Thursday, March 23, 2017

Principles of Business Management Solved Paper - May' 2016 Semester Exam

2016 (May)
(General/Speciality)
Course: 204
(Principles of Business Management)
Time: 3 hours
The figures in the margin indicate full marks for the questions

(NEW COURSE)
Full Marks: 80
Pass Marks: 24
1. Answer the following as directed:
a) Who first propounded the principle of ‘esprit de crops’?                          1
Ans: Henry Fayol                                             
b) Write the full form of MIS.                                     1
Ans: Management Information System                
c) ‘Zero-based budgeting’ technique was first used in ____. (Fill in the blank)                                     1
Ans: This technique was first used in America in 1962. The former President of America, Jimmy Carter used this technique when he was the Governor of Georgia for controlling state expenditure.
d) ‘Functional foremanship’ was introduced by ____. (Fill in the blank)                              1
Ans: F.W. Taylor. It insists on hiring specialist for every job. (8 Specialists foremen)
e) State two limitations of planning.                                                                         2

Ans: Planning does not work in dynamic environment, Planning is a time consuming process.
f) ‘Centralization’ and ‘Decentralization’ are used in the same sense. (Write True or False)                           1
Ans: False
g) State one distinction between formal organization and information organization.                        1
Ans: Formal organsiation is official, so it has prescribed structure of roles and relationships.  It is planned and deliberately created by management. On the other hand, informal organisation is unofficial or natural having no specific structure.  It arises spontaneously without official sanction by management.
2. Answer briefly any four of the following questions:                                                                                                    4x4=16
a)      What kind of role does a good plan play in business management?
b)      Briefly explain the aims of departmentation.
c)       Briefly state the relationship between ‘division of work’ and ‘specialization’.
d)      Write a short note on ‘systems approach’ of management.
e)      Explain the features of ‘line and staff’ organization.
Ans: a) Significance of a good plan
Planning is of vital importance in the managerial process. No enterprise can achieve its objectives without systematic planning. “Planning is the heart of management” The following points highlight the importance of planning function of management:
a.      Planning provides directions: By stating i n advance how work is to be done, planning provide direction for action. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals. Departments and individuals in the organisation are able to work in coordination. Planning keeps the organisation on the right path.  If there was no planning, employees would be working in different directions and the organisation would not be able to achieve its goals efficiently.
b.      Planning reduces the risks of uncertainty: Business enterprises operate in an uncertain environment and face several types of risks. Planning enables these enterprises to predict future events and prepare to face the unexpected events. With the help of planning, managers can identify potential dangers and take steps to overcome them. Thus, planning helps risk and uncertainty.
c.       Planning facilitates decision-making: Decision-making involves searching for various alternative courses of action, evaluating them and selecting the best course of action. Under planning, targets are laid down. With the help of these targets, managers can better evaluate alternative courses of action and select the best alternative. Plans lay down in advance what is to be done and how it is to be done. Therefore, decisions can be taken with greater confidence.
d.      Planning reduces overlapping and wasteful activities: Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions. There is no confusion and misunderstanding. Useless and redundant activities are minimized or eliminated. It is easier to detect inefficiencies and take corrective measures to deal with them.
b) Aims and objectives of Departmentation
It is an established fact that there is a limitation on the number of personnel an enterprise or a supervisor can directly control. This limitation of control restricts the size of the enterprise unless it divides and groups its activities into departments. Departments comprise a framework for an organisation and enables it to expand indefinitely. Departmentation aims at:
(i) Specialization of activities for efficient performance;
(ii) Simplifying the task of management within a workable span; and
(iii) Maintaining co-ordination and control of the various activities.
c) Specialisation and Division of Labour
Specialisation occurs when workers are assigned specific tasks within a production process. Workers will require less training to be an efficient worker. Therefore this will lead to an increase in labour productivity and firms will be able to benefit from economies of scale (lower average costs with increased output) and increased efficiency.
Examples of specialisation and division of labour
In the process of producing cars, there will be a high degree of labour specialisation.
1)      Some workers will design the cars
2)      Some will work on testing cars
3)      Some will work on marketing
4)      Some workers will work on different sections of the assembly line. Their job may be highly specific such as putting on tyres e.t.c.
d) SYSTEMS APPROACH: The systems approach focuses on understanding the organisation as an open system that transforms inputs into outputs. The systems approach began to have a strong impact on management thought in the 1960s as a way of thinking about managing techniques that would allow managers to relate different specialties and parts of the company to one another, as well as to external environmental factors. The systems approach focuses on the organisation as a whole, its interaction with the environment, and its need to achieve equilibrium.
e) Features of Line and Staff Organization
1) There are two types of staff :
Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.
Staff Supervisor- Operation Control Manager, Quality Controller, PRO
2) Line and Staff Organization is a compromise of line organization. It is more complex than line concern.
3) Division of work and specialization takes place in line and staff organization.
4) The whole organization is divided into different functional areas to which staff specialists are attached.
5) Efficiency can be achieved through the features of specialization.
6) There are two lines of authority which flow at one time in a concern : Line Authority and Staff Authority
7) Power of command remains with the line executive and staff serves only as counselors
3. (a) How would you define the term ‘business management’? Describe its significance.           6+8=14
Ans: Management - Introduction
Management is the coordination of all resources through the process of planning, organising, directing, staffing and controlling in order to attain stated objectives effectively and efficiently.  Effectively means doing the right task, completing activities and achieving goals and efficiently means to attain objectives with least amount of resources at a minimum cost. This process starts at the top and continues in more or less degree at every level of the organisation.
According to Harold Koontz, “Management is an art of getting things done through others and with formally organised groups."
According to F.W. Taylor, “Management is an art of knowing what do you want to do and then seeing that is is done in the best and cheapest way.”
According to Henry Fayol, “To manage is to forecast, to plan, to organize, to command to co-ordinate and control.
George R. Terry, “Management is a distinct process consisting of planning, organising, actuating and controlling performance t determine and accomplish the objectives by the use of people and resources,”
Thus management may be defined as a process including various activities like planning, organising , directing, controlling  co-ordination etc in order to make optimum use of men machinery, materials and money by way of preparing plans, policies and purposes, for achieving organisational goals under healthy internal environment.
IMPORTANCE/SIGNIFICANCE/OBJECTIVES OF MANAGEMENT
According to Drucker, management is the dynamic life giving element in every organisation. In its absence, an organisation is merely a collection of men, machines, money and material. The importance of management is:-
a)      Optimum Use of Resources: Management ensures optimum utilization of resources by attempting to avoid wastage of all kinds. It helps in putting the resources to the best advantage.
b)      Effective leadership and Motivation: In the absence of management, the working of an enterprise will become random and haphazard in nature. Management creates teamwork and motivates employees to work harder and better by providing guidance, counseling and effective leadership.
c)       Establish Sound Industrial Relations: Management minimizes industrial disputes and contributes to sound industrial relations in an undertaking. Industrial peace is an essential requirement for increasing productivity.
d)      Achievement of Goals: Objectives can be achieved only when the human and non human resources are combined in a proper way. Managers plan carefully, organize the resources properly, hire competent people, and provide necessary guidance. Thus management is goal oriented.
e)      Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.
f)       Establishes Equilibrium - It enables the organisation to survive in changing environment. It keeps in touch with the changing environment. With the change is external environment, the initial co-ordination of organisation must be changed. So it adapts organisation to changing demand of market / changing needs of societies. It is responsible for growth and survival of organisation.
g)      Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living.
Or
(b) Evaluate the contribution made by F.W. Taylor to the growth of management thought.                        14
Ans: CONTRIBUTION OF F.W. Taylor
Taylor's Scientific Management
F.W. Taylor is one of the founders (the other two are Max Weber and Henry Fayol) of classical thought/classical theory of management. He suggested scientific approach to management also called scientific management theory. Frederick Winslow Taylor well-known as the founder of scientific management was the first to recognize and emphasis the need for adopting a scientific approach to the task of managing an enterprise. He tried to diagnose the causes of low efficiency in industry and came to the conclusion that much of waste and inefficiency is due to the lack of order and system in the methods of management. He found that the management was usually ignorant of the amount of work that could be done by a worker in a day as also the best method of doing the job. As a result, it remained largely at the mercy of the workers who deliberately shirked work. He therefore, suggested that those responsible for management should adopt a scientific approach in their work, and make use of "scientific method" for achieving higher efficiency. The scientific method consists essentially of:
a)      Observation
b)      Measurement
c)       Experimentation and
d)      Inference.
He advocated a thorough planning of the job by the management and emphasized the necessity of perfect understanding and co-operation between the management and the workers both for the enlargement of profits and the use of scientific investigation and knowledge in industrial work. He summed up his approach in these words:
a)      Science, not rule of thumb
b)      Harmony, not discord
c)       Co-operation, not individualism
d)      Maximum output, in place of restricted output
e)      The development of each man to his greatest efficiency and prosperity.
Elements of Scientific Management: The techniques which Taylor regarded as its essential elements or features may be classified as under:
1. Scientific Task and Rate-Setting (work study): Work study may be defined as the systematic, objective and critical examination of all the factors governing the operational efficiency of any specified activity in order to effect improvement. Work study includes.
(a) Methods Study: The management should try to ensure that the plant is laid out in the best manner and is equipped with the best tools and machinery. The possibilities of eliminating or combining certain operations may be studied.
(b) Motion Study: It is a study of the movement, of an operator (or even of a machine) in performing an operation with the purpose of eliminating useless motions.
 (c) Time Study (work measurement): The basic purpose of time study is to determine the proper time for performing the operation. Such study may be conducted after the motion study. Both time study and motion study help in determining the best method of doing a job and the standard time allowed for it.
(d) Fatigue Study: If, a standard task is set without providing for measures to eliminate fatigue, it may either be beyond the workers or the workers may over strain themselves to attain it. It is necessary, therefore, to regulate the working hours and provide for rest pauses at scientifically determined intervals.
(e) Rate-setting: Taylor recommended the differential piece wage system, under which workers performing the standard task within prescribed time are paid a much higher rate per unit than inefficient workers who are not able to come up to the standard set.
2. Planning the Task: Having set the task which an average worker must strive to perform to get wages at the higher piece-rate, necessary steps have to be taken to plan the production thoroughly so that there is no bottlenecks and the work goes on systematically.
3. Selection and Training: Scientific Management requires a radical change in the methods and procedures of selecting workers. It is therefore necessary to entrust the task of selection to a central personnel department. The procedure of selection will also have to be systematised. Proper attention has also to be devoted to the training of the workers in the correct methods of work.
4. Standardization: Standardization may be introduced in respect of the following.
(a) Tools and equipment: By standardization is meant the process of bringing about uniformity. The management must select and store standard tools and implements which will be nearly the best or the best of their kind.
(b) Speed: There is usually an optimum speed for every machine. If it is exceeded, it is likely to result in damage to machinery.
(c) Conditions of Work: To attain standard performance, the maintenance of standard conditions of ventilation, heating, cooling, humidity, floor space, safety etc., is very essential.
(d) Materials: The efficiency of a worker depends on the quality of materials and the method of handling materials.
5. Specialization: Scientific management will not be complete without the introduction of specialization. Under this plan, the two functions of 'planning' and 'doing' are separated in the organisation of the plant. The `functional foremen' are specialists who join their heads to give thought to the planning of the performance of operations in the workshop. Taylor suggested eight functional foremen under his scheme of functional foremanship.
(a) The Route Clerk: To lay down the sequence of operations and instruct the workers concerned about it.
(b) The Instruction Card Clerk: To prepare detailed instructions regarding different aspects of work.
(c) The Time and Cost Clerk: To send all information relating to their pay to the workers and to secure proper returns of work from them.
(d) The Shop Disciplinarian: To deal with cases of breach of discipline and absenteeism.
(e) The Gang Boss: To assemble and set up tools and machines and to teach the workers to make all their personal motions in the quickest and best way.
(f) The Speed Boss: To ensure that machines are run at their best speeds and proper tools are used by the workers.
(g) The Repair Boss: To ensure that each worker keeps his machine in good order and maintains cleanliness around him and his machines.
(h) The Inspector: To show to the worker how to do the work.
6. Mental Revolution: At present, industry is divided into two groups – management and labour. The major problem between these two groups is the division of surplus. The management wants the maximum possible share of the surplus as profit; the workers want, as large share in the form of wages. Taylor has in mind the enormous gain that arises from higher productivity. Such gains can be shared both by the management and workers in the form of increased profits and increased wages.
4. (a) What do you mean by ‘decision-making process’? Explain its different techniques.            4+10=14
Ans: Decision Making - Introduction
Decision-making is an essential aspect of modern management. It is a primary function of management. A manager's major job is sound/rational decision-making. He takes hundreds of decisions consciously and subconsciously. Decision-making is the key part of manager's activities. Decisions are important as they determine both managerial and organisational actions. A decision may be defined as "a course of action which is consciously chosen from among a set of alternatives to achieve a desired result." It represents a well-balanced judgment and a commitment to action.
It is rightly said that the first important function of management is to take decisions on problems and situations. Decision-making pervades all managerial actions. It is a continuous process. Decision-making is an indispensable component of the management process itself.
The effectiveness of management depends on the quality of decision-making. In this sense, management is rightly described as decision-making process. According to R. C. Davis, "management is a decision-making process." Decision-making is an intellectual process which involves selection of one course of action out of many alternatives. Decision-making will be followed by second function of management called planning. The other elements which follow planning are many such as organising, directing, coordinating, controlling and motivating.
Decision-making has priority over planning function. According to Peter Drucker, it is the top management which is responsible for all strategic decisions such as the objectives of the business, capital expenditure decisions as well as such operating decisions as training of manpower and so on. Without such decisions, no action can take place and naturally the resources would remain idle and unproductive. The managerial decisions should be correct to the maximum extent possible. For this, scientific decision-making is essential.
Definitions of Decision-making
The Oxford Dictionary defines the term decision-making as "the action of carrying out or carrying into effect".
According to Trewatha & Newport, "Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem".
Techniques of Decision-making
Decision taken must be accurate and should not lead to confusion; the decisions taken must also be scientific and available for accuracy and verification. The important techniques that aid the manager in decision making are operations research and other quantitative techniques.
1. Operations Research: Operations Research is the application of methods of science to complex problems arising in the direction and management of large system of men, machines, materials and money in industry, business, government and defense. Operations Research helps the decision maker to make objective decisions. OR does this by providing factual basis to guide and support judgment, easing the burden of effort and time on the executive. Some of the managerial problems usually subjected to operations research analysis include production scheduling, inventory control, sales policies, expansion of plant etc.
2. Models: Model building is the central concept in the application of OR while making use of quantifying models. Models are simple convenient and relatively economic resource conservation device for testing hypothesis.  Mathematical models help the optimization concept in decision making. This is very important in the calculation and choice of best possible alternative solutions for a given problem.
3. Simulation: This technique is used to test the feasibility and possible outcome of various decision alternatives. "Simulation is a quantitative technique for evaluating alternative courses of action based upon facts and assumptions with a computerized mathematical model in order to represent actual decision making under conditions of uncertainty.
4. Linear Programming: This is defined as "How could a company with limited resources make optimum use with their resources, combination for the achievement of the desired objective, or goal was, the central idea of this mathematical technique". A linear or straight line relationship exists between variables and that the limits of variation can be determined. It adopts an analytical instead of intuitive approach in decision making.
5. Games Theory: Games theory attempts to work out optimum solution in which an individual in a given situation can develop a strategy irrespective of what a competition does with maximizing gains or minimizing losses. It involves mathematical study of tactics under conditions of uncertainty.
6. PERT and CPM: Programme Evaluation and Review Technique is useful to analyze and control the timing aspects of programmes. In planning and controlling a programme, PERT helps in obtaining lower costs and reducing programme time, bringing about better utilization of human and physical resources.  Critical Path Method (CPM) is a commonly used term for all network analysis and for a particular version of these techniques. PERT relies on three estimates, an optimistic, most likely and pessimistic of the time each activity may take. CPM relies only one 'most likely'.
7. Probability Theory Analysis: Probability refers to a chance that a particular event will occur. The events must be random and be effected by chance and not by design. The probability of success is defined as the number of successful outcomes divided by the total number of outcomes. It cannot be denied that some element of probability does exist in all decision making.
Or
(b) What are the fundamental principles of planning in business management? Discuss its importance.                  6+8=14
Ans: Introduction of Planning
Planning is the primary function of management.  Planning concentrates on setting and achieving objectives through optimum use of available resources.  Planning is necessary for any organisation for its survival growth and prosperity under competitive and dynamic environment.  Planning is a continuous process to keep organisation as a successful going concern,
In the words of:
Koontz and O’Donnel – “Planning is deciding in advance, what to do, how to do it, when to do it, and who is to do it.  It bridges the gap from where we are to where we want to go.”
Allen – “Management planning involves the development of forecasts, objectives, policies programmes, procedures, schedules and budgets.”
Haynes and Massie - Planning is a decision making process of a special kind.  It is an intellectual process in which creative thinking and imagination is essential.”
Alfred and Beatty - “Planning is the thinking process, the organized foresight, the vision based on fact and experience that is required for intelligent action.
Significance of Planning
Planning is of vital importance in the managerial process. No enterprise can achieve its objectives without systematic planning. “Planning is the heart of management” The following points highlight the importance of planning function of management:
e.       Planning provides directions: By stating i n advance how work is to be done, planning provide direction for action. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals. Departments and individuals in the organisation are able to work in coordination. Planning keeps the organisation on the right path.  If there was no planning, employees would be working in different directions and the organisation would not be able to achieve its goals efficiently.
f.        Planning reduces the risks of uncertainty: Business enterprises operate in an uncertain environment and face several types of risks. Planning enables these enterprises to predict future events and prepare to face the unexpected events. With the help of planning, managers can identify potential dangers and take steps to overcome them. Thus, planning helps risk and uncertainty.
g.      Planning facilitates decision-making: Decision-making involves searching for various alternative courses of action, evaluating them and selecting the best course of action. Under planning, targets are laid down. With the help of these targets, managers can better evaluate alternative courses of action and select the best alternative. Plans lay down in advance what is to be done and how it is to be done. Therefore, decisions can be taken with greater confidence.
h.      Planning reduces overlapping and wasteful activities: Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions. There is no confusion and misunderstanding. Useless and redundant activities are minimized or eliminated. It is easier to detect inefficiencies and take corrective measures to deal with them.
i.        Planning promotes innovative ideas: Planning is thinking in advance and, therefore, there is scope of finding better ideas and better methods and procedures to reach the objectives/goals of the enterprise. This forces managers to think differently about the future of the organisations from the present. Thus, planning makes the managers innovative and creative.
j.        Planning establishes standards for controlling: Planning provides the goals or standards against which the actual performance can be measured and evaluated. A comparison of actual performance with the standards helps to identify the deviations and to take corrective action. Planning makes control meaningful and effective. ‘Control is blind without planning.” Thus, planning provides the basis of control.
Fundamental Principles of Planning
A number of fundamental principles have been devised over the year for guiding managers undertaking planning. Some of these principles are discussed as under,
a)      Principle of contribution to objective: All types of plans are prepared to achieve the objectives of the organisation. Both major and derivative plans are prepared to contribute to the objectives of the enterprise. Planning is used as a means to reach the goals.
b)      Principles of primacy of Planning: This principle states that planning is the first or primary function of every manager; He has to plan first and then proceed to carry out other functions. Other managerial functions are organized to reach the objectives se in planning.
c)       Principle of Planning Premises: In order to make planning effective, some premises or presumptions have to be made on the basis of which planning has to be undertaken. Plans are, generally not properly structures. The reason being that planning premises are not properly developed. This principle lays emphasis on properly analyzing the situation which is going to occur in future.
d)      Principle of Alternatives: Planning process involves developing of many alternatives and then selecting one which will help in achieving desired business goals. In the absence of various alternatives proper planning will be difficult.
e)      Principle of Timing: Plans can contribute effectively to the attainment of business goals if they are property timed. Planning premises and policies are useless without proper timing.
f)       Principle of Flexibility: This principle suggests flexibility in plans if some contingencies arise. The plans should be adjusted to incorporate new situations. The dangers of flexibility should be kept in mind. The changes may upset the earlier commitments. So the cost of changes should be compared to the benefits of flexibility.
g)      Principle of Commitment: There should be a time frame for meeting the commitments made. This will ensure the achieving of targets in time.
h)      Principle of Competitive Strategies: While formulating own. Plans a manager should keep in mind the plans of competitors. The plans should be framed by thinking of what the. Competitors will do in similar situations.
5. (a) Describe the nature and process of organizing.                                                                      7+7=14
Ans: Introduction of Organisation and organising
The term 'Organisation' can be used in different senses. It can be used as a group of person working together to as a structure of relationships or as a process of management.  When it is used to refer to a group of person working together, it means a concern, an undertaking or as enterprise.
When it is used to refer to a structure of relationships, it means the structural relationships among the positions and jobs and person (i.e., the framework of responsibility and authority) through which the enterprise functions, and it is called organisation structure.
On the other hand, Organising or Organizing in management refers to the relationship between people, work and resources used to achieve the common objectives (goals).
Definitions
In the words of
Allen – “An organisation is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.”
Mooney and Reily – “Organisation is the form of every human association for the attainment of a common purpose.”
Koontz & O’Donnel – Organising involves the establishment of an intentional structure of roles through determination and enumeration of the activities required to achieve the goals of an enterprise and each part f it, the grouping of these activities, the assignment of such groups of activities to manager, the delegation of authority to carry them out and provision for co-ordination of authority and informational relationships, horizontally and vertically in the organisation structure.
Nature or characteristics of organising
From the study of the various definitions given by different management experts we get the following information about the characteristics or nature of organization:
1)      Division of Labour: Every organisation is characterized by the division of work.  The total efforts of the group are divided into different functions and each function is assigned the function for which he is observed to be suited best.
2)      Co-ordination: As different persona are assigned different functions and all these functions aim at achieving organisational goals, hence necessary relationships are established between them so as to co-ordinate all the activities of all the people of the organisation.
3)      Objectives: Organisations exist to achieve objectives. Without objectives organisations cannot exist for a long period.
4)      Authority and Responsibility structure: In an organisation the positions are so ranked that each of them is subordinate to the one above it and is superior to the one below it.  Each position is delegated necessary authority and responsibility so as to enable it functions effectively.
5)      Communication: Every organisation has its own channels or methods of communication.  Effective communication is vital for success of management.
6)      Organisation is a Machine of Management: Organisation is considered to be a machine of management because the efficiency of all the functions depends on an effective organisation. In the absence of organisation no function can be performed in a planned manner.
7)      Organisation is a Universal Process: Organisation is needed both in business and non business organisations. Not only this, organisation will be needed where two or mom than two people work jointly. Therefore, organisation has the quality of universality.
8)      Organisation is a Dynamic Process: Organisation is related to people and the knowledge and experience of the people undergo a change. The impact of this change affects the various functions of the organisations.
Steps or Process of Organising
Organization is the process of establishing relationship among the members of the enterprise. The relationships are created in terms of authority and responsibility. To organize is to harmonize, coordinate or arrange in a logical and orderly manner. Each member in the organization is assigned a specific responsibility or duty to perform and is granted the corresponding authority to perform his duty. The managerial function of organising consists in making a rational division of work into groups of activities and tying together the positions representing grouping of activities so as to achieve a rational, well coordinated and orderly structure for the accomplishment of work. The various steps involved in this process are:
a) Determination of Objectives: It is the first step in building up an organization. Organization is always related to certain objectives. Therefore, it is essential for the management to identify the objectives before starting any activity. Organization structure is built on the basis of the objectives of the enterprise. That means, the structure of the organization can be determined by the management only after knowing the objectives to be accomplished through the organization. This step helps the management not only in framing the organization structure but also in achieving the enterprise objectives with minimum cost and efforts.
b) Enumeration of Objectives: If the members of the group are to pool their efforts effectively, there must be proper division of the major activities. The first step in organising group effort is the division of the total job into essential activities. Each job should be properly classified and grouped. This will enable the people to know what is expected of them as members of the group and will help in avoiding duplication of efforts. For example, the work of an industrial concern may be divided into the following major functions – production, financing, personnel, sales, purchase, etc.
c) Classification of Activities: The next step will be to classify activities according to similarities and common purposes and functions and taking the human and material resources into account. Then, closely related and similar activities are grouped into divisions and departments and the departmental activities are further divided into sections.
d) Assignment of Duties: Here, specific job assignments are made to different subordinates for ensuring a certainty of work performance. Each individual should be given a specific job to do according to his ability and made responsible for that. He should also be given the adequate authority to do the job assigned to him.
e) Delegation of Authority: Since so many individuals work in the same organization, it is the responsibility of management to lay down structure of relationship in the organization. Authority without responsibility is a dangerous thing and similarly responsibility without authority is an empty vessel. Everybody should clearly know to whom he is accountable; corresponding to the responsibility authority is delegated to the subordinates for enabling them to show work performance. This will help in the smooth working of the enterprise by facilitating delegation of responsibility and authority.
Or
(b) What do you mean by ‘span of management’? Discuss its significance.                          6+8=14
Ans: SPAN OF MANAGEMENT OR SPAN OF CONTROL
In the words of Spriegal, "Span of control means the number of people reporting directly to an authority. The principle of span of control implies that no single executive should have more people looking to him for guidance and leadership than he can reasonably be expected to serve. The span of supervision is also known as span of control, span of management, span of responsibility, span of authority and span of direction.
Factors influencing the span of Management
                There are number of factors that influence or determine the span of Management in a particular organisation, the most important of these are as follows:
1.       The capacity and ability of the executive.
2.       Competence and training of subordinates.
3.       Nature of Work.
4.       Time available for supervision.
5.       Degree of Decentralization and Extent of Delegation.
Type of span of supervision: Broadly speaking there are two types, of span of supervision:
(a)    Wider Span of Supervision: In this type of span, the supervisor controls and guides the activities of subordinates directly under his control. Wider span or supervision is favoured where workers are competent and trained.
(b)   Narrow Span of Supervision: under this type of supervision, there are many levels and more supervisors are required to perform the job of guidance and control for different activities. It increases the efficiency of supervision but the cost of supervision is very high as compared to wider span of supervision. This type of supervision is favored at higher levels of management where all the other activities of planning, organising, directing, and controlling are also to be performed. But more the levels of supervision, more difficult are the task of coordinating the activities of various groups of people.
Significance of Span of Management or Span of Control
The Span of control should not be too wide (large) or too narrow (small). If the span is too wide, then the personal supervision is difficult and the control will be ineffective. On the other hand, if the span is too narrow, then there will be excessive (too much) supervision of the subordinates. This will affect their work. So it is desirable to select an appropriate (proper) span of control. An appropriate span of control gives the following benefits to the organisation:
1. Better supervision and control: If there is an appropriate span of control, then the superior will have a limited number of subordinates under him. This will result in better supervision and control.
2. Increases efficiency: An appropriate span of control results in better supervision and control. This increases the efficiency, productivity and profitability of the organisation.
3. Increases goodwill: An appropriate span of control increases the efficiency of the organisation. Therefore, they distribute good quality goods and services at fair prices to the customers. They also give high rate of dividend to the shareholders. All this increases the goodwill of the organisation.
4. Good professional relations: If there is an appropriate span of control, then the superiors and subordinates will get time to develop close and good professional relations between themselves.
5. Team spirit and morale: An appropriate span of control creates good relations between superiors and subordinates. This improves the team spirit and morale of the employees.
6. Good communication and co-ordination: If there is an appropriate span of control, then superiors will get time to communicate with every single subordinate. This will improve the communication in the organisation. Good communication results in good co-ordination. Therefore, an appropriate span of control results in good communication and co-ordination.
7. Facilitates quick action: An appropriate span of control results in good professional relations, better communication and co-ordination. This facilitates quick action in the organisation.
8. Less labour absenteeism and turnover: An appropriate span of control helps to decrease the labour absenteeism and turnover in the organisation.
9. Develops discipline and mutual trust: An appropriate span of control helps to develop discipline and mutual trust.
10. Superiors can concentrate on important work: If there is an appropriate span of control, then the superior will get time to concentrate on important work. However, if the span of control is very wide, then the superior will have to spend most of his time on supervising and controlling his subordinates.
6. (a) Explain Abraham Maslow’s theory of motivation.                                                                                14
Ans:  Abraham Maslow's Hierarchy of Needs
Maslow Abraham proposed his theory in the 1940s. This theory, popularly known as the Hierarchy of Needs assumes that people are motivated to satisfy five levels of needs: physiological, security, belongingness, esteem and self-actualization needs. The figure 9.1 shows Maslow's hierarchy of needs

Maslow suggested that the five levels of needs are arranged in accordance with their importance, starting from the bottom of the hierarchy. An individual is motivated first and foremost to satisfy physiological needs. When these needs are satisfied, he is motivated and 'moves up' the hierarchy to satisfy security needs. This 'moving up process continues until the individual reaches the self-actualization level.
a)      Physiological needs: Physiological needs represent the basic issues of survival such as food, sex, water and air. In organisational settings, most physiological needs are satisfied by adequate wages and by the work environment itself, which provides employees with rest rooms, adequate lighting, comfortable temperatures and ventilation.

b)      Security or safety needs: Security or safety needs refer to the requirements for a secure physical and emotional environment. Examples include the desire for adequate housing and clothing, the need to be free from worry about money and job security and the desire for safe working conditions. Security needs are satisfied for people in the work place by job continuity, a grievance resolving system and an adequate insurance and retirement benefit package.

c)       Social needs: Belonging or social needs are related to the, social aspect of human life. They include the need for love and affection and the need to be accepted by one's peers. For most people these needs are satisfied by a combination of family and community relationships and friendships on the job. Managers can help ensure the 'satisfaction of these important needs by allowing social interaction and by making employees feel like part of a team or work group.

d)      Esteem needs: Esteem needs actually comprise of two different sets of needs:
i.         The need for a positive self-image and self-respect.
ii.       The need for recognition and respect from others.
Organisations can help address esteem needs by providing a variety of external symbols of accomplishment such as job titles and spacious offices. At a more fundamental level, organisations can also help satisfy esteem needs by providing employees with challenging job assignments that can induce a sense of accomplishment.
e)      Self-actualization needs: At the top of the hierarchy are those needs, which Maslow defines the self-actualization needs. These needs involve realizing one's potential for continued: growth and individual development. Since these needs are highly individualized and personal, self-actualization needs are perhaps the most difficult for managers to address. Therefore, an employee should try to meet these needs on his own end.
However, an organisation can help his employee by creating a climate for fulfillment of self-actualization needs. For instance, an organisation can help in fulfillment of these needs by encouraging employee’s participation in decision-making process and by providing them with an opportunity to learn new things about their jobs and organisation. This process of contributing to actual organisational performance helps employees experience personal growth and development associated with self-actualizing.
Critical Analysis of Maslow’s Theory
A number of research studies have been undertaken to see the validity of hierarchy of needs. Lawler and Suttle collected data on 187 Managers in two different organisations for a period of six months to one year. No evidence was found to support Maslow's theory. They found there were two levels of needs-biological and other needs- and that other needs would emerge only when biological needs were reasonably satisfied. A survey conducted in India of 200 factory worker revealed that they give top priority to job security, earnings and personal benefits-all lower other needs.
It is generally seen that needs do not follow Maslow's hierarchy. The hierarchy is determined by individuals differently. They proceed to follow their own pattern of needs satisfaction. Some people may try for self-actuating needs rather than lower needs. For some persons esteem needs are more important than social needs.
There is no cause effect relation between and need and behavior. A particular need may cause behavior in different ways in different person. Similarly, one particular behavior may result due to different needs. It is said that higher needs motivate a person when lower needs are reasonably satisfied. The word 'reasonably satisfied' is a subjective matter. The level of satisfaction may be different for persons.
Or
(b) Briefly discuss the concept and process of managerial control.                                           7+7=14
Ans: Introduction to Management Control
Control is one of the managerial functions. These functions start with planning and end at controlling. The other functions like organising, staffing, directing act as the connecting like between planning and controlling. Planning will be successful only if the progress planning and controlled, Planning involves setting up of goals and objectives while controlling seeks to ensure.
In the words of Koontz and O'Donnel, “The measurement and correction of the performance of activities of subordinates in order to make sure that enterprise objectives and plan devised to attain them are being accomplished." The accomplishment of organisational goals is the main aim of every management. The performance of subordinates should be constantly watched to ensure proper implementation of plans. Co-ordination is the channel through which goals can be achieved and necessary.
According to Henry Fayol, “In an undertaking, control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and principles established. It has to point out weakness and errors in order to rectify them and prevent recurrence”.
Thus, controlling implies determining and stating specifically what is to be accomplished, then checking performance against such standards prescribed with a view to supplying the corrective action required to achieve the planned objectives. The end objective of controlling is, therefore, to ensure that the people’s   effort   in   the   organisation   is   continuously   directed   towards   the attainment of the predetermined objectives.
Nature or Characteristics of Control
1)      Control is a function of management: It is, in fact, a follow-up action to the other functions of management. All the managers in the organisation to control the activities assigned to them perform this function.
2)      Control is a dynamic process: It involves continuous review of standards of performance and results in corrective action, which may lead to changes in other functions of management.
3)      Control is a continuous activity: It does not stop anywhere. According to : Koontz and O’Donnell, “Just as the navigator continually takes reading to a planned action, so should so should be the business s manager continually take reading to assure himself that his enterprise or : department is on course”.
4)      Control is forward looking: It is related to future, as past cannot be controlled. It is usually preventive as the presence of control systems leads to minimize wastages, losses, and deviations from standards. It should be noted that control does not curtail the rights of the individuals. It simply keeps a check on the performance of individuals.
5)      Planning and Controlling are closely related with each other: Managerial planning seeks consistent and integrated while managerial control seeks to compel events to conform to plans. As a matter of fact, planning is based on control and control is based on planning. The process of control uses certain standards for measuring performance, which are laid down by planning. The control process, in turn, may reveal the deficiency of planning and may lead to the revision of planning. It may also lead to setting of new goals, changing the organisational structure, improving staffing and making major changes in the techniques of directing.
Steps in Controlling Process
In order to perform his control functions, a manager follows three basic steps. First of all, he establishes the standards of performance to ensure that performance is in accordance with me plan. After this, the manager will appraise the performance and compare it with predetermined standards. This step will lead the manager to know whether the performance has come up to the expected standard or if there is any deviation. If the standards are not being met, the manager will take corrective actions, which is the final step in controlling.
1)      Establishing standards: A standard acts as a reference line or basic of comparison of actual performance. Standards should be set precisely and preferably in quantitative terms. It should be noted that setting standards is also closely linked with and is an integral part of the planning process. Different standards of performance are set up for various operations at the planning stage, which serve as the basis of any control system. Establishment of standards in terms of quantity, quality or time is necessary for effective control. Standards should be accurate, precise, acceptable and workable. Standards should be flexible, i.e., capable of being changed when the circumstances require so.
2)      Measurement of performance: This step involves measuring of actual performance of various individuals, groups or units and then comparing it with the standards, which have already been set up at the planning stage. The quantitative measurement should be done in cases where standards have been set in quantitative terms. In other cases, performance should be measured in terms of quantitative factors as in case of performance of industrial relations manager. Comparison of performance with standards is comparatively easier when the standards are expressed in quantitative terms.
3)      Comparison: This is the core of the control process. This phase of control process involves checking to determine whether the actual performance meets the predetermined or planned performance. Manager must constantly seek to answer, “How well are we doing?” When a production supervisor checks the actual output or performance of his department with the production schedule, he is performing comparison aspect of control. When-an executive calculates the performance of his subordinates once in six months or   annuity, he is performing comparison aspect of control. Checking return on in investment is a comparison phase of control.
4)      Taking corrective action: The final step in the control process is taking corrective actions so that deviations may not occur again and the objectives of the organisation are achieved. This will involve taking certain decision by the management like re-planning or redrawing of goals or standards, assignment of clarification of duties. It may also necessitate reforming the process of selection and the training of workers. Thus, control function may require change in all other managerial functions. If the standards are found to be defective, they will be modified in the light of the observations.

(OLD COURSE)
Full Marks: 80
Pass Marks: 32
1. Answer the following as directed:
a) POSDCORB was introduced by ____. (Fill in the blank)                                                                                               1
Ans: P – Planning. O – Organising, S – Staffing, D – Directing, C – Coordinating, O – Organising, R – Reporting and B – Budgeting. This term is coined by L. Gullick and L. Urwick.
b) Father of scientific management is                                                                                                                     1
Ans: F. W. Taylor.
c)  ‘Motion study’ is a part of ____. (Fill in the blank)                                                                                       1
Ans: Scientific management
d) ‘Esprit de corps’ is a basic principle of scientific management. (Write True or False)                     1
Ans: False
e) Who initiated the concept of ‘management of objectives’?                                                                    1
Ans: Peter Drucker
f) Who developed the concept of ‘functional organization’?                                                                        1
Ans: F.W. Taylor. It insists on hiring specialist for every job. (8 Specialists foremen)
g) Mention two features of a good plan.                                                                                                                               2
Ans: Goal-oriented or focus on objectives, flexibility
2. Write short notes on (any four):                                                                                                                           4x4=16
a)      Planning premises.
b)      Budget.
c)       Herzberg’s theory of motivation.
d)      Qualities of a good leader.
e)      Limitations of planning.
f)       Formal and informal organizations.
Ans: a) Planning Premises: Managerial plans are based on certain assumptions which are called planning premises. They constitute the ground on which plans will stand. Meaningful premises facilitate consistency and coordination of plans. The premises may be of:
a. Non-controllable premises such as economic conditions, political situations, tastes, preferences of people etc.
b. Semi-controllable premises such as firms market shares, union management relations etc.
c. Controllable premises such as policies of the organisation, procedures, rules etc.
Effective Premising :
a.       To effectuate the planning premises following guidelines may be adopted.
b.      Selection of the premises that bear materially on program.
c.       Development of alternative premises for contingency planning.
d.      Verification of the consistency of premises
e.      Communication of the premises.
b) Budget: A budget is the monetary or/and quantitative expansion of business plans and policies to be pursued in the future period of time. The term budgeting is used for preparing budgets and other procedures for planning, co-ordination and control of business enterprise. So a budget is a pre-determined statement of management policy during a given period which provides a standard for comparison with the results actually achieved.
Significance of Budget: Budgets act as a tool in the hands of management. They help in improving the efficiency of the business. The following are some of the advantages of budgeting:
1.       Improves Efficiency: Budgeting helps in improving efficiency in the organization. Every person gets a target for achievement.
2.       Co-ordination: The working of different departments and sectors is properly co-ordinated with the help of budgeting.
3.       Economy: The planning of expenditure will be systematic and there will be an economy in spending.
4.       Consciousness among Employees: Budgeting creates consciousness among employees. By fixing targets for the employees they are made conscious of their responsibility.
5.       Time Bound: The budgets are prepared for specific periods and the performance is judged at the end of these periods. The results of employees working can be known after a specified time.
c) Herzberg theory of Motivation
Another popular need-based approach to motivation is the dual-structure approach developed by Frederick Herzberg. This is also known as Two-factor Theory. Herzberg developed this approach after interviewing 200 accountants and engineers in Pittsburg. He asked them to recall such occasions when they had been dissatisfied and less motivated. He found that entirely different sets of factors were associated with satisfaction and dissatisfaction. For instance, an individual who identified 'low pay' as causing dissatisfaction did not necessarily mention 'high pay' as a cause of satisfaction. Instead, several other factors, such as recognition or accomplishment, were cited as causing satisfaction.
This finding suggests that satisfaction and dissatisfaction are at opposite ends of a single scale. Employees would, therefore, be satisfied, dissatisfied or somewhere in between. Herzberg argued that attitudes and motivation consists of a dual structure. One structure involves a set of factors that result in feelings ranging from satisfaction to no satisfaction. The other structure involves a set of factors that result in feelings ranging from dissatisfaction to no satisfaction.
Herzberg identified two sets of factors responsible for causing either satisfaction or dissatisfaction. The factors influencing satisfaction are called motivation factors or motivators, which are related specifically to the job itself and the factors causing dissatisfaction, are called hygiene factors, which are related to the work environment in which the job is performed.
d) Qualities of a Good Leader
1.       Patience: Patience is the capacity to face difficult situations, hardships or inconvenience without making a single complaint. A good leader must show patience while waiting for expected results, facing difficult situations and taking important decisions. He must avoid taking hasty decisions and actions.
2.       Good Personality: A good personality is a combination of physical, mental and social qualities. Good personality helps a leader to influence his followers. Attractive physique and good manners add an advantage to the leader's personality.
3.       Self-confidence: A good leader must have self confidence. This quality is necessary for facing challenging situations and for solving problems easily and effectively.
4.       Human Skills: A good leader must have essential social and human skills. That is, he must understand people. This quality is necessary for dealing with different types of persons and social groups.
5.       Judgment skills: A good leader should be able to examine problems in right perspective. His judgment and decision making abilities should be superior to others. He should be able to form opinions and judge based on facts and not be prejudiced
6.       Communication skills: A good leader should be able to communicate the goals and procedures of the organisation clearly, precisely and effectively to the subordinates. Only then will it be possible for him to convince, persuade and stimulate subordinates to action.
e) Limitations of Planning
Planning is essential for a business organisation. It is difficult to manage operations without formal planning. It is important for the organisation to move towards achieving goals. But often things to not always go according to plan. Unforeseen events and changes, rise in costs and prices, environmental changes, government interventions, legal regulations, all affect our business plans. Plans then need to be modified. Therefore, planning might fail due to the following limitations:
a.      Planning does not work in dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions— economic, political, technological, legal and social dimensions. The organisation has to constantly adapt itself to the changes in business environment. However, it is not always possible to accurately assess future trends in the environment.
                                             i.      Competition in the market can upset financial plans.
                                           ii.      Sales targets have to be revised and according is cash budgets also need to be modified since then are based on sales figures.
Thus, planning cannot foresee everything and thus these are obstacles to effective planning.
b.      Planning is a time consuming process: Planning is a time consuming process. It requires collection of information, its analysis and interpretation. These activities may take considerable time. Sometimes plans to be drawn up take so much of time that there is not much time left for implementation of plans.
c.       Planning involves huge costs: Planning is an expensive process in terms of money. When plans are drawn up, huge costs are involved in the formulation of plans. If the costs are not justified by the benefits derived from the plan, it may have adverse effect on the enterprise. There are a number of incidental costs as well, like expenses on Board’s meetings, discussions with professional experts and preliminary investigations to find out the Viability of the plan.
d.      Planning creates rigidity: Planning leads to rigid mode of functioning for managers. This has adverse effect on the initiative to be taken by them.
e.       Planning does not guarantee success: The success of an enterprise is possible only when plans are Properly drawn up implemental. Managers have a tendency to rely on previously tried and tested successful plans. But it is not always true that a plan which has worked before, will work effectively again.
f.        Planning reduces creativity: Planning is an activity which is done by top management. Usually the rest of the organisation just implements these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. They only carry out orders.
f) Formal and Informal organisation
FORMAL ORAGANISATION: The formal organization refers to the structure of jobs and positions with clearly defined functions and relationships as prescribed by the top management. This type of organization is built by the management to realize objectives of an enterprise and is bound by rules, systems and procedures. Everybody is assigned a certain responsibility for the performance of the given task and given the required amount of authority for carrying it out.
INFORMAL ORAGANISATION: Man is a social being and wants social interaction.  Formal organisations are jointed by people to satisfy their needs but these organisations cannot satisfy all the needs of people because of their nature.  Hence informal organisation emerges in all the formal organisations. Informal organisation is natural or spontaneous network of personal and social relationships between individuals formed on the basis of personal attitudes values emotions, friendships prejudices, interest’s likes and dislikes, regional affinity, common work place etc.  Informal organisation is all pervasive and is found at all levels of management.  It consists of small informal groups with their own behavioral patterns, status systems, beliefs and goals.
3. (a) Discuss the nature and scope of business management.                                                                   6+6=12
Ans: Management - Introduction
Management is the coordination of all resources through the process of planning, organising, directing, staffing and controlling in order to attain stated objectives effectively and efficiently.  Effectively means doing the right task, completing activities and achieving goals and efficiently means to attain objectives with least amount of resources at a minimum cost. This process starts at the top and continues in more or less degree at every level of the organisation.
Nature or characteristics of Management:
On the basis of critical analysis of  various definitions of management, the main features of management may be stated as follows :
a)      Management is a process: Management is a continuous activity which aims at making optimum use of the available resources like men, machinery, materials, and money, for achieving organisational goals.
b)      Management deals with several functions: Management includes several functions such as planning, organising, staffing, directing co-ordinating, controlling, motivating or actuating, controlling, decision making, leadership and communication.
c)       Management is goal oriented: Every management activity is directed towards achieving predetermined objectives of the organiation.
d)      Management is a group of organized activities: Management plans, organizes, co-ordinates, directs and controls the group efforts so as to achieve organisational goals efficiently and effectively.
e)      Management is basically a factor of production: The factors of production include land, labour, capital and entrepreneurs.  A manager or entrepreneur mobilizes resources like land, labour and capital to produce’ output to satisfy needs of the society and earn profit.
f)       Management is a discipline: Management , although borrows several concept for other social sciences, it has developed its own body of principles and theories so as to become a special discipline or subject of study for potential managers.
g)      Management is  a science and also an art: Science is defined as a systematized body of knowledge and it uses scientific methods of observation measurement, experimentation etc.  Its principles are exact and university applicable. Management has systematized body of knowledge and its principles are evolved on the basis of   observation. But management being a social science, it is not an exact science.  So management is a soft or inexact science.
Art refers to the way of doing specific things i.e. it indicates “ how an objective is to be achieved.  it is the know-how to achieve the desired results.  Art needs continuous practice to reach the level of perfection.  An art is application of science. Thus art and science are interrelated in the sense that putting scientific principles into practice requires art, which needs special knowledge and skills.
Management is both a science as well as an art.  The science of management provides certain principles that can guide managers in the professional efforts, while the art of management deals with tackling every situation in an effective manner.  Planning and organising emphasize the science of management while direction, communication motivation coordination and control emphasize art of management.  Getting work done through people is an art of management.
h)      Management is dynamic: Under dynamic environment management faces several challenges hence efforts are made to develop and use new techniques for managing the organisations effectively and efficiently.  as social change takes place, management also changes to overcome the problems whenever they arise.
i)        Management is a Profession: Profession is an occupation for which specialized skills and training are required and these skills are used not for private profit but for the larger interests of the society.  There is a professional body to control the behaviour of its members.  At present management is not a full fledged profession but it is heading towards becoming a profession.
Scope or Branches of Management:
Management is an all pervasive function since it is required in all types of organized endeavour. Thus, its scope is very large. The following activities are covered under the scope of management:
a)      Planning,
b)      Organisation
c)       Staffing.
d)      Directing,
e)      Coordinating, and
f)       Controlling.
The operational aspects of business management, called the branches of management, are as follows:
1)      Production Management
2)      Marketing Management
3)      Financial Management.
4)      Personnel Management and
5)      Office Management.
1) Production Management: Production means creation of utilities. This creation of utilities takes place when raw materials are converted into finished products. Production management, then, is that branch of management ‘which by scientific planning and regulation sets into motion that part of enterprise to which has been entrusted the task of actual translation of raw material into finished product.’
Plant location and layout, production policy, type of production, plant facilities, material handling, production planning and control, repair and maintenance, research and development, simplification and standardization, quality control and value analysis, etc., are the main problems involved in production management.
2) Marketing Management: Marketing is a sum total of physical activities which are involved in the transfer of goods and services and which provide for their physical distribution. Marketing management refers to the planning, organising, directing and controlling the activities of the persons working in the market division of a business enterprise with the aim of achieving the organisation objectives.
It can be regarded as a process of identifying and assessing the consumer needs with a view to first converting them into products or services and then involving the same to the final consumer or user so as to satisfy their wants with a stress on profitability that ensures the optimum use of the resources available to the enterprise. Market analysis, marketing policy, brand name, pricing, channels of distribution, sales promotion, sale-mix, after sales service, market research, etc. are the problems of marketing management.
3) Financial Management: Finance is viewed as one of the most important factors in every enterprise. Financial management is concerned with the managerial activities pertaining to the procurement and utilization of funds or finance for business purposes. The main functions of financial management include:
(i) Estimation of capital requirements;
(ii) Ensuring a fair return to investors;
(iii) Determining the suitable sources of funds;
(iv) Laying down the optimum and suitable capital
Structure for the enterprise:
(i) Co-coordinating the operations of various departments;
(ii) Preparation, analysis and interpretation of financial statements;
(iii) Laying down a proper dividend policy; and
(iv) Negotiating for outside financing.
4) Personnel Management: Personnel Management is that phase of management which deals with the effective control and use of manpower. Effective management of human resources is one of the most crucial factors associated with the success of an enterprise. Personnel management is concerned with managerial and operative functions. Managerial functions of personnel management include:
(i) Personnel planning;
(ii) Organising by setting up the structure of relationship among jobs, personnel and physical factors to contribute towards organisation goals;
(iii) Directing the employees; and
(iv) Controlling.
The operating functions of personnel management are:
(i) Procurement of right kind and number of persons;
(ii) Training and development of employees;
(iii) Determination of adequate and equitable compensation of employees;
(iv) Integration of the interests of the personnel with that of the enterprise; and
(v) Providing good working conditions and welfare services to the employees.
5) Office Management: The concept of management when applied to office is called ‘office management’. Office management is the technique of planning, coordinating and controlling office activities with a view to achieve common business objectives. One of the functions of management is to organize the office work in such a way that it helps the management in attaining its goals. It works as a service department for other departments.
The success of a business depends upon the efficiency of its administration. The efficiency of the administration depends upon the information supplied to it by the office. The volume of paper work in office has increased manifold in these days due to industrial revolution, population explosion, increased interference by government and complexities of taxation and other laws.
Or
(b) Describe the ‘contingency approach’ of management.                                                                           12
Ans: Contingency Approach to Management:
Another important approach which has arisen because of the inadequacy of the Quantitative, Behavioural and System Approach to management is the Contingency Approach. Pigors and Myers propagated this approach in 1950. They analyzed the relationship between organization and environment. They concluded that managers must keep the functioning of an organization in harmony with the needs of its members and the external forces. Management is situational and lies in identifying the important variables in a situation. The basic theme of contingency approach is that organizations have to cope with different situations in different ways. There cannot be particular management action which will be suitable for all situations. The management must keep the functioning of an organization in harmony with the needs of its members and the external forces.
According to Kast and Rosenzweig, “The contingency view seeks to understand the interrelationships within and among sub-system as well as between the organization and its environment and to define patterns of relationships or configurations of variables. Contingency views are ultimately directed towards suggesting organizational designs and managerial actions most appropriate for specific situations”.
The contingency approach focuses on applying management principles and processes as dictated by the unique characteristics of each situation. It emphasizes that there is no one best way to manage and that it depends on various situational factors, such as the external environment, technology, organisational characteristics, characteristics of the manager, and characteristics of the subordinates. Contingency theorists often implicitly or explicitly criticize the classical approach for its emphasis on the universality of management principles; however, most classical writers recognized the need to consider aspects of the situation when applying management principles. The main features of contingency approach are:
• Management is entirely situational. The application and effectiveness of any techniques is contingent on the situation.
• Management action is contingent on certain action outside the system or subsystem as the case may be.
• Management should, therefore, match or fit its approach to the requirements of the particular situation. To be effective management policies and practices must respond to environmental changes.
• Organizational action should be based on the behaviour of action outside the system so that organization should be integrated with the environment.
• Management should understand that there is no one hard way to manage.
However, it is an abstract depiction of the contingency model. In order to operationalise the contingency approach, managers need to know the alternatives for different situations. It may be operationalized as a ‘if then’ approach to management. The environment (If) is an independent variable where as management (when) is a dependent variable. In this model, a manager has to take four sequential steps:
• Analyze and understand the situation,
• Examine the applicability or validity of different principles and techniques to the situation at hand,
• Make the right choice by matching the techniques to the situations,
• Implement the choice.
4. (a) Discuss elaborately and different techniques of decision making.                                                                11
Ans: Decision Making - Introduction
Decision-making is an essential aspect of modern management. It is a primary function of management. A manager's major job is sound/rational decision-making. He takes hundreds of decisions consciously and subconsciously. Decision-making is the key part of manager's activities. Decisions are important as they determine both managerial and organisational actions. A decision may be defined as "a course of action which is consciously chosen from among a set of alternatives to achieve a desired result." It represents a well-balanced judgment and a commitment to action.
It is rightly said that the first important function of management is to take decisions on problems and situations. Decision-making pervades all managerial actions. It is a continuous process. Decision-making is an indispensable component of the management process itself.
The effectiveness of management depends on the quality of decision-making. In this sense, management is rightly described as decision-making process. According to R. C. Davis, "management is a decision-making process." Decision-making is an intellectual process which involves selection of one course of action out of many alternatives. Decision-making will be followed by second function of management called planning. The other elements which follow planning are many such as organising, directing, coordinating, controlling and motivating.
Decision-making has priority over planning function. According to Peter Drucker, it is the top management which is responsible for all strategic decisions such as the objectives of the business, capital expenditure decisions as well as such operating decisions as training of manpower and so on. Without such decisions, no action can take place and naturally the resources would remain idle and unproductive. The managerial decisions should be correct to the maximum extent possible. For this, scientific decision-making is essential.
Definitions of Decision-making
The Oxford Dictionary defines the term decision-making as "the action of carrying out or carrying into effect".
According to Trewatha & Newport, "Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem".
Techniques of Decision-making
Decision taken must be accurate and should not lead to confusion; the decisions taken must also be scientific and available for accuracy and verification. The important techniques that aid the manager in decision making are operations research and other quantitative techniques.
1. Operations Research: Operations Research is the application of methods of science to complex problems arising in the direction and management of large system of men, machines, materials and money in industry, business, government and defense. Operations Research helps the decision maker to make objective decisions. OR does this by providing factual basis to guide and support judgment, easing the burden of effort and time on the executive. Some of the managerial problems usually subjected to operations research analysis include production scheduling, inventory control, sales policies, expansion of plant etc.
2. Models: Model building is the central concept in the application of OR while making use of quantifying models. Models are simple convenient and relatively economic resource conservation device for testing hypothesis.  Mathematical models help the optimization concept in decision making. This is very important in the calculation and choice of best possible alternative solutions for a given problem.
3. Simulation: This technique is used to test the feasibility and possible outcome of various decision alternatives. "Simulation is a quantitative technique for evaluating alternative courses of action based upon facts and assumptions with a computerized mathematical model in order to represent actual decision making under conditions of uncertainty.
4. Linear Programming: This is defined as "How could a company with limited resources make optimum use with their resources, combination for the achievement of the desired objective, or goal was, the central idea of this mathematical technique". A linear or straight line relationship exists between variables and that the limits of variation can be determined. It adopts an analytical instead of intuitive approach in decision making.
5. Games Theory: Games theory attempts to work out optimum solution in which an individual in a given situation can develop a strategy irrespective of what a competition does with maximizing gains or minimizing losses. It involves mathematical study of tactics under conditions of uncertainty.
6. PERT and CPM: Programme Evaluation and Review Technique is useful to analyze and control the timing aspects of programmes. In planning and controlling a programme, PERT helps in obtaining lower costs and reducing programme time, bringing about better utilization of human and physical resources.  Critical Path Method (CPM) is a commonly used term for all network analysis and for a particular version of these techniques. PERT relies on three estimates, an optimistic, most likely and pessimistic of the time each activity may take. CPM relies only one 'most likely'.
7. Probability Theory Analysis: Probability refers to a chance that a particular event will occur. The events must be random and be effected by chance and not by design. The probability of success is defined as the number of successful outcomes divided by the total number of outcomes. It cannot be denied that some element of probability does exist in all decision making.
Or
(b) Discuss briefly and advantages and limitations of ‘management by objectives’.                        5 ½ +5 ½=11
Ans: Introduction: Management by Objective (MBO)
The concept Management by Objectives was coined by Peter Drucker in 1954. As per this concept, the organisational goals are broken down to different level objectives and assigned to individuals at different level in order to have the organisational goal. It is a technique and philosophy of management based on converting an organisational objective into a personal   objective on the presumption that establishing personal objectives makes an employee committed, which leads to better performance.
Koontz defined MBO as follows: “MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner, consciously directed towards the effective and. Efficient achievement of organisational objectives.”
The main benefits of MBO are as follows:
1.       Improved Planning: MBO involves participative decision-making which makes objectives explicit and plans more realistic. It focuses attention on goals in key result areas. MBO forces managers to think in terms of results rather than activities. It encourages people to set specific pleasurable goals instead of depending on hunches or guesswork. An integrated hierarchy of objectives is created throughout the organisation. Precise performance objectives and measures indicating goal accomplishment are laid down. There is a time bound programme.
2.       Co-ordination: MBO helps to clarify the structure and goals of the organisation. Harmony of objectives enables individuals at various levels to have a common direction. Every individual knows clearly his role in the organisation, his area of operation and the results expected of him. MBO result in clarification of organisational roles and structure. It promotes and integrated view of management and helps interdepartmental co-ordination.
3.       Motivation and Commitment: Participation of subordinates in goal setting and performance reviews tend to improve their commit­ment to performance. The corporate goals are converted into personal goals at all levels to integrate the individual with the organisation. Timely feedback on performance creates a feeling of accomplishment Job enrichment and sense of achievement help to improve job satisfac­tion and morale. Improved communication and sense of involvement provides psychological satisfaction and stimulates them for hard work. MBO ensures perfor­mance by converting objective needs into personal goals and by providing freedom to subordinates.
4.       Accurate Appraisal: MBO replaces trait based appraisal by per­formance based appraisal. Quantitative targets for every individual ena­ble him to evaluate his own performance. Performance under MBO is innovative and future oriented. It is positive, more objective and par­ticipative. Emphasis is on job requirements rather than on personality. MBO provides an objective criterion for evaluation of actual performance. "Indeed one of the major contributions of MBO is that it enables us to substitute management by self-control, for management by domina­tion.
5.       Executive Development: The MBO strategy is a kind of self-discipline whereby shortcomings and development needs are easily iden­tified. It stresses upon a long term perspective and self-development. MBO releases potential by providing opportunities for learning, innova­tion and creativity. It encourages initiative and growth by stretching capabilities of executives.
6.       Organisational Change and Development: MBO provides a frame­ work for planned changes. It enables managers to initiate and manage change. It helps to identify short-comings in organisational structure and processes. In this way, MBO improves the capacity of the organisation to cope with its changing environment. When an organisation is managed by objectives, it becomes performance-oriented and socially-useful.
Originally MBO was developed for business organisations but now it is being used by social welfare organisations also. But MBO might not be very successful in welfare organisations because of the abstract nature of the values to be measured in specific and quantified terms, general unwillingness on the part of personnel to subject their efforts to precise evaluations and lack of measuring instruments which could generate valid and reliable data. MBO has special significance in the areas of long range planning and performance appraisal.
Limitations of MBO
Although MBO is generally taken as the panacea for all the problems of an organisation, it is not without weaknesses or limitations. The following are the limitations of MBO:
1. MBO cannot be implemented effectively on account of difficulty in setting verifiable    objectives.
2. Open atmosphere for appropriate objective-setting is absent because of differences in the status of subordinates.
3. Managers may not get time to do even their normal work as MBO involves much paperwork and holding of many meetings.
4. There is a tendency on the part of the managers to emphasis’s short-term objectives and to become more precise in objective setting and accomplishment.
5. MBO is a philosophy of managing an organisation in a new way. However, many managers fail to understand and appreciate this new approach.
6. MBO represents the danger of inflexibility in the organisation, particularly when the objectives need to be altered. In a dynamic environment, a particular objective may not be valid for ever.
                 In spite of all these weaknesses, MBO is considered as one of the unique techniques of managing the organisation. However, the full benefits of it can only be derived if the following basic requirements are taken into account.
5. (a) What do you mean by ‘span of management’? Explain its significance.                                      4+7=11
Ans: SPAN OF MANAGEMENT OR SPAN OF CONTROL
In the words of Spriegal, "Span of control means the number of people reporting directly to an authority. The principle of span of control implies that no single executive should have more people looking to him for guidance and leadership than he can reasonably be expected to serve. The span of supervision is also known as span of control, span of management, span of responsibility, span of authority and span of direction.
Factors influencing the span of Management
                There are number of factors that influence or determine the span of Management in a particular organisation, the most important of these are as follows:
6.       The capacity and ability of the executive.
7.       Competence and training of subordinates.
8.       Nature of Work.
9.       Time available for supervision.
10.   Degree of Decentralization and Extent of Delegation.
Type of span of supervision: Broadly speaking there are two types, of span of supervision:
(c)    Wider Span of Supervision: In this type of span, the supervisor controls and guides the activities of subordinates directly under his control. Wider span or supervision is favoured where workers are competent and trained.
(d)   Narrow Span of Supervision: under this type of supervision, there are many levels and more supervisors are required to perform the job of guidance and control for different activities. It increases the efficiency of supervision but the cost of supervision is very high as compared to wider span of supervision. This type of supervision is favored at higher levels of management where all the other activities of planning, organising, directing, and controlling are also to be performed. But more the levels of supervision, more difficult are the task of coordinating the activities of various groups of people.
Significance of Span of Management or Span of Control
The Span of control should not be too wide (large) or too narrow (small). If the span is too wide, then the personal supervision is difficult and the control will be ineffective. On the other hand, if the span is too narrow, then there will be excessive (too much) supervision of the subordinates. This will affect their work. So it is desirable to select an appropriate (proper) span of control. An appropriate span of control gives the following benefits to the organisation:
1. Better supervision and control: If there is an appropriate span of control, then the superior will have a limited number of subordinates under him. This will result in better supervision and control.
2. Increases efficiency: An appropriate span of control results in better supervision and control. This increases the efficiency, productivity and profitability of the organisation.
3. Increases goodwill: An appropriate span of control increases the efficiency of the organisation. Therefore, they distribute good quality goods and services at fair prices to the customers. They also give high rate of dividend to the shareholders. All this increases the goodwill of the organisation.
4. Good professional relations: If there is an appropriate span of control, then the superiors and subordinates will get time to develop close and good professional relations between themselves.
5. Team spirit and morale: An appropriate span of control creates good relations between superiors and subordinates. This improves the team spirit and morale of the employees.
6. Good communication and co-ordination: If there is an appropriate span of control, then superiors will get time to communicate with every single subordinate. This will improve the communication in the organisation. Good communication results in good co-ordination. Therefore, an appropriate span of control results in good communication and co-ordination.
7. Facilitates quick action: An appropriate span of control results in good professional relations, better communication and co-ordination. This facilitates quick action in the organisation.
8. Less labour absenteeism and turnover: An appropriate span of control helps to decrease the labour absenteeism and turnover in the organisation.
9. Develops discipline and mutual trust: An appropriate span of control helps to develop discipline and mutual trust.
10. Superiors can concentrate on important work: If there is an appropriate span of control, then the superior will get time to concentrate on important work. However, if the span of control is very wide, then the superior will have to spend most of his time on supervising and controlling his subordinates.
Or
(b) Briefly discuss the different bases of departmentation.                                                                        11
Ans: Departmentation - Introduction
The process of dividing activities into units and subunits is referred to as departmentation. The term departmentation is used in a generic sense n is not only confined to the creation of such units as are called departments, but it includes divisions, sections and jobs also.
Dividing up work calls or identification of total activities and classification of such activities into units and subunits. There are three bases for primary grouping of activities at the second level of the organisation just below the top level. Units at the second level are commonly called departments when business functions are adopted as the pattern of grouping activities. Such units go by the name of divisions when either products manufactured or territories are adopted as the means of classifying activities.
There are, however, two approaches to departmentation- top down and bottom-up approaches. In the top-down approach, activities are divided step by step downward form the chief executive's job to the operating jobs. In the bottom-up approach, the division of activities is carried on in a reverse order. Starting form operating jobs, there arise sections form combining some correlated jobs, departments from combining some sections and finally the chief executive position form putting departments together. While the top-down approach gives emphasis on co-ordination and managerial action, the bottom-up approach gives emphasis on co-ordination and managerial action, the bottom-up approach focuses attention on employee performance. Although the top-down approach is easy for understanding the departmentation process, both the approaches are utilized in actual practice
Bases or Methods of departmentation
Departmentation provides motivation by developing feeling of autonomy to the extent possible. There are several bases of departmentation. The more commonly used bases are function, produt, territory, process, customer, time etc. Some of these bases are internal-operation – oriented like function, process, time while others like product, territory and customer are output-oriented.
a.       Functional Departmentation: The grouping of common or homogeneous activities to form an organisation unit is known as functional departmentation. Functional departmentation is the most widely used basis for organising activities and is present almost in every large organisation at some level.
Functional departmentation is most commonly used because it offers certain advantages which include advantages of specialization, ensuring performance of activities necessary for the achievement of organisational objectives, elimination of un-necessary activities, easier control over functions, easier way for pinpointing training need of the managers and maintaining the relative importance of functions in the organisation.
b.      Product wise departmentation: Product departmentation involves the grouping together of all activities necessary to manufacture a product or product line. Product departmentation is preferred for product expansion and diversification when manufacturing and marketing characteristics of each product are of primary concern. Product departmentation offers several advantages places attention to product lines, reduces problems of coordination for different products, provides opportunities for further diversification and expansion of organisation and provides product specialization necessary for managers specially when each product is different from other.
c.       Territory – wise Departmentation: Territorial or geographical departmentation is specially useful to large-sized organisations having activities which are physically  or geographically spread such as banking, insurance, transportation etc., Territorial departmentation provides certain efficiency in operation. Local factors such as customers, culture, styles, preferences etc., always affect organisational functioning.
d.      Production processes – wise departmentation: In  process departmentation, processes involved in production or various types of equipments used are taken as basis for departmentation. When the production activities involve the use of several distinctive processes, these can be used as the base for grouping of activities. Such activities may be textiles, oil production etc., The process are set in such a way that a series of operations is feasible making operations economic. It provides advantages of specialization required at each level of total processes, maintenance of plant can be done in better way, and manpower can be utilized effectively.
e.      Customer – wise departmentation: Customer based departmentation is  basically market – oriented in which departments are created around the markets served or around marketing channels. The basic idea of this departmentation is to provide services to clearly identified groups of customers. Each group of customers has different purchase behavior, payment schedule, demand pattern etc., Therefore they can be attracted to the organisation’s business by satisfying them by providing services, payment schedule demand pattern etc.
6 (a) What do you mean by ‘motivation’? Discuss its importance in business management.        4+7=11
Ans: Introduction: Motivation
The word motivation is derived from ‘motive', which means an active form of a desire, craving or need that must be satisfied. Motivation is the key to organisational effectiveness. The manager in general has to get the work done through others. These 'others' are human resources who need to be motivated to attain organisational objectives.
According to George R. Terry, "Motivation is the desire within an individual that stimulates him or her to action."
According to Berelson and Steiner “A motive is an inner state that energizes activates, or moves and directs or channels behavior goals".
According to Lills "It is the stimulation of any emotion or desire operating upon one's will and promoting or driving it to action".
According to Encyclopedia of Management  "Motivation refers to the degree of readiness of an organism to pursue some designated goals and implies the determination of the nature and locus of force inducing a degree of readiness."
Importance of Motivation
a)      High Performance: - Motivated employee’s writ put maximum efforts for achieving organisational goals. The untapped reservoirs of physical and mental abilities are taped to the maximum. Better performance will also result in higher productivity. The cost of production can also be brought down if productivity is raised.
b)      Low employee Turnover and Absenteeism: -When the employees are not satisfied with their job then they will leave it whenever they get an alternative offer. The dissatisfaction among employees also increases absenteeism. The employment training of new employees costs dearly to the organisation.
c)       Better Organisational Images: -Those enterprises which offer better monetary and non-monetary facilities to their employees have a better image among them. Such concerns are successful in attracting better qualified and experienced persons. Since there is a better man-power to development programme, the employees will like to join such organisations. Motivational efforts will simplify personnel functions also.
d)      Better Industrial Relations: -A good motivational system will create job satisfaction among employees. The employment will offer them better service conditions and various other incentives. There will be an atmosphere of confidence among employers and employees. There will be no reason for conflict and cordial relations among both sides will create a healthy atmosphere. So motivation among employees will lead to better industrial relations.
e)      Acceptability to Change: -The changing social an industrial situations will require changes and improvements in the working of enterprises. There will be a need to introduce new and better methods of work from time to time. Generally employees resist changes for fear of an adverse effect on their employment.
f)       Understanding Human Behaviour: The process of Motivation helps the manager in analyzing and understanding human behavior and finding but how an individual can be inspired to produce desirable working behavior.
a)      Determining level of performance: Motivation also plays a crucial role in determining the level of performance. Highly motivated employees get higher satisfaction, which may lead to higher efficiency.
b)      Boost up the marale of the employees: The motivation procedure contributes to and boosts up the morale of the employees. A high degree of motivation may lead to high morale.
Or
(b) Write an explanatory note on ‘leadership styles’.                                                                                    11
Ans: Introduction to Leadership
Leadership is the ability to build up confidence and deal among people and to create an urge in them to be led. To be a successful leader, a manager must possess the qualities of foresight, drive, initiative, self-confidence and personal integrity. Different situations may demand different types of leadership.
Leadership means influencing the behaviour of the people at work towards realizing the specified goals. It is the ability to use non-coercive (no force) influence on the motivation, activities and goals (MAG) of others in order to achieve the objectives of the organisation.
Koontz and 0' Donnel “Leadership is the ability of a manager to induce subordinates to work with confidence and zeal”.
George R Terry “Leadership is the activity of influencing people to strive willingly for group objectives”.
Likert’s Leadership Styles or Types of Leaders
1.       Autocratic or Authoritarian Style leader: An autocratic also known as authoritarian style of leadership implies wielding absolute power. Under this style, the leader expects complete obedience from his subordinates and all decision-making power is centralized in the leader. No suggestions or initiative from subordinates is entertained. The leader forces the subordinates to obey him without questioning. An autocratic leader is, in fact, no leader. He is merely the formal head of the organisation and is generally disliked by the subordinates who feel comfortable to depend completely on the leader.
Advantages:
a)      Reduced stress due to increased control
b)      A more productive group ‘while the leader is watching’
c)       Improved logistics of operations
d)      Faster decision making
Disadvantages:
a)      Short-termistic approach to management.
b)      Manager perceived as having poor leadership skills
c)       Increased workload for the manager
d)      People dislike being ordered around
e)      Teams become dependent upon their leader
2.       Laissez-faire or Free-rein Style Leader: Under this type of leadership, maximum freedom is allowed to subordinates. They are given free hand in deciding their own policies and methods and to make independent decisions. The leader provides help only when required by his subordinates otherwise he does not interfere in their work. The style of leadership creates self-confidence in the workers and provides them an opportunity to develop their talents. But it may not work under all situations with all the workers, may bring problems of indiscipline. Such leadership can be employed with success where workers are competent, sincere and self-disciplined.
Advantages:
a)      No work for the leader
b)      Frustration may force others into leadership roles
c)       Allows the visionary worker the opportunity to do what they want, free from interference
d)      Empowers the group
Disadvantages:
a)         It makes employees feel insecure at the unavailability of a manager.
b)         The manager cannot provide regular feedback to let employees know how well they are doing.
c)          Managers are unable to thank employees for their good work.
d)         The manager doesn’t understand his or her responsibilities and is hoping the employees can cover for him or her.
3.       Democratic or Participative Style leader: The democratic or participative style of leadership implies compromise between the two extremes of autocratic and laissez-fair style of leadership. Under this style, the supervisor acts according to the mutual consent and the decisions reached after consulting the subordinates. Subordinates are encouraged to make suggestions and take initiative. It provides necessary motivation to the workers by ensuring their participation and acceptance of work methods. Mutual trust and confidence is also created resulting in job satisfaction and improved morale of workers. It reduces the number of complaints, employee's grievances, industrial unrest and strikes. But this style of leadership may sometimes cause delay in decisions and lead to indiscipline in workers.
Advantages
a)      Positive work environment
b)      Successful initiatives
c)       Creative thinking
d)      Reduction of friction and office politics
e)      Reduced employee turnover
Disadvantages:
a)      Takes long time to take decisions
b)      Danger of pseudo participation
c)       Like the other styles, the democratic style is not always appropriate. It is most successful
d)      when used with highly skilled or experienced employees or when implementing operational changes or resolving individual or group problems.
4.       Paternalistic Style leader: This style of leadership is based upon sentiments and emotions of people. A paternalistic leader is like a father to these subordinates. He looks after the subordinates like a father looks after his family. He helps guides and protects all of his subordinates but under him no one grows. The subordinates become dependent upon the leader.
7. (a) Briefly describe the different steps of managerial control with the help of suitable diagram.                         11
Ans: Introduction to Management Control
Control is one of the managerial functions. These functions start with planning and end at controlling. The other functions like organising, staffing, directing act as the connecting like between planning and controlling. Planning will be successful only if the progress planning and controlled, Planning involves setting up of goals and objectives while controlling seeks to ensure.
In the words of Koontz and O'Donnel, “The measurement and correction of the performance of activities of subordinates in order to make sure that enterprise objectives and plan devised to attain them are being accomplished." The accomplishment of organisational goals is the main aim of every management. The performance of subordinates should be constantly watched to ensure proper implementation of plans. Co-ordination is the channel through which goals can be achieved and necessary.
Steps in Controlling Process
In order to perform his control functions, a manager follows three basic steps. First of all, he establishes the standards of performance to ensure that performance is in accordance with me plan. After this, the manager will appraise the performance and compare it with predetermined standards. This step will lead the manager to know whether the performance has come up to the expected standard or if there is any deviation. If the standards are not being met, the manager will take corrective actions, which is the final step in controlling.
1)      Establishing standards: A standard acts as a reference line or basic of comparison of actual performance. Standards should be set precisely and preferably in quantitative terms. It should be noted that setting standards is also closely linked with and is an integral part of the planning process. Different standards of performance are set up for various operations at the planning stage, which serve as the basis of any control system. Establishment of standards in terms of quantity, quality or time is necessary for effective control. Standards should be accurate, precise, acceptable and workable. Standards should be flexible, i.e., capable of being changed when the circumstances require so.
2)      Measurement of performance: This step involves measuring of actual performance of various individuals, groups or units and then comparing it with the standards, which have already been set up at the planning stage. The quantitative measurement should be done in cases where standards have been set in quantitative terms. In other cases, performance should be measured in terms of quantitative factors as in case of performance of industrial relations manager. Comparison of performance with standards is comparatively easier when the standards are expressed in quantitative terms.
3)      Comparison: This is the core of the control process. This phase of control process involves checking to determine whether the actual performance meets the predetermined or planned performance. Manager must constantly seek to answer, “How well are we doing?” When a production supervisor checks the actual output or performance of his department with the production schedule, he is performing comparison aspect of control. When-an executive calculates the performance of his subordinates once in six months or   annuity, he is performing comparison aspect of control. Checking return on in investment is a comparison phase of control.
4)      Taking necessary action: The final step in the control process is taking corrective actions so that deviations may not occur again and the objectives of the organisation are achieved. This will involve taking certain decision by the management like re-planning or redrawing of goals or standards, assignment of clarification of duties. It may also necessitate reforming the process of selection and the training of workers. Thus, control function may require change in all other managerial functions. If the standards are found to be defective, they will be modified in the light of the observations.
Or
(b) Explain the essential requirements of an effective control system.                                                                 11
Ans: Introduction to Management Control
Control is one of the managerial functions. These functions start with planning and end at controlling. The other functions like organising, staffing, directing act as the connecting like between planning and controlling. Planning will be successful only if the progress planning and controlled, Planning involves setting up of goals and objectives while controlling seeks to ensure.
In the words of Koontz and O'Donnel, “The measurement and correction of the performance of activities of subordinates in order to make sure that enterprise objectives and plan devised to attain them are being accomplished." The accomplishment of organisational goals is the main aim of every management. The performance of subordinates should be constantly watched to ensure proper implementation of plans. Co-ordination is the channel through which goals can be achieved and necessary.
Essentials of an Effective control system:
The following are the essentials or basic requirements of an effectively control system:
1)      Suitable: The control system must be suitable for the kind of activity intended to serve. Apart from differences in the systems of control in different business, they also vary from department to department and from one level in the organisation to the other. The manager must be sure that he is using the technique appropriate for control of the specific activity involved.
2)      Understandable: The system must be understandable, i.e., the control information supplied should be capable of being understood by those who use it. A control system that a manager cannot understand is bound to remain ineffective. The control information supplied should be such as will be used by the managers concerned. It is, therefore, the duty of the manager concerned to make sure that the control information supplied to him is of a nature that will serve his purpose.
3)      Economical: The system must be economical in operation, i.e., the cost of a control system should not exceed the possible savings from its use. The extent of control necessary should be decided by the standard of accuracy or quality required. A very high degree or standard of accuracy or quality may not really be-necessary.
4)      Flexible: The system of control must be flexible, i.e. workable even if the plans have to be changed. In case the control systems can work only on the basis of one specific plan, it becomes useless if the plan breaks down and another has to be substituted. A good control system would be sufficiently flexible to permit the changes so necessitated.
5)      Expeditious: Nothing can be done to correct deviations, which have already occurred. It is, therefore, important that the control system should report deviations from plans expeditious. The objective of the control system should be to correct deviations in the immediate future.
6)      Forward Looking: The control system must be forward looking, as the manager cannot control the past. In fact, the control system should be so designed so as to anticipate possible deviations, or problems. Thus deviations can be forecast so that corrections can be incorporated even before the problem occurs.
7)      Organisational Conformity: Since people carry on activities, and events must be controlled through people, it is necessary that the control data and system must conform to the organisational pattern. The control data must be so prepared that it is possible to fix responsibility for the deviations within the areas of accountability.
8)      Indicative of Exceptions at Critical Points: The management principle of exception should be used to show up not only deviations but the critical areas must also be fixed for most effective control.
9)      Objectivity: As far as possible the measurements used must have objectivity, particularly while appraising a subordinate's performance, the subjective element cannot be entirely removed.

10)   Suggestive Of Corrective Action: Finally, an adequate control system should not only detect failures must also disclose where they are occurring, who is responsible for them and what should be done to correct them. Overall summary information can cover up certain fault areas.

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