IGNOU B.Com Solved Question Paper
Term-End Examination (June,
2011)
ELECTIVE COURSE:
COMMERCE
ECO-03: MANAGEMENT
THEORY
Time:
2 hours (Maximum Marks: 50)
Weightage:
70%
Note: Attempt any five
questions.
All questions carry
equal marks.
1. (a) Discuss the human relations
approach the study of management. 5+5
Ans: Human Relations Approach: There are two thoughts of management – Classical and neo classical. The classical school did not give importance to the human aspects of the workers. Therefore, they did not achieve a high level of production efficiency and co-operation between the management and workers. The failure of the classical approach led to the human relations movement. The human relations experts tried to integrate (combine) Psychology and Sociology with Management. According to them, organisation is a social system of interpersonal and inter group relationships. They gave importance to the management of people. They felt that management can get the work done from the workers by satisfying their social and psychological needs. The basic principles of human relations approach is that human beings are not interested only in financial gains. They also need recognition and appreciation. Workers are also human beings. So they must be treated like human beings and not like machines. Managers should try to understand the feelings and emotions of the workers.
(b) Do you think that management
principles are universally valid? Give arguments.
Ans: Taylor’s
techniques are developed through scientific approach and not by rule of
thumb. Any principle developed scientifically is universally applicable
because these are not affected by personal feelings or biasness of managers.
The techniques which facilitate the universal applicability of Taylor’s
principles are:
a)
Time study
b)
Motion study
c)
Method study
d)
Fatigue study
But, some techniques of scientific management are not universally applicable
under some situations. These are:
a)
Functional Foremanship:
This technique is not applicable in the organization following the
principle of unity of command.
b)
Differential Piece Wage system: This
technique is also not applicable in the organization following the principle of
equity.
2. (a) What are the characteristics of
an organisation ? 5+5
Ans:
Nature or characteristics of organisation
From
the study of the various definitions given by different management experts we
get the following information about the characteristics or nature of
organization:
1) Division of Labour: Every organisation is
characterized by the division of work.
The total efforts of the group are divided into different functions and
each function is assigned the function for which he is observed to be suited
best.
2) Co-ordination: As different persona are
assigned different functions and all these functions aim at achieving
organisational goals, hence necessary relationships are established between
them so as to co-ordinate all the activities of all the people of the
organisation.
3) Objectives: Organisations exist to achieve
objectives. Without objectives organisations cannot exist for a long period.
4) Authority and Responsibility structure: In an
organisation the positions are so ranked that each of them is subordinate to
the one above it and is superior to the one below it. Each position is delegated necessary authority
and responsibility so as to enable it functions effectively.
5) Communication: Every organisation has its own
channels or methods of communication.
Effective communication is vital for success of management.
6) Organisation is a
Machine of Management: Organisation is
considered to be a machine of management because the efficiency of all the
functions depends on an effective organisation. In the absence of organisation
no function can be performed in a planned manner.
7) Organisation is a
Universal Process: Organisation is
needed both in business and non business organisations. Not only this,
organisation will be needed where two or mom than two people work jointly.
Therefore, organisation has the quality of universality.
8) Organisation is a Dynamic Process:
Organisation is related to people and the knowledge and experience of the
people undergo a change. The impact of this change affects the various
functions of the organisations.
(b) Discuss the importance of
organisation.
Ans:
Importance of Organising
Organising
is the fundamental activity of management.
It is necessary for management to mobilize men machinery money and
materials or resources for achieving organisational objectives. Organising provides basis for other functions
of management, hence scientifically designed organisation helps manager to
function efficiently and effectively.
The importance of organisation may be explained as follows –
a)
Efficiency
of Management: A Good organisation helps in making optimum use of available
resources for achieving organisational objectives, increasing efficiency of
management.
b)
Facilities
Administration: A properly designed and balanced organisation facilitates both
management and operation of the enterprise.
c)
Facilitates
growth and diversification: On account of sound organisational
structure growth and diversification can be successfully achieved for improving
competitive strength of the organisation.
d)
Facilitates
Technological progress: Sound organisational structure is
useful for coping with technological changes which have become inevitable under
modern conditions.
e)
Encourages
healthy human relations: Scientific and balanced
organisational structure when manned by right type of people tends to motivate
people through job satisfaction that promotes healthy human relations in the
organisation. It helps maintaining
morale at a higher level.
f)
Stimulates
initiative and creativity: Sound organisation stimulates
creative thinking and initiative by providing opportunities to experiment with
new ideas for developing new ways of doing things.
g)
Reduction
in work load of top management: Sound organisation stimulates
creative thinking and initiative by providing opportunities to experiment with
new ideas for developing new ways of doing things.
h)
Smooth
direction: In sound organisation right men are placed at right place hence
direction tends to become smooth and effective.
i)
Easy
communication: Every organisation has its own channels or methods of
communication. Effective communication
helps in effective management..
j)
Integration
of individual efforts to achieve organisational goals: The
functions, duties and responsibilities of the different departments are clearly
defined which helps in achieving organisational goals.
k)
Effective
control over employees: Each subordinate should have only
one superior. There should not be dual subordination. It helps in effective
control over the employees.
3.
Distinguish between formal and informal organisation. Describe the functions of
an informal organisation. 5+5
Ans: Meaning of formal organisation: In the words of
Chester Barnard, "An organisation is formal when the activities of two or
more persons are consciously co-ordinated towards a common objective".
Meaning of Informal organisation: Man is a social
animal and wants social interaction.
Formal organizations are joined by people to satisfy their needs but
these organizations cannot satisfy all the needs of people because of their
nature. Hence informal organization
emerges in all the formal organizations.
Difference
between formal and Informal organisation:
|
FORMAL |
INFORMAL |
1.Structure |
It
is official, so it has prescribed structure of roles and relationships. It is planned and deliberately created by
management |
It
is in unofficial or natural having no specific structure. It arises spontaneously without official
sanction by management |
2.Base |
It
is based on delegation of authority & may grow to very big size. It is mechanistic and brings order in the
organisations. |
It
arises through social interactions between employees. It usually remains small is size. It is humanistic and gives satisfaction to
employees. |
3.Nature |
It
is deliberately created impersonal with emphasis on authority, functions,
status differentials and down ward communications |
It is personal
with emphasis on people and their intricate relationships, informal rankings
and multidimensional communications. |
4.Shape |
It
is hierarchical and pyramid shaped. |
It has no
definite shape, and no division of work.
It is structural less and ill defined.
It is psychosocial system. |
5.Orientation |
Its
tasks, goals and values are economic oriented towards efficiency,
productivity profitability and growth. |
Its tasks,
goals and values are socio- psychological centering on individual and group
satisfaction affiliation co-friendship esteem etc. |
6. Charts and
Manuals |
It
can be shown in the form of charts and manuals of the organisation. |
It finds no
place on organisation charts and manuals. |
7. Role and
Relationships |
It
has written roles and procedures, authority and responsibility are clearly
defined. There are well defined roles
and relationships. |
It
has unwritten conventions and norms there are no written rules or procedures. |
8. Authority |
Formal
authority is institutional, it attaches to a position and a person exercises
it by virtue of his position. Formal authority flows downwards as it is
delegated. |
Informal
authority attaches to a person and it flows upwards or horizontally as it has
to be earned there is informal leader and has strong influence. |
9. Behaviour |
It
has prescribed system of behaviour .Rewards and punishments are given on the
basis of desired behaviour rewards can be both monetary and non monetary. |
It
is unwritten norms of behaviour, enforced through mutual consent rewards
include social esteem, satisfaction group leadership while punishments are
censure isolation, boycott etc. |
10.Stability |
It
is rational and created to meet organisational goals. It is stable, permanent and predictable. |
It arises to
satisfy man’s quest for social satisfaction It is relatively fickle and
unpredictable. |
11.Membership |
Group
membership is rigidly defined, every employee belongs to one workgroup only. |
One person can
be member of several informal groups of his choice. He may be a leader in one group and a
follower in the other. |
Functions
of Informal Organizations:
1)
Informal
group gives social satisfaction to the employees.
2)
It
promotes sense of belongingness.
3)
It
provides safety valve for emotional problems of the employees
4)
It
provides social control.
5)
It
helps developing communication channels in the organization
6)
It
provides help on the job to the employees during illness, accidents etc.
7)
It
serves as a check on authority of a manager.
8)
It provides fertile ground for future leaders
9)
it
supports in achieving organizational goals
10)
It
reduces supervision.
11)
It
may help manager to overcome their natural limitations of ability.
4. What is directing? Describe the
principles of directing. 3+7
Ans: Direction may be defined as the function
of management which is related with instructing, guiding and inspiring human
factor in the organization to achieve organization objective. The direction is
not merely issuing orders and instructions by a superior to his subordinates,
but is includes the process of guiding and inspiring them. The analysis of
definition reveals that direction function consists of three elements –
Motivation, Leadership and Communication.
In the words of Koontz and O’Donnell, ”Directing
is a complex function that includes all those activities which are designed to
encourage subordinates to work effectively and efficiently.”
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.
5. (a) Describe the barriers to
effective delegation. 5+5
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.
(b) Discuss the measures to be taken
for effective delegation.
Ans: Principles
of Effective Delegation of Authority or How barriers can be removed or Elements
of delegation:
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.
6. Explain various techniques of
management development programmes. 10
Ans: Methods of training for managers/methods of managerial
development/executive development:
A) On the job method: On the job method refers to training
given to personnel inside the company. There are different methods of on the
job training.
1. Job
rotation: This method enables the company to train managerial personnel in
departmental work. They are taught everything about the department. Starting
from the lowest level job in the department to the highest level job. This
helps when the person takes over as a manager and is required to check whether
his juniors are doing the job properly or not. Every minute detail is studied.
2.
Planned progression: In this method juniors are assigned a certain job of their
senior in addition to their own job. The method allows the employee to slowly
learn the job of his senior so that when he is promoted to his senior job it
becomes very easy for him to adjust to the new situation. It also provides a
chance to learn higher level jobs.
3.
Coaching and counseling: Coaching refers to actually teaching a job to a
junior. The senior person who is the coach actually teaches his junior
regarding how the work must be handled and how decisions must be taken, the
different techniques that can be used on the job, how to handle pressure. There
is active participation from the senior.
Counseling
refers to advising the junior employee as and when he faces problems. The
counselor superior plays an advisory role and does not actively teach
employees.
4. Under
study: In this method of training a junior is deputed to work under a senior.
He takes orders from the senior, observes the senior, attends meetings with
him, learns about decision making and handling of day to day problems. The
method is used when the senior is on the verge of retirement and the job will
be taken over by the junior.
5. Junior
board: In this method a group of junior level managers are identified and they
work together in a group called junior board. They function just like the board
of directors. They identify certain problem, they have to study the problem and
provide suggestions. This method improves team work and decision making
ability. It gives an idea about the intensity of problem faced by the company.
Only promising and capable junior level managers are selected for this method.
B) Off the job training method: Off the job
training refers to method of training given outside the company. The different
methods adopted here are:
1.
Classroom method: The classroom method is used when a group of managers have to
be trained in theoretical aspects. The training involves using lectures, audio
visuals, case study, role play method, group discussions etc. The method is
interactive and provides very good results.
2.
Simulation: Simulation involves creating atmosphere which is very similar to
the original work environment. The method helps to train manager handling
stress, taking immediate decisions, handling pressure on the jobs etc. An
actual feel of the real job environment is given here.
3. Business
games: This method involves providing a market situation to the trainee manager
and asking him to provide solutions. If there are many people to be trained
they can be divided into groups and each group becomes a separate team and play
against each other.
4.
Committee: A committee refers to a group of people who are officially appointed
to look into a problem and provide solution. Trainee managers are put in the
committee to identify how they study a problem and what they learn from it.
5.
Conference: Conferences are conducted by various companies to have elaborate
discussions on specific topics. The company which organizes the conference
invites trainee manager and calls for experts in different fields to give
presentation or lecture. The trainee manager can ask their doubts to these
experts and understand how problems can be solved on the job.
6.
Readings: This method involves encouraging the trainee manager to increase his
reading related to his subject and then ask him to make a presentation on what
he has learned. Information can be collected by trainee manager from books,
magazines and internet etc.
7. In
basket training: In this method the training is given to the manager to handle
files coming in and to finish his work and take decisions within a specified
time limit. The trainee manager is taught how to prioritize his work, the
activities which are important for his job and how to take decisions within
limited time limit.
7. What is leadership? Explain the
qualities of an effective leader. 3+7
Ans:
Introduction to Leadership
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.
Qualities of a Good Leader
1.
Patience: Patience
is the capacity to face difficult situations, hardships or inconvenience
without making a single complaint. 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
6. Communication skills: A good leader should be able to communicate the
goals and procedures of the organisation clearly, precisely and effectively to
the subordinates. Only then will it be possible for him to convince, persuade
and stimulate subordinates to action.
7. Listening skills: People tend to avoid a leader who does not listen.
Hence a good leader in one who can listen to other peoples problems. He should
be able to create a culture whereby people can be frank with him and give him
information and also give him feedback about himself, which can help him to
improve himself.
8.
Inspiring
skills: A good
leader should be able to inspire people to deal with the “why” question. He
should not just command and control but be able to lead the people and get them
involved to work together as a team.
9.
Administrative Skills: A good leader must have an
administrative ability. This means, he must be able to get the work done
through his followers. He must know how to plan, organize and control the work
of his followers.
10.
Discipline: A good leader must be a disciplined
person. This means he must have respect for the rule and regulations of the
organisation. This is because his followers will follow his example.
11.
Initiative: A good leader must always take an
initiative. This means he should do the right thing at the right time without
being told by others. He must be able to construct and implement his own plan.
12.
Intelligence: A good leader must be smart and
intelligent. That is, he should have a good educational background and sound
technical knowledge. He should be more intelligent than his followers. If not,
his followers will not respect him. This will have a bad effect on his
performance.
13.
Innovative: A
good leader must have an art of innovation. That is, he must have a good
imagination and visualization skills. He must develop new ideas and tactics to
solve problems. He must combine the new ideas with the old ideas.
8. What is supervision? Discuss the
qualities of a good supervisor.
3+7
Ans: The word supervision is the combination
of two words i.e., super+vision where super means over and above and vision
means seeing. Thus, supervision means overseeing the subordinates at work.
supervision refers to the direct and immediate guidance and control of
subordinates in performance of their task.
Qualities of a Good Supervisor
a) Good Personality and self confidence: A good personality is a combination of
physical, mental and social qualities. Good personality helps a supervisor to
influence his subordinates. Also he must
have self confidence which is necessary for facing challenging situations and
for solving problems easily and effectively.
b) Human Skills: A
good supervisor must have essential social and human skills. That is, he must
understand his subordinates. This quality is necessary for dealing with
different types of employees working in an organisation.
c)
Judgment skills: A good supervisor 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
d)
Communication and technical skills: A good supervisor
should be able to communicate the goals and procedures of the organisation
clearly, precisely and effectively to the subordinates. He must also be
familiar with the technology used within the organisation.
e)
Listening skills: Employees just have a supervisor who does not
listen. Hence a good supervisor in one who can listen to his subordinates’ problems.
He should be able to create a culture whereby subordinates can be frank with
him and give him information and also give him feedback about himself, which
can help him to improve himself.
f) Inspiring skills: A good supervisor
should be able to inspire his subordinates. He should not just command and
control but be able to inspire his subordinates and get them involved to work
together as a team.
g) Administrative Skills and ability to develop
organisation: A good supervisor must have an
administrative ability. This means, he must be able to get the work done
through his subordinates. He must know how to plan, organize and control the
work of his subordinates. He must also be able to develop an effective organisation
that meets current needs.
h) Discipline: A
good supervisor must be a disciplined person. This means he must have respect
for the rule and regulations of the organisation. This is because his subordinates
will follow his example.
9. Write notes on the following: 5+5
(a) Line organisation
Ans: LINE ORGANISATION: Line organisation or military organsiation is
a direct type of internal organisation. It is the oldest and the simplest form
of integral organisation. Line organisation is a type of internal organisation
in which there are direct vertical authority relationships (i.e.,
superior-subordinate relationships), connecting the positions at each level
with those above and those below in the hierarchy. In other word, it is a form
of organisation in which the relationships between the various levels of
management form a hierarchy of authority or chain of command.
Features of
Line Organisation
The chief features of line organisation are:
1)
The line organisation forms a vertical
line relationship from the top to the bottom of the organisation.
2)
There is authority relationship or
superior-subordinate relationship in the line organisation. Each position in
the organisation structure has authority over its subordinate, and is
accountable to his superior.
3)
Under this system, authority flows
from the top of the structure to its bottom level step by step through downward
delegation of authority, while responsibility flows upward from the bottom of
the structure to the top step by step.
4)
There is no provision for staff officers
(i.e., experts or specialists) to offer advice to the line officers under this
system.
(b) Budgetary control
Ans: Concept of Budgetary Control
Budgetary control is the process of
determining various budgeted figures for the enterprise for the future period
and them comparing the budgeted figures with the actual performance for
calculating variances, if any.
According to Brown and Howard, “Budgetary
control is a system of controlling costs which includes the preparation of
budgets, coordinating the departments and establishing responsibilities,
comparing actual performance with the budgeted and acting upon results to
achieve maximum profitability.”
Objectives of Budgetary Control: The main objectives of
budgetary control are as follows:
a) To ensure planning for future by setting up
various budgets, the requirements and expected performance of the enterprise
are anticipated.
b) To co-ordinate the activities of different
departments.
c) To operate various cost centres and
departments with efficiency and economy.
d) Elimination of wastes and increase in
profitability.
e) To anticipate capital expenditure for future.
f) To centralize the control system.
g) Correction of deviations from the established
standards.
h) Fixation of responsibility of various
individuals in the organization.
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