immediate needs but are acquired as per the future requirements. This
method will be useful if future needs are estimated accurately and purchases are made whenever
favourable market situations arise. The market situation is constantly studied for forecasting price trends.
ADVERTISEMENTS:
The advantages of this method are: lower purchase prices, more margin on finished products due to
lower material cost and saving in purchase expenses. This method suffers from some limitations: losses
in case of wrong judgment, fear of obsolescence, higher storing expenses due to more purchases.
3. Speculative Purchasing:
Speculative purchasing refers to purchases at lower prices with a view to sell them at higher prices in
future. The attention in this method is to earn profits out of price rises later on. The purchases are not
made as per the production needs of the plant rather these are far in excess of such requirements. A cloth
mill may purchase cotton in the market when prices are low with the attention of earning profits out of its
sales when prices go up.
Speculative purchasing should not be confused with market purchasing. The former is done to earn
profits out of future price rises where as the latter is concerned with purchasing for own needs when
favourable market situations exist. Though speculative purchasing may result in profits but there are
chances of prices going down in future, fear of obsolescence and incurring higher storage costs.
4. Purchasing for Specific Future Period:
This method is used for the purchase of those goods which are regularly required. These goods areneeded
in small quantity and chances of price fluctuations are negligible. The needs for specific period are
assessed and purchases made accordingly. The requirements for such purchases may be assessed on the
basis of past experience, period for which supplies are needed, carrying cost of inventory etc.
5. Contract Purchasing:
ADVERTISEMENTS:
In the words of Spriegel it is “the purchasing under contract, usually formal, of needed materials,
delivery of which is frequently spread over a period of time.” Under this method a specific quantity of
materials is contracted to be purchased and delivery is taken in future. Even though the goods are
procured in future but the price and other terms and conditions are fixed at the time of contract. This
method may be useful when price rises in future may be expected and material requirements for future
may be accurately estimated.
6. Scheduled Purchasing:
Under this method the suppliers are supplied a probable time schedule for material requirements so that
they are in a position to arrange these in time. An accurate production schedule is prepared for estimating
future material needs. The suppliers are informed of probable needs and orders are sent accordingly. The
schedule provided by the purchaser to the vendor is not a contract. This is only a gentleman’s agreement
for terms and conditions of purchases. The main objectives of this method are: minimum inventory,
prompt service. low prices, quality goods etc.
7. Group Purchasing of Small Items:
Sometimes a number of small items are required to be purchased. The prices of these items are so small
that costs of placing orders may be more than prices. In such situations the buyer places order with a
vendor for all these items. The purchase price is agreed to be by adding some percentage of profit in the
dealer’s cost. This method will be used only when dealer’s records are open to inspection for determining
his cost. This type of purchasing reduces the cost of the buyer by eliminating much clerical work.
8. Co-operative Purchasing:
Small industrial units may join to pool their requirements and then place bulk orders with dealers. This
will help them in availing rebates on large quantity purchases, cash discounts and savings in
transportation costs. After receiving the materials these are divided among the member units. Co-
operative purchasing helps small units in availing the benefits of bulk purchasing.
8. What are the steps in quality control?
Quality control refers to the technical process that gathers, examines, analyze & report the
progress of the project & conformance with the performance requirements
The steps involved in quality control process are
1) Determine what parameter is to be controlled.
2) Establish its criticality and whether you need to control before, during or after results are
produced.
3) Establish a specification for the parameter to be controlled which provides limits of
acceptability and units of measure.
4) Produce plans for control which specify the means by which the characteristics will be
achieved and variation detected and removed.
5) Organize resources to implement the plans for quality control.
6) Install a sensor at an appropriate point in the process to sense variance from specification.
7) Collect and transmit data to a place for analysis.
8) Verify the results and diagnose the cause of variance.
9) Propose remedies and decide on the action needed to restore the status quo.
10) Take the agreed action and check that the variance has been corrected.
Advantages and disadvantages
 Advantages include better products and services ultimately establishing a good reputation for
a company and higher revenue from having more satisfied customers.
 Disadvantages include needing more man power/operations to maintain quality control and
adding more time to the initial process.
9. Explain the following:
(i) Purchase control
Purchase control is an element of material control. Material procurement is known as the purchase
function. The functional responsibility of purchasing is that of the purchase manager or the purchaser.
Purchasing is an important function of materials management because in purchase of materials, a
substantial portion of the company's finance is committed which affects cash flow position of the
company. Success of a business is to a large extent influenced by the efficiency of its purchase
organization. The advantages derived from a good and adequate system of the purchase control are as
follows:
i) Continuous availability of materials: It ensures the continuous flow of materials. so production
work may not be held up for want of materials. A manufacturer can complete schedule of production in
time.
j) Purchasing of right quantity: Purchase of right quantity of materials avoids locking up of working
capital. It minimizes risk of surplus and obsolete stores. It means there should not be possibility of
overstocking and understocking.
k) Purchasing of right quality: Purchase of materials of proper quality and specification avoids waste
of materials and loss in production. Effective purchase control prevents wastes and losses of materials
right from the purchase till their consumptions. It enables the management to reduce cost of production.
l) Economy in purchasing: The purchasing of materials is a highly specialized function. By
purchasing materials at reasonable prices, the efficient purchaser is able to make a valuable contribution
to the success of a business.
m) Works as information centre: It serves as a function centre on the materials knowledge relating to
prices, sources of supply, specifications, mode of delivery, etc. By providing continuous information to
the management it is possible to prepare planning for production.
n) Development of business relationship: Purchasing of materials from the best market and from
reliable suppliers develops business relationships. The result is that there may be smooth supply of
materials in time and so it avoid disputes and financial losses.
o) Finding of alternative source of supply: If a particular supplier fails to supply the materials in time,
it is possible to develop alternate sources of supply. the effect of this is that the production work is not
disturbed.
p) Fixing responsibilities: Effective purchase control fix the responsibilities of operating units and
individuals connected with the purchase, storage and handling of materials.
In short, the basic objective of the effective purchase control is to ensure continuity of supply of
requisite quantity of material, to avoid held up of production and loss in production and at the same
time reduces the ultimate cost of the finished products
(ii) Maintenance Control
Maintenance department has to excercise effective cost control, to carry out the maintenance functions
in a pre-specified budget, which is possible only through the following measures:
First line supervisors must be apprised of the cost information of the various materials so that the
objective of the management can be met without extra expenditure on maintenance functions
A monthly review of the budget provisions and expenditures actually incurred in respect of each
center/shop will provide guidlines to the departmental head to exercise better cost control.
The total expenditure to be incurred can be uniformly spread over the year for better budgetary control.
however, the same may not be true in all cases particularly where overhauling of equipment has to be
carried out due to unforseen breakdowns. some budgetary provisions must be set aside, to meet out
unforeseen exigencies.
The controllable elements of cost such as manpower cost and material cost can be discussed with the
concerned personnel, which may help in reducing the total cost of maintenance. Emphasis should be
given to reduce the overhead expenditures, as other expenditures cannot be compromised.
It is observed through studies that the manpower cost is normally fixed, but the same way increase due
to overtime cost. however, the material cost, which is the prime factor in maintenance cost, can be
reduced by timely inspections designed, to detect failures. If the
inspection is carried out as per schedule, the total failure of parts may be avoided, which otherwise
would increase the maintenance cost. the proper handling of the equipment by the operators also
reduces the frequency of repair and material requirements. Operators, who check their equipment
regularly and use it within the operating limits, can help avoid many unwanted repairs. In the same way
a good record of equipment failures/ maintenance would indicate the nature of failures, which can then
be corrected even permanently.
(iii) Quality Control.
Quality control refers to the technical process that gathers, examines, analyze & report the
progress of the project & conformance with the performance requirements
The steps involved in quality control process are
1) Determine what parameter is to be controlled.
2) Establish its criticality and whether you need to control before, during or after results are
produced.
3) Establish a specification for the parameter to be controlled which provides limits of acceptability
and units of measure.
4) Produce plans for control which specify the means by which the characteristics will be achieved
and variation detected and removed.
5) Organize resources to implement the plans for quality control.
6) Install a sensor at an appropriate point in the process to sense variance from specification.
7) Collect and transmit data to a place for analysis.
8) Verify the results and diagnose the cause of variance.
9) Propose remedies and decide on the action needed to restore the status quo.
10) Take the agreed action and check that the variance has been corrected.
Advantages and disadvantages
 Advantages include better products and services ultimately establishing a good reputation for a
company and higher revenue from having more satisfied customers.
 Disadvantages include needing more man power/operations to maintain quality control and
adding more time to the initial process.
10. What is productivity? Explain the methods of improving productivity in IT industry.(May 2016)
Productivity refers to the ratio between the output from production processes to its input.
Productivity may be conceived of as a measure of the technical or engineering efficiency of production.
As such quantitative measures of input, and sometimes output, are emphasized.
Typical Productivity Calculations
Measures of size and resources may be combined in many different ways. The three common
approaches to defining productivity based on the model of Figure 2 are referred to as physical,
functional, and economic productivity. Regardless of the approach selected, adjustments may be needed
for the factors of diseconomy of scale, reuse, requirements churn, and quality at delivery.
a) Physical Productivity
This is a ratio of the amount of product to the resources consumed (usually effort). Product may be
measured in lines of code, classes, screens, or any other unit of product. Typically, effort is measured in
terms of staff hours, days, or months. The physical size also may be used to estimate software
performance factors (e.g., memory utilization as a function of lines of code).
b) Functional Productivity
This is a ratio of the amount of the functionality delivered to the resources consumed (usually
effort). Functionality may be measured in terms of use cases, requirements, features, or function points
(as appropriate to the nature of the software and the development method). Typically, effort is measured
in terms of staff hours, days, or months. Traditional measures of Function Points work best with
information processing systems. The effort involved in embedded and scientific software is likely to be
underestimated with these measures, although several variations of Function Points have been
developed that attempt to deal with this issue.
c) Economic Productivity
This is a ratio of the value of the product produced to the cost of the resources used to produce
it. Economic productivity helps to evaluate the economic efficiency of an organization. Economic
productivity usually is not used to predict project cost because the outcome can be affected by many
factors outside the control of the project, such as sales volume, inflation, interest rates, and substitutions
in resources or materials, as well as all the other factors that affect physical and functional measures of
productivity. However, understanding economic productivity is essential to making good decisions
about outsourcing and subcontracting. The basic calculation of economic productivity is as follows:
Economic Productivity = Value/Cost
PROBLEMS IN MEASUREMENT OF PRODUCTIVITY OF KNOWLEDGE WORKERS
Productivity implies measurement, which in turn, is an essential step in the control process.
Although there is a general agreement about the need for improving productivity, there is a little
consensus about the fundamental causes of the problem and what to do about them. The blame has been
assigned to various factors. Some people place it on the greater proportion of less skilled workers with
respect to the total labor force, but others disagree. There are those who see cutback in research and the
emphasis on immediate results as the main culprit. Another reason given for the productivity dilemma
is the growing affluence of people, which makes them less ambitious. Still others cite the breakdown in
family structure, the workers’ attitudes, and government policies and regulations. Another problem is
that the measurement of skills work is relatively easy, but it becomes more difficult for knowledge
work. The difference between the two kinds is the relative use of knowledge and skills.
11. List out the need and characteristics of MIS. (May 2016)
System approach:MIS follows the system approach, which implies a step by step approach to the study
of system and its performance in the light of the objective for which it has been constituted. It means
taking an inclusive view at sub-systems to operate within an organization.
Management-oriented:
The management-oriented characteristic of MIS implies that top-down approach needs to be followed for
designing MIS. A top-down method says the initiation of system development determines management
requirements as well as business goals. MIS implies the management dynamically to the system
development towards the completion of management decision.
As per requirements:The design and development of MIS should be as per the information required by
the managers. The required design and development information is at different levels, viz., strategic
planning, management control and operational control. It means MIS should cater to the specific needs of
managers in the hierarchy of an organization.
Future-oriented:
The design and development of MIS should also be future purpose so that the system is not restricted to
provide only the past information.
Integrated:
A complete MIS is a combination of its multiple sub-components to provide the relevant information to
take out a useful decision. An integrated system, which blends information from several operational
areas, is a necessary characteristic of MIS.
Common data flows:This concept supports numerous basic views of system analysis such as avoiding
duplication, combining similar functions and simplifying operations. The expansion of common data
flow is a cost-effectively and logical concept.
Long-term planning:MIS should always develop as a long term planning because it involves logical
planning to get success of an organization. While developing MIS, the analyst should keep future
oriented analysis and needs of the company in mind.
Relevant connection of sub-system planning:The MIS development should be decomposing into its
related sub-systems. These sub-systems must be meaningful with proper planning.
Central database:it contains data in tabular form. The data base is responsible to operations like
insertion, deletion, updation of records. This database covers information related to inventory, personnel,
vendors, customers, etc. the data stored in the database.
12. Write short notes on : (May 2016)
(i) Control of productivity and management,
Mangers have various means of controlling productivity and monitoring the individuals under their
direction. Some controls are sophisticated and involve process improvement techniques, while others are
standard activities seen in all types of organizations. Management must promote productivity in order for
businesses to remain competitive in the marketplace, which is accomplished through a systematic
approach to quality and employee performance.
Quality Management Systems
One method for enhancing productivity involves implementing a quality management system. This allows
management to monitor and control the quality of the products and services produced by a company. A
process excellence leadership team is a common component of a quality management system, which
involves senior leaders meeting together on a regular basis to discuss organizational efficiency. A well-
constructed and properly functioning system keeps waste and defects at a low level and enhances
productivity.
Balanced Scorecards
A balanced scorecard measures the operational and strategic performance of an organization through
financial and non-financial metrics. If productivity is slipping, business leaders can evaluate the different
categories on a balanced scorecard to find the reasons why operations are suffering and make adjustments
accordingly. Financial, internal business process, customer service and training categories are among the
issues tracked on a typical balanced scorecard. This tool allows management to monitor productivity
using analytical measures.
Employee Interviews
Selecting the right people to bring into an organization directly impacts productivity. Effective selection
processes typically consist of multiple rounds of interviews with different managers. Although the exact
process differs based on the size of the organization, selection should be structured in a manner that
screens out incompatible candidates. Managers must take interviews seriously and prepare in advance.
Asking the right questions also is critical. If leaders decide to hire their friends or acquaintances instead of
the most qualified candidates, operations suffer as a result.
Employee Reviews
Standardized employee reviews allow managers to rate their teams and provide feedback on an individual
basis. If certain employees are struggling to meet their numbers or job requirements, it is up to leaders to
coach them and give them direction. Not all organizations use employee reviews, citing a minimal return
on investment. However, managers who do perform reviews have the opportunity to impact employee
behavior and ultimately influence productivity. Managers need to hone their communication skills in order
for performance reviews to have meaning.
ii) Direct and preventive control.
13. Explain the uses of computers and IT in management control? (April 2017, Nov 2016, Nov 2017)
In virtually every business, a computer is an essential tool for running the day-to-day operations,
enhancing productivity and communicating with customers, suppliers and the public. Managers use
computers for a variety of reasons, including keeping their teams on track, budgeting and planning
projects, monitoring inventory and preparing documents, proposals and presentations. Managers need
to understand not only the basic functions of the corporate software tools used in the office but also
the Internet and other external computing tools that can improve the way they manage their
departments.
Business Planning
Business planning can take up a lot of a manager's time, but computer programs make it easier. From
using email programs like Outlook or Google Mail to set appointments, tasks and deadlines to using
financial tools to develop budgets and project proposals, using computers to plan the day-to-day
activities of a business is essential. Managers also use the Internet to research their industries, the
competition and to look for ideas to help them create plans to engage customers, win more business
and succeed in the competitive world of business.
Record Keeping
Managers keep track of a lot of information that is vital to the company's success. From customer
records to financial records to employee records, the data a company has to store are seemingly
endless. Using computers to store and manage documents, files and records reduces the amount of
physical storage a company needs and also allows managers to have easy access to their files using
simple document search methods. Additionally, by keeping records, managers can easily share
information about an employee's history and job performance with other managers in the company.
14. Explain the Various control techniques? (Nov 2017)
Direct Supervision and Observation
'Direct Supervision and Observation' is the oldest technique of controlling. The supervisor himself
observes the employees and their work. This brings him in direct contact with the workers. So, many
problems are solved during supervision. The supervisor gets first hand information, and he has better
understanding with the workers. This technique is most suitable for a small-sized business.
Financial Statements
All business organisations prepare Profit and Loss Account. It gives a summary of the income and
expenses for a specified period. They also prepare Balance Sheet, which shows the financial position of
the organisation at the end of the specified period. Financial statements are used to control the
organisation. The figures of the current year can be compared with the previous year's figures. They can
also be compared with the figures of other similar organisations.
Ratio analysis can be used to find out and analyse the financial statements. Ratio analysis helps to
understand the profitability, liquidity and solvency position of the business.
3. Budgetary Control
A budget is a planning and controlling device. Budgetary control is a technique of managerial control
through budgets. It is the essence of financial control. Budgetary control is done for all aspects of a
business such as income, expenditure, production, capital and revenue. Budgetary control is done by the
budget committee.
4. Break Even Analysis
Break Even Analysis or Break Even Point is the point of no profit, no loss. For e.g. When an
organisation sells 50K cars it will break even. It means that, any sale below this point will cause losses
and any sale above this point will earn profits. The Break-even analysis acts as a control device. It helps
to find out the company's performance. So the company can take collective action to improve its
performance in the future. Break-even analysis is a simple control tool.
5. Return on Investment (ROI)
Investment consists of fixed assets and working capital used in business. Profit on the investment is a
reward for risk taking. If the ROI is high then the financial performance of a business is good and vice-
versa.
ROI is a tool to improve financial performance. It helps the business to compare its present
performance with that of previous years' performance. It helps to conduct inter-firm comparisons. It also
shows the areas where corrective actions are needed.
6. Management by Objectives (MBO)
MBO facilitates planning and control. It must fulfill following requirements :-
1. Objectives for individuals are jointly fixed by the superior and the subordinate.
2. Periodic evaluation and regular feedback to evaluate individual performance.
3. Achievement of objectives brings rewards to individuals.
7. Management Audit
Management Audit is an evaluation of the management as a whole. It critically examines the full
management process, i.e. planning, organising, directing, and controlling. It finds out the efficiency of
the management. To check the efficiency of the management, the company's plans, objectives, policies,
procedures, personnel relations and systems of control are examined very carefully. Management
auditing is conducted by a team of experts. They collect data from past records, members of
management, clients and employees. The data is analysed and conclusions are drawn about managerial
performance and efficiency.
8. Management Information System (MIS)
In order to control the organisation properly the management needs accurate information. They need
information about the internal working of the organisation and also about the external environment.
Information is collected continuously to identify problems and find out solutions. MIS collects data,
processes it and provides it to the managers. MIS may be manual or computerised. With MIS, managers
can delegate authority to subordinates without losing control.
9. PERT and CPM Techniques
Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) techniques
were developed in USA in the late 50's. Any programme consists of various activities and sub-activities.
Successful completion of any activity depends upon doing the work in a given sequence and in a given
time
Importance is given to identifying the critical activities. Critical activities are those which have to be
completed on time otherwise the full project will be delayed.
So, in these techniques, the job is divided into various activities / sub-activities. From these activities,
the critical activities are identified. More importance is given to completion of these critical activities.
So, by controlling the time of the critical activities, the total time and cost of the job are minimised.
10. Self-Control
Self-Control means self-directed control. A person is given freedom to set his own targets, evaluate his
own performance and take corrective measures as and when required. Self-control is especially required
for top level managers because they do not like external control.
The subordinates must be encouraged to use self-control because it is not good for the superior to
control each and everything. However, self-control does not mean no control by the superiors. The
superiors must control the important activities of the subordinates.
15. Illustrate and explain the three steps in the control process. (April 2018)\
There are three basic steps in a control process:
 Establishing standards.
 Measuring and comparing actual results against standards.
 Taking corrective action.
Establishing Standards
The first step in the control process is to establish standards against which results can be measured. The
standards the managers desire to obtain in each key area should be defined as far as possible in
quantitative terms. Standards expressed in general terms should be avoided. Standards need to be flexible
in order to adapt to changing conditions.
The standard should emphasis the achievement of results more than the conformity to rules and methods.
If they do not do so, then people will start giving more importance to rules and methods than to the final
results.
While setting the standards, the following points have to be borne in mind:
a. The standards must be clear and intelligible. If the standards are clear and are understood by the
persons concerned, they them selves will be able to check their performance.
b. Standards should be accurate, precise, acceptable and workable.
c. Standards are used as the criteria or bench marks by which performance is measured in the control
process. It should not be either too high or too low. They should be realistic and attainable.
d. Standards should be flexible i.e., capable of being changed when the circumstances require so.
Measuring and Comparing actual Results against Standards
The second step in the control process is to measure the performance and compare it with the
predetermined standards.
Measurement of performance can be done by personal observation, by reports, charts and statements. If
the control system is well organised, quick comparison of these with the standard figure is quite possible.
This will reveal variations.
After the measurement of the actual performance, the actual performance should be compared with the
standards fixed quickly. A quick comparison of actual performance with the standard performance is
possible, if the control system is well organised. While comparing the actual performance with the
standards fixed, the manager has to find out not only the extent of variations but also the causes of
variations. This is necessary, because some of the variations may be unimportant, while others may be
important and need immediate corrective action by the manager.
Taking Corrective Action
After comparing the actual performance with the prescribed standards and finding the deviations, the next
step that should be taken by the manager is to correct these deviations. Corrective action should be taken
without wasting of time so that the normal position can be restored quickly. The manager should also
determine the correct cause for deviation.
Taking corrective action can be achieved in the following way:
a. The manager should try to influence environmental conditions and external situations in such a
way as to facilitate the achievement of goals.
b. He should review with his subordinates the instructions given earlier so that hemay be able to give
clear, complete and reasonable instructions in future.
c. There are many external forces which cannot be adjusted by the manager. They have to be
accepted as the facts of the situation, and the executives should revise their plans in the light of
these changing forces.
16. Discuss the various types of tools used to monitor and measure organizational performance. (April
2018)
Accurate measurement of organizational performance allows managers to correct deficiencies, leading to
cost-savings and higher customer satisfaction. But without the right tools, it's hard to adjust operations and
lead personnel in the right direction. Several specific quality tools measure organizational performance
and provide meaningful feedback to leadership.
Control Charts
Control charts are graphs that track the performance of a process over a period of time. Elements of
control charts include a central line for the average process performance, an upper control limit and a
lower control limit with data points plotted in time order. By comparing current and historical data,
managers are able to determine if a process is in control or whether variation in process outputs is normal.
Control charts give management a scientific way of measuring performance.
Pareto Diagrams
Pareto Diagrams are bar charts that plot the frequency of defects or costs, with the largest bars placed to
the left. In this way, managers can see the areas of greatest concern quickly, assessing the areas of
operations that need adjustment based on the most important defects or costs. Once these issues are
corrected, smaller defects often are eliminated. Managers save time and resources by focusing on the
problem areas that have the largest impact on operations.
Cause-and-Effect Diagrams
Cause-and-effect diagrams, also known as fishbone diagrams, identify the possible causes for defects
within a process or system. A problem statement is examined by discussing the potential for defects in
methods, machines, people, materials, measurement and environment. Employees more easily can
visualize processes and systems that are mapped out in this fashion. These diagrams and discussions are
effective ways to identify deficiencies and talk about solutions.
Process Mapping
Process mapping graphically depicts the different steps and decision points within a process. This tool can
be used by managers or employees to assess and standardize work tasks. It also allows subject matter
experts to communicate with managers about specific processes. Process maps are sometimes easier to
interpret than lengthy written procedures and can serve as benchmarks to measure performance against.
This quality tool and others make it easier to gauge operations in an objective manner.
17. Case study: Modern manufacturing company has been using a budgetary control system for the last 3 years.
When asked to explain the system, Mr.John, Managing Director of the company, observed: “We’re pretty flexible
in our budgetary system. Every manager is given a total amount that he or she can spent for the next year. We
don’t care how it is used as long as the total is not exceeded and organizational objectives are achieved.”
i) Discuss the merits and demerits of the company’s approach to budgeting.
ii) Do you agree or disagree with this approach? Explain your view. (Nov 2017)

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MG6851 Principles of Management Department of ECE 2018 - 2019

MG6851 PRINCIPLES OF MANAGEMENT LT P C 3 0 0 3

St. Joseph’s Institute of Technology 1

RELATION BETWEEN COURSE CONTENT WITH COs

UNIT II: PLANNING

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UNIT III: ORGANISING

UNIT IV: DIRECTING

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UNIT – I: INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS

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P – Planning; O – Organizing; S – Staffing; D – Directing; CO – Coordinating; R – Reporting; B – Budgeting

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4. What are the various skills required by a manager?

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23. What do you understand by organization chart? (Nov 2017)

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3.List the steps involved in recruiting a graduate engineer trainee.

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11. Differentiate between formal and informal organization.

12. (i) Discuss the types of centralization.

Significance of Organization Structure

3. Explain the motivation theories.(May 2016, April 2017, Nov 2017)

3. What is concurrent control?

9. Define productivity. (Nov 2017)

Three types of control are distinguished according to when control is exerted.

BUDGETARY CONTROL TECHNIQUES

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