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IGNOU Solved Question Papers: ECO - 03 (June' 2019) | IGNOU B.Com Solved Question Paper

 

IGNOU B.Com Solved Question Paper

Term-End Examination (June, 2019)

ELECTIVE COURSE: COMMERCE

ECO-003: MANAGEMENT THEORY

Time: 2 hours (Maximum Marks: 50)

(Weightage: 70%)

Note: Attempt both the Sections, A and B.

SECTION A

Attempt any three questions:

1. Explain briefly the evolution of management thought. 12

Ans: Evolution of management thoughts

The practice of management is as old as human civilization. The ancient civilizations of Egypt (the great pyramids), Greece (leadership and war tactics of Alexander the great) and Rome displayed the marvelous results of good management practices. The origin of management as a discipline was developed in the late 19th century. Over time, management thinkers have sought ways to organize and classify the voluminous information about management that has been collected and disseminated. These attempts at classification have resulted in the identification of management approaches. The approaches of management are theoretical frameworks for the study of management. Each of the approaches of management are based on somewhat different assumptions about human beings and the organisations for which they work. The different approaches of management are:

a) Early management approaches represented by scientific management (Classical approach or Theories)

b) Modern management approaches represented by behavioral science movement, quantitative approach, systems approach and Contingency approach (Neo-classical approach or theories)

a) THE CLASSICAL APPROACH: The classical approach is the oldest formal approach of management thought. Its roots pre-date the twentieth century. The classical approach of thought generally concerns ways to manage work and organisations more efficiently. Three areas of study that can be grouped under the classical approach are scientific management, administrative management, and bureaucratic management.

(i) Scientific Management: Frederick Winslow Taylor is known as the father of scientific management. Scientific management (also called Taylorism or the Taylor system) is a theory of management that analyzes and synthesizes workflows, with the objective of improving labor productivity. In other words, Traditional rules of thumb are replaced by precise procedures developed after careful study of an individual at work.

(ii) Administrative Management: Administrative management focuses on the management process and principles of management. In contrast to scientific management, which deals largely with jobs and work at the individual level of analysis, administrative management provides a more general theory of management. Henri Fayol is the major contributor to this approach of management thought.

(iii) Bureaucratic Management: Bureaucratic management focuses on the ideal form of organisation. Max Weber was the major contributor to bureaucratic management. Based on observation, Weber concluded that many early organisations were inefficiently managed, with decisions based on personal relationships and loyalty. He proposed that a form of organisation, called a bureaucracy, characterized by division of labor, hierarchy, formalized rules, impersonality, and the selection and promotion of employees based on ability, would lead to more efficient management. Weber also contended that managers' authority in an organisation should be based not on tradition or charisma but on the position held by managers in the organisational hierarchy.

b) Neo-classical approach: It can be studied under the following headings:

a) THE BEHAVIORAL Or SITUATIONAL APPROACH: The behavioral approach of management thought developed, in part, because of perceived weaknesses in the assumptions of the classical approach. The classical approach emphasized efficiency, process, and principles. Some felt that this emphasis disregarded important aspects of organisational life, particularly as it related to human behavior. Thus, the behavioral approach focused on trying to understand the factors that affect human behavior at work.

(i) Human Relations: The Hawthorne Experiments began in 1924 and continued through the early 1930s. A variety of researchers participated in the studies, including Elton Mayo. One of the major conclusions of the Hawthorne studies was that workers' attitudes are associated with productivity. Another was that the workplace is a social system and informal group influence could exert a powerful effect on individual behavior. A third was that the style of supervision is an important factor in increasing workers' job satisfaction.

(ii) Behavioral Science: Behavioral science and the study of organisational behavior emerged in the 1950s and 1960s. The behavioral science approach was a natural progression of the human relations movement. It focused on applying conceptual and analytical tools to the problem of understanding and predicting behavior in the workplace. The behavioral science approach has contributed to the study of management through its focus on personality, attitudes, values, motivation, group behavior, leadership, communication, and conflict, among other issues.

b) THE QUANTITATIVE APPROACH: The quantitative approach focuses on improving decision making via the application of quantitative techniques. Its roots can be traced back to scientific management.

(i) Management Science: Management science (also called operations research) uses mathematical and statistical approaches to solve management problems. It developed during World War II as strategists tried to apply scientific knowledge and methods to the complex problems of war. Industry began to apply management science after the war. The advent of the computer made many management science tools and concepts more practical for industry

 (ii) Production And Operations Management: This approach focuses on the operation and control of the production process that transforms resources into finished goods and services. It has its roots in scientific management but became an identifiable area of management study after World War II. It uses many of the tools of management science. Operations management emphasizes productivity and quality of both manufacturing and service organisations. W. Edwards Deming exerted a tremendous influence in shaping modern ideas about improving productivity and quality. Major areas of study within operations management include capacity planning, facilities location, facilities layout, materials requirement planning, scheduling, purchasing and inventory control, quality control, computer integrated manufacturing, just-in-time inventory systems, and flexible manufacturing systems.

c) SYSTEMS APPROACH: The systems approach focuses on understanding the organisation as an open system that transforms inputs into outputs. The systems approach began to have a strong impact on management thought in the 1960s as a way of thinking about managing techniques that would allow managers to relate different specialties and parts of the company to one another, as well as to external environmental factors. The systems approach focuses on the organisation as a whole, its interaction with the environment, and its need to achieve equilibrium.

In simple words, a system may be defined as a set a interrelated and interdependent parts forming an organized unit or entity. These parts are known as sub-systems which interact with each other and are subject to change. They are interrelated as well as interdependent. Hence, changes in any sub-system lead to changes in others. Any working organisation may be said to have three sub-systems as follows:

1. Technical Sub-System It represents the formal relationships among the members of an organisation.

2. Social Sub-System: It provides social satisfaction to members through informal group relations.

3. Power Sub-System: It reflects the exercise of power or influence by individuals and groups.

Critical Evaluation of system approach of management

Systems theory has made the following advantages

1. It provides a manager a way of thinking about the job he has to managed and finds an opportunity to him for looking it the organization as a whole and for achieving overall effectiveness.

2. It provides main focus to organizational efforts towards a direction which people should move.

3. It draws attention of managers to an important factor and that is the environment in which an organization works. The interaction with the environment is dynamic.

4. It includes within it focus both micro and macro aspects of the organizations. Hence it serves a multi-level and multi-dimensional approach.

5. It implies that the modern manager should have analytical orientation should be expert in motivating to achieve goals and open mandate to receive and respect new ideas, i.e. creativity and innovation.

6. It also implies that management education must seek to develop the ability to work with and motivate others.

7. The feed back mechanism provides and opportunity to rearrange organizations part according to the change in the environment.

The system theories have been criticized on the following grounds.

1. Systems theory is not a complete explanation of the whole organizational system. It does not explain how the sub-system of the specific organization is uniquely related in a given environment.

2. The conceptional framework for understanding organization provided by system theory is too abstract.

3. It does not really offer any new thing. Managers do understand interrelationship between different parts and the influence of environment on organization and it sub-systems.

d) CONTINGENCY APPROACH: The contingency approach focuses on applying management principles and processes as dictated by the unique characteristics of each situation. It emphasizes that there is no one best way to manage and that it depends on various situational factors, such as the external environment, technology, organisational characteristics, characteristics of the manager, and characteristics of the subordinates. Contingency theorists often implicitly or explicitly criticize the classical approach for its emphasis on the universality of management principles; however, most classical writers recognized the need to consider aspects of the situation when applying management principles.

Basis

Features of Contingency approach

a) Focus

Emotion and human qualities of workers

b) Structure

Social system

c) Application

Democratic process

d) Emphasize

Personal security and social demand

e) Work Goal of worker

Attainment of organisation goal

f) Concept about men

Social being

g) Content

Human relation movement and organisational behaviour

h) Relation

Informal

i) Nature

Organisitic

 

2. (a) Discuss briefly the principles of delegation of authority.

Ans: In every organisation managers are assigned lot of work and manager alone cannot perform all the work. So, he divides the work among different individuals working under his according to their qualification and gets the work done from them. After passing the responsibilities the manager also shares some of his authority with his subordinates. To make sure that his subordinates perform all works effectively and efficiently the manager creates accountability and this whole process is known as delegation of authority.

Principles of Delegation of authority:

a)      Knowledge of Objectives: Before delegating authority, the subordinates should be made to understand their duties and responsibilities. In addition, knowledge of objectives and policies of the enterprise should be provided to them.

b)      Parity of Authority and Responsibility: This principle of delegation suggests that when authority is delegated, it should be commensurate with the responsibility of the subordinate.

c)       Unity of Command: This principle of delegation suggests that everyone should have only one boss. A subordinate should get orders and instructions from one superior and should be made accountable to one superior only.

d)      The Scalar Principle: The scalar principle of delegation maintains that there should be clear and direct lines of authority in the Organisation, running from the top to the bottom. The subordinate should know who delegates authority to him and to whom he should contact for matters beyond his authority.

e)      Clarity of Delegation: The principle of clarity of delegation suggests that while delegating authority to subordinates, they should be made to understand the limits of authority so that they know the area of their operation and the extent of freedom of action available to them. Such clarity guides subordinates while performing their jobs.

(b) Discuss the barriers to effective delegation. 6+6

Ans: Barriers in delegation of authority

a)      Reluctance to delegate: In many cases managers will not be interested to delegate to authority. They will not be willing to give authority to subordinates. They will not make any plan to delegate authority.

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

c)       Lack of trust: Managers may lack confident or trust on subordinates. They do not think or believe that after delegating authority, subordinates will do better or their performance will improve.

d)      Incompetence of subordinates: Subordinates must be competent enough for effective delegation of authority. Subordinate must be willing and competent to accept delegated authority. In many organizations due to the incompetency of subordinates delegation of authority is affected.

e)      Lack of control: When employees are delegated authority, they will be free to work. They will work autonomously; managers cannot exercise effective control over them. Delegation is affected.

3. Discuss Herzberg's Motivation Hygiene Theory. How is this theory different from Maslow's Need Hierarchy Theory? 7+5

Ans: Another popular need-based approach to motivation is the dual-structure approach developed by Frederick Herzberg. This is also known as Two-factor Theory. Herzberg developed this approach after interviewing 200 accountants and engineers in Pittsburg. He asked them to recall such occasions when they had been dissatisfied and less motivated. He found that entirely different sets of factors were associated with satisfaction and dissatisfaction. For instance, an individual who identified 'low pay' as causing dissatisfaction did not necessarily mention 'high pay' as a cause of satisfaction. Instead, several other factors, such as recognition or accomplishment, were cited as causing satisfaction.

This finding suggests that satisfaction and dissatisfaction are at opposite ends of a single scale. Employees would, therefore, be satisfied, dissatisfied or somewhere in between. Herzberg argued that attitudes and motivation consists of a dual structure. One structure involves a set of factors that result in feelings ranging from satisfaction to no satisfaction. The other structure involves a set of factors that result in feelings ranging from dissatisfaction to no satisfaction.

Herzberg identified two sets of factors responsible for causing either satisfaction or dissatisfaction. The factors influencing satisfaction are called motivation factors or motivators, which are related specifically to the job itself and the factors causing dissatisfaction, are called hygiene factors, which are related to the work environment in which the job is performed.

Motivators

a)      Achievement

b)      Recognition

c)       Advancement

d)      The work itself

e)      The possibility of personal growth

f)       Responsibility       

Hygiene or Maintenance Factors

a)      Company policies

b)      Technical supervision

c)       Interpersonal relations with supervisor

d)      Interpersonal relations with peers

e)      Interpersonal relations with subordinates

f)       Salary

g)      Job security

h)      Personal life

i)        Work conditions

j)        Status

Based on these findings, Herzberg recommended that managers seeking to motivate employees should first make sure that hygiene factors are taken care of and that employees are not dissatisfied with pay, security and working conditions. Once a manager has eliminated employee dissatisfaction, Hertzberg recommends focusing on a different set of factors to increase motivation, by improving opportunities for advancement, recognition, advancement and growth. Specifically, he recommends job enrichment as a means of enhancing the availability of motivation factors.

Criticism

                Although widely accepted by managers, Hertzberg’s dual structure approach however suffers from certain drawbacks. Other researchers who measured satisfaction and dissatisfaction based on different aspects reached very different conclusions. They have also criticized Herzberg's theory for its inability to define the relationship between satisfaction and motivation and to pay enough attention to differences between individuals. Hence, at present Herzberg's theory is not held in high esteem by researchers in the field of motivation. The theory, however, had a major impact on managers and has played a key role in increasing their awareness of motivation and its importance in type work place.

Difference between Maslow’s Need Hierarchy theory and Herzberg’s motivation Hygiene Theory

1. Meaning:

Maslow's theory is based on the concept of human needs and their satisfaction.

Hertzberg's theory is based on the use of motivators which include achievement, recognition and opportunity for growth.

2. Basis of Theory:

Maslow's theory is based on the hierarchy of human needs. He identified five sets of human needs (on priority basis) and their satisfaction in motivating employees.

Hertzberg refers to hygiene factors and motivating factors in his theory. Hygiene factors are dissatisfies while motivating factors motivate subordinates. Hierarchical arrangement of needs is not given.

3. Nature of Theory:

Maslow's theory is rather simple and descriptive. The theory is based long experience about human needs.

Hertzberg's theory is more prescriptive. It suggests the motivating factors which can be used effectively. This theory is based on actual information collected by Hertzberg by interviewing 200 engineers and accountants.

4. Applicability of Theory:

Maslow's theory is most popular and widely cited theory of motivation and has wide applicability. It is mostly applicable to poor and developing countries where money is still a big motivating factor.

Herzberg's theory is an extension of Maslow's theory of motivation. Its applicability is narrow. It is applicable to rich and developed countries where money is less important motivating factor.

5. Descriptive or Prescriptive

Maslow's theory or model is descriptive in nature.

Herzberg's theory or model is prescriptive in nature.

6. Motivators

According to Maslow's model, any need can act as motivator provided it is not satisfied or relatively less satisfied.

In the dual factor model of Hertzberg, hygiene factors (lower level needs) do not act as motivators. Only the higher order needs (achievement, recognition, challenging work) act as motivators.

4. Why is communication so important for any business organisation? What are the barriers to effective communication? 6+6

Ans: Significance (Need) of Business communication

Communication is the life blood of business. It is an all pervasive function of management. Today the organizational structure is designed on the basis of specialization and division of labour. Large number of people work together who are functionally related to each other. Thus, co ordination is must amongst the workmen. Co-ordination can be achieved only when there is mutual trust and understanding between them. This understanding is created by effective communication. Thus communication is an essential ingredient for effective management. Further the role of communication may be summed up as:-

1.       The objectives, plans and policies of the organization are cleared to the workers through communication.

2.       It provides unity of direction to various activities of the enterprise.

3.       It helps in controlling and coordinating the various activities of the organization.

4.       It helps in motivating the workers of an organization.

5.       It helps the managers to develop their managerial skill.

According to Sir John Harvey-Jones, “Communication is the single most essential skill. Effective   communication is the need of the day.” In recent times communication has become all more essential due to the following reasons:-

1.       Growth in the size of the business organization: An efficient system of communication is required because the business organizations are growing tremendously. Thousands of people work in the organization. Organizations have factories or offices in different parts of the country or even world.

2.       Advance technology: Day by day rapid changes are taking place in science and technology leading to obsolescence of old technology. Thus in order to upgrade or modernize technology proper communication between the superior and subordinate in an organization is a must.

3.       Tough competition in the market: Globalization and liberalization have resulted in cut throat competition. Thus to survive such competition, persuasive communication in form of advertisement, publicity, personal contacts are essential.

4.       Growing specialization: Division of work paved way for specialists to work in different department’s sound communication is thus essential for ensuring mutual cooperation and understanding between different departments.

5.       Trade union movement: trade union movement is on its growth. Management now has to consult trade unions on various matters. A strong and meaningful relation between management and trade union is possible only by effective communication.

6.       Human relation: Employee’s participation in management helps to develop among them a sense of loyalty and belongingness towards the organization. Thus effective communication between management and employee is necessary to develop mutual trust and confidence.

7.       Public relations: Public relations help an organization to improve its image in society as the organization has a social responsibility especially towards the customers.

Barriers of Communication:

Communication is the process of passing information and understanding from one person to another, anything that obstructs the free flow of communication is referred to us Barrier of communication. E.g. Problem in encoding and decoding, wrong or defective communication channel, noise in the channel etc. Barrier may arise at any of the following level:

a)      Sender oriented,

b)      Receiver oriented

Sender-oriented barriers could be voluntary or involuntary. At any cost, efforts should be made on the part of the sender to identify and remove them. As the sender is the originator of communication, he should be extremely careful not to erect barriers. If his interaction gives rise to or indicates that there are barriers, the communication comes to a grinding halt. Some of the barriers that are sender-oriented are as follows:

Receiver can also have some barriers in the course of the interaction. Although his role in the initial phase is passive, he becomes active when he starts assimilating and absorbing the information. He is equally to blame if the situation goes awry and communication comes to a stop, or there is miscommunication. Some of the barriers emanating from the side of the receiver are as follows:

Types of Barriers in communication: The barriers to communication in an organization may be broadly categorized into following groups:

1. Physical barriers (RECEIVER’S ORIENTED)

2. Socio- psychological or personal barriers (RECEIVER’S ORIENTED)

3. Organizational barriers (SENDER’S ORIENTED)

4. Semantic barriers (SENDER’S ORIENTED)

5. Mechanical barriers (SENDER’S ORIENTED)

However, such a classification does not suggest that these are mutually exclusive. Rather, it is helpful in understanding the nature of communication barriers.

1. Physical Barriers: There are the environmental factors that also obstruct or reduces the sending and receiving of communication, such as physical distance distracting noises and other interferences difficulty arises in communicating a message, when the physical distance increases:-

Noise: Noise is first and foremost barrier to effective communication. Noise may be caused by machines, equipment, communication device, disturbances in the time of transmission etc. noise also encompasses many other factors such as the sender may use ambiguous or confusing signal. The receiver may misinterpret the message. Thus communication is likely to be spoilt due to noise.

Time and distance: Time and distance also acts as a barrier in smooth flow of communication. Distance between the sender and receiver acts as a hurdle. Although this barrier can be overcome by technology but still in case of breakdown, this exists. Different timing of shifts at workplace also act as barriers in imparting on vital information.

2. Socio-psychological or personal Barriers: There are certain socio psychological factors which restrict the free flow of communication. They are the attitude and opinions, status consciousness, ones relations with fellow workers, seniors, and junior’s etc. family background. These restrict participative communication:

I. Motives, attitudes, judgments, emotions, and social values of people from the part of the personal barriers. Psychological distance is also developed with this.

II. Individual Differences: There are differences in the motives, attitudes and sentiments of the people. So this causes problems in encoding and decoding other’s sentiments, attitudes and motives.

III. Differences in interest: The interest of people also differs. A problem may be important for one person but may not carry weight for another. The ideas, question, attitudes, feelings etc of other party may represent an obstacle to one’s own personal goal.

IV. Division of People: Communication is ideas and viewpoint also gets affected by the division of people into classes, castes and communities.

V. Difference of viewpoints: Communication suffers when there are differences in view point of the different people.

VI. Lack of planning: Good communication never happens but has to be planned. When people take it lightly and communicate without planning it turns into miscommunication or mal communication.

VII. Cultural barriers: Due to difference in the cultural background the same word, phrases, symbols, actions etc. may mean different to different group of people. Mis understanding may take place due to this.

3. Organizational Barriers: Organisational barriers arise due to defects in the organization structure and the communication system of an organization:

I. Hierarchical distance: Downward communication promotes hierarchical distance. The chances of information being filtered are more at this structure, because there are several layers. Information received from the top may not reach at bottom in the same shape. The information gets coloured which brings hierarchical distance.

II. Diversion: Diversion of information is also one of the causes which brings barrier to communication process. For example sometimes a manager diverts the information meant for one person or group to another.

III. Colouring: Information are also coloured by the manager intentionally with a view to twist the situation in their favour. For example, an office may quote his subordinate wrongly, to spoil his career or his chance of promotion or his image in the eyes of the boss.

IV. Status barriers: Status is a barrier of communication in a formal organization. Organizational interaction and communication are influenced by the status and the expectations.

V. Goal conflicts: Goal conflict acts as communication reducers. Different goal lead to bifurcation of interest. Due to this communication suffers.

4. Semantic Barriers: Semantic means the relationships of signs of their reference. Semantic barrier arises from the disadvantages of the symbolic system. Symbols have got number of meaning and one has to choose any one of them according to the requirement of communication. Symbol or the language is the most important tool of communication which has to be used very carefully:-

I. Words with different meaning: Some words convey more than one meaning. When the receiver assigns a different meaning to a word than what the sender intended, there occurs miscommunication.

II. Denotation and connotation: Words have two types of meaning = Denotation and connotation. Denotation is the literal meaning of the words connotation are the suggestive meaning of the words. Connotation is the suggestive meanings of the words. Connotation may be positive or negative.

III. Offensive style of communication: Badly expressed messages lose their impact. Offensive style of communication leads to communication breakdown causing loss of time and money.

IV. Wrong assumptions: Communication should not be based on assumption as it may lead to wrong interpretation. All possible efforts should be made to clarify assumptions.

V. Selective perception: many a time the message is decoded by the receiver in a way which may be selective. In other words most of the receivers protect their own interest and expectations leading to a particular type of feedback which becomes a communication problem.

5. Mechanical Barriers: Mechanical barriers include inadequate arrangement for transmission of news, facts and figures. Example poor office layout and defective procedure and the use of wrong media led to poor communication.

I. Information overload: Excess of communication is called information overload. Brevity is the soul of communication. The receiver cannot comprehend and absorb beyond his mental capacity. His mind will remain closed for the excess part of the communication. Therefore one should be brief and to the point.

II. Loss of transmission: When messages are transmitted from person to person they are filtered. In other words they are diluted and distorted on the way. In oral communication about 30% of the information is lost in each transmission.

5. What do you mean by coordination? What is the need for coordination in today's business environment? 6+6

Ans: Concept of Coordination

Coordination is an orderly arrangement of group efforts to provide unity of action in pursuit of common purpose. The key features of coordination are as follows:

a)      Coordination is not a distinct function but the very essence of management.

b)      It is the result of conscious and concerted action by management.

c)       Coordination is a continuous, never ending or on-going process. It is also a dynamic process.

d)      Coordination is required in group efforts not in individual effort.

e)      Coordination has a common purpose of getting organizational objectives accomplished.

Importance of co- ordination (Essence of Management): 

Co-ordination is an integral element or ingredient of all the managerial functions as discussed below: -

a)      Coordination through Planning: Planning facilitates co-ordination by integrating the various plans through mutual discussion, exchange of ideas. e.g. - co-ordination between finance budget and purchases budget.

b)      Co-ordination through Organizing - Mooney considers co-ordination as the very essence of organizing. In fact when a manager groups and assigns various activities to subordinates, and when he creates department’s co-ordination uppermost in his mind.

c)       Co-ordination through Staffing - A manager should bear in mind that the right no. of personnel in various positions with right type of education and skills are taken which will ensure right men on the right job.

d)      Co-ordination through Directing - The purpose of giving orders, instructions & guidance to the subordinates is served only when there is a harmony between superiors & subordinates.

e)      Co-ordination through Controlling - Manager ensures that there should be co-ordination between actual performance & standard performance to achieve organizational goals.

Now we can conclude that all the functions of management are affected by coordination. Hence coordination is essential for achieving the objectives of the organisation. It is also required for the survival, growth and profitability of the organisation. Coordination encourages team spirit, gives right direction, motivates employees, and makes proper utilisation of resources. Therefore, Coordination is rightly called the "Essence of Management".

 6. Explain briefly Programme Evaluation and Review Technique (PERT). How is it different from CPM? Discuss. 12

Ans: PERT: Programme Evaluation and Review Technique is based on network analysis which uses estimates of time required to complete tasks for scheduling and controlling execution of projects. PERT is basically used for projects which are one time and may not be repeated. It helps in planning and controlling of time required to complete the task.

PERT was first developed as a Management Aid for completing Polaris Ballistic Missile Project in USA in October 1958. It worked well in expediting the completion of the project from 7 years to 5 years. Since then, PERT has become very popular technique used for project planning and control. In nutshell, it schedules the sequence of activities to be completed in order to accomplish the project within a short period of time. It helps reduce both the time and cost of the project. .

CPM: Critical Path Method is a statistical technique of project management in which planning, scheduling, coordination and control of well defined activities takes place. CPM is basically used for projects which are of repetitive nature. It helps in controlling cost and time involved in the project. CPM was first developed as an algorithm used in planning, scheduling, coordination and control of activities of a project.

Difference between PERT and CPM

Basis

PERT

CPM

1. Activities

PERT is a technique used in planning, scheduling, coordination and control of uncertain events.

CPM is a technique used in planning, scheduling, coordination and control of well defined activities.

2. Nature

PERT is used for projects which are of non-repetitive nature.

CPM is used for projects which are of repetitive nature.

3. Focus on

PERT main focus on controlling of time.

CPM helps in controlling cost and time involved in the project

4. Model used

Probabilistic model used in PERT.

Deterministic model used in CPM.

5. Projects

PERT is used for research based projects.

CPM is used for mainly construction projects.

6. Orientation

PERT is event oriented.

CPM is activity oriented.

SECTION B

7. Write explanatory notes on any two of the following: 7+7

(a) Henry Fayol's Administrative Theory

Ans: Contribution of Henry Fayol

Henry Fayol (1841-1925): was a Frenchman with considerable executive experience who focused his research on the things that managers do. He wrote during the same period Taylor did. Taylor was a scientist and he was managing director of a large French coal-mining firm. He was the first to envisage a functional process approach to the practice of management. His was a functional approach because it defined the functions that must be performed by managers. It was also a process approach because he conceptualized the managerial job in a series of stages such as planning, organizing and controlling. According to Fayol, all managerial tasks could be classified into one of the following six groups:

Technical (related to production);

Commercial (buying, selling and exchange);

Financial (search for capital and its optimum use);

Security (protection for property and person);

Accounting (recording and taking stock of costs, profits, and liabilities, keeping balance sheets, and compiling statistics);

Managerial (planning, organizing, commanding, coordinating and control);

He pointed out that these activities exist in every organization. He focused his work on the administrative or managerial activities and developed the following definition:

Planning meant developing a course of action that would help the organization achieve its objectives.

Organizing meant mobilizing the employees and other resources of the organization in accordance with the plan.

Commanding meant directing the employees and getting the job done.

Coordinating meant achieving harmony among the various activities.

Controlling meant monitoring performance to ensure that the plan is properly followed.

 (b) Principles of Planning

Ans: A number of fundamental principles have been devised over the year for guiding managers undertaking planning. Some of these principles are discussed as under,

a)      Principle of contribution to objective: All types of plans are prepared to achieve the objectives of the organisation. Both major and derivative plans are prepared to contribute to the objectives of the enterprise. Planning is used as a means to reach the goals.

b)      Principles of primacy of Planning: This principle states that planning is the first or primary function of every manager; He has to plan first and then proceed to carry out other functions. Other managerial functions are organized to reach the objectives se in planning.

c)       Principle of Planning Premises: In order to make planning effective, some premises or presumptions have to be made on the basis of which planning has to be undertaken. Plans are, generally not properly structures. The reason being that planning premises are not properly developed. This principle lays emphasis on properly analyzing the situation which is going to occur in future.

d)      Principle of Alternatives: Planning process involves developing of many alternatives and then selecting one which will help in achieving desired business goals. In the absence of various alternatives proper planning will be difficult.

e)      Principle of Timing: Plans can contribute effectively to the attainment of business goals if they are property timed. Planning premises and policies are useless without proper timing.

f)       Principle of Flexibility: This principle suggests flexibility in plans if some contingencies arise. The plans should be adjusted to incorporate new situations. The dangers of flexibility should be kept in mind. The changes may upset the earlier commitments. So the cost of changes should be compared to the benefits of flexibility.

g)      Principle of Commitment: There should be a time frame for meeting the commitments made. This will ensure the achieving of targets in time.

h)      Principle of Competitive Strategies: While formulating own. Plans a manager should keep in mind the plans of competitors. The plans should be framed by thinking of what the. Competitors will do in similar situations.

(c) Factors Affecting Span of Control

Ans: Factors influencing the span of Management

                There are number of factors that influence or determine the span of Management in a particular organisation, the most important of these are as follows:

1.       The capacity and ability of the executive: The characteristics and abilities such as leadership, administrative capabilities; ability to communicate, to judge, to listen, to guide and inspire, physical vigour, etc. differ from person to person. A person having better abilities can manage effectively a large number of subordinates as compared to the one who has lesser capabilities.

2.       Competence and training of subordinates: Subordinates who are skilled, efficient, knowledgeable, trained and competent require less supervision, and therefore, the supervisor may have a wider span in such cases as compared to inexperienced and untrained subordinates who requires greater supervision.

3.       Nature of Work: Nature and importance of work to be supervised is another factor that influences the span of supervision. The work involving routine, repetitive, unskilled and standardized operations will not call much attention and time on the part of the supervisor.

4.       Time available for supervision: The capacity of a person to supervise and control a large number of persons is also limited on account of time available at his disposal to supervise them. The span of control would be generally narrow at the higher level of management because top manager have to spend their major time on planning, organising, directing and controlling and the time available at their disposal for supervision will be less.

5.       Degree of Decentralization and Extent of Delegation: If a manager clearly delegates authority to undertake a well-defined task, a well trained subordinate can do it with a minimum of supervisor's time and attention.

6.       Effectiveness of communication system: Faulty communication puts a heavy burden on manager's time and reduces the span of control.

7.       Quality of Planning: Effective planning helps to reduce frequent calls on the superior for explanation, instructions and guidance and thereby saves in time available at the disposal of the superior enabling him to have a wider span.

8.       Degree of Physical Dispersion: If all persons to be supervised are located at the same place and within the direct supervision of the manager, he can supervise relatively more people as compared to the one who has to supervise people located at different places.

9.       Assistance of Experts: the span of supervision may be wide where the services of experts are available to the subordinate on various aspects of work. In case such services are not provided in the organisation, the supervisor has to spend a lot of time in providing assistance to the workers himself and a such the span of control would be narrow.

(d) Principles of Directing

Ans: Principles of Directing are given below:

a)      Maximum Individual contribution: According to this principle, directing must help every individual employee to contribute his Best towards the achievement of organizational goal.

b)      Harmony of objectives: Directing must ensure that the individual goals of employees and that of organization do not conflict with each other. Directing must aim at bringing harmony among them.

c)       Unity of direction: There should be one head and one plan for a group of activities having the same objective to have effective direction.

d)      Unity of Command: According to this principle an employee should receive orders from one boss only to avoid confusion. If there are more bosses it can create problem amongst superiors.

e)      Effective leadership: A manager must possess the qualities of a good leader. He must guide his subordinates not only on work problems but also on their personal problems.

f)       Effective communication:  To have effective direction, it is very essential to have an effective communication system which provides for free flow of ideas, information, suggestions, complaints and grievances.

g)      Follow through: Managers must continuously review whether the instructions are being understood and followed by the employees or not.

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