What is William Ouchi’s Theory Z of Leadership?

William Ouchi spent years researching Japanese companies under the great Japanese economic boom of the 1980s. In this period, Japanese companies were by far the most productive in the world, and hence very interesting to western management scientists.

During his research, William Ouchi identified several characteristic traits of Japanese leadership, which formed the basis for the formulation of a new leadership style – Theory Z. Therefore, Theory Z is also oftentimes described as the so-called Japanese Management Style.

In short, Theory Z stresses the importance of a caring and benevolent relationship between leaders and followers, and presumes that workers will get motivated by a strong social relationship with the company. Loyalty to the company will increase by providing a job for life, in which the company takes genuine interest in the well-being of the employee.

This leadership style is also comparable with Paternalistic Leadership that is oftentimes the most accepted leadership style in Asian countries, in which social relations between leaders and followers play a significant role for employee motivation.

Just as for Douglas McGregor’s Theory X & Y, it is very important always to acknowledge that it is the followers needs that should determine which leadership style to adopt, and that every leader must adapt his/her leadership style to the local cultural context. Therefore it may not be easy to implement Theory Z in a western cultural setting, because western employees may have completely different needs for leadership than e.g. the Japanese workforce.

When wanting to understand cultural differences between national and organizational cultures, current or prospective leaders may benefit from understanding the research performed by scientists such as Geert Hofstede, Fons Trompenaars and Edgar Schein, who all conducted extensive research on both national and organizational culture, and on how potential cultural differences may affect leadership.

1(a). Define Open and Close system and give at least one example of each.

Answer: A system is commonly defined as a group of interacting units or elements that have a common purpose. The units or elements of a system can be cogs, wires, people, computers, and so on. Systems are generally classified as open systems and closed systems and they can take the form of mechanical, biological, or social systems. Open systems refer to systems that interact with other systems or the outside environment, whereas closed systems refer to systems having relatively little interaction with other systems or the outside environment. For example, living organisms are considered open systems because they take in substances from their environment such as food and air and return other substances to their environment. Humans, for example, inhale oxygen out of the environment and exhale carbon dioxide into the environment. Similarly, some organizations consume raw materials in the production of products and emit finished goods and pollution as a result. In contrast, a watch is an example of a closed system in that it is a relatively self-contained, self-maintaining unit that has little interacts or exchange with its environment.

1(b). Distinguishes between scientific management and behavioral management.

Answer: The principle difference between scientific management and OBM might be on the conceptual underpinnings: OBM is based on B.F. Skinner's science of human behavior.

Taylor's principles of scientific management

· Science, not rule-of-thumb; · Scientific selection of the worker

· Management and labor cooperation rather than conflict · Scientific training of workers.

Fayol's principles of management: Administrative theory

.Division of work (specialization) · Authority and responsibility· Discipline Unity of command

· Unity of direction · Subordination of individual interest

· Remuneration of personnel · Centralization

· Scalar chain · Order

· Equity · Stability of tenure of personnel

· Initiative · Esprit de corps

· The concept of line and staff · Committees

· Functions of management – planning, organizing, training, commanding, coordinating.

1(c). “A manager must be a leader of employee.”-Explain.

Answer: A healthy employee relationship is essential for the employees to find their work interesting and perform their level best. It is important for everyone to understand that one goes to his organization to work and conflicts must be avoided as it is nothing but a mere waste of time. Employees must be comfortable with each other and work in unison towards a common goal. An individual cannot remain tightlipped and work for infinite hours, he needs people around to talk to and discuss his ideas.

The team leader or the manager plays an important role in promoting healthy relation at workplace:

1. A team leader should be a role model to his team members. He should treat each and every individual as one and avoid partialities at work.

2. The superior must not act pricy and should always be accessible to his employees.

3. The manager must ensure that all important communication takes place on an open forum for everyone to get a common picture.

4. As a team leader it is one’s prime responsibility to encourage healthy competition at work.

5. Make sure all your team members take their lunch together and you are also a part of it.

The team leader should be neutral to his team members and make sure they enjoy a healthy relationship with him as well as their fellow team members for a better output. A team leader should try his level best to bring his team members closer and bind them together.

2(a). Define Charismatic leadership.

Answer: Charismatic leaders describe individuals who convey an inspiring vision of the future for the unit or organization as well as align their behavior to these values. Recent research indicates, however, that charismatic leadership--often regarded as a specific facet of the broader concept of transformational leadership-is not effective in all contexts. Charismatic leadership, for example, is not as effective when individuals feel a sense of belonging to their organization. There are three main stages of this leadership process as well as key behaviors. During the first stage, the leaders determine the possibilities and opportunities that could be explored. Specifically, these leaders consider the opportunities and constraints in the environment as well as the needs and preferences of members of their workgroup. During the second stage, charismatic leaders promulgate an inspiring vision to accommodate these opportunities and preferences. Finally, during the third stage, charismatic leaders implement this vision, motivating followers to pursue these objectives. In particular, these leaders engage in personal risk, partly to inspire followers through role modeling, as well as demonstrate unconventional behavior.

2(b). As a manager of a branch of a bank which type of leadership style would you choose from Blake and Mount’s managerial grid? Please explain.

Answer:

The Managerial Grid is based on two behavioral dimensions:

· Concern for People – This is the degree to which a leader considers the needs of team members, their interests, and areas of personal development when deciding how best to accomplish a task.

· Concern for Production – This is the degree to which a leader emphasizes concrete objectives, organizational efficiency and high productivity when deciding how best to accomplish a task.

The Blake Mouton Managerial Grid is a practical and useful framework that helps you think about your leadership style. By plotting ‘concern for production’ against ‘concern for people’, the grid highlights how placing too much emphasis in one area at the expense of the other leads to low overall productivity.

The model proposes that when both people and production concerns are high, employee engagement and productivity increases accordingly. This is often true, and it follows the ideas of Theories X and Y, and other participative management theories.

While the grid does not entirely address the complexity of “Which leadership style is best?”, it certainly provides an excellent starting place to critically analyze your own performance and improve your general leadership skills.

2(c). Is it possible a manager is both task oriented and employee oriented at the same time?

Answer: Task orientation and employee orientation are the two general components of the Blake Mouton Managerial Grid, a model of leadership Robert Blake and Jane Mouton developed in the early 1960s. This model depicts the balance of concern for production and concern for people that managers should have.

Task Orientation: Task orientation relates to Blake and Mouton's concern for production. It is the quality of a manager who maintains strong discipline to task completion and deadlines. A highly task-oriented manager maintains focus on timing and quality of work and, at the extreme, can lose sight of the importance of showing consideration for employees. A leader with strong orientation often gets labeled as an authoritarian leader because he puts his own plan into action with little employee involvement.

Employee Orientation: Employee orientation, or Blake and Mouton's concern for people, is a trait of a manager who cares about the people who work for him. For long-term motivation, employees generally want to know their leader cares about them as people. Taken to the extreme, however, employee orientation can cause a manager to overlook task failures and missed deadlines. The employee-oriented manager often has a democratic style of leadership.

3(a). Define conflict.

Answer: We define conflict as a disagreement through which the parties involved perceive a threat to their needs, interests or concerns.

Disagreement - Generally, we are aware there is some level of difference in the positions of the two (or more) parties involved in the conflict. But the true disagreement versus the perceived disagreement may be quite different from one another.

Parties involved - There are often disparities in our sense of who is involved in the conflict. Sometimes, people are surprised to learn they are a party to the conflict, while other times we are shocked to learn we are not included in the disagreement.

Perceived threat - People respond to the perceived threat, rather than the true threat, facing them.

Needs, interests or concerns - There is a tendency to narrowly define "the problem" as one of substance, task, and near-term viability. However, workplace conflicts tend to be far more complex than that, for they involve ongoing relationships with complex, emotional components.

3(b). “Conflict and competition are not similar terms.”-Explain.

Answer: Conflict is an inevitable part of human relationships. Depending on how it is approached and managed, conflict can be either constructive or destructive. Conflict arises when people disagree over something perceived as important. We live in communities and families with people who may not see things as we do. Conflicts occur on a daily basis, sometimes as small disputes, sometimes as violent battles.

Competition: a situation in which people or organizations try to be more successful than other people or organizations. Intergroup competition can play a significant role in creating prejudicial or discriminatory ideas, attitudes or behavior. According to conflict theory, resource scarcity and intergroup competition to acquire them are the source of prejudices against members of opposing groups. When groups engage in this kind of competition, negative or prejudicial attitudes toward their competitors can be observed among group members.

3(c). Discuss the different types of conflict management styles.

Answer: The Five Conflict Management Styles

We all adopt different types of conflict management styles, which vary with the conflict at hand and the person it involves. Knowing the 5 different types of conflict management styles can help people in becoming more aware of how they deal with conflict, and if this is a good strategy to address the noted issue. It’s important to note that each style has its pros and cons.

· The Competing Style of conflict management can be described as placing high emphasis on the goal, at the detriment of the relationship you have with the individual involved. “It’s my way or the highway!” The goal is asserted aggressively, and the use of authority, position, as well as pressure tactics such as threats, force of persuasion is common. The power in this style of conflict management comes from a position of strength.

· The Avoiding Style of conflict management occurs when someone places little emphasis on their goal as well as on the relationship with the individual involved. “No way! Let’s not make a big deal out of this!” The individual may deny the problem, avoids decisions and confrontations. They may also deflect responsibilities and blame other people. The power in this style of conflict management comes from silence and lack of cooperation.

· The Accommodating Style of conflict management can be described as placing low emphasis on the goal, but high emphasis on the relationship with the person involved. “OK, whatever you say. We’ll do it your way!” Someone adopting this style can be described as protective and ‘soft’ on relationships. They set aside their needs for the other person and will yield to the other point of view. They are highly cooperative and can be described as a ‘yes’ person. They want to build good faith and relationships for the future. The other person may learn from the experience and the risk is low. The power in this style of conflict management comes from relationships and approval of others.

· The Compromising Style is characterized by moderate emphasis on both the goal and the relationship with the person involved. “OK, I’ll meet you half way!” the individual may listen and understand both sides, and introduces many issues so everyone gets a share. They split the difference and everyone loses and wins. The power in this style of conflict management comes from moderation and reasonableness.

· The Collaborating Style occurs when someone places high emphasis on both the goal and the relationship involved. There is high assertiveness. “Let’s do it our way! This is what I prefer…What do you want?” They listen and communicate with others to understand needs and values. They use information and resources most effectively, and ongoing problem solving is required. Trust and balance are also important. Satisfaction with the work and commitment to the solution is imperative to all. The risk with this style includes fatigue, and use of too much time, no solution in sight and distraction from other tasks. The power comes from openness, clarity and cooperation.

Q:An Organization is a social system.

A social system is a complex set of human relationships interacting in many ways. Within an organization, the social system includes all the people in it and their relationships to each other and to the outside world. The behavior of one member can have an impact, either directly or indirectly, on the behavior of others. Also, the social system does not have boundaries... it exchanges goods, ideas, culture, etc. with the environment around it. Culture is the conventional behavior of a society that encompasses beliefs, customs, knowledge, and practices. It influences human behavior, even though it seldom enters into their conscious thought. People depend on culture as it gives them stability, security, understanding, and the ability to respond to a given situation. This is why people fear change. They fear the system will become unstable, their security will be lost, they will not understand the new process, and they will not know how to respond to the new situations. Individualization is when employees successfully exert influence on the social system by challenging the culture.

Organization & Organizational Behavior

Q:Distinguhish between formal and informal organization.

Meaning :Formal Organization is formed when two or more persons come together. They have a common objective or goal. They are willing to work together to achieve this similar objective. Formal Organization has its own rules and regulation. These rules must be followed by the members (employees and managers). A formal Organization has a system of co-ordination. It also has a system of authority. It has a clear superior-subordinate relationship. In a formal Organization, the objectives are specific and well-defined. All the members are given specific duties and responsibilities. Examples of formal Organization are:- a company, a school, a college, a bank, etc.

Informal Organization exists within the formal Organization. An informal Organization is a network of personal and social relationships. People working in a formal Organization meet and interact regularly. They work, travel, and eat together. Therefore, they become good friends and companions. There are many groups of friends in a formal Organization. These groups are called informal Organization. An informal Organization does not have its own rules and regulation. It has no system of co-ordination and authority. It doesn't have any superior-subordinate relationship nor any specific and well-defined objectives. Here in informal Organization, communication is done through the grapevine.

Formed by Whom? A formal Organization is formed by the top level management. An informal Organization is formed by social forces within the formal Organization.

Rules and Regulations: The members of a formal Organization have to follow certain rules and regulations. These rules are available in writing (documented). They are made by a formal authority (superiors). If the members follow these rules properly, then they will be rewarded. However, if they do not follow these rules, they will be punished. The members of an informal Organization do not have to follow any rules and regulations.

Duties and Responsibilities: In a formal Organization, the duties, responsibilities, authority and accountability of each member is well-defined. In an informal Organization, there are no fixed duties, responsibilities, authority, accountability, etc. for the members.

Objectives or Goals: In a formal Organization, the objectives or goals are specific and well-defined. The main objectives of a formal Organization are productivity, growth, and expansion. In an informal Organization, the objectives are not specific and well-defined. The main objectives of an informal Organization are friendship, security, common interest, individual and group satisfaction, etc.

Stability: A formal Organization is stable. An informal Organization is not stable.

Channels of Communication: A formal Organization uses formal channels of communication. An informal Organization uses informal channels of communication (i.e. grapevine)

Superior-Subordinate Relationship: In a formal Organization, there exist a superior-subordinate relationship. In an informal Organization, there is no such superior-subordinate relationship.

Benefits for Members :The members of the formal Organization get financial benefits and perks like wages or salaries, bonus, travelling allowances, health insurance, etc. The members of informal Organization get social and personal benefits like friend circle, community, groups, etc.

Q: Define Organizational Behavior and its key forces.

Organizational behavior is the study and application at knowledge about the how people - as individuals and a groups - act within organization. It strives to identify ways in which people can act more effectively."
- Keith Davis

"Organizational behavior can be defined as the understanding, prediction and management of the human behavior affect the performance of the organizations.

- Luthans

1. People – Individuals and groups.

2. Structures – Jobs and relationships.

3. Technology – Machinery and computers( Hardware and Software).

4. Social System Environment – Government, societal pressure and competition.

Q: What are the basic approaches of Organizational Behavior?

The four basic approaches of OB are:

Human Resources ( supportive) approach- Employee growth and development toward higher levels of competency, creativity and fulfillment are encouraged and supported because people are the central resource in any organization and society.

Contingency approach-Different managerial behaviors are required by different environments for effectiveness.

Results-oriented approach-Outcomes of organizational behavior programs are assessed in terms of their efficiency.

Systems approach- All parts of an organization interact in a complex relationship. Systems approach takes an across- the board view of people in organizations and analyses issues in terms of total situations and as many factors as possible that may affect people’s behavior.

Q: Define Organization. Family unit is an organization.

An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.

A social unit of people, systematically structured and managed to meet a need or to pursue collective goals on a continuing basis. All organizations have a management structure that determines relationships between functions and positions, and subdivides and delegates roles, responsibilities, and authority to carry out defined tasks. Organizations are open systems in that they affect and are affected by the environment beyond their boundaries.

Family unit is an organization: It is good to remember a family is an organization. In fact, it is the basic organization of society. This is just one of the reasons I am such a proponent of family meetings. You wouldn't think of running a successful business without a plan, goal setting meetings, team building sessions and clear missions and expectations. As such, everyone in the family should have an equivalent of a job description. Each person's job description helps him define his roles and responsibilities in the family. Just like in the workplace, the clearer the job description and the more input is solicited from the participant, the more ownership is established. If you have ever worked in a workplace where no one knew what their job was day to day and rules were arbitrary, you will recall how chaotic and frustrating it was for everyone. The following information on structuring a family council has been compiled in part from information contained in The Parent's Handbook by Dinkmeyer & McKay, as well twenty five years of personal experience.

Q: What are the factors influence organizational behavior?

People: Organizations consist of individuals with very diverse educational backgrounds, values, abilities, and perceptive.

Structure: The formal relationship between and use of the people within the organization. Jobs and relationships make-up the structure of the organization. The present trend is towards a flatter organizational structure consisting of fewer levels.

Technology: The machinery and computer hardware and software that the people of the organization use to effectively accomplish tasks. While technology allows people to accomplish their jobs in a more efficient way there is a delicate balance between technology and the social systems within an organization.

Environment: Organizations have both an internal and external environment. Every organization is part of a larger system that consists of elements such as government, competitors, family, and other organizations. Factors such as globalization, and society’s expectations of the organization influence one another in an intricate, complex system in which all organizations and the effects of their behavior are interrelated.

Q: Define Goal. What are the goals of organizational Behavior?

An observable and measurable end result having one or more objectives to be achieved within a more or less fixed timeframe.

There are some goals of organizational behavior which are as follows:

Describe: The first goal is to describe, systematically how people behave under a variety of conditions. Achieving this goal allows managers to communicate about human behavior at work using a common language.

Understand: A second goal is to understand any people behave as they do. The managers would be frustrated if they could talk about behavior of their employees, but not understand the reasons behind those actions.

Predict: The managers would have capacity to predict which employees might be dedicated and productive or which ones might have absent, cause problem. And thus the managers could take preventive actions.

Control: The final goal of OB is to control and develop some human activity at work. Since managers are held responsible for performance outcome, they are vitally interested in being able to make an impact on employee behavior, skill development, team effort, and productivity. Managers need to be able to improve results through the actions they and their employees take, and organizational behavior can aid them in their pursuit of this goal.

Q. What are the three levels of analysis in a organizational behabior?

At the group level of analysis, organizational behavior involves the study of group dynamics, intra- and inter group conflict and cohesion, leadership, power, norms, interpersonal communication, networks, and roles. At this level of analysis, organizational behavior draws upon the sociological and socio-psychological sciences
organizational level: At the organization level of analysis, organizational behavior involves the study of topics such as organizational culture, organizational structure, cultural diversity, inter-organizational cooperation and conflict, change, technology, and external environmental forces. At this level of analysis, organizational behavior draws upon anthropology and political science

Planning

Q: Define Planning.

Ans.: Simply stated, planning means deciding future course of action i.e. making plans for attaining organization’s objectives. Planning is the process of determination of organization’s objectives and selecting the course of action i.e. plans for attaining them.

According to Weihrich and Koontz – “Planning involves selecting mission and objectives and actions to achieve them. If requires decision making i.e. choosing from among alternative future course of action.

According to Robert Albanese, “Planning is the process or activity of determining in advance specifically what should be done in order to achieve particular goals, how it should be done, when or where it should be done and who should do it.”

Q. What are the essential elements of Planning?

Ans.: The main components or elements of planning are as follows:-

(1) Objectives: Objectives are the desired results that an organization wants to achieve within a specified time period.

(2) Strategies: Strategy means the long range approach for dealing with the organization’s competitive environment with a view to win over competitors in business.

(3) Policies: Policies are the guidelines set to provide direction in decision making. These set the boundaries around which decisions are made.

(4) Procedures: Procedures are the chronological sequence of steps or actions to be taken to accomplish a specific test or job.

(5) Method: A method is a prescribed way of completing a step in a procedure.

(6) Rules: Rules are guiding statements that direct action or behaviour of individuals in a given situation.

(7) Standards: Standard is a measure against which the level of performance is measured or evaluated.

(8) Programmes : A programme is a sequence of action steps arranged in the priority necessary to accomplish an objective.

(9) Schedules: A Schedule is a plan which indicate the time of

(i) commencement of task.

(ii) passing through the different stages or processes.

(iii) Finalizing the task.

(10) Budgets: A budget is a numerical plan containing expected results in quantitative or numerical terms.

(11) Projects: A project is a programme with less significant objectives, generally a shorter period of time and usually less detail.

Q. What are the steps involved in the Planning Process?

Ans.: Steps in Planning:

(i) Environment Scanning

(ii) Setting Objectives

(iii) Establishing Planning Promises

(iv) Searching Alternatives

(v) Evaluating the Alternatives

(vi) Selecting the Most Appropriate Alternative or Plan

(vii) Formulating Derivative Plans

(viii) Budgeting i.e. Committing Resources

(ix) Implementing the Plans

(x) Follow-up Action

Q.4 Write the essentials of an Effective Planning.

Ans.: Planning or a plan can be more effective if the following factors are taken into consideration:-

(i) Well Defined Objectives

(ii) Simple and Easy to Understand

(iii) Comprehensive (Cover each and every aspect)

(iv) Flexible (Capable of being modified)

(v) Balanced (Balance between objectives and resources)

(vi) Economical

(vii) Stable

(viii) Continuity

(ix) Unity (Operate under one overall plan)

(x) Consistency

(xi) Written

(xii) Practicable

(xiii) Logical and Rational

(xiv) Accountability for Implementation

Q. “Planning and control are Siamese twins” explain it.

PPC comprise the planning, routing, dispatching in the manufacturing process so that the movement of material, performance of machines and operation of labor however are subdivided and are directed and coordinated as to quantity, quality, time and place. Planning and control are two basic and interrelated managerial functions. They are so interrelated that they can be and often are considered as being one function. Planning is the preparation activity while control is the post-operation function. Both of them are so closely related that they are treated as Siamese twins. Planning sets the objectives, goals, targets on the basis of available resources with their given constraints. Control is the integral part of effective planning. Similarly control involves assessment of the performance, such assessment can be made effectively only when some standard of are set in advance. Planning involves setting up to such standard. The controlling is made by comparing the actual performance with these present standard and deviations are ascertained and analyzed. Production is an organized activity of converting raw materials into useful products but before starting that work of actual production, production planning is done in order to anticipated possible difficulties and decide in advance as to how the production should be carried out in the best and economical way. Since mere planning of production is not only sufficient, hence management take shall possible steps to see that project or plan chalked by the planning department are properly adhered to and the standards set are attained in order to achieve it, control over production is exercised. The aim of production control is to produce the products of right quality, in right quantity at the right time by using the best and least expensive methods.

Q. “Planning is looking Ahead & Control is looking back” - Comment.

Planning is Looking Ahead is true because it contributes heavily to success and gives us some control over the future. By, planning we set aside our tasks and deadlines so we can enlarge our mental focus and seeing the bigger picture. By, planning we can set our Personal or organizational goals and for this defiantly we have to look ahead. But, Planning is not ending with such strategies or guidelines. It has relation with Implementation and controls. Because plans are not always proceed as conceived. The control process measures progress towards goal attainment and indicate corrective action if too much deviation is detected. Controlling investigates whether planning was successful. Controlling referred to as terminal management function, takes place after the other functions have been completed. And for this process we have to look back and have to analyze the performance of our planning, organizing and leading. And therefore we have to look back also. So, yes we can say Control is looking back for Investigation, Analysis, and Understandings and for checking our effectiveness and efficiency.

Control:

The Nature of Control in Organizations

Control is a process to regulate organizational activities so that some targeted element of performance remains within acceptable limits. Without this regulation, organizations have no indication of how well they perform in relation to their goals. Example: ship’s rudder, keeps the organization moving in the proper direction. Like a rudder, control provides an organization with a mechanism for adjusting its course if performance fails outside of acceptable boundaries.

Purposes of Control:

• It is one of the four basic management functions and has four basic functions. What are the functions?

– Adapts to environmental change.

– Limits accumulation of error.

– Helps coping with organizational complexity.

– Helps minimize costs.

The Purposes of Control

Adapts to environmental change.

All organizations need to contend with change. A properly designed control system can help managers anticipate, monitor, and respond to changing circumstances. In contrast, an improperly designed system can result organization performance that falls far below acceptable levels.

Limits accumulation of error.

Small mistakes and errors do not often seriously damage an organization's financial health. However, small errors may accumulate and eventually become vary serious. Controlling helps managers to rectify small mistakes and errors so that they do not become a major problem for the long run.

Helps coping with organizational complexity.

Small companies which produces only one product, has simple organizational design, and enjoys constant demand, can maintain control with a very basic and simple system. But business that produce many products and has a large market area, a complicated organization design , many competitors needs sophisticated system to maintain adequate control. Example : Emery Air Freight was quite profitable until it bought Purolator Courier Corporation. After the acquisition the company became big, and more complex, but it added no new controls to organization. Consequently, Emery lost market share and was on the verge of bankruptcy.

Helps minimize costs.

When practiced effectively, control can help reduce costs and boost output. Example: Georgia- pacific Corporation, a furniture company, learned a new technology that it could use thinner blades for its saws. The company used its control system to calculate that massive amount of wood could be saved by using the thinner blades, and thus it could save them a huge cost. As the company discovered, effective control systems can eliminate waste, lower labor costs, and improve per unit output.

Levels of Control

• Operational control: Focuses on the processes used to transform resources into products or services.

• Financial control: Concerned with financial resources. Example : Monitoring receivables to make sure that customers are paying their bills on time.

• Structural control: How the elements of organization’s structure are serving the intended purposes. Example : Monitoring the administrative ration to make sure that staff expenses do not become excessive.

• Strategic control: How effective the organization’s corporate, business, and functional strategies are succeeding in helping the organization meet its goals and objectives. Example : if a corporation has been unsuccessful in implementing its strategy of related diversification, its managers need to identify the reasons, either change the strategy or renew their efforts to implement it)

Steps in the Control Process

Steps in the Control Process

Establish Standards

The first step in the control process is establishing standards. A control standard is a target against which subsequent performance will be compared. Example : at Taco Bell Fast –food restaurant service standards are

– 95% of all the customers are greeted within 3 minutes

– Preheated chips will not sit in the warmer for more than 30 minutes

– All Empty tables will be cleaned within 5 minutes after being vacated

Standard established for control should be expressed in measurable terms. In the above example standard one is 95%, three is ‘‘All Tables’’.

Control standards should be consistent with the organization’s goals. Taco Bell has organizational goals involving customer service, food quality, and restaurant cleanliness.

A final aspect of establishing standards is to identify performance indicators. Performance indicators are measures of performance that provide information that is directly relevant to what is being controlled. Example: an organization is following a tight schedule in building a new plant. Relevant performance indicators can be buying a site, selecting a building contractor, ordering equipment. However, monthly sales increase are not relevant in this regard. On the other hand, if control is focused on revenue, then monthly sales increases are relevant, whereas buying land for a new plant is less relevant.

Measure Performance

This is the second step in the control process. Performance measurement is a constant , ongoing activity for most organization. For control to be effective, performance measures must t be valid.

– Daily, weekly, and monthly sales figures measure sales performance.

– Production performance may be expressed in terms of unit cost, product quality, or volume produced.

– Employee performance is often measure in terms of quality or quantity of output.

Compare Performance Against Standards.

Performance may be higher than, lower than, or identical to the standard. In some cases comparison is easy. The timetable for comparing performance to standards depends on a variety of factors including the importance and complexity of what is being controlled. For longer-run and higher-level standards, annual comparisons are necessary. In another circumstances, more frequent comparisons are necessary. Example : a business with a cash shortage may need to monitor its on-hand cash reserves daily.

Consider Corrective Action

Decisions regarding corrective actions draw heavily on a manager’s analytic and diagnostic skills. After comparing performance against control standards, one of the three actions is appropriate.

--Maintain status quo (do nothing) : preferable when performance matches the standard

--Correct the deviation : some actions are needed to correct the deviation. Sometimes, if performance is higher than expected it may cause problems. Example : Ford enjoyed a huge demand for Contour (car). There were customers waiting list and many were willing to pay more for the car. Ford did not increase production in the fear that demand would eventually drop. To deal with the excessive demand, ford reduced its advertising for the car. That curtailed the demand for the car.

Change the standards: changing standard is necessary if it was set too high or too low. This is apparent if most employees routinely beat the standard by a wide margin or if no employees ever meet the standard. Also, standards that seemed appropriate when they were established may need to be adjusted because circumstances have changed.

Characteristics of Effective Control

• Integration with planning

• Flexibility

• Accuracy

• Timeliness

• Objectivity

Integration With Planning

Control should be linked with planning. The explicit and precise this linkage, the more effective the control system. As goals are set during the planning process, attention should be paid to developing standards that will reflect how well the plan is realized. Example : Managers at Champion Spark Plug Company developed twenty one new products. Managers decided in advance what level of sales they wanted to realize from each product for each of the next five years. They established these sales goals as standard against which actual sales would be compared. Thus by accounting for their control system, managers did an excellent job of integrating planning and control.

Flexibility

The Control system itself must be flexible enough to accommodate change. Example : an organization whose diverse product line requires seventy five different raw materials. The company’s inventory control system must be able to manage and monitor all seventy five materials. When a change in product line changes the number or raw materials needed, or when the required quantities of raw materials change, the control system should be able to handle the revised requirements. Because developing and implementing a new control system is expensive.

Accuracy

Managers make large number of decisions based on inaccurate decisions.

– Field representative may hedge their sales estimates to make themselves look better.

– Production managers may hide costs to meet their targets.

– Human resource managers may overestimate their minority recruiting prospects to meet affirmative action goals

The results of these inaccurate information managers receive is dramatic. If sales projection are inflated, a manager might cut advertising. Hiding production costs may lead a company quote a sales price much lower than desirable. In each case, the results of inappropriate information results inappropriate managerial action.

Timeliness

Timeliness does not mean quickness it rather describes a control system that provides information as often as is necessary.

Champion Spark Plug has a wealth or historical data on its sparkplug sales, it does not need information on sparkplug as frequently as it needs sales feedback for its newer products.

Retail organizations usually need sales results daily so that they can manage cash flow and adjust advertising and promotion. In contrast, they may require information about physical inventory only quarterly or annually.

The more uncertain and unstable the circumstances, the more frequently measurement is needed.

Objectivity

The control system should provide information that is as objective as possible. Example: a manger responsible for control of his organization’s human resources asks two managers to submit reports.

–One manager reports that morale at his plant is ‘‘okay’’, grievances are ‘‘ about where they should be’’, and turnover is ‘‘under control’’

– Other manager reports that absenteeism at her plant is running at 4 percent, that sixteen grievances have been filed this year, and that turnover is 12 percent.

The second report almost always be more useful than the first report.

Strategic Planning

Q. State the nature and focus of strategic planning.

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the "strategic plan." While strategic planning may be used to effectively plot a company's longer-term direction, one cannot use it to reliably forecast how the market will evolve and what issues will surface in the immediate future. Therefore, strategic innovation and tinkering with the "strategic plan" have to be a cornerstone strategy for an organization to survive the turbulent business climate.Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least one of three key questions:

1. "What do we do?"

2. "For whom do we do it?"

3. "How do we excel?"

In business strategic planning, some authors phrase the third question as "How can we beat or avoid competition?" (Bradford and Duncan, page 1). But this approach is more about defeating competitors than about excelling.

Q. Briefly describe the process of strategic planning.

In today's highly competitive business environment, budget-oriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. The firm must engage in strategic planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track.A simplified view of the strategic planning process is shown by the following diagram:

The Strategic Planning Process

Mission & Objectives

Environmental Scanning

Strategy Formulation

Strategy Implementation

Evaluation & Control

Mission and Objectives: The mission statement describes the company's business vision, including the unchanging values and purpose of the firm and forward-looking visionary goals that guide the pursuit of future opportunities. Environmental Scan: The environmental scan includes the following components:

Internal analysis of the firm
Analysis of the firm's industry (task environment)
External macroenvironment (PEST analysis)

The internal analysis can identify the firm's strengths and weaknesses and the external analysis reveals opportunities and threats. A profile of the strengths, weaknesses, opportunities, and threats is generated by means of a SWOT analysis

An industry analysis can be performed using a framework developed by Michael Porter known as Porter's five forces. This framework evaluates entry barriers, suppliers, customers, substitute products, and industry rivalry.

Strategy Formulation: Given the information from the environmental scan, the firm should match its strengths to the opportunities that it has identified, while addressing its weaknesses and external threats.

Strategy Implementation: The selected strategy is implemented by means of programs, budgets, and procedures. Implementation involves organization of the firm's resources and motivation of the staff to achieve objectives.

Evaluation & Control: The implementation of the strategy must be monitored and adjustments made as needed.

Evaluation and control consists of the following steps:

1. Define parameters to be measured

2. Define target values for those parameters

3. Perform measurements

4. Compare measured results to the pre-defined standard

5. Make necessary changes

Q. Distinguish between strategies and policies.

Strategy is the process of specifying an organization's objectives, developing policies and plans to achieve these objectives, and allocating resources to implement the policies and plans to achieve the organization's objectives. On the other hand, a policy is a plan of action to guide decisions and actions. The policy process includes the identification of different alternatives, such as programs or spending priorities, and choosing among them on the basis of the impact they will have. Policies can be understood as political, management, financial, and administrative mechanisms arranged to reach explicit goals.

Decision Making

Q.1 Define Decision Making and give its characteristics.

Ans.: Decision making is the process of choosing or selecting any one option out of several options to achieve some objectives.

Glueck – “Decision making is the process of thought and deliberation that leads to a decision.”

Allen – “Decision making is the work a manager performs to arrive at a conclusion or judgment”. Thus decision is a process of selecting a course of action from among the available alternatives in order to achieve a desired goal in a given situation.

Characteristics/Nature of Decision Making :

(i) Decision making is a sequential process involves the searching, evaluative and choosing a course of action.

(ii) It is an intellectual and logical process.

(iii) This process will take place in the human mind.

(iv) It is a human and social process.

(v) It is largely an intuitive process but can be formally structured.

(vi) There is an existence of alternatives.

(vii) Ascertainment of choice.

(viii) It aims at attaining some objectives.

(ix) Decision is directed to solve some problem.

(x) Decision making involves commitment.

(xi) It is influenced by environmental conditions.

(xii) Decision making is the essence of management.

Q.2 Discuss in brief the various techniques of Decision Making.

Ans.: The important techniques of decision making are as follows :-

(1) Experience or Judgment: In this technique, a manager makes decision on the basis of his knowledge and experience gained through working in a particular position over the years

(2) Intution :Intution or hunch is a knowledge based on instant inner feelings or spiritual perception rather than reasoning. It is based on faith.

(3) Habbits :Established habits can be used as a technique of decision making. Managers try to solve repetitive and routine problems through their established habits.

(5) Organization Structure: Organization structure make it clear who is responsible for what and to whom. Therefore it can be used as a decision making technique.

(6) Principles of Management: The principle of management can serve as a useful guide in making decisions.

(7) Economic and Financial Techniques: Marginal analysis, break even analysis, utility analysis etc are some of the most important economic techniques of decision making. Pay back analysis, inflow outflow analysis, ratio analysis are some of the financial techniques of decision making.

(8) Linear Programming: It is a mathematical technique of limited resources. It helps in making decisions regarding allocation of limited resources among various competing demands in an optimum way.

(9) Game Theory: In this technique, one member chooses one such course of action that frustrates and defeats the action of the competing member and help him in wining the game. This technique used under competitive and conflicting situations.

(10) Waiting Line or Queuing Theory: This technique is used to decide problem of waiting line in an organization with the help of the technique, manager decides optimum rate of flow through service points by balancing the cost of making customers wait against the cost of servicing them more rapidly.

(11) Simulation: Simulation is a technique for studying and analyzing behaviour of a system under several alternative conditions in an artificial setting.

(12) Network Techniques: PERT and CPM are the techniques that helps managers in deciding a logical sequence of activities required for completing a complex project.

(13) Heuristic Technique: It is an trial and error technique of finding solutions to a complex problem by breaking it into small components.

(14) Participative Techniques: It is a technique of making decisions with the participation of the employees. This technique encourages industrial democracy.

Q.3 Draw a flow diagram of process of Decision Making.

Ans.: A flow diagram of process of Decision Making is as follows:
Steps in Decision Making Process:
1. Identification of Problem
2. Diagnosing the Problem
3.Establishing Specific Objectives
4.Identifying Limitations
5.Evaluating Alternatives
6.Selecting Appropriate Alternative
7.Implementing the Decision
8. Feedback

Management by Objective

Q.5 What is MBO? Explain its characteristics and objectives.

Ans.: MBO: The modern model of objective setting is known as the “Management by Objectives” or “MBO”. This model was first discussed by Peter Drucker in 1954 in his book – “The Practice of Management”.

Meaning and Definition of MBO: MBO is a process where by both superior and subordinate managers jointly identify their common goals or their work unit and define each employee major areas of responsibility and goals with his active participation.

Carlisle – “Management by Objective is a process by which the members of a work unit individually meet with their superior to establish performance related goods.”

Boone and Koontz – “MBO is a prgramme designed to improve employee’s motivation by having them participate in setting their own goals, letting them know in advance precisely have they will be evaluated.”

Characteristics of MBO :

A Philosophy of Management

Goal Oriented Approach

An Interactive Approach

A Comprehensive Approach

A System Approach

Applies to Total Management System

Aims at Optimum Results

Simple Universal Approach

Multiple Uses

Participation and Involvement

Common Objectives and Individual Goals

Assumptions:

Mutual understanding between superior and subordinate.

Employees know their expected efforts and their contribution in overall performance.

Employees participate in formulation of the plan.

Employees know the results of their efforts.

Employees want to be fairly rewarded for their performance.

Objectives of MBO :

(i) To set organizational units and individual goals by active participation of the all concerned.

(ii) To set verifiable and measurable goals.

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(iii) To measure and judge performance.

(iv) To relate individual performances to organizational goals.

(v) To clarify both the job to be done and the expectation of accomplishment.

(vi) To foster the increasing competence and growth of subordinates.

(vii) To enhance communications between superiors and subordinates.

(viii) Serve as a basis for judgment about salary and promotion.

(ix) To stimulate the subordinates motivation.

(x) To serve as device for organizational control.

Management

Q .Contingency approach of management.

Basically, contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. Basically, it’s the approach that “it depends.” For example, the continuing effort to identify the best leadership or management style might now conclude that the best style depends on the situation. If one is leading troops in the Persian Gulf, an autocratic style is probably best (of course, many might argue here, too). If one is leading a hospital or university, a more participative and facilitative leadership style is probably best.

Q. What is meant by the term “Management by exception”?

Management by Exception is a "policy by which management devotes its time to investigating only those situations in which actual results differ significantly from planned results. The idea is that management should spend its valuable time concentrating on the more important items (such as shaping the company's future strategic course). Attention is given only to material deviations requiring investigation." It is not entirely synonymous with the concept of exception management in that it describes a policy where absolute focus is on exception management, in contrast to moderate application of exception management. In Project Management, an implication of Management by Exception is that the project board should meet when key decisions about the project should be taken, and not on regular intervals. The Project Manager should produce an Exception Report to summon the board for such meetings.

Q. “Every manager is a decision maker” discuss.

Decision making is a central aspect of virtually every management and business activity; important decisions are not only made by managers and entrepreneurs, but also by the consumers of their goods and services, and by their business rivals, partners and employees. The ability to understand how decisions are made, and to predict, guide and improve those decisions, will be an invaluable part of every manager's toolbox. It is this ability that will be developed in this course. Some decisions are impossible to make analytically, for lack of time, data, computational ability, or awareness. These are situations that could put decision makers at risk of falling into systematic biases and errors. The first part of this course will raise your awareness about these 'traps' with a view to becoming a better intuitive decision maker. Other decisions are made with and require extensive thought and analysis, as the stakes are high, there are multiple conflicting objectives to balance, and many sources of uncertainty about the future. To these decisions we will devote the second half of the course, where you will learn how to structure decision problems, identify relevant objectives and make trade-offs among them when objectives are in conflict with one another, as well as, represent and analyse the main uncertainties and risks involved in a decision.

Q. What is scientific management?

Scientific management, also called Taylorism, was a theory of management that analyzed and synthesized workflows. Its main objective was improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management. Its development began with Frederick Winslow Taylor in the 1880s and 1890s within the manufacturing industries. Its peak of influence came in the 1910s; by the 1920s, it was still influential but had begun an era of competition and syncretism with opposing or complementary ideas. Although scientific management as a distinct theory or school of thought was obsolete by the 1930s, most of its themes are still important parts of industrial engineering and management today. These include analysis; synthesis; logic; rationality; empiricism; work ethic; efficiency and elimination of waste; standardization of best practices; disdain for tradition preserved merely for its own sake or merely to protect the social status of particular workers with particular skill sets; the transformation of craft production into mass production; and knowledge transfer between workers and from workers into tools, processes, and documentation.

Q. State the principle of scientific management?

Taylor explained his principles of scientific management. He starts by describing what he considered the best system of management in then current use, the system of "initiative and incentive." In this system, management gives incentives for better work, and workers give their best effort. The form of payment is practically the whole system, in contrast to scientific management. Taylor's scientific management consisted of four principles: First. They develop a science for each element of a man's work, which replaces the old rule-of.-thumb method. Second. They scientifically select and then train, teach, and develop the workman, whereas in the past he chose his own work and trained himself as best he could. Third. They heartily cooperate with the men so as to insure all of the work being done in accordance with the principles of the science which has been developed. Fourth. There is an almost equal division of the work and the responsibility between the management and the workmen. The management take over all work for which they are better fitted than the workmen, while in the past almost all of the work and the greater part of the responsibility were thrown upon the men.

Q. What are the most commonly used tests in the selection process of managers?

Examples of employment tests and other selection procedures, many of which can be administered online, include the following:

Cognitive tests assess reasoning, memory, perceptual speed and accuracy, and skills in arithmetic and reading comprehension, as well as knowledge of a particular function or job;
Physical ability tests measure the physical ability to perform a particular task or the strength of specific muscle groups, as well as strength and stamina in general;
Sample job tasks (e.g., performance tests, simulations, work samples, and realistic job previews) assess performance and aptitude on particular tasks;
Medical inquiries and physical examinations, including psychological tests, assess physical or mental health;
Personality tests and integrity tests assess the degree to which a person has certain traits or dispositions (e.g., dependability, cooperativeness, safety) or aim to predict the likelihood that a person will engage in certain conduct (e.g., theft, absenteeism);
Criminal background checks provide information on arrest and conviction history;
Credit checks provide information on credit and financial history;
Performance appraisals reflect a supervisor’s assessment of an individual’s performance; and

English proficiency tests determine English fluency.

Q. Distinguish between the science of management and the art of management.

FOUNDATIONS OF THE MANAGEMENT AS A SCIENCE PERSPECTIVE

Practicing managers who believe in management as a science are likely to believe that there are ideal managerial practices for certain situations. That is, when faced with a managerial dilemma, the manager who believes in the scientific foundation of his or her craft will expect that there is a rational and objective way to determine the correct course of action. This manager is likely to follow general principles and theories and also by creating and testing hypotheses. For instance, if a manager has a problem with an employee's poor work performance, the manager will look to specific means of performance improvement, expecting that certain principles will work in most situations. He or she may rely on concepts learned in business school or through a company training program when determining a course of action, perhaps paying less attention to political and social factors involved in the situation. Many early management researchers subscribed to the vision of managers as scientists. The scientific management movement was the primary driver of this perspective. Scientific management, pioneered by Frederick W. Taylor, Frank and Lillian Gilbreth, and others, attempted to discover "the one best way" to perform jobs. They used scientific processes to evaluate and organize work so that it became more efficient and effective. Scientific management's emphasis on both reducing inefficiencies and on understanding the psychology of workers changed manager and employee attitudes towards the practice of management. See Exhibit 1 for a summary of the principles of scientific management.

FOUNDATIONS OF THE MANAGEMENT AS AN ART PERSPECTIVE

Practicing managers who believe in management as an art are unlikely to believe that scientific principles and theories will be able to implemented in actual managerial situations. Instead, these managers are likely to rely on the social and political environment surrounding the managerial issue, using their own knowledge of a situation, rather than generic rules, to determine a course of action. For example, as a contrast to the example given previously, a manager who has a problem with an employee's poor work performance is likely to rely on his or her own experiences and judgment when addressing this issue. Rather than having a standard response to such a problem, this manager is likely to consider a broad range of social and political factors, and is likely to take different actions depending on the context of the problem. Henry Mintzberg is probably the most well-known and prominent advocate of the school of thought that management is an art. Mintzberg is an academic researcher whose work capturing the actual daily tasks of real managers was ground breaking research for its time. Mintzberg, through his observation of actual managers in their daily work, determined that managers did not sit at their desks, thinking, evaluating, and deciding all day long, working for long, uninterrupted time periods. Rather, Mintzberg determined that mangers engaged in very fragmented work, with constant interruptions and rare opportunities to quietly consider managerial issues. Thus, Mintzberg revolutionized thinking about managers at the time that his work was published, challenging the prior notion that managers behaved rationally and methodically. This was in line with the perspective of management as an art, because it indicated that managers did not necessarily have routine behaviors throughout their days, but instead used their own social and political skills to solve problems that arose throughout the course of work.

Q: Three level of management.

Top level management: CEO

Middle level management: HOD (Head of the department)

Lower level management: Worker (Supervisor)

Individual level
in individual level organizational behavior involves the study of learning, perception, creativity, motivation, personality, turnover, task performance, cooperative behavior, deviant behavior, ethics, and cognition. At this level of analysis, organizational behavior draws heavily upon psychology, engineering, and medicine.
group level
At the group level of analysis, organizational behavior involves the study of group dynamics, intra- and inter group conflict and cohesion, leadership, power, norms, interpersonal communication, networks, and roles. At this level of analysis, organizational behavior draws upon the sociological and socio-psychological sciences
organizational level
At the organization level of analysis, organizational behavior involves the study of topics such as organizational culture, organizational structure, cultural diversity, inter-organizational cooperation and conflict, change, technology, and external environmental forces. At this level of analysis, organizational behavior draws upon anthropology and political science.

Q: What is Effectiveness and efficiency.

Efficiency and effectiveness are both commonly used management terms. Yet, while they sound similar and start with the same letters, they both mean different things.

Efficiency refers to doing things in a right manner. Scientifically, it is defined as the output to input ratio and focuses on getting the maximum output with minimum resources. Effectiveness, on the other hand, refers to doing the right things. It constantly measures if the actual output meets the desired output.
Since efficiency is all about focusing on the process, importance is given to the ‘means’ of doing things whereas effectiveness focuses on achieving the ‘end’ goal.

Q.4 Discuss the major functions of management.

Ans.: A function is a

group of similar activities. However what functions are undertaken by managers in organisations, there is a divergence of views. But the major management functions suggested by most of the authors are as follows :-i) Planning : Planning is the conscious determination of future course of action. This involves why an action, what action, how to taken action, and when to take action. Thus planning includes determination at specific objectives, determining projects and programmes, setting policies and strategies, setting rules and procedures and preparing budgets.

(ii) Organising : Organising is a process of dividing work into convenient task or duties, grouping of such duties in the form of positions, grouping of various positions into department and sections, assigning duties to individual positions and delegating authority to each position so that the work is carried out as planned.

(iii) Staffing : Staffing involves manning the various positions created by the organizing process. It includes preparing inventory of personnel available and identifying the gap between manpower required and available, identifying the sources from where people will be selected, selecting people, training and development fixing financial compensation, appraising them periodically etc.

(iv) Directing : Directing includes communicating, motivating and leading. When people are working in an organisation, they must know what they are expected to do in the organisation. Superior managers fulfill this requirement by communicating to subordinates about their expected behaviour. The superiors have a continuous responsibility of guiding and leading them for better work performance and motivating them to work with zeal and enthusiasm.

(v) Controlling : Controlling involves identification of actual results. Comparison of actual results with expected results as set by planning process, identification of deviation between the two, if any and taking of corrective action so that actual result match with expected results.

Q.3 Discuss the major functional area of Management.

Ans.: An acceptable and practical classification includes four broad functional areas :-

(i) Production : This area is normally kept under the control of a production manager who is responsible for the performance of entire related activities.

This area may further be classified into major sub-activities :-

· Purchasing

· Material Management

· Research and Development

(ii) Marketing : This area involves the distribution of organisation’s product to the buyers. This can be divided into following subareas :-

· Advertising

· Marketing Research

· Sales Management

(iii) Finance and Accounting : This area deals with the record keeping of various transactions and management of financial resources :-

· Financial Accounting

· Management Accounting

· Costing

· Investment Management

· Taxation

(iv) Personnel : This aspect deals with the management of human beings in the organisation. It includes following areas :-

· Recruitment and Selection

· Training and Development

· Wage and Salary Administration

· Industrial Relations

Q. Distinguish between administration and management.

Distinguish between administration and management

Motivation

Q. What is motivation?

Motivation is the driving force by which humans achieve their goals. Motivation is said to be intrinsic or extrinsic .The term is generally used for humans but it can also be used to describe the causes for animal behavior as well. According to various theories, motivation may be rooted in a basic need to minimize physical pain and maximize pleasure, or it may include specific needs such as eating and resting, or a desired object, goal, state of being, ideal, or it may be attributed to less-apparent reasons such as altruism, selfishness, morality, or avoiding mortality. Conceptually, motivation should not be confused with either volition or optimism. Motivation is related to, but distinct from, emotion.

Q. What are primary and secondary needs?

Murray identified needs as one of two types:

1. Primary Needs

Primary needs are based upon biological demands, such as the need for oxygen, food, and water.

2. Secondary Needs

Secondary needs are generally psychological, such as the need for nurturing, independence, and achievement.

Q. What are the assumptions of Theory-x and theory-y

Theory X

In this theory, which has been proven counter-effective in most modern practice, management assumes employees are inherently lazy and will

avoid work if they can and that they inherently dislike work. As a result of this, management believes that workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each and every level. According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. According to Michael J. Papa, if the organizational goals are to be met, theory X managers rely heavily on threat and coercion to gain their employee's compliance. Beliefs of this theory lead to mistrust, highly restrictive supervision, and a punitive atmosphere. The Theory X manager tends to believe that everything must end in blaming someone. He or she thinks all prospective employees are only out for themselves. Usually these managers feel the sole purpose of the employee's interest in the job is money. They will blame the person first in most situations, without questioning whether it may be the system, policy, or lack of training that deserves the blame. A Theory X manager believes that his or her employees do not really want to work, that they would rather avoid responsibility and that it is the manager's job to structure the work and energize the employee. One major flaw of this management style is it is much more likely to cause Diseconomies of Scale in large businesses.

Theory Y

In this theory, management assumes employees may be ambitious and self-motivated and exercise self-control. It is believed that employees enjoy their mental and physical work duties. According to Papa, to them work is as natural as play[1]. They possess the ability for creative problem solving, but their talents are underused in most organizations. Given the proper conditions, theory Y managers believe that employees will learn to seek out and accept responsibility and to exercise self-control and self-direction in accomplishing objectives to which they are committed. A Theory Y manager believes that, given the right conditions, most people will want to do well at work. They believe that the satisfaction of doing a good job is a strong motivation. Many people interpret Theory Y as a positive set of beliefs about workers. A close reading of The Human Side of Enterprise reveals that McGregor simply argues for managers to be open to a more positive view of workers and the possibilities that this creates. He thinks that Theory Y managers are more likely than Theory X managers to develop the climate of trust with employees that is required for human resource development. It's human resource development that is a crucial aspect of any organization. This would include managers communicating openly with subordinates, minimizing the difference between superior-subordinate relationships, creating a comfortable environment in which subordinates can develop and use their abilities. This climate would include the sharing of decision making so that subordinates have say in decisions that influence them. This theory is a positive view to the employees, meaning that the employer is under a lot less pressure than some one who is to influenced by a theory X management style.

Q. “You can not motivate managers. They are self propelled.” Comment on the statements.

Self propelled describes something that moves, progresses or acts on its own power without needing outside help. Like anything else, leadership ability is distributed throughout a population. Can you be a good leader without being a good manager? In my experience, the best leaders are also great managers, and the best managers have strong leadership capabilities. To be successful, you must have both a passion for improving your organization and the capability to drive your efforts through to completion. Some people are "natural" leaders, others prefer to operate capably within a well-defined context, and many people are somewhere in between. Natural leaders have important core abilities, but they often need careful training in the more practical aspects of converting a creative vision into a concrete program of action. Very often, they need to understand the length of the change lifecycle so they don't underestimate the importance of persistence. Most people, however, can develop their leadership skills by working at it. The process starts with the recognition that leadership requires "ambidextrous" activities. The first hurdle is recognizing that excellence at the day-to-day is critical, but it is not enough. The second is the need to look inside yourself and decide whether you are willing to be uncomfortable for a prolonged period while you conceptualize and lead the change. The ultimate reward is the deep satisfaction that comes from seeing something new that wouldn't have been there if you had not created it. Once you decide to become a leader, you can develop the characteristics you'll need by being thoughtful about the accomplishments that you want on your resume, and deciding to devote the time and attention needed to achieve them. Like anything else, practice makes perfect. To be a great leader, you need a certain level of intellect, but not necessarily great genius. You need a certain level of social skills, but not necessarily those of a great salesperson. However, you do need a compulsion to operate at two levels: to be a great doer, and a great reflector. Most importantly, to be a great leader, you need to find what you really like. That's where the passion, commitment, and integrity come from. In my experience, the most important underlying factor in leadership is whether a person has searched out and found a great match between what's in his or her heart, which is what he or she really enjoys, and the work situation. Think about the definition of leaders, "people who leave their footprints in their areas of passion." It's easy to focus on the first part, how to leave footprints. But the real power comes from the second, working in your area of passion.

Q. To what extent and how is money an effective motivation.

Despite the fact that most of the world works for the sake of financial reward, the need for money only obliges us to undertake certain sort of work, but doesn’t motivate in actual fact. For example, one of the theories of human motivation - ‘Money as a motivator theory’ is grounded on the belief that the need for money primarily motivates all workers (“Theories of Human,” 2004). Nonetheless, such a statement is true just to a limited extent, to say the least. Although the very word “money” (which in final outcome aims to ensure greater happiness) would be the most common reply to the question of whatever causes us to work, in its own right it lags behind the variety of other human values. “A simple pay raise, naturally not identified as part of the corporate culture, would be defined as an external motivator. Pay is expected, needed, and required - it is not necessarily an identifier of either corporate or personal identity” (Grossman, n.d., A brief pause section, para. 2). “Psychologists have been finding that rewards can lower performance levels, especially when the performance involves creativity” (Kohn, n.d., Introduction section, para. 2). Furthermore, “if a reward - money, awards, praise, or winning a contest - comes to be seen as the reason one is engaging in an activity, that activity will be viewed as less enjoyable in its own right” (Kohn, n.d.

Q. Explain the Maslows Need Hirarcy theory of motivation. State why it is criticized?

The Maslow's Hierarchy of Needs five-stage model below (structure and terminology - not the precise pyramid diagram itself) is clearly and directly attributable to Maslow; later versions of the theory with added motivational stages are not so clearly attributable to Maslow. These extended models have instead been inferred by others from Maslow's work. Specifically Maslow refers to the needs Cognitive, Aesthetic and Transcendence (subsequently shown as distinct needs levels in some interpretations of his theory) as additional aspects of motivation, but not as distinct levels in the Hierarchy of Needs. Each of us is motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of years. Abraham Maslow's Hierarchy of Needs helps to explain how these needs motivate us all. Maslow's Hierarchy of Needs states that we must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself. Only when the lower order needs of physical and emotional well-being are satisfied are we concerned with the higher order needs of influence and personal development. Conversely, if the things that satisfy our lower order needs are swept away, we are no longer concerned about the maintenance of our higher order needs. Maslow's original Hierarchy of Needs model was developed between 1943-1954, and first widely published in Motivation and Personality in 1954. At this time the Hierarchy of Needs model comprised five needs. This original version remains for most people the definitive Hierarchy of Needs.1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc. 2. Safety needs - protection from elements, security, order, law, limits, stability, etc.3. Belongingness and Love needs - work group, family, affection, relationships, etc.4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc. 5. Self-Actualization needs - realising personal potential, self-fulfillment, seeking personal growth and peak experiences.

Q.Describe the various theories of motivation

Instinct Theory of Motivation: According to instinct theories, people are motivated to behave in certain ways because they are evolutionarily programmed to do so. An example of this in the animal world is seasonal migration. These animals do not learn to do this, it is instead an inborn pattern of motivation.

Incentive Theory of Motivation: The incentive theory suggests that people are motivated to do things because of external rewards. For example, you might be motivated to go to work each day for the monetary reward of being paid. Behavioral learning concepts such as association and reinforcement play an important role in this theory of motivation.

Drive Theory of Motivation: According to the drive theory of motivation, people are motivated to take certain actions in order to reduce the internal tension that is caused by unmet needs. For example, you might be motivated to drink a glass of water in order to reduce the internal state of thirst. This theory is useful in explaining behaviors that have a strong biological component, such as hunger or thirst. The problem with the drive theory of motivation is that these behaviors are not always motivated purely by physiological needs. For example, people often eat even when they are not really hungry.

Arousal Theory of Motivation: The arousal theory of motivation suggests that people take certain actions to either decrease or increase levels of arousal. When arousal levels get too low, for example, a person might watch and exciting movie or go for a jog. When arousal levels get too high, on the other hand, a person would probably look for ways to relax such as meditating or reading a book. According to this theory, we are motivated to maintain an optimal level of arousal, although this level can vary based on the individual or the situation.

Humanistic Theory of Motivation: Humanistic theories of motivation are based on the idea that people also have strong cognitive reasons to perform various actions. This is famously illustrated in Abraham Maslow's hierarchy of needs, which presents different motivations at different levels. First, people are motivated to fulfill basic biological needs for food and shelter, as well as those of safety, love and esteem. Once the lower level needs have been met, the primary motivator becomes the need for self-actualization, or the desire to fulfill one's individual potential

Q. “Motivation as a need satisfying process” Explain from your view point.

Basically, motivation stems from a desire to satisfy a need. Understanding the motivation theory, the hierarchy of needs, helps management with the business and the employees. This is based on Abraham Maslow’s motivation theory that says that individuals are motivated to satisfy a number of needs in a hierarchy and people move from the basic needs to a higher level needs only after the basic one is satisfied. Until the need is satisfied, other needs have little effect on an individual’s behaviour. In other words, we satisfy the most prepotent needs first and then progress to the less pressing ones. As one need becomes satisfied, that need becomes less important; other needs loom up and become motivators of our behavior. Maslow’s Needs Hierarchy is : 1. Physical - such as food, clothing and shelter. 2. Security – which is the feeling a safety, and the assurance of continued satisfaction of physical needs. 3. Social – this is the feeling of belonging, love, affection. It could be expressed in belonging to the organization or the immediate work group. Have affiliation of some sort, be a part of something. 4. Safety – the need to have physical safety and psychological security, the desire for self esteem and the esteem of others. This is done through increasing competence and development programs. Expressed through recognition, titles, offices, awards. 5. Self Actualization – Self fulfillment. Reaching maximum potential. Management should socus on continuous growth.

Q. What is meant by Management Information System (MIS)?

A management information system (MIS) provides information needed to manage organizations efficiently and effectively. Management information systems involve three primary resources: people, technology, and information. Management information systems are distinct from other information systems in that they are used to analyze operational activities in the organization.Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. decision support systems, expert systems, and executive information systems.

Q. Advantage of MISThe following are some of the benefits that can be

attained for different types of management information systems.

The company is able to highlight their strength and weaknesses due to the presence of revenue reports, employee performance records etc. The identification of these aspects can help the company to improve their business processes and operations.
Giving an overall picture of the company and acting as a communication and planning tool.
The availability of the customer data and feedback can help the company to align their business processes according to the needs of the customers. The effective management of customer data can help the company to perform direct marketing and promotion activities.
Information is considered to be an important asset for any company in the modern competitive world. The consumer buying trends and behaviors can be predicted by the analysis of sales and revenue reports from each operating region of the company.

Q. What is decision support system? What is its advantage?

A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance. DSSs include knowledge-based systems. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models to identify and solve problems and make decisions.

Benefits:

1. Improves personal efficiency

2. Speed up the process of decision making

3. Increases organizational control

4. Encourages exploration and discovery on the part of the decision maker

5. Speeds up problem solving in an organization

6. Facilitates interpersonal communication

7. Promotes learning or training

8. Generates new evidence in support of a decision

9. Creates a competitive advantage over competition

10. Reveals new approaches to thinking about the problem space

11. Helps automate managerial processes

Q. What are the barriers to effective interpersonal communication.

Communication barriers can prove to be a great problem as they make it difficult and frustrating for people to communicate with each other and understand each other’s meanings. Some of the barriers to effective interpersonal communication are:

Physical barriers: can be the difference in territories, closed doors, and people separated from each other by physical distances. These barriers make it difficult for people to get to know each other and communicate in a free and easy manner. Perception :is another barrier because everyone has their own views about the world and things. So the difference of their understanding and thinking can be a barrier. Emotions: also act as a barrier because while people are emotional, they don’t think clearly and this makes communication difficult as one person might have suspicion, mistrust, fear or any other emotion. Culture: determines people’s behavioral patterns. Varying cultures can be a barrier to effective communication. Language: is also another major barrier because if all the people involved in communication don’t speak or know the same language, it can be difficult to communicate the message. Another barrier to communication is gender because people think differently about communicating with men and women in relation to logic and emotions. So this can act as a barrier.

Q. Discuss why banker-customer relationship is very important.

Banker customer relationship,is just a special contract where a person entrusts valuable items with another person with an intention that such items shall be retrieved on demand from the keeper by the person who so entrust. Thus the banker is the one who is entrustd with the above mentioned valuable items,whie the person who entrust the tems with a view to retrieving it on demand is called the customer. The relationship is thus based on contract.It is based on certain terms and conditons.For instance,the customer has the right to collect his deposit on demand personally or by proxy.The banker too is under obligation to pay, so long the proxy is duly auhorised by the customer It has a semblance of creditor /debtor relationship.Thus the customer is the creditor who has the right of demand on the money from the banker.As long as the banker is keeping the customer items,the banker is indebted to the customer. The elationship is also fiducial.The terms and conditons governing the relationship should not be leaked to a third party,particularly by the banker.Also the items kept should not be released to a third party without due authorisation by the customer. Banker customer relationship,is just a special contract where a person entrusts valuable items with another person with an intention that such items shall be retrieved on demand from the keeper by the person who so entrust. Thus the banker is the one who is entrustd with the above mentioned valuable items,whie the person who entrust the items with a view to retrieving it on demand is called the customer. The relationship is thus based on contract.It is based on certain terms and conditons.For instance,the customer has the right to collect his deposit on demand personally or by proxy.The banker too is under obligation to pay, so long the proxy is duly auhorised by the customer It has a semblance of creditor /debtor relationship.Thus the customer is the creditor who has the right of demand on the money from the banker.As long as the banker is keeping the customer items,the banker is indebted to the customer. The relationship is also fiducial.The terms and conditons governing the relationship should not be leaked to a third party,particularly by the banker.Also the items kept should not be released to a third party without due authorisation by the customer.

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Leadership

Q.1 What do you understand by Leadership? Discuss the functions of Leadership.

Ans.: Keith Davis - “Leadership is the ability to persuade others to seek defined objectives enthusiastically. It is the human factor which binds the group together and motivates it towards goal.”

Keys and Case – “Leadership is the process of influencing and supporting others to work enthusiastically towards achieving objectives.”

Weihrich and Koontz – “Leadership is the art or process of influencing people so

that they will strive willingly and enthusiastically towards the achievement of group goals.”

Thus leadership is the process and the art influencing the behaviour, attitudes, activities of people to work willingly and enthusiastically towards the accomplishment of group goals.

Functions of Leadership:

• Guides or Inspires or Motivates

• Boosts Morals

• Creates Confidence and Enthusiasm

• Develops Team Spirit

• Creates Vision and Initiative

• Transforms Potential into Reality

• Sincerity and Honesty

• Courage and Will Power

• Flexible and Dynamic

• Emotional Stability i.e. Maturity

• Sound Judgment

• Tact and Humour

• Education and Knowledge

• Conceptual Skills

• Administrative Skills

• Analytical Skills

• Human Relations Skills

• Technical Skills

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Q.2 Explain the various styles of Leadership.

Ans.: Leadership style is the general way or pattern of behaviour of a leader towards his followers in order to influence their behaviour to attain a goal.

The main styles of leadership are as follows:-

(1) Autocratic and Authoritarian Leadership: An autocratic leader is one who centralizes power and make all the decisions himself. He tells his followers what to do and expects to be obeyed without questions. Thus, such a leader imposes his will on his followers.

Autocratic leaders may be of two types :-

(i) Pure Autocratic or Negative Leader : He is a director and makes all decisions himself. He superimposes his decisions on his subordinates. He uses fear of punishment or penalty to carry out his decisions. Thus, it is a negative leadership.

(ii) Benevolent Autocrat or Positive Leader : When an autocrat leader avoids negative coercive power and uses reward power to influence his subordinates, he is called a benevolent autocrat leader. Such a leader shows active concern for the feelings and welfare of his subordinates.

(2) Participative/Democrative Leadership: Participative leaders decentralize authority. Such leaders involve subordinates in decision making process. The leaders and their group members work as a social unit. They freely exchange their views and express opinions and suggestions.

(3) Free Rein or Laissez Faire Leadership Style : Such a leader completely delegates his authority to his subordinates and allow them to make their own plans, procedures and decisions. He simply aids his subordinates in performing their job. He exist as a contact person with the subordinates external environment. Free rein leadership style is permissive and leader least intervenes his subordinates. The leader remains passive observer but intervenes only during the crisis. Free rein leadership is suitable where subordinates are highly competent and duty conscious.

(4) Paternalistic Leadership: A paternalistic leadership is authoritarian by nature. It is heavily work centered but has consideration after his subordinates the way father looks after his children. Such a leader helps, guide and encourages his subordinates to work together as member of a family. The subordinate in turn tend to remain submissive and faithful.

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Q.3 Discuss the different theories of Leadership.

Ans.: Several theories of leadership have been developed by management theoreticians. These theories may be classified into three categories.

(1) Personality Theories

(2) Behavioral Theories

(3) Situational or Contingency Theories

(1) Personality Theories: Personality theories are theories that focus on the personal qualities or traits of leader. Such theories include the following:-

(i) Great Man Theory (ii) Trait Theory

(i) Great Man theory of Leadership: Great man theory of leadership claims that “Leaders are born, not made”. Leadership qualities are inherited or carried in genes. Leadership qualities cannot be acquired or developed through education or training.

(ii) Trait Theory of Leadership: This theory states that there are certain unique traits or qualities essential for successful leader. Any person who wants to be a successful leader must posses those traits. This theory emphasizes that those traits need not necessarily be inborn but may be acquired through education, training and practice.

(2) Behavioural Theory of Leadership: Behavioural theory focuses on what the leaders do i.e. on the actual behaviour of the leader. Behavioural theory is based on the premise that effective leadership is the result of effective behaviour of the leader. Success of leadership depends on the behaviour of the leader and not on his traits.

A particular behaviour pattern of a leader (functional behaviour) makes him a successful leader and its opposite (dysfunctional) would reject him as a leader. The functional dimensions include setting goals, motivating employees towards achievement of goals, making effective communication and interaction, building team spirit etc. The dysfunctional dimensions of leaders behaviour include in ability to accept subordinates ideas, poor communication and ineffective interaction, poor, human relations etc.

(3) Situational / Contingency Approach : The situational approach of a leadership emphasis that emergence and success of a leader is largely determined by supranational factors This theory stresses that a leadership behaviour which is effective under the particular situation may be ineffective under the other. These are several different situational models of leadership have been developed. Fiedler’s contingency model, path goal model, Blanchard’s model etc.

Introduction to Business

Q.1 Discuss the different concepts of Business that have emerged so far in World. Also distinguish between the Traditional and Modern Concept of Business?

Ans.: Business activity has been conceptualized by many business persons, business managers and academicians in the field of business management ever
since business emerged as an organised activity. Therefore the concept of business has changed over the years of history of business. So far the following concept of business has emerged :-

(i) Profit Oriented Concept of Business
(ii) Customer Oriented Concept of Business
(iii) Social or Modern Eclectic Concept of Business

Profit Oriented Concept of Business : In the early age of the business, it was conceived to be a wealthy producing or profit making economic activity. Any human activity directed towards the acquisition of wealth or earning profit through production or exchange of goods was treated to be a business. The profit oriented concept is also known as traditional concept of business. When people started doing business by forming organization, than business used to be conceived as an organization organised and operated to produce and provide goods and services to society under the incentive of private gain or profit.

Assumptions :

(i) The sole objective of the business is to earn profits by production and/or distribution of goods.

(ii) Customers will buy the products that are available in the market at the most competitive rates.

(iii) There is hardly any need to think for customer service and satisfaction for running a business.

Customer Oriented Concept of Business : This concept has came into existence around 1950’s and gained momentum during the 1960’s and 1970’s. The business organization began to think that business should earn profits through service and satisfaction of the customers Organization were forced to regard customer as the king of the market.

Assumption :

(i) Business organizations should produce and provide the goods/ services that are needed by the customers.

(ii) The products and services provided by the business should satisfy the needs of the customers.

(iii) The business should earn the profits through the service and satisfaction of the customer.

Distinction between Traditional and Modern Concept :

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Q.2 What do you mean by Business. Explain clearly the role of Business in the Modern World.

Ans.: The literal meaning of the term business is the ‘state of being busy’ or business. But when the term is used in relation to the business world, it means much more specific. All the definition to business may be classified under the following three categories.

Traditional Definitions : Traditionally, business was regarded as the institution organised for production and /or distribution of goods/ services for earning profit.

Customer Oriented Definitions : Businessmen began to think about earning profits through customer service and satisfactions. Hence the academicians and professional the term business accordingly.

Hopkins, Duff et.cl – “Business is the organised activities designed to satisfy people’s wants for goods and services.”

Urwick and Hunt – “Business is any enterprise which makes, distributes or provides any article or service which other members of the community head and are able and willing to pay.”

Social Definitions/ Modern Eclectic Definitions : A few such modern definitions from social point of view are reproduced as follows:-

Buskirk, Green and Rodgers - “Business is a system created to satisfy societies, need and desires.”

Keith Davis and Blomstorm - “The term business refers to both private and public institutions which develop and process economic values in a society.”

Significance/ Role of Business : The role or significance may be properly discussed under the following heads : -

(i) Significance for Business Persons/ Institutions

(ii) Significance for Consumers

(iii) Significance for the Society

(iv) Significance for the Economy

(i) Significance for Business Persons :

· It helps in accomplishing their objectives.

· It helps in acquiring the knowledge and letter skills.

· Business persons may go for expansion and diversification of business.

· Get knowledge and feed back information from the middleman & customers

· They may by more emphasis on customer satisfaction.

· Create and maintain better relation with wholesalers, dealers, retailers, and other merchantile intermediaries.

· Easily innovate and develop new product.

· More responsible to the society.

· Optimum utilization of resources in the most effective and efficient way.

· Enjoy a very high societal status.

(ii) Significance for Customers:

· Helps them to get right the product.

· It ensures satisfaction of the needs of consumers

· It ensures better facilities, better deal and after –sale services.

· Customers also get benefits under loyal customer schemes.

· Customer gets better products and services at lower costs.

· Customer also gets the joy of larger choice.

(iii) Significance for the Society:

· Members of society get better products and services at reasonable rates.

· Employment Opportunities.

· Better standard of living and quality of life.

· Security and welfare of their old age and raising days.

· Eradicate poverty, disease, ignorance, social evils through social welfare programmes.

(iv) Significance for the Economy :

· Planned development in the economy.

· Efficient and effective utilization of national resources.

· Ensures regular process of production and distribution of goods and services.

· Increasing national productivity.

· Balanced Regional Development.

· Increase and provide employment opportunities.

· Foreign exchange reserves by way of exports of goods and services.

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Q.3 What are the forms of Business Ownership? State the main features of all of them.

Ans.: Different forms of ownership of business organization available to each sector they are as follows :-

(1) Private Sector: In private sector, the following forms of ownership/organization are available:

(a) Sole Proprietorship

(b) Partnership

(d) Company

(e) Cooperative Society

(2) Public Sector: In public sector, the following are the main forms of ownership of business organization:-

(a) Departmental Organization

(b) Corporations

Private Sector:

(i) Sole Proprietorship: Sole proprietorship is a form of business organization which is established, owned controlled and usually operated by an individual and that individual also assumes all the risks of the business and entitled to all the profits made from it.

Characteristics:

· The oldest form

· Sale ownership

· Unlimited liability

· Entitled to all profits

· No separate existence of the business

· Free from legal formalities

· Sole decisions and control

· Limited scope of operations

(ii) Partnership: A partnership is an association of two or more persons who agree to carry on business for earning and sharing profit among them.

Characteristics:

· At least two persons

· Maximum number of partners – (Banking sector – 10 persons, Any other sector – 20 persons)

· Agreement

· Business

· Sharing of profit

· Mutual agency

· Unlimited liability

· Jointly and several liability

· Mutual trust and confidence

· Business in firm’s name

· No separate existence of the firms

· Registration not compulsory

· Unanimous decisions

· Contribution of capital

(iii) Hindu Undivided Family : When a Joint Hindu Family carries on a business, it is called Joint Hindu Family Firm. The members of such firm are called co-partners Joint Hindu family consist of all persons lineally descended from a common ancestor and includes their wives and unmarried daughter. There are two schools of Hindu law namely ‘Dayalhagya’ and Mitakshra’. According to ‘Dayalhagya’ school of Hindu law, each son acquires an interest in the ancestral property only after the death of his father. According to Mitakshra school a son acquires such interest by birth or by adoption.

(iv) Company: Company is a voluntary association of persons formal and registered under the present Companies Act, or under any previous law. In the eyes of the law, it is an artificial persons having separate entity from its members, with perpetual succession and a common seal. The capital of the company is divided into transferable shares and shareholders are called members.

Characteristics:

· Registered voluntary association

· At least seven persons in case of public company and two in case of a private company.

· Maximum number of member in a private company may be 50. No limit in case of public company

· Company is an artificial person

· Separate legal entity

· Perpetual succession

· Limited liabilities

· Minimum paid up capital of BDT 5 lakh in case of public company and BDT 1 lakh in case of private company

· Governance by majority

· Nationality

· It is not a citizen and has no fundamental rights

· Managed by board of directors

· Transferable shares

(v) Cooperative Organizations: A co-operative society or organization is one which has been voluntarily formed by some persons for the promotion of their common economic interest.

Characteristics:

· Voluntary organization/association

· Registered under the co-operative societies

· Legal existence

· Limited liabilities

· Perpetual existence

· Every member contributes in its capitals

· Non transferable shares.

· One member - one vote

· Democratic management

· Equitable distribution of profit

· Service motives

· Based on principles of equality, justice and mutual help

Public Enterprises: A public enterprise refers to an industrial, commercial or service enterprise which is owned and controlled by the government or by public authority/ government organization for providing goods or services to the public.

(i) Departmental Organization: Departmental form of organization is the oldest form of organizing public enterprises. Under this form of organization, an enterprise is put under the control of a department. Such department is leaded by the concerned minister. Example:- Railway Department.

Characteristics :

· Managed by a department of the government.

· Minister-in-charge of the department has the direct control.

· Financed by annual appropriations.

· Wholly owned and financed by the government.

· Accountable to the Lok Sabha, Rajya Sabha & Vidhan Sabha

· Employees are civil servants.

(ii) Public or Statutory Corporation : A public or statutory corporation is a body corporate incorporated under a special Act of the Parliament or state legislature for the purpose of carrying on certain industrial or commercial activities or rendering specific type of services.

Characteristics :

· Incorporated body under a statute enacted by a parliament or state legislature.

· Artificial person having all the rights of a person but not of a individual.

· Separate legal existence from the government.

· It can sue and be sued by the government.

· Wholly owned by the central and/ or state government.

· When ownership is shared by private entrepreneurs it is said to be a mixed corporations.

· It can enjoy independence in the matters of its financial management.

· Employees are not civil servants.

· Autonomy in its operation.

· Accountable to the parliament and/or state legislature.

(iv) Government Company: Government Company is one in which not less than 51% of the paid-up capital is held by the central or state government; and/or by the government company and/or by any public corporation, authorities.

Characteristics:

· It is registered or an incorporated body under the Indian companies Act, but all the provisions of the act will not apply to it.

· Majority of shares are held by the central government on by the state government or by any public corporation/authority or government company.

Decision Making

Q.1 Define Decision Making and give its characteristics.

Ans.: Decision making is the process of choosing or selecting any one option out of several options to achieve some objectives.

Glueck – “Decision making is the process of thought and deliberation that leads to a decision.”

Characteristics/Nature of Decision Making :

(i) Decision making is a sequential process involves the searching, evaluative and choosing a course of action.

(ii) It is an intellectual and logical process.

(iii) This process will take place in the human mind.

(iv) It is a human and social process.

(v) It is largely an intuitive process but can be formally structured.

(vi) There is an existence of alternatives.

(vii) Ascertainment of choice.

(viii) It aims at attaining some objectives.

(ix) Decision is directed to solve some problem.

(x) Decision making involves commitment.

(xi) It is influenced by environmental conditions.

(xii) Decision making is the essence of management.

Q.2 Discuss in brief the various techniques of Decision Making.

Ans.: The important techniques of decision making are as follows :-

(1) Experience or Judgment: In this technique, a manager makes decision on the basis of his knowledge and experience gained through working in a particular position over the years

(2) Intution : Intution or hunch is a knowledge based on instant inner feelings or spiritual perception rather than reasoning. It is based on faith.

(3) Habbits : Established habits can be used as a technique of decision making. Managers try to solve repetitive and routine problems through their established habits.

(4) Standing Plans and Procedures: There are standing plans and procedures in every organization such as policies, rules, procedures, methods etc. They all serve as a technique for decision making.
(5) Organization Structure: Organization structure make it clear who is responsible for what and to whom. Therefore it can be used as a decision making technique.

(6) Principles of Management: The principle of management can serve as a useful guide in making decisions.

(7) Economic and Financial Techniques: Marginal analysis, break even analysis, utility analysis etc are some of the most important economic techniques of decision making.

Pay back analysis, inflow outflow analysis, ratio analysis are some of the financial techniques of decision making.

(11) Simulation: Simulation is a technique for studying and analyzing behaviour of a system under several alternative conditions in an artificial setting.

(12) Network Techniques: PERT and CPM are the techniques that helps managers in deciding a logical sequence of activities required for completing a complex project.

(13) Heuristic Technique: It is an trial and error technique of finding solutions to a complex problem by breaking it into small components.

(14) Participative Techniques: It is a technique of making decisions with the participation of the employees. This technique encourages industrial democracy.

Q.3 Draw a flow diagram of process of Decision Making.Ans.: A flow diagram of process of Decision Making is as follows:

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Steps in Decision Making Process:
1. Identification of Problem
2. Diagnosing the Problem
3. Establishing Specific Objectives
4. Identifying Limitations
5. Evaluating Alternatives
6. Selecting Appropriate Alternative
7. Implementing the Decision
8. Feedback

Planning

Q.1 What do you meant by Planning? Discuss its nature.

Ans.: Simply stated, planning means deciding future course of action i.e. making plans for attaining organization’s objectives. Planning is the process of determination of organization’s objectives and selecting the course of action i.e. plans for attaining them.

According to Weihrich and Koontz – “Planning involves selecting mission and objectives and actions to achieve them. If requires decision making i.e. choosing from among alternative future course of action.

According to Robert Albanese, “Planning is the process or activity of determining in advance specifically what should be done in order to achieve particular goals, how it should be done, when or where it should be done and who should do it.”

Nature of Planning:

(1) Primary or Basic Function: It is a primary function because it is the foundation on which all other managerial function rest.

(2) Pervasive Function: Each and every manager has to perform this function regardless of his level and area of specialization.

(3) Purposeful: Planning begins with some goals or objective that an organization wishes to achieve.

(4) Interdependent Activity: Planning in one development is dependent on the planning of other department.

(5) A Process: Planning is a process in which managers anticipate future by analyzing environmental factors, set goals or objectives.

(6) Planning is a Path Finder Process: It is the process by which answers to questions like where, when, how etc.

(7) It is a continuous and never ending process.

(8) It is a dynamic process.

(9) It is an intellectual process because it requires managers to think intelligently and rationally before doing.

(10) Futuristic: Every plan is prepared to face and win over the future challenges and threats.

(11) Time Bound: It is always time bound. It may be of short range or medium range or long range.

(12) Planning involves Decision Making: It is a process of selecting one best course of action out of the available alternatives.

(13) Planning and Action are Twins: Planning alone cannot serve any purpose. Planning presupposes necessary action for its implementation. Both must go hand in hand.

(14) Planning and Controlling are Inseparable: Plans furnished the standards against which actual performance is measured and controlled.

(15) Forecasting is the Basis of Planning: Future course of action are decided on the basis of information and knowledge provided by forecasting.

Q.2 What are the essential elements of Planning?