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INTERNAL ASSESSMENT EXAMINATION I PRINCIPLES OF MANAGEMENT PART A (Answer the ALL questions) 1. Enlist the roles of functional foremanship.

. Functional Foremanship: According to Taylor, one Supervisor cannot be an expert in all aspects of work supervision. He suggested the system of functional Foremanship in which eight supervisors supervise a workers job. Four of them are concerned with the planning of work in the factory office and the other four are involved in the execution of work at the shop floor. 2. Differentiate between management and administration S.No Administration 1 Legislative & determination function 2 3 4 Determination of objectives & policies Provides a sketch of the enterprise Management Executive Function Implementation of Policies Provides the entire body mainly by administrative (5X2=10)

Influenced mainly by public opinion & Influenced other outside force function

Mainly top level function involves Mainly middle level function involves thinking & planning doing and acting

3. Enlist the principles of scientific management according to F.W.Taylor. Principles of Scientific Management Science not rule of thumb Harmony not discord Co-operation not individualism Maximum output in place of restricted output Development of each individual to his greatest efficiency and prosperity Mental Revolution Workers and Management, Workmen towards their work, their fellowmen and towards their employees. 4. Mention the characteristics of good plan. Features of a good plan 1. Based on clearly defined objectives 2. Simple, easily understandable 3. Flexible or adaptable to changing conditions

4. must be balanced in all respects 5. must provide standards for the evaluation of performance and actions 6. It should be economical 7. It should be practicable 5. Differentiate between strategic and operational planning. S.No 1 2 3 4 5 Strategic Planning Lays down major goals and Policies of the Organisation Done at higher levels of Management Long term in nature Broad and general Based on long term forecast and appraisal of Environment PART B (Answer the ALL questions) 06. Discuss the steps involved to make MBO effective and state its merits and demerits. (8) Management by Objectives (MBO) MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed towards the effective and efficient achievement of Organisation and individual Objectives. Process of MBO 1. Setting preliminary Objectives 2. Clarifying Organizational roles 3. Setting subordinates Objectives 4. Recycling Objectives How to set Objectives 1. Quantitative & Qualitative 2. Setting Objectives in Government. 3. Guidelines for setting Objectives Benefits of MBO Improvement of managing Clarification of Organisation Encouragement of Personal commitment Development of Effective control Weakness of MBO (1X8+2X16=40) Operational Planning Decides the use of resources in day to day operations Done at lower level of Management Short term in nature Detailed and specific Based on past experience

Failure to teach the philosophy of MBO Failure to give guidelines to goal setters Difficulty of setting goals Emphasis on short run goals Danger of Inflexibility 07. (a) Explain the fourteen principles involved for management process according to Henry fayol. Classification of Business Activities According to Fayol all activities of a business enterprise could be divided into six groups: Technical (Production or manufacturing) Commercial (Buying, selling and exchange) Financial (Search for and optimum use of capital) Security (Protection of property and persons) Accounting (Record keeping, costing, statistics) Managerial (Planning, organizing, commanding, coordinating and controlling) Elements of Management Fayol classified the elements or functions of management as follows: Planning (to foresee and provide means for the future) Organizing (to provide a business everything useful to its functioning raw materials, tools, capital and personnel) Commanding (maintaining activity among personnel) Coordinating (unifying and harmonizing all activity and efforts) Controlling (seeing that everything occurs in conformity with established rules and expressed command) Universal Principles of Management Fayol gave fourteen basic principles of management. Fayol cautioned that these principles are flexible guidelines and should not be considered as rigid rules. He pointed out that these principles have by and large universal application. Managerial Qualities and Training Fayol identified the following qualities of an effective manager: Physical (health,vigour and address) Mental (ability to understand and learn, judgment and adaptability) Moral (energy, firmness, willingness to accept responsibility, initiative, loyalty, tact and dignity) (16)

General education (general acquaintance with matters not, belonging exclusively to the function performed) Special knowledge (peculiar to the function being performed) Experience (knowledge arising from work proper) 7. (b) Write short notes on: (a) Sole proprietorship Sole proprietorship The individual entrepreneur supplies the entire capital, employs labour and machines. Individual uses his own skill in the management of affairs and is solely responsible for the good or bad result of its operation and working Merits 1. Simplest form of business 2. Least legal complication 3. Quick decision 4. Maximum Profit 5. Personal Care 6. Quality product 7. Minimum wastage 8. Flexible business (b) Partnership Partnership Two or more persons come together and start a business with their own funds, the parties agree to share the profits as well as bear the losses in the agreed proportion. The formation and management of partnership organization is governed by the Indian Partnership Act, 1932. Merits 1. Has larger financial resources 2. greater personal contacts of the partners gives more customer base and benefits 3. Persons of different skills and abilities can work for betterment of Organisation 4. Less expenditure per partner is involved in forming partnership Organisation 5. Loss will be divided among the partners (c) Joint stock companies. of different values. (4) Joint Stock Company Capital is contributed by a large number of people in the form of shares (4) (4)

Private Ltd Company can be established with two to fifty members. The maximum number of membership is limited to 50. When this type of Organisation expands beyond certain limit, it can restrict its liability by registering the firm as a limited company. The company is registered under Indian Company act 1956. Public Ltd Company the minimum number of members required are 7 and there is no upper limit. Such companies offer shares to general public. Public Ltd companies are supervised and controlled by the Government to protect the interest of Share holder public. The company is governed by an elected body called board of directors. Merits 1. The shareholders bears no risk as the liability is limited 2. large scale business can be undertaken 3. Take advantage of economies of scale in production because management can employ specialized labour, can use latest machinery and thus can achieve large scale production at low cost. 4. It is not affected by the retirement of any share holder hence the existence of Organisation is permanent in nature. 5. It works on democratic principles, which results in economy and efficiency. Co-operative Enterprises Co-operation is a form of Organisation where persons irrespective of caste, creed and religion, voluntarily associate together as human beings. It is based on the democratic principles and functions for the welfare of the public at large. It protects the interest of consumer as well as that of small producers. Features 1. Voluntary Organisation 2. Open Membership 3. Common purpose / Interest 4. Democratic Management 5. Not profit oriented (d) Different roles of managers Roles of a manager ( Mintzberg) 1. Interpersonal Role - Interacting with people inside and outside the Organisation Figurehead as a symbolic head of an organisation, the manager performs routine duties of a legal nature Leader Hiring, Training, motivating and guiding subordinates Liason - Interacting with other managers outside the organisation to obtain (4)

favours and information 2. Informational Role Serving as a focal point for exchange of Information Monitor Seeks and receive information concerning internal and external events so as to gain understanding of the Organisation and its environment. Disseminator Transmits information to subordinates, peers and superiors within the Organisation Spokesperson Speaking on behalf of the Organisation and transmitting information on Organisation plans, policies and actions to outsiders. 3. Decisional Role Makes important decision Entrepreneur Initiating changes or improvements in the activities of the Organisation Disturbance handler- Taking charge and corrective action when Organisation faces unexpected crises Resource allocator Distributing Organizations resources like money, time, equipment and labour Negotiator Representing the Organisation in bargaining and negotiations with outsiders and insiders 08. (a) Explain in detail about the modern classical approaches and state its limitations. (16) APPROACHES TO MANAGEMENT Modern management has developed through several stages or approaches. These approaches to the study of management may be classified as under: 1. Classical Approach 2. Behavioural Approach 3. Management Science Approach 4. System Approach 5. Contingency Approach The Classical Approach The classical or empirical approach is based on the following tenets: 1. Management is a process consisting of interrelated functions performed to achieve the desired goals. 2. From the experience of managers in different organizations, principles or guidelines can be derived. 3. These principles are basic truths, which can be applied, in different organizations to improve managerial efficiency.

Behavioral sciences approach involves the application of knowledge drawn from behavioral sciences (psychology, sociology, anthropology, etc.) to managerial problems. propositions of this approach are: 1. A business organization is not merely a techno-economic system. It is much more a social system of interpersonal and intergroups relations. 2. The attitudes and performance of an employee are dominated by the social group to which he belongs. Members of and organization behave not as individuals but as members of some group. 3. Social and psychological incentives exercise a greater influence on employee motivation than working a conditions and economic rewards. Critism: i. ii. Human relations movement seeks to manipulate and exploit the emotions of employees for the It ignores the wider environmental issues inside and outside an organization. Social benefit of the organization by providing a false sense of happiness or satisfaction. environment may fail to motivate employees if they find their find their jobs highly structured and monotonous. (b) Management Science or Mathematical Approach The management science approach was evolved after the Second World War. It involves the application of sophisticated quantitative/mathematical techniques for solving managerial problems. (i) Rational decision-making. An organization is considered a decision-making unit and the main job of a manager is to make decisions and solve problems. (ii) Mathematical models. A model is simplified representation of real life situation. It utilizes mathematical symbols and relationships. It reduces a managerial decision to a mathematical form so that decision-making process can be simulated and evaluated before the actual decision is made. (1) Computer applications. The use of computers has been the driving force n the development of the management science approach. The computer can handle in minutes extremely complex problems with an immense volume of data and also calculate numerous variations in the solution. (2) Evaluation criteria. As the main focus of the management science approach is on scientific decision-making, models are evaluated for effectiveness against the set criteria, like cost reduction, return on investment, schedules and deadlines, etc., (C) System approach: The fundamental features of the systems approach are as follows. (1) An organization is a system consisting of may interrelate and interdependent parts or subsystems. These elements are arranged. These elements are arranged orderly according to some scheme such that the whole is more than the sum of the parts. This is called synergy. The main

(2) As a system an organization draws inputs (energy, information, materials, etc.) from its environment. It transforms these inputs and returns the output into the environment in the form of super system. (Environment). All living system is open system. Organizations are open systems. Because they consist of peoples. ENVIRONMEN T INPUTS Money Manpower Machinery Material Method FEEDBACK Systems approach is an improvement over classical and neoclassical theories as it is closer to reality. The traditional theorists viewed organization as a closed system while modern theorists treat it as open system. (d) Contingency approach: . Internal environment or state of the organization refers to various constraints and resources that are available. These include. (1) Technological constraints. Nature and type of the process used to produce goods and services. (2) Task constraints. Nature of tasks performed by individual workers. (3) People constraints. Types of individuals employed and their levels of competences. The main features of the contingency approach are as follows: Management is entirely situational. There is no one best way of managing an organization. What managers do depends upon the circumstances of the particular situation. For example, people-oriented style may succeed in given situation but task-orientation may be more effective in another situation. Management style and proactive should match the requirements of the situation. Success in management depends upon the ability to cope with environmental demands. TRANSFORMATION OUTPUTS Goods & services Employment Taxes Others

. Effective management requires a proper match between the two types of variables.

Management variables


IF Environment variables The contingency approach is an extended and improved version of the system approach. This theory emphasizes that the best way to lead, plan, organize and conduct managerial activities varies with situation. There are no universal principles to be applied in all situations. Managers must analyze different situations and use the best approach, which is most suitable in that particular situation. The main advantage of this theory is that it compels us to be aware of complexity in every situation and forces us to take an active and dynamic role in determining what best would work in each case. Contingency theory is practical and realistic and offers and explanation of the realities of managers job. It questions the universal validity of management principles and practices. It avoids value judgments and exhorts managers to be innovative and creative. The contingency approach advocates comparative analysis of organizations to bring about a fit between management system and environment. Contingency theory has, however, been criticized on several ground. First, it lacks a sound theoretical base. Secondly, it all depends upon the situation confuses management. A manager has to think through all possible alternatives as he has no cut; of dried principles to act upon. In order to operationally the contingency theory, management may adopt the following process:(a) Analyze and understand the particular situation, (b) examine the validity of alternative approaches to the situation at hand, (c) make the right choice by matching the approach with the situation, and (d) implement the choice and review program. 8. (b). Write short notes on: (i) Nature of planning 1. Being aware of Opportunity (4)

- In light of the market, competition, what customer wants our strengths and weakness? 2. Setting Objectives or goals - Where we want to be and we want to accomplish and when 3. Considering Planning Premises - In what environment. Internal or External will our plan to operate? 4. Identifying alternatives - What are the most promising alternatives to accomplish our objectives? 5. Comparing alternatives in light of goals - Which alternative will give us the best chance of meeting our goals at the lowest cost and highest profits? 6. Choosing an alternative - Selecting the course of action we will pursue 7. Formulating supporting plan - Such as plans to buy equipment, buy materials, hire and train workers. Develop a product. 8. Numberizing plans by making budgets - Developing such budgets as volume and price of sales operating expenses necessary for plans expenditure for capital equipment (ii) Types of plans Types of Plans 1. Purposes or Missions identifies the basic function or task of an enterprises or agency or any part of it. The purpose of business generally is the production and distribution of goods and services. 2. Objectives or goals are the ends towards which activity is aimed, they are the results to be achieved. They represent not only the end point of planning but the end toward which organizing, staffing, leading and controlling are aimed. 3. Strategies Strategies are grand plan. The most common usage of the terms is general programs of action and deployment of resources to attain comprehensive objectives. The determination of the basic long term objectives of an enterprises and the adoption of courses of action and allocation of resources necessary to achieve these goals. 4. Policies are general statements or undertakings which guide or channel thinking in decision making. Not all policies are Statements; they are often merely implied from the actions of managers. 5. Procedures are plans that require method of handling future activities. They are guides to action, rather than to thinking, and they detail the exact manner in which certain activities must be accomplished. They are chronological sequences of required actions. (4)

6. Rules spell out specific actions or non-actions, allowing no discretion. 7. Programs are a complex of goals, policies, procedures, rules, tasks assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action; they are ordinarily supported by budgets. 8. Budgets is a statement of expected results expressed in numerical terms. Referred as numberized program. The financial operating budget is often called a profit plan (iii) Steps in formulating successful strategy 1. Based on clearly defined objectives 2. Simple, easily understandable 3. Flexible or adaptable to changing conditions 4. must be balanced in all respects 5. must provide standards for the evaluation of performance and actions 6. It should be economical 7. It should be practicable 8. Prepared with the consultation of concerned persons 9. Should be clear, specific and logical 10. Should be capable of being controlled (iv)Types of policies 1. External & Internal policies External policies ECONOMIC ENVIRONMENT Includes the type of economic system that exist in the economy The nature and structure of the economy, the business cycle, the fiscal, monetary and financial policies of the government, foreign trade and foreign investment policies of the government. The type of economic system, that is socialist, capitalist or mixed provides institutional framework with in which business firm have to work. (i) SOCIAL AND CULTURAL POLICIES - Members of a society yields important influence over business firms. - Activities of business firm may harm the physical environment and impose heavy social costs. - Business should consider the social implication of their decisions. - Social responsiveness the ability of a corporate firm to relate its operations and - Policies to social environment in way that are mutually beneficial to the company and society at large. - Social responsibility / social responsiveness related to ethics. (ii) POLITICAL AND LEGAL ENVIRONMENT POLICIES (4) (4)

Closely related to government. Political philosophy of the government yields a great influences over business policies. (iii) TECHNOLOGICAL ENVIRONMENT POLICIES The nature of technology used for production of goods and services in an important Factor responsible for the success of a business firm. The improvements in technology raise the total factor productivity of a firm and Reduce unit cost of output. Technological environment affects the success of firms and the need for Technological advancement cannot be ignored. (iv) DEMOGRAPHIC ENVIRONMENT POLICIES Includes the size and growth of population, life expectancy of the people rural urban Distribution of population the technological skills and educational levels of labour force. Since new workers are recruited from outside the firm, demographic factors are considered as parts of external environment. The skills and ability of a firms workers determine to a large extent how well the Organisation can achieve its mission. NATURAL ENVIRONMENT POLICIES - In the ultimate source of many inputs such as raw materials, energy which business firms use in their productive activity. - Availability of natural resources in a region a country is a basic factor in determining business activity in it. - It includes geographical and ecological factors such as minerals and oil reserves, water and forest resources wealth and climatic conditions, port facilities are all highly significant for various business activities. - Not the availability of natural resources alone, but also the technology and ability to being them in use that determines the growth of business and the economy. INTERNAL ENVIRONMENT POLICIES Internal factors are to good extent controllable factors because the firm can change or modify these factors to improve its efficiency.

VALUE SYSTEMS Means the ethical belief that guides the organization in achieving its mission and objective. The value system of a business organisation makes an important contribution to its success

and its prestige in the world of business. Value system of a business firm has an important bearing on its corporate culture and determines its behaviour towards its employees, shareholders and society at large. Infosys Our corporate culture is to achieve our objectives in environment of Fairness, honesty, transparency and courtesy towards our customers employees, Vendors and society at large