IGNOU B.Com Solved Question Paper
Term-End Examination (December, 2019)
ELECTIVE COURSE: COMMERCE
ECO-003: MANAGEMENT THEORY
Time:
2 hours, Maximum Marks: 50
Weightage:
70%
Note: Attempt both the
Section A and Section B.
Section-A
Note: Attempt any three
questions.
1. Discuss various
managerial functions that are basic and common to all organisations. 12
Ans: Functions/Elements of Management
According
to Henry Fayol, in every organisation manager perform certain functions to achieve
results. These functions are broadly classified under five categories:-
a)
Planning:
Planning is a process of making decision about future. It provides direction to
enterprise activities. Its work is to decide in advance what is to be done,
when and where it is to be done, how it is to be done and by whom. The main
functions of planning are Set up goals, Forecasting, Search for alternatives
source of action and Budgeting.
b)
Organising: It is
concerned with the arrangement of an organisation’s resources – people,
material, technology and finances in order to achieve enterprise objective. The
main functions of organising are Job design, Job specification and Authority
and responsibility.
c)
Staffing:
Staffing is the function of employing suitable personas for the enterprise. It
may be defined as an activity where people are recruited, selected, trained,
developed, motivated and compensated for manning various positions.
d)
Directing:
According to Dale, direction is telling people what to do and seeing that they
do it to the best of their ability. Directing is a function of guiding and
supervising the activities of sub ordinates. The four main elements of
directing are:-
1. Leadership: It is a process of influencing
the action of a person or a group to attain desired objectives. The success of
an organisation depends upon the quality of leadership shown by its managers.
2. Motivation: It is the process of stimulating people to take desired courses of action. It is to inspire, encourage and impel people to take required action.
3. Communication: It is a way of reaching
other with ideas, facts, and thoughts. Effective communication is important in
organisation because managers can achieve very little without it.
4. Supervision: Supervision means
instructing, guiding, monitoring and observing the employees while they are
performing jobs in the organisation. The word supervision is the combination of
two words i.e., super+vision where super means over and above and vision means
seeing.
e)
Controlling: It
is the management function concerned with monitoring employee’s activities,
keeping the organisation on track towards its goals, and making corrections as
required. It include four things:
Ø
setting standard
of performance;
Ø
measuring actual
performance;
Ø
comparing actual
performance against the standard ;
Ø
taking corrective
actions to ensure goal accomplishment.
2.
"Planning is a process consisting of certain steps or series of sequential
activities." Comment upon the statement with relevant examples. 12
Ans:
Planning Process: Planning
process involves the setting up of business objectives and allocation of
resources for achieving them. Planning determines the future course of action
for utilizing various resources in a best possible way. It is a combination of
information handling and decision making systems based on information inputs,
outputs and a feedback loop.
Steps
in the process of Planning:
a)
Setting
organisational objectives: The first and foremost step in the planning
process is setting organisational objectives or goals, which specify what the
organisation wants to achieve. For example, an
increase in sales by 20% could be the objective of the organisation. Objectives
may also be set for each individual department. They give direction to all
departments.
b)
Developing
planning premises: Planning is concerned with the future, which
is uncertain. Therefore, the manager is required to make certain assumptions
about the future. These assumptions are called premises.
Assumptions are made in the form of forecasts about the demand for a particular
product, government policy, interest rates, tax rates, etc. Therefore, accurate
forecasts become essential for successful plans.
c)
Identifying
alternative courses of action: Once objectives are set and
assumptions are made, then the next step is to identify all possible
alternative courses of action. For example, in order to achieve the
organisational objectives of increasing profit, the alternatives may be
a.
increase the sales of an existing product,
or
b.
Produces and sells a completely new product.
d)
Evaluating
alternative courses: The positive and negative aspects of each
proposal need to be evaluated in the light of the objective to be achieved, its
feasibility and consequences. For example, the risk-return trade-off is
very common. The more risky the investment, the higher is the possibility of
returns. To evaluate such proposals, detailed calculations of earnings,
earnings per share, interest, taxes, dividends are made.
e)
Selecting
the best possible alternative: This is the real point of decision
making. The best/ideal plan has to be adopted, which must be the most feasible,
profitable and with least negative consequences. The manager must apply
permutations and combinations and select the best possible course of action.
Sometimes, a combination of plans. may be selected instead of one best plan.
f)
Implementing
the plan: Once the plans are developed, they are put into action. For this,
the managers communicate the plans to all employees very clearly and allocate
them resources (money, machinery, etc.
g)
Follow-up
action: The managers monitor the plan carefully to ensure that the
premises are holding true in the present condition or not. If not, adjustments
are made in the plan.
3. (a) Describe the importance of
staffing function in an organisation. 6
Ans: Need and Importance of Staffing:
1. Obtaining competent personnel: Proper
staffing helps in discovering and obtaining competent personnel for various
jobs.
2. Higher performance: Proper staffing ensures
higher performance by putting right person on the right job.
3. Continuous survival and growth: Proper
staffing ensures continuous survival and growth of the enterprise, research
& development, innovation.
4. Optimum utilization of human resources:
Proper staffing helps to ensure optimum utilization of human resources. It
prevents underutilisation of personnel and high labour costs. At the same time,
it avoids disruption of work.
5. Improve job satisfaction: Proper staffing
improves job satisfaction and morale of employee through objective assessment
and fair rewarding of their contribution.
(b)
What do you mean by Management Development Programmes? Discuss few techniques
of management development programmes. 6
Ans: All those
persons who have authority over others and are responsible for their activities
& for the operations of an enterprise are managers. Any activity designed to improve the performance of
existing managers to provide for a planned growth of managers to meet future
requirements is management development.
According to Flippo “executive development
includes the process by which managers and executives acquire not only skills
and competency in their present job but also capabilities for future managerial
tasks of increasing difficulty and scope.”
In simple words, Executive development or
management development is a systematic process of learning and growth by which
managerial personnel gain and apply knowledge, skills, attitudes and insights
to manage the work in their organization effectively and efficiently.
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.
4. Explain various techniques of co-ordination used by management in an
organisation. 12
5. Explain different
stages involved in the control process. Give suitable example to support your
answer. 12
Ans:
Steps in Controlling Process
In
order to perform his control functions, a manager follows three basic steps.
First of all, he establishes the standards of performance to ensure that
performance is in accordance with me plan. After this, the manager will
appraise the performance and compare it with predetermined standards. This step
will lead the manager to know whether the performance has come up to the
expected standard or if there is any deviation. If the standards are not being
met, the manager will take corrective actions, which is the final step in
controlling.
1) Establishing standards: A standard acts as a
reference line or basic of comparison of actual performance. Standards should
be set precisely and preferably in quantitative terms. It should be noted that
setting standards is also closely linked with and is an integral part of the
planning process. Different standards of performance are set up for various
operations at the planning stage, which serve as the basis of any control
system. Establishment of standards in terms of quantity, quality or time is
necessary for effective control. Standards should be accurate, precise,
acceptable and workable. Standards should be flexible, i.e., capable of being
changed when the circumstances require so.
2) Measurement of performance: This step involves
measuring of actual performance of various individuals, groups or units and
then comparing it with the standards, which have already been set up at the
planning stage. The quantitative measurement should be done in cases where
standards have been set in quantitative terms. In other cases, performance
should be measured in terms of quantitative factors as in case of performance
of industrial relations manager. Comparison of performance with standards is
comparatively easier when the standards are expressed in quantitative terms.
3) Comparison: This is the core of the control
process. This phase of control process involves checking to determine whether
the actual performance meets the predetermined or planned performance. Manager
must constantly seek to answer, “How well are we doing?” When a production
supervisor checks the actual output or performance of his department with the
production schedule, he is performing comparison aspect of control. When-an
executive calculates the performance of his subordinates once in six months or annuity, he is performing comparison aspect
of control. Checking return on in investment is a comparison phase of control.
4) Taking corrective action: The final step in
the control process is taking corrective actions so that deviations may not
occur again and the objectives of the organisation are achieved. This will
involve taking certain decision by the management like re-planning or redrawing
of goals or standards, assignment of clarification of duties. It may also
necessitate reforming the process of selection and the training of workers.
Thus, control function may require change in all other managerial functions. If
the standards are found to be defective, they will be modified in the light of
the observations.
6. Discuss briefly the
three basic styles of leadership with suitable examples. 12
Ans:
Leadership Styles or Types of Leaders
1.
Autocratic or
Authoritarian Style leader: An
autocratic also known as authoritarian style of leadership implies wielding
absolute power. Under this style, the leader expects complete obedience from
his subordinates and all decision-making power is centralized in the leader. No
suggestions or initiative from subordinates is entertained. The leader forces
the subordinates to obey him without questioning. An autocratic leader is, in
fact, no leader. He is merely the formal head of the organisation and is
generally disliked by the subordinates who feel comfortable to depend
completely on the leader.
Advantages:
a)
Reduced stress due to increased control
b)
A more productive group ‘while the leader is
watching’
c)
Improved logistics of operations
d)
Faster decision making
Disadvantages:
a)
Short-termistic approach to management.
b)
Manager perceived as having poor leadership
skills
c)
Increased workload for the manager
d)
People dislike being ordered around
e)
Teams become dependent upon their leader
2.
Laissez-faire or
Free-rein Style Leader: Under
this type of leadership, maximum freedom is allowed to subordinates. They are
given free hand in deciding their own policies and methods and to make
independent decisions. The leader provides help only when required by his
subordinates otherwise he does not interfere in their work. The style of
leadership creates self-confidence in the workers and provides them an
opportunity to develop their talents. But it may not work under all situations
with all the workers, may bring problems of indiscipline. Such leadership can
be employed with success where workers are competent, sincere and
self-disciplined.
Advantages:
a)
No work for the leader
b)
Frustration may force others into leadership
roles
c)
Allows the visionary worker the opportunity to
do what they want, free from interference
d)
Empowers the group
Disadvantages:
a)
It makes employees feel insecure at the
unavailability of a manager.
b)
The manager cannot provide regular feedback to
let employees know how well they are doing.
c)
Managers are unable to thank employees for
their good work.
d)
The manager doesn’t understand his or her
responsibilities and is hoping the employees can cover for him or her.
3.
Democratic or
Participative Style leader: The
democratic or participative style of leadership implies compromise between the
two extremes of autocratic and laissez-fair style of leadership. Under this
style, the supervisor acts according to the mutual consent and the decisions
reached after consulting the subordinates. Subordinates are encouraged to make
suggestions and take initiative. It provides necessary motivation to the
workers by ensuring their participation and acceptance of work methods. Mutual
trust and confidence is also created resulting in job satisfaction and improved
morale of workers. It reduces the number of complaints, employee's grievances,
industrial unrest and strikes. But this style of leadership may sometimes cause
delay in decisions and lead to indiscipline in workers.
Advantages
a)
Positive work environment
b)
Successful initiatives
c)
Creative thinking
d)
Reduction of friction and office politics
e)
Reduced employee turnover
Disadvantages:
a)
Takes long time to take decisions
b)
Danger of pseudo participation
c)
Like the other styles, the democratic style is
not always appropriate. It is most successful
d)
when used with highly skilled or experienced
employees or when implementing operational changes or resolving individual or
group problems.
Section—B
7. Write explanatory
notes on any two of the following: 7+7
(a) McGregor's
Participation theory
Ans: McGregor’s Theory X and Y
Doughlas
McGregor introduced these two theories i.e., Theory X and Theory Y, based on
two distinct views of human beings. He proposed, at opposite extremes, two
pairs of assumptions about human beings which he thought were implied by the
actions of the mangers. Theory X deals with one extreme, based on one set of
assumptions and Theory y deals with another extreme based on another set of
assumptions. These theories are not based on any research, but according to
McGregor, these are intuitive deduction.
Theory
X:
-This theory is based on the
traditional approach to human behavior. The assumptions generally, held by the
managers in their theory are: -
a) The
average human beings inherently dislike work and will try to avoid it, whenever
possible
b) A the
employee are lazy, they must be controlled, coerced, threatened with punishment
to achieve goals, to which they are indifferent
c) Average
employee will try to avoid responsibility and seek formal directions whenever
possible, because they have relatively little ambition.
Theory
y:
-This approach assumes that management
by direction and control is questionable method for motivating such people
whose physiological and social needs have been satisfied and whose social;
esteem and self actualization needs are becoming more important. For such
people, Theory Y seems to be applicable, which is the contrast of Theory X.
This theory makes the following assumptions about people:
a)
The average human
being does not inherently dislike work. He can view work as natural or
enjoyable as rest or play
b)
Employees will
exercise self direction and self control in the attainment of the objectives to
which they are committed
c)
Given proper working
conditions, average person can learn to accept and even to seek responsibility
d)
Commitment to
objectives is a function of the rewards associated with their achievement
e)
All the people are
capable of making innovative and creative decision and the decision making is
not the sole province of the people in management position.
(b) Problems of informal
organisation
Ans: Disadvantages of Informal Organisations:
1)
Informal groups generally resist
change.
2)
Interest of formal and informal groups
may clash with each other.
3)
As informal groups set their own norms
about quote of work to be done hence productivity remain below optimum
(maximum) level.
4)
Members of informal organisation may
adopt group think philosophy by way of assuming that group decision is the only
right decision.
5)
Informal group ends to promote rumors,
grapevine which spreads at a much faster rate and hence harmful to the
organisation.
6)
Mangers should not resist formation of
in formal groups but try to convince it to contribute to organisational goals.
(c) Behavioural approach to management
(d) Limitations of management
principles
Principles of Management are
the statements of fundamental truth which provide guidelines which help
management to take decisions and action. They are derived from observation and
experimental studies. Some of the limitations of management
principles are listed below:
a)
Universal Application is a myth: Though
management principles are considered to be universally applicable, it is a well
known fact that all the principles are not applicable in every situation.
Universal applicability of management principles is a myth.
b)
Employees will suffer in long run: a
Management principle promotes specialisation which can be a problem for
employees in the long run because present business situation is diversified and
expertise in various fields in now a must for every employee.
c)
Delay in decision making: Complete
Centralisation of powers and decision making some times causes unnecessary
delay in decision making.
d)
Misuse of authority: Complete decentralisation
will result in misuse of authority.
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