TUTOR MARKED ASSIGNMENT
Course Code: ECO-03
Course Title: Management Theory
Assignment Code: ECO-03/TMA/2015-16
Coverage: All Blocks
Maximum Marks: 100
Attempt all
questions.
1. “Management
Principles focus on one of the best way of doing things and are prescriptive”.
Do you agree? Give reasons and explain various principles of management. (6+14)
Ans. Principles of Management: The
word principles mean a fundamental truth that can establish relationship between cause and effect and also
helps in thinking out a plan for an action. The principles help in predicting
the results expected to follow through set actions undertaken and thus provide
basis for a scientific action plan. Meaning of management principles in simple
word is that they form the basis
of all managerial actions through which desired goals needs to be achieved. By
nature these principles are flexible and are more or less based on experiences
and can adopt to changing situations and problems and thus became the pillars
of management as scientific process.
Need for Management Principles: Management
principles are needed for successful practice of managerial process. They help the managers to
use the basic principles for decision making. They help the art of management
by suggesting as to how the things should be done to obtain the optimum
benefits. These principles simplify management practice by bringing out the
core aspects of management activities for the good of the organization. The
management principle of “science, not rule of the thumb” suggests
that every task should be done with minimum effort and energy and additional
work can be done with the saved energy. By saving time, efforts and energy
activities can be made economical and enhance the productivity of the
resources. From the above explanation we can say that management principles
focuses on the best way of doing things and it is prescriptive in nature.
Various Principles of Management: Different management experts have explained different
principles on the basis of their research. Henry Fayol, a famous industrialist
of France, has described fourteen principles of management in his book General
and Industrial Management.
While presenting the principles of management Fayol has kept two things
in mind. Firstly, the list of the principles of management should not be long
but should be suggestive and only those principles should be explained which
become applicable in most of the situations. Secondly, the principles of
management should be flexible and not rigid so that changes can be made in them
in case of need.
Fayol suggested
the following 14 principles:
a)
Division
of work: Division of work is important for reducing work burden of an
employee and improves his skills. This helps an individual to get
specialization in his area of expertise. This helps to increase the
productivity of an individual.
b)
Authority
and Responsibility: Authority is the right to
issue command and make decisions. Responsibility is obligation towards
organization and decisions made. There must be balance in authority and
responsibility. If there is no authority, he cannot fulfill his responsibility
and if an individual has an authority he must have equal responsibility.
c)
Discipline: Discipline is important for the success of an organization.
There must be good employee-employer relationship. Employees must obey orders
and employer must provide good leadership.
d)
Unity
of command: According to this principle of Fayol, every employee should
receive orders and instructions from one boss and he should be responsible and
accountable to him only.
e)
Unity
of Direction: One objective and one plan. There must be one plan for an
organization at a time and should be directed by one manager using the same
plan.
f)
Subordination
of individual interests to the general interest: The
interests of any one employee or group of employees should not take precedence
over the interests of the organization as a whole.
g)
Remuneration: Fair wage for the service is important. Every worker should
be paid fair remuneration.
h)
Centralization: Centralization refers to the degree to which subordinates
are involved in decision making. Whether decision making is centralized (to
management) or decentralized (to subordinates) is a question of proper
proportion.
i)
Scalar
Chain: The line of authority from top management to the lowest ranks
represents the scalar chain. There should be a chain for the flow of
communication. Authority must flow from top management to lower and
responsibility must flow vice-versa.
j)
Order: There must be an order for everything. Material and people must be
placed in right place. Right person at right place and right material at right
time and in right place.
k)
Equity: manager should treat all his subordinates equally. There should be
no difference or should not show special attention or kind to any particular
subordinate.
l)
Stability
of tenure of personnel: There must be stability and
job security. High employee turnover affects organization adversely.
m)
Initiative: The successful management provides an opportunity to its employees
to suggest their new ideas, experiences and more convenient methods of work. It
is the duty of the manager to encourage the feeling of initiative among the
employees for doing some work
n)
Esprit
de Corps: Promoting team spirit will build harmony and unity within
the organization.
2. What is
meant by morale? Outline the factors that influence the morale of employees in
an organization. What is the significance of leadership vis-a-vis morale? (4+8+8)
Ans: Morale is a state of mind or willingness to work
which in turn affects individuals and organizational objectives.
According to Flippo “morale is a mental
condition or attitudes of individuals and groups which determine their
willingness to co-operate. Good morale is evidenced by employee enthusiasm,
voluntary conformance with regulation and orders, and a willingness, to
cooperate with others in the accomplishment of an organization’s objectives.
Poor morale is evidenced by surliness, insubordination, a feeling of
discouragement and dislike of the job, company and associates. ”
In the words of Yoder, “morale is a
feeling, somewhat related to esprit de corps, enthusiasm or zeal. For group of
workers, morale, according to a popular usage of the word, refers to the
over-all tone, climate or atmosphere of work, perhaps vaguely sensed by the
members.’
Factors
Affecting Morale: The employee morale is a very complex phenomenon and is
influenced by many factors. Different authors like McFarland. Bradshaw and
Krugman. Roach and Apple white name given different criterion for the
determination of morale. On
the basis of all these classifications, the important factors in the
determination of levels of morale are as describe below:
1.
The Organization: The first factor affecting the employee morale is the
organization itself. The organization influences the worker’s attitudes to
their jobs. The public reputation of an organization may build up for better or
worse, their attitudes towards it.
2.
The Nature of Work: The nature of the work, the worker is expected to perform
also affects his attitude towards the job as well as his morale. If the
employee is expected to perform routine or specialized jobs, he will feel bored
and alienated. Repetition of the same task again and again makes the working
situation worse for the employees. Another factor is the large impersonal
organizational structure. Sometimes, if the employee feels that he is just a
cog in the machine instead of a person, his morale will become very low. Lack
of understanding of organizational goals may also affect the morale. Another
factor which causes low morale is the assembly line operations moving at a
constant speed.
3.
The Level of Satisfaction: The level of satisfaction, a
worker derives from his job is another determinant of morale. If the job
factors and the satisfaction they bring is perceived to be favourable by the
employee morale will tend to be higher than if there factors seem to be
unfavourable. The job factors include the factors such as opportunities for
promotions, job security, steadiness of employment, opportunities to learn the
job and to use his own ideas, pay working conditions, recognition,
cooperativeness of co-workers, group relationship etc.
4.
The Level of Supervision: The level of supervision
received by an employer has a tremendous influence on his morale. High rate of
employee turnover indicates that the leadership is ineffective. On the other
hand, if employees are given freedom to do the job, their morale will be high.
Nobody likes to be supervised all the time.
5.
Concept of Self: What is the employee’s concept of himself? The answer to
this question influences the attitudes of the employees to the organizational
environment. How an employee perceives himself, is a very important question.
The morale of persons who have lots of self confidence or who enjoy good mental
and physical health is generally high as compared to those who lack self
confidence or suffer from poor physical or mental health.
6.
Worker’s Perception of Rewards System: The worker’s perception of
past rewards and future opportunities for rewards affect their morale to a
substantial extent. If the workers regard the rewards as fair and satisfactory,
their morale will tend to by higher than if the perception is in the opposite
direction. Moreover, if the rewards and opportunities for the future tend to be
bleak, morale will tend to be low as compared to the situation where the worker
perceives opportunities for satisfaction and for attainment in the rewards that
lie ahead in the future.
7.
The Employee’s Age: Studies have reported that age and morale are directly
related. Other things being equal, elder employees seem to have higher morale.
This is because of the reason that perhaps younger workers are more
dissatisfied with higher expectations than their elders. The older employees
have more stability which comes with maturity, a serious attitude towards job.
more reliability, less absenteeism, proven steady work habits, a sense of
responsibility and loyalty and less tendency to be distracted by outside
interest as influences.
8.
The Employee’s Educational Level: Studies have concluded an
inverse relationship in the educational level of the employee and his morale.
Higher the educational level lower will be the job satisfaction and vice versa.
The higher he thinks he should be the more dissatisfied he will be.
9.
The Employee’s Occupational Level: The occupational level of the
employee also influences his level of morale. The higher up in organisational
hierarchy an employee is higher will be his morale. The morale of the people
who are lower in the levels of hierarchy is generally low because they compare
their own attainments with those of others.
Importance of Leadership in relation to Morale:
Leadership is an important function of management which helps to maximize
efficiency and to achieve organizational goals. The following points justify
the importance of leadership in a concern.
a)
Initiates
action- Leader is a person who starts the work by communicating the
policies and plans to the subordinates from where the work actually starts.
b)
Motivation- A leader proves to be playing an incentive role in the concern’s
working. He motivates the employees with economic and non-economic rewards and
thereby gets the work from the subordinates.
c)
Providing
guidance- A leader has to not only supervise but also play a guiding role
for the subordinates. Guidance here means instructing the subordinates the way
they have to perform their work effectively and efficiently.
d)
Creating
confidence- Confidence is an important factor which can be achieved through
expressing the work efforts to the subordinates, explaining them clearly their
role and giving them guidelines to achieve the goals effectively. It is also
important to hear the employees with regards to their complaints and problems.
e)
Building
morale- Morale denotes willing co-operation of the employees towards their
work and getting them into confidence and winning their trust. A leader can be
a morale booster by achieving full co-operation so that they perform with best
of their abilities as they work to achieve goals.
f)
Builds
work environment- Management is getting things done from people. An efficient work
environment helps in sound and stable growth. Therefore, human relations should
be kept into mind by a leader. He should have personal contacts with employees
and should listen to their problems and solve them. He should treat employees
on humanitarian terms.
g)
Co-ordination- Co-ordination can be achieved through reconciling personal
interests with organizational goals. This synchronization can be achieved
through proper and effective co-ordination which should be primary motive of a
leader.
3. Distinguish
between the following: (4×5)
i) Strategic
and Tactical Planning
Ans: Basic differences
between strategic planning and tactical planning:
a)
Since upper managers generally
have a better understanding of the organization as a whole than lower level
managers do, upper management generally develops the strategic plans and
because lower level managers generally have better understanding of the day to
day organizational operations, generally the lower level managers develop the
tactical plans.
b)
Because Strategic Planning
emphasizes analyzing the future and tactical planning emphasizes analysing the
everyday functioning of the organization,facts on which to base strategic plans
are usually more difficult to gather than are facts on which to base tactical
plans.
c)
Because strategic plans are based
primarily on a prediction of the future and tactical plans on known
circumstances that exist within the organization, strategic plans are generally
less detailed than tactical plans.
d)
Because strategic planning focuses
on the long term and tactical planning on the short term, strategic plans cover
a relatively long period of time whereas tactical plans cover a relatively
short period of time.
Despite their
differences, tactical and strategic planning are integrally related. Manager
need both tactical and strategic planning program, and these program must be
closely related to be successful.
ii) Autocratic
Style and Authoritative Style
Ans: Autocratic leadership is
a leadership style characterized by
individual control over all decisions and little input from group members.
Autocratic leaders typically make choices based on their ideas and judgments
and rarely accept advice from followers. Autocratic leadership involves
absolute, authoritarian control over a group.
An authoritarian leadership style is
being used when a leader dictates
policies and procedures, decides what goals are to be achieved, and directs and
controls all activities without any meaningful participation by the
subordinates.
iii) Formal
Communication and Informal Communication
Ans: Difference
between Formal and Informal Communication Channel
Basis
|
Formal
Communication
|
Informal
Communication
|
01.
Rules
|
In
Formal communication, Organizational rules are strictly followed.
|
It
does not generally follow the rules of organization
|
02.
Recognition
|
Such
communication requires official’s recognition.
|
In
informal communication, It does not require any official’s recognition.
|
03.
Flexibility
|
It is
inflexible in nature as it cannot be changed when desired.
|
Being
flexible, It can be changed easily.
|
04.
Secrecy
|
Such Communication is not free and open to
all. So, Secrecy is maintained here.
|
It is
free and open to all, So it is very difficult to maintain secrecy here. i.e.
Grapevine communication which
spread informally.
|
05.
Time & Cost
|
It
follows various rules of organization. So, It requires much time and cost.
|
Informal
communication does not bother for the formalities of organization and
therefore it requires less time and cost.
|
iv) PERT and
CPM
Ans:
Difference between PERT and CPM
1.The Program Evaluation and Review Technique (PERT) is a project
management technique or tool which is suitable for projects that have
unpredictable activities while the Critical Path Method (CPM) is a project
management tool which is suitable for projects that have predictable
activities.
2.CPM uses a single estimate for the time that a project can be completed
while PERT uses three estimates for the time that it can be completed.
3.CPM is a deterministic project management tool while PERT is a
probabilistic project management tool.
4.CPM allows project management planners to determine which aspect of the
project to sacrifice when a trade-off is needed in order to complete the
project while PERT does not.
4. Briefly
comment on the following: (4×5)
i) Individual
behaviour is closely liked with group behaviour.
Ans. Individual behaviour is closely
linked with the behaviour of the group to which he belongs. The group dictates changes in his behaviour.
Individuals observe those work standards which are prescribed by the group.
Informal leadership, rather than formal authority of managers is more important
for setting and enforcing group standards of performance. A a leader, a manager
may be more effective and acceptable to subordinates, if he adopts the
democratic style of. Behavioural scientists maintain that by nature most people
enjoy work and are motivated by self-control and self-development. Managers
should try to identity and provide necessary conditions conducive to the proper
and sufficient use of human potential. The managers attitude towards human
behaviour should positive. They should know that average man is not lazy by
nature. But he is ambition. Every man likes to work and prefers to assume
responsibilities. MacGregor maintains that employees favour self-direction and
self-control. Behaviouralists believe that in place of the concept of social
man the concept of self-actualizing man would be more appropriate to explain
human motivations.
ii) Medium
range plans have duration of more than one year.
Ans: Medium-term
plans outline the company's direction for several years into the future. Unlike
long-term plans, which may set goals that take decades to complete, medium-term
plans deal with time frames that typically span two to eight years into the
future. For example, an auto manufacturer may have a short-term plan that
outlines what needs to happen in the accounting department during the next
fiscal year, a medium-term plan that outlines new vehicle goals for the next
five years, and a long-term plan that addresses the car needs of a new
generation of buyers. A company's medium-term plan typically contains important
management directives regarding the direction of the company that may take a
few years to complete. For example, if a leading computer company wants to
create a workforce that's more autonomous and self-directed, it may specify
certain steps in its medium-term plan that must be followed to attain that
goal. This may include eliminating managers and flattening the company
bureaucratic structure --- processes that likely can't happen in the short
term. Medium-term objectives are generally those that relate to a period from
18 months to three years or sometimes five years (whichever is appropriate for
the organisation and people setting the objectives). These objectives will
therefore be broader, can be reviewed and may need to be amended with time.
iii) Delegation
is essential for management but decentralization is optional.
Ans: Delegation of authority is a process in which the
authority and powers are divided and shared amongst the subordinates. When the
work of a manager gets beyond his capacity, there should be some system of
sharing the work. This is how delegation of authority becomes an essential tool
in organization function. Through delegation, a manager, in fact, is
multiplying himself by dividing/multiplying his work with the subordinates. Decentralization
is the systematic delegation of powers of decision-making to the lower level
where the work is to be performed. It is concerned with the placement of
authority. When the organization is large and complex, management cannot
centrally control the total activities. So, the management and organization
divide the activities into different units and accordingly delegates authority
for decision making in decentralization. Thus, decentralization of authority
means the systematic distribution of authority and power to the lowest level of
organization for decision making in order to get the works done successfully.
But, Decentralisation is an optional policy
because it is on the top management of an organisation how much power and work
they want to share with the lower levels.
iv)
Organizational efficiency is ensured with the help of controls.
Ans: The term
control has different connotations depending upon the context of the use of the
term. In manufacturing it refers to a Device or mechanism installed or
instituted to guide or regulates the activities or operation of an apparatus,
machine, person, or system; in law it refers to controlling interest and in
management as an authority to order and manage the workings and management of
an entity. Control is a management process to aim at achieving defined goals
within an established timetable, and comprises of three components: (1) setting
standards, (2) measuring actual performance, and (3) taking corrective action.
The control system helps in improving organizational efficiency. Various
control devices act as motivators to managers. The performance of every person
is regularly monitored and any deficiency if present is corrected at the
earliest. Controls put psychological pressure on persons in the organization.
On the other hand control also enables management to decide whether employees
are doing right things. That is why controlling is the key in improving
performance.
5. Write Short Notes on the following: (4×5)
i) Span of
Control
Ans: In the
words of Spriegal, "Span of control means the number of people reporting
directly to an authority. The principle of span of control implies that no
single executive should have more people looking to him for guidance and
leadership than he can reasonably be expected to serve. The span of supervision
is also known as span of control, span of management, span of responsibility,
span of authority and span of direction.
Factors influencing the span of control: There are number of factors that
influence or determine the span of supervision in a particular organisation,
the most important of these are as follows:
a)
The capacity and ability of the
executive.
b)
Competence and training of
subordinates.
c)
Nature of Work.
d)
Time available for supervision.
e)
Degree of Decentralization and
Extent of Delegation
Type of span of control: Broadly speaking there are two types, of span of
control:
a) Wider Span of control: In this type of span, the supervisor controls
and guides the activities of subordinates directly under his control. Wider
span or supervision is favoured where workers are competent and trained.
b) Narrow Span of Supervision: under this type of supervision, there are
many levels and more supervisors are required to perform the job of guidance
and control for different activities. It increases the efficiency of
supervision but the cost of supervision is very high as compared to wider span
of supervision.
ii) Recruitment
Ans: Recruitment
is the process of searching for prospective employees and stimulating them to
apply for jobs in the organization. When more persons apply for job then there
will be a scope for recruiting better persons. The job-seekers too on the other
hand, are in search of organizations offering them employment. Recruitment is a
linkage activity bringing together those with jobs and those seeking jobs.
Flippo: “Recruitment is the process of searching prospective employees
and stimulating them to apply for the jobs in the organization”
Dale Yoder: Recruitment is “the process of discovering the sources of
manpower to meet the requirements of staffing schedule and to employ effective
measures for attracting that manpower in adequate numbers to facilitate effective
selection of an efficient working force”
Thus recruitment may be considered as a positive action as it involves
attracting the people towards organization.
The main purpose is to have a rich inventory of eligible persons from
amongst whom the most suitable candidates can be selected for employment in the
organization.
Process of Recruitment: Recruitment process passes thought the following
stages:
1.
Finding out the sources where
suitable person will be recruited. Ex.: colleges
2.
Developing the techniques to
attract the desired candidates. The goodwill of an organization in the market
may be one technique. The publicity about the company being a good employer may
also help in stimulating candidates to apply.
3.
Employing of techniques to attract
candidates. There may be offers of attractive salaries, proper facilities for
development, etc.
4.
The next stage in this process is
to stimulate as many candidates as possible and ask them to apply for jobs. In
order to increase the selection ratio, there is a need to attract more
candidates.
iii) Process of
control
Ans: In order to perform his
control functions, a manager follows four basic steps. First of all, he establishes the standards of
performance to ensure that performance is in accordance with me plan. After
this, the manager will appraise the performance and compare it with
predetermined standards. This step will lead the manager to know whether the
performance has come up to the expected standard or if there is any deviation.
If the standards are not being met, the manager will take corrective actions,
which is the final step in controlling.
Establishing standards: A standard acts as a reference line or basic of comparison
of actual performance. Standards should be set precisely and preferably in
quantitative terms. It should be noted that setting standards is also closely
linked with and is an integral part of the planning process. Different
standards of performance are set up for various operations at the planning
stage, which serve as the basis of any control system. Establishment of
standards in terms of quantity, quality or time is necessary for effective
control. Standards should be accurate, precise, acceptable and workable.
Standards should be flexible, i.e., capable of being changed when the circumstances
require so.
Measurement of performance: This step involves measuring
of actual performance of various individuals, groups or units and then
comparing it with the standards, which have already been set up at the planning
stage. The quantitative measurement should be done in cases where standards
have been set in quantitative terms. In other cases, performance should be
measured in terms of quantitative factors as in case of performance of
industrial relations manager. Comparison of performance with standards is
comparatively easier when the standards are expressed in quantitative terms.
Comparison: This is the core of the control process. This phase of
control process involves checking to determine whether the actual performance
meets the predetermined or planned performance. Manager must constantly seek to
answer, “How well are we doing?” When a production supervisor checks the actual
output or performance of his department with the production schedule, he is
performing comparison aspect of control. When-an executive calculates the
performance of his subordinates once in six months or annuity, he is performing comparison aspect
of control. Checking return on in investment is a comparison phase of control.
Taking corrective action: The final step in the control process is taking corrective
actions so that deviations may not occur again and the objectives of the
organization are achieved. This will involve taking certain decision by the
management like re-planning or redrawing of goals or standards, assignment of
clarification of duties. It may also necessitate reforming the process of
selection and the training of workers. Thus, control function may require
change in all other managerial functions. If the standards are found to be defective,
they will be modified in the light of the observations.
iv) Leadership
Effectiveness
Ans: Leadership is the ability to
build up confidence and deal among people and to create an urge in them to be
led. To be a successful leader, a manager must possess the qualities of
foresight, drive, initiative, self-confidence and personal integrity. Different
situations may demand different types of leadership.
Leadership means
influencing the behaviour of the people at work towards realizing the specified
goals. It is the ability to use non-coercive (no force) influence on the
motivation, activities and goals (MAG) of others in order to achieve the
objectives of the organisation. To be a effective leader, one must have the
following qualities:
1.
Patience: A good leader must show patience
while waiting for expected results, facing difficult situations and taking
important decisions. He must avoid taking hasty decisions and actions.
2.
Good Personality: A
good personality is a combination of physical, mental and social qualities.
Good personality helps a leader to influence his followers. Attractive physique
and good manners add an advantage to the leader's personality.
3.
Self-confidence: A
good leader must have self confidence. This quality is necessary for facing
challenging situations and for solving problems easily and effectively.
4.
Human Skills: A
good leader must have essential social and human skills. That is, he must
understand people. This quality is necessary for dealing with different types
of persons and social groups.
5. Judgment skills: A good leader should be able to examine problems in
right perspective. His judgment and decision making abilities should be
superior to others. He should be able to form opinions and judge based on facts
and not be prejudiced.