IGNOU B.Com Solved Question Paper
Term-End Examination: June, 2010
ELECTIVE COURSE: COMMERCE
ECO-3: MANAGEMENT THEORY
Time: 2 hours, Maximum Marks: 50
Note: Attempt both Sections A and B.
SECTION - A
Attempt any three questions.
1. Discuss the basic
principles of scientific management. What are their merits and limitations? 6+6
Ans: According to F.W.Taylor who is regarded
as the father of scientific management, “Scientific Management is the art of
knowing exactly what you want your men to do and seeing that they do it in the
cheapest way”. He suggests the following principles of scientific management:
a)
Replacing rule of
thumb with science: According to this principle, scientific
investigation should be applied in the scientific management, which will
replace the rule of thumb. Taylor had made study of every job and fixed the
method and timing for performing the job so that the worker should know that
what, when, and how is required to perform the job. This principle is the
starting point of scientific.
b) Harmony in group action: This principle states that there should be cooperation between the management and the workers. In order to achieve the best possible results from the business operations, it is essential that there should be harmonious relations between the management and the workers.
c)
Division of
responsibility between workers and management: According to this principle there
should proportionate division of the responsibility between the managers and
the workers, clearly defined, and predetermined.
d)
Maximum Output: Scientific
Management aims for the continuous production and productivity instead of
restricting the productivity by the management or the workers. According to
this principle management and the workers should try to increase the production
at the minimum cost.
e)
Selection,
training, and development of the workers in the scientific manner: According to
this principle the right men is placed on the right job. The jobs are
determined first for which the workers are required and then the qualifications
required for the job are determined. On the basis of these standards the
employees are selected.
Scientific management provides
the following advantages:
a) Reduction
in the Cost of Production: It increases production with the help
of mechanisation and latest technology used in producing the goods. On account
of large scale production, per unit cost of production is considerably reduced.
b) Better
Quality Products: By resorting to the measures of
standardisation and effective supervision, better quality products are ensured.
c) Benefits
of Division of Labour: The principle of specialisation
adopted under scientific management ensures the benefits derived from the
division of labour. The work is simplified and is carried out in most
economical and efficient manner.
d)
Avoidance of Disputes between
Labour and Management: Scientific management is instrumental
in developing healthy cooperation between the management and the labour thereby
encouraging cordial and harmonious relations between the two. This leads to
reduction in industrial disputes and provides of industrial peace.
e) Increased
Wages: Scientific
management aims at higher productivity and the workers get increased wages.
Taylor suggested a differential incentive plan for increased wages to efficient
workers.
Limitations of scientific management:
a)
It is based upon one best way and is
applicable for simple organizations than that for today’s dynamic and complex
organization
b)
It focuses on individual performance than
group efforts and divides the workers into efficient and inefficient categories
c)
It is focused on specialization and repetition
of jobs to increase the productivity which reduces innovation and creativity
and promotes monotony
d)
It neglects human factor because it motivates
workers to work for monetary benefits rather than human resource development
and resources
e)
There is no scope for creativity of employees
because they are developed by manager which promotes frustration.
2.
What are the features of directing? Explain the principles of directing. 5+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.
a)
Motivation
b)
Leadership
c)
Communication
Direction has the following characteristics
a)
Direction is an
important managerial function. Through direction management can initiates
actions in the organization.
b)
Direction
function is performed at every level of management.
c)
Direction is a
continuous process and it continuous through out the life of the organization.
d)
Direction
initiates at the top level in the organization follows and bottom through there
hierarchy. It emphasizes that a subordinates is to be directed by his own
superior only.
Principles
of direction: Direction is one
of the most complex function of the management as it ideals with people whose
nature itself is quite complex and unpredictable.
1. Principles of relating to the purpose of
directing
a)
Principles of
maximum individual contribution.
b)
Principle of
harmony of objectives.
c)
Principle of
efficiency of direction.
2. Principle relating to direction process:
a)
Principle of
unity of command.
b)
Principle of
appropriateness of direction technique.
c)
Principle of
managerial communication.
d)
Principle of
comprehension.
e)
Principle of use
of informal organization.
f)
Principle of
leadership.
g)
Principle of
follow through.
Thus one of the basics functions of management
is direction. Direction means the use of leadership and motivation to guide the
performance of subordinates towards the achievement of the organization’s
goals. Important requirements for effective direction are Harmony of
objectives, Unity of command, direct supervision, efficient communication and
follow-up.
3.
Briefly explain the principles of planning. What is the difference between
plans and policies? 8+4
Ans:
Principles of Planning: 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 organization. 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.
4.
Discuss briefly the importance of leadership in an organisation. Explain the
concept of 'managerial grid' and its purpose. 6+6
Ans: Ans: 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)
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.
Managerial Grid: Robert Blake and
Jane Mouton (1960s) proposed a graphic portrayal of leadership styles through
a managerial grid (sometimes called leadership grid). The grid
depicted two dimensions of leader behavior, concern for
people (accommodating people’s needs and giving them priority) on y-axis
and concern for production (keeping tight schedules) on x-axis, with
each dimension ranging from low (1) to high (9), thus creating 81 different
positions in which the leader’s style may fall. The Managerial or Leadership Grid
is used to help managers analyze their own leadership styles through a
technique known as grid training. This is done by administering a questionnaire
that helps managers identify how they stand with respect to their concern for
production and people. The training is aimed at basically helping leaders reach
to the ideal state of 9, 9. The purpose of it is to identify the five
leaderships styles and to determine which one is best for the highest
production but which is also the best option for the people.
5.
Do you think that external sources of recruitment are better than internal
sources of recruitment? Give your argument and also state the advantages of
internal sources. 6+6
Ans: The sources of recruitment may be
classified into internal sources and External Sources.
Internal
Sources: Internal sources are considered to be
more important and reliable sources. It
includes the employees of the organization, the employed who had left the
organization but desire to join the organization again, or those to whom the
company may like to rehire as they had left voluntarily or those on production
lay off.
External
Sources: These are sources, which lie outside
the organization. These sources includes
new entry in the labour force especially young energetic inexperienced
potential employees like college students. This method of recruitment is
considered to be more suitable because of the following reasons:
a)
Recruitment of
internals leads to inbreeding and discourages new blood with new ideas from
entering into the organization.
b)
It is possible
that internal sources ultimately dry up and hence it may be difficult to find
suitable persons from within the organization.
c)
In case of
certain jobs such as advertising, style, designing, basic research etc
recruitment from within is not desirable.
d)
In many
organizations promotion is based on seniority and there is a danger that right
type of man may not be chosen.
e)
Likes and
dislikes of management may affect the process of selection of persons.
f)
External sources
provide huge scope for selecting required type of personnel for the
organization, having necessary skill, abilities, education, training upto required standard.
g)
Since few people
are to be selected from very large market, it becomes possible to select best
persons irrespective of caste, sex, religion etc.
h)
In the long run
to external sources are more economical because potential employees may not
need extra training for their jobs.
Advantages
of Internal sources of recruitment:
a)
Internal
recruitment tends to improve the morale of the employees because they realize that they are preferred
over outsiders when there are vacancies
in the organization.
b)
It is easier to
evaluate those who are already employed than outside persons. Because the company keeps a record of the
progress, experience training, service etc of all its employees.
c)
It also promotes
loyalty among the employees as it gives them a sense of job security and
opportunities for career development.
d)
The persons
employed by the company are fully aware and well acquainted with its policies
procedures etc. So they require little
training and their chances to remain with the organization are relatively
higher them those of outsiders.
e)
They are tried
and hence reliable people recruitment of internal of cheaper and time saving.
6.
What are the characteristics of a good control system? "Planning without
control is meaningless". Do you agree with the statement? Why? 6+6
Ans: Essentials of a goo control system: The following are the essentials or basic
requirements of an effectively control system:
1)
Suitable: The control system must be
suitable for the kind of activity intended to serve. Apart from differences in
the systems of control in different business, they also vary from department to
department and from one level in the organization to the other.
2)
Understandable: The system must be
understandable, i.e., the control information supplied should be capable of
being understood by those who use it. A control system that a manager cannot
understand is bound to remain ineffective.
3)
Economical: The system must be
economical in operation, i.e., the cost of a control system should not exceed
the possible savings from its use. The extent of control necessary should be
decided by the standard of accuracy or quality required. A very high degree or
standard of accuracy or quality may not really be-necessary.
4)
Flexible: The system of control must
be flexible, i.e. workable even if the plans have to be changed. A good control
system would be sufficiently flexible to permit the changes so necessitated.
5)
Forward Looking: The control system
must be forward looking, as the manager cannot control the past. In fact, the
control system should be so designed so as to anticipate possible deviations,
or problems. Thus deviations can be forecast so that corrections can be
incorporated even before the problem occurs.
6)
Suggestive Of Corrective Action: An
adequate control system should not only detect failures must also disclose
where they are occurring, who is responsible for them and what should be done
to correct them. Overall summary information can cover up certain fault areas.
Planning
without control is meaningless:
Planning and Controlling are closely related.
The relationship between planning and controlling can be divided into the
following two parts.
(i) Interdependence between Planning and
Controlling.
(ii) Difference between Planning and
Controlling.
(i) Interdependence between Planning and
Controlling. Planning is meaningless without controlling and controlling is
blind without Planning. Both the aspects of the interdependence of planning and
control have been discussed below:
(a) Planning is meaningless without
Controlling: if the process of controlling is taken away from management no
person working in the enterprise will take it seriously to work according to
the plans and consequently, the plans will fail.
(b) Controlling is blind without Planning:
Under the system of controlling actual work performance is compared with the
standards. Hence, if the standards are not determined there is no justification
left for control and the standards are determined under planning.
(ii) Difference between Planning and
Controlling: Yes, planning and controlling are incomplete and ineffective
without each other but it doesn’t mean that both are not independent. Reasons
are:
(a) Planning is looking Ahead whereas
Controlling is Looking Back: Plans are always formulated for future and
determined the future course of action for the achievement of objectives laid
down. On the contrary, controlling is looking back because under it a manager
tries to find out, after the work is completed, whether it has been done
according to the standards or not.
(b) Planning is the first function and
Controlling is the last function of Managerial Process: the managerial process
moves in a definite sequence- like planning, organizing, staffing, directing
and controlling happens to be the last step.
SECTION - B
7. Write notes on any two of the following: 7+7
a) Morale: Out of Syllabus
b) Importance of
communication
Ans: Communication is a process of
understanding between the persons through exchange of ideas, messages,
suggestions etc. It is important due to the following reasons –
a) It
facilitates Planning: Participation of all the executives in planning is a pre
requisite for getting the task done. This participation is possible only when
the managers and employees interact with each other. There should be no
communication gap.
b) It helps in decision making. Most of the
decisions are taken up by the top level management. But for decision making,
right type of information is required from different persons. It is through
communication that people come together in a firm, managers can identify the
problems faced by the employees, so that he can take the decisions effectively.
c) It helps in the process of motivation:
Sharing of the information with the subordinate gains their confidence and
willing cooperation. Discussion on common interest of the management and
workers is a source of satisfaction for the employees as it gives them
recognition. It increases their morale of doing work.
d) It is a basis of effective leadership. A
good communicator is a good leader. Through good communication skill, the
manager comes closer to his subordinates and removes the misunderstanding. Thus
it is the basis of leadership.
c) Objectives of
coordination
Ans: Objectives of Co-Ordination:
1. Harmony
of Goals: The most important objective of
co-ordination is to create harmony of objectives in the minds of the employees.
2. Total
Accomplishment: The other main
objective of the co-ordination is to achieve total accomplishment rather than
individual effort. It has been proved beyond doubt that total accomplishment is
always much more than the sum of the individual efforts.
3. Economy
and Efficiency: Another
important objective of co-ordination is economy and efficiency. The
co-ordination among the various resources of input results in economy and
efficiency in the organisation.
4. Good
social Relations: Integration of
individual interests and organisational goals is the primary objective of the
co-ordination. It provides job satisfaction and boosts morale of the employees
and also establishes goods human relations in the enterprise.
d) Programme Evaluation
and Review Technique (PERT).
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 fixing the time and cost parameters of the project.
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.
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