758 20/97/2887 14:25 91-124-3061412 MOKINSEY 8 CD. INDIA PAGE 15 INDIAN INSTITUTE OF MANAGEMENT CALCUTTA, ONE YEAR EXECUTIVE PROGRAM IN BUSINESS MANAGEMENT (EPBM 11) OPERATIONS MANAGEMENT MARKS: 100 TIME: 1.5 HR PART A (Time 45 Mins, Marks 50) + Make reasonable assumptions if necessary. Closed Book Exam, + No clanfcation will be provided during the examination Q L.Cricaily comment on anv one of the following stements ao A. Once the competitive priorities are set for a product, operations strategy must then erermune the required production system needed to support the prioties. B. Safety stock is reality inthe face of uncertaiaty in demand and lead time. Q.2For tach question A'to E given below, solution Shas also been provided For anv four state whether S is True/False. Give justifications for youranswer, —_(10x4=40) ‘A. Consider two items, item? and iter 2 that are consumed by an organization rejularly over the years, Demand for both the itans is deterministic and wnifotin, The anna! demand and cost per unit of the items are Dy, Ds and C, C, cespectively. The AM ratio (where the symbols bave the usual meaning), ace same for both the item’ and-you may assume that EOQ is used for determining the order quantity, It is known that Dy-S:Da ind GPG S: Under the gives conditions, item 1 should be or red more frequently, B. ‘Consider die activities and times of a tablet packaging line: Act. Count & put aside 25 tablets from a stack of bets ‘Act 2 Put25 tablets jaa bottle and seal Act3 Put bottles ina box and pack ‘Tablets are 1 be supplied to the above line through a high-speed machine, As stich injiut mmateral is nota constraint, Currently each activity is maaned by one person, ‘Thus, thre persons are working in line and boxes ae produced in large volumes, 5: The above three-worker line can produce a maximum of &5 Boxes’ per hour CX wants to determine the minimum cost plan that will meet the demand, Demands for the Droduct in the next 3 months aré Ds, Ds, Ds respectively. The relevant costs are (a) Inventors ‘carrying cost of Rs. Hunt Jevied on the end-inventoty of any: mionth-and (b) Set up cost of “Re A/month only if there is production in tha math, Maximum of C units can be produced in any moot. Ics also known that D, Gosercd 2 fight between the client and the victim, in which the client pulled a gun cet ihe aetion five times, The lawyer expects to receive s conviction, bot is hoping 10 convince the jury that manslaughter is the only ‘appropriate conviction, 2oPine sc avas commited in the heat of passion. Apparently, the lawyer is ROPINE the jury will make a(n) ‘concerning the behavior of the client a. internal attribution b. extemal attribution self-serving bias error d fwidamental attribution error Page 2 0f 89, Members of a student team in Professor Lasu's organizational behavior cliss have approached her with a problem. The team ‘members are complaining that Sameer, separ of their team, has been tate or absent for almost ett team meetings and sree ghould reece a lower grade on the tam project. Professor Basu concludes aaerpmeer had the same opportunity to participate as everyone else on the lear, and arm gssigns the lower grade widiowt consulting Sameer. Im this decision, Professor Basu may have demonstrated: - ‘a. projection the self-serving bias ce. the self-fulfilling prophocy 4. the fundameatal attribution ecror 10, Satisficing occurs when decision makers: 1h. begin with a solution instead of a problem. select a few alternatives that differ only slightly from the status quo. ~~ select-the first alternative that comes along. ___ 4. select a good altemative instead of continuing to seach for the ‘ptienia chotee:~ 11, Rabul had an opportunity to attotid ain fndi Pakistan gamo.on the night before his ‘epanizational befsvior final exam. He decided that be had studied enough by that time, and went off to enjoy the game with his friends. A week later, he discovered that he had gotten a grade of "Din the inal exam. Rahul then concluded that the xan was 0 hard, his grade wouldn't have been any better even if he had studied more. Rahul has probably just experienced: the fundamental attribution error the self-fulfilling prophecy QP projection the self-serving bias 12. Which of the following is nor a cognitive bias? 2. Resonance b. Projection ¢. Frequency 4. Illusion of control 13. Developing 2 lexming organization includes all excep a. feeling etached to a job, b._ making programmed decisions. ¢. developing # commitment to work. 4. developing ataste for risk-taking,EBB iis eo sestie oe sei ne ee a ore important than individual leaning because: only minor decisions are made in groups. yw. most important decisions ate made in groups ©. groups are less effective, 4. op management makes sategie decisions, 16, 20, . When managers have an illusion of control bias, they ten: + 2." centralize decision-making authority. b. docentralize decision-making authority, © promote mutual adjustment. 4, implement a collateral structure. Aemanseer at an automobile plant had two supplicrs that delivered defective parts Hie or she now thinks that all suppliers arc unreliable. This is an example of which of the following cognitive biases? ° 4. Escalation of commitment b. Projection © Representativeness 4. Illusion of contol Ze coenitve bias that causes individuals to blame others for problems is__ 8. representativencss &. projection © cognitive dissonance 4. frequency A copnitive bias that leads managers to reimain committed too losing course of action and not admit mistakes is & escalation of commitment b. cognitive dissonance ©. projection 4d. representativeness Allof the following can improve the quality of an organization's decision-making except: listening to dissenters ‘engaging in groupthink maintaining a diverse top-man; 4. devil's advocacy Page 4 of §FA en ermnnersitse sic REE! ‘21. In order to promote effectiveness, a manager should strive to attain all of the following characteristics in his oF her groups excens: 8. Members are another. b. Members engage in an equal amount of task-oriented and self-dtiented role behavior. ©. Members are able to diagnose individual and group processes and improve their ‘own and the group's functioning. 4. Members kitow why the group exists and have shared goals, ling to Féccive help from one another and to give help to one ‘The conformity that emerges when like-minded People reinforce the tendency to interpret events and information in similar ways. This is called . 3, groupthink b. devil's advocacy experimenting “d:“rationat declsion-making ——— 23. At3M product shanagers submit ideas to a commitce that challenges the size ofthe market or the cost of manufacturing. This approach is called 2. devils advocacy b. dialectic inquiry rational approach 4. unstructured approach 24 are poople who have an interest or elaim in en organization, foes, and in Row wel it pgp 8, Stakeholders b. Organizers €. Technicians 4. Foreign officials wha i 25. The characteristic of groupthink called leads members to ignore the ethics! consequences of their decisions. self-censorship collective rationslization self-appointed mind guards belief in the inherent morality of the team 26: Jere is the appoinied leader of a cross-functional team composed of very big individuals who arc investigating methods of improving quality in specific tne ERmany Mroduers. The team-has identified a problem that Jefficy hes never ne Refore,andis having dificult understarding. Under these eircurnsances is Ti that a. team productivity will dectine b. team cohesiveness will increase an informal task-oriented leader will emerge in the team an informal relations-oriented leader will emerge in the teain27-rAl ofthe fllowing are among the contingency variables most oflen suggested as influences on a leader's behavior except f-structure and tasks of the tear, department, or organization b. leader attributions regarding employee behavior employee's personal characteristics 4 4. team’s characteristics 26. A Indy colleagus has met with a motor acident while driving her ovn ca, You bave teen driven by this colleague # number of times, and you have found fer d ing to be safe and cautious. Your first reaction is “She must've been driving lite madcap to have met with the accident”. You are making what kind of an ateibuion in he case? 4. Situational atribution b. Dispositional attribution ©. Both situational and dispositional None ofthesbove. 29. The above is a typical example of which kind of attribytion bias? 2. Fundamental Attribution Error - b. Actor Observer effect ©. Botha and b 4. None of the above Faring is # list of task characteristics. For the following 10 questions, match only one of the {oltowing ten task charecteristics with each of the job deseripticns Write only the corresponding Key alphabets in the space your answer sheet : ‘A. High Variety B. Low Variety C. High Identity D. Low Identity . E. High Significsnce F. Low significance G. High Autonomy H. |. Low autonomy 1. High feedback . J. Low feedback 30. A professor in an institute doing-research, teaching courses, and an admi holder istrative pei 31. An electronics factory worker who assembles a fadio and then passes it on to the quality “nspection division for checking whether it works or not 32. An aecduniant in an institute who tallies accounts all day 23: ‘An elecronics factory worker who assembies a radio and then tess tose itis working Properly Page 6 of §34," Nursing wounded soldiers in a’military hospital _ 35. Cleaning the premises of a military hospital _ 36. A.tilor who opertes only on the hemming of dresses __ , 37. A service advisor in a car workshop who schedules hisMher cars for the day, attenés to them and decides on the best way to solve the cars’ problems _ 38. A dress designer who designs'a dress, selects material to make the dress, stiches the dress, end finishes it to perfection __ 39. A service mechanic in car workshop who changes engine oil, brake fuid, et. according to.a highly. specified procedure _—_ Consider the case of Aftab, who isthe captain of the Hawaiian cricket cam. Outcomes of his, performance on the field that are ion of captaincy” and “i ~ advertising contracts for endorsing products”. Ad contracts tre more endearing,to Aftab thant ‘Captaincy Retention (7 vs. $ on a the same scale), as they bring in more money and farne and requires less work to be done. ‘Aftab Gigures that ithe can perform at a very high level, in the next few matches, the odds are tree in ten that he will retain his captaincy. Getting ad contracts are easier (odds are six in ten). However if he performs in an average manner, the odds for captaincy retention and ad ‘contracts are onc in ten and two in ten respectively. Aftab is highly’certain that he agg geform on a avenge nel. Ont of tn performances the past, six have been averag@Biowever out of tose ten, only two have been high performances. . Use Expectianey theory of Motivation to determine how and whether Aftab will perform at ‘an averagehigh level of performance. Answer the following questions accordingly. 40. Valence of Advertising Contiects for Aftab is aS . 7 6 3 41. tnsteumentality that Aftab’s average performance will lead to advertising contracts is a. 0.1 b. 03 «. 06 4. 02 42, Valence of Captaincy Retention for Aftab is a5 » 449. Instrumentality that Afab's high performance will lead to advertising contracts is - 2 0 b 03 © 06 . 4.02 44, Instrumentality that Aftab's average performance will lead to Captaincy Retention is 201 be 03 : 06 4.02 45. Instrumeniality that Aftab's high pecformance will lead to Captainey Retention is ® Ol . 4 02 46. Expoctancy for high Performance is ‘ 2 06 b 03 © 02 @ 01 47, Expectancy for Average Performance is 8 06 . b 03 wu © 02 401 48. Valence of High Performance for Aftab is a 12 : b. 63 . $7 4 19 49. Valence of Average Performance for Aftab is: a 12 b 63 © 57 419 50. Aftab will be motivated to perform > a. High b. Average & Neither high nor average & Low Page Sof &sora Pace 43/58 MOXINSEY & 00. . 87/2087 14:25 91-124-3861412 . . . pera? snusan lastiture of Management Calcutta ‘ EPBM-§ Behavioural Sciences-1 Exami nn ~ Question paper ime: hour Instructions: Piase read each question carefully and CLEARLY circle your answers on the answer sheet provided with the question paper. Both answer shee! and cuestiog sheet have to be Mar ec the eed of the examination, No examinee is allowed to leaee the examizs ball during the examination. ‘This 's a clos: marks. All the Best! 1 The process by which people filter out most stimali so that they can dea mote important ones is referred io as. I with tig interpretation perceptual extraction” perceptual organization Perceptual selection » aoe 2. Ammoag the following factors affécting perceptual selection, which one would tend to be least influenced by individual differences: Teaming contrast fry motivation familiarity @ aogp 3. Sheila has been telephoning job applicants afer Teviewing their resumes in, order to siltet 2 few to By out to company headquarters for job intemene er briet discussion with Maharoof, she noted that his voice hed Reavy nasal: quality to it Although he had an impressive resume and presemted sone good ideas about how Shea ete orgenvzaton, she was unsure whether or net to offec him an interne She had a gut feeling that he probably would not ft into hes seer very well, If She: wanted to both control costs and guard against the possible problems associated vit “perceptual errors, she should probably: : Nerview with members’of her tem. 2 Trust hr initia judgment, since she feels comfortable wih & Call Maharoof back aad explain her reservations to him in oder to assess his reaction, ~~ Hive one or more members of he team phone Maharoof to discuss the job and Friel Pinions of him before making a final decision on whether weber him.20/07/2087 14:25 91-124-3061412 MOKINSEY & GO. INDIA PAGE, 12 of af} eiror ia perception, 2. expectancy bb. similarity ec. contr 4 continuity of the following is not anatopriate advice to insrease the accuracy of person ion 2. Do not generalize froin’a single trait to many traits b. Do rot assume that a single behavior will show itself in all situations. ¢. . Do not place too much reliance on physical appearance @ Do not compare your perceptions with those of others Jamal bas been particularly impressed with the creative problem solving skills demonstrated on the job by Saeed, whom he hired six months ago. While Jamal is aware that Saeed has had a few minor disagreements .with his team members and has missed a few meetings, he feels that his overall performance nevertheless warrants the highest possible rating on the performance appraisal requifed at the conclusion of ‘sthe.company's probationary employment period. "Jamal may be experiencing the perceptual error of. a. halo effect b: * stereotyping ¢. expectancy effect ._ self-fulfilling prophecy If the boss perceives a subordinate as strong performer, all of the following ebaviors are more likely excent: a, Treats mistakes as leaming opportunities. ». Solicits opinions from subordinate. cc’ Gives subordinate routine assignments @) May frequently: deferto subordinate’s dpinions in disagreements A lawyer is defending a client charged with premeditated murder. Several witnesses observed a fight betiveen the clicnt and the vietim, in which the client pulled a gun and shot the victim five times. The lawyer expects to receive a conviction, but is hoping to convince the jury that manslaughter is the only appropriate conviction. since the act was committed in the heat of passion. Apparently. the lawyer is hoping the jury will make a(n) conceming the behavior of the client a. internal anribution b. extemal attribution: c. self-serving bias error 4. fundanent attribution e:ror 44/5820/67/2007 uM 1 5/58 14:25 91-124~3061412 MCXINSEY & CO. INDIA PAGE 45: Members of a student team in Professor Basu’s organizational behavior class have approached her with a problem, The team members are complaining that:Sameer, 2 member of their team, has been late or absent for almost all team meetings anc therefore shouid receive a lower grade on the icacn project. Profassor Basti conelucc: that Sameer hed the same opportunity to participare as everyone else on the team, ani therefore assigns the lower grade without consulting Sameer. In this decision Professor Basu may have demonstrated: projection . the self-serving bias tbe self-fulfilling prophecy’ the fundamental attribution error pegs Satisficing occurs when decision makers a, begin with 2 solution instead of a problem, b, select a fesw alternatives that differ only slightly from the stams quo c. select the first alternative that comes along. 4. select a good altemative instead of continuing to search for the optimal choice. Rahul had an opportunity to attend an India-Pakistan game on the night before his organizational behavior Sinal exam, He decided that he had studied enouigh by that time, and went off to enjoy the game with his friends. A week later, he diseovefed that he had gotten a grade of "D" in the final exam, Rabol then concluded that the exam was so hard, his grade wouldn't have been any bester even if he had studied more, Rahul has probably just experienced: the fundamental attribution error the self-fulfilling prophecy projection the self-serving bias aoge Which of the following is not a cognitive bias? a. Resonance b. Projection c. Frequency aot 4. Ilusion of control coats . . Developing a leaming organization includes all excep. 8, feeling attached to a job. b. making programmed decisions ¢. developing a commitment to work. d. developing a taste for risk-taking,1 16. . 18, 19. 20/07/2007 14:25 91-124~3062412 MCKINSEY 2 00. INDIA Pace 6/58 ‘Team learning is move important than individual learning because: / " a. only minor decisions are mede in griieps. 'o, most important decisions exe made in groups. . ¢, groups are less effective. * 4. top management makes strategic decisions “e Salman is a manager ofa fast-food cestaurent thar serves only harvburgers and french Eine He fails to resize changes in the environment, such asa trend toward health ines jousness, He continues (© limit lis menu to greasy burgers and states that “ostomers will renem when the weather gets better. Which! cognitive bias does ‘Salman have? a. Cognitive dissonance b, Representativeness c. Projection a. Frequency ‘When managers have an illusion of control bias, they often: ‘centralize decision-making authority. deceatralize decision-making authority promote mutual adjustment. jenplement a collateral structure peor ‘A.manager at'an automobile plant bad evo supplies that delivered defective pacts Hie [6y She'now:thinks, that all suppliers are unreliable. This isan example of which of “Edllowidg cognitive binses? a-Bitaldtion of commitment b. Projection . c. . Representativencss dy Wlusion of control “The coguitive bias that causes individuals to blame others for problems is a.” repfesentativeness b. projection.” cc. cognitive dissonance 4, frequency ‘A cofpitve bias tit ends managers‘o remait commited w losing cburse of action and not admit mistakes is a. escalation of commitment . cognitive dissonance 6. projection d._ representativeness ‘AtLof the following can irmprove the quality of an organization’s decision-making excep 2. listening to dissenters b. engaging in groupthink cc, maintaining'a diverse top-menagement team. 1. devil's advoracy20/07/2807 24 25, Pace 47/58 14:25 91-124-3061412 MeKINSEY & CO. INDTA 5. 2 ager should sirive or her groups exces sare willing (0 receive help from one another and to give help to one another. Members engage in behavior. &. Members are able to diagnose individual and ‘group processes and improve their own and the group's functioning, .- Members know why the group exists and have shaced goais a equal amcue? of task-oriented and self-oriented rete ‘The conformity that emerges when like-minded people reinforce the tendency to interpret events and information in similar wavs. This 1s called a. groupthink devil's advocacy experimenting rational decision-making ‘At 3M product managers submit ideas to a corumitiee that challenges the size of the market or the cost of manvfaciuring, This approach is called a. devil’s advocacy. b. dialectic inguiny ¢ tational approach d. unstructured approach ace people who have an , and in how well it performs. Stakeholders : . Organizers Technicians Foreign officials doe: aogee The characteristic of groupthink called leads members to ignore'thé éthical consequences of their decisions. self-censorship collective rationalization self-appointed mind guards belief in the inherent morality of the team, : a 4. Jeffrey’ is the appointed leader of a cross-functional téam composed of very’ bright individuals who ate investigating methods of improving quality in a specific line-et company products, The team tas identified a problem that Jeffrey-hes never es, before, and is having difficulty understanding. Under these circumstances, itis likele that team productivity will decline team,cohesiveness will increase an informal task-oriented leader will emerge in the tedmn. en informal rejations-oriented leader wil! ‘emerge in the tear20/07/2007 14:25 91-124-3061412 MCKINSEY & CO, INDIA PAGE 48/58 of the teass, department, or organization banens regarding employee behavior employee's personal characteristics team's characteristics aoge 38. A lady colleague has met with a motor aecident while driving her own car, You have been driven by this colleagve a number of times, and you have found her driving to tbe safe and cautious. Your first reaction is “She must've been driving like a madcap So have mei with the accident”. You are making what Kind of an attribution in this case? a. Situational attibution ». Dispositional attribution cc. Both situational and dispositional d None of the above 29. The above is a typical example of which kind of attribution bias? a. “Fundainental Attribution Error b, Actor-Observer effect ¢. Botheandb None of the above Following ia lst of task characteristics. For the following L0 questions, match only one of the following tehltask:charactenstics with each of the job descriptions. Write only the corresponding bev‘alghateSan'the space yout answer sheet. ‘Av High Variety B. Low Variew C. High entity D: Low Identity E. High’Sighificance F.. Low significance G. High Autonomy 1H. Low autonomy 1. High feedback J. Low feedback =A, A professor in an institute doing research. teaching courses. and an administrative pot- holder 1, An electronics factory workér who assembles a radio and then passes it on to the quality inspection division for checking whether ix works or not _ An accountant in ar institute who tallies accounts all day __ An electronics factory worker who assembles a radio and then tests to see if is working sreperly20/07/2007 14:25 91-124~3061412 MCKINSEY & 00. INDIA PAGE 49/58 me / Nursing wounded soldi ine mil rv hespital 35. Cleaning the premises of a militan: ‘ospital 36. A tailor who operates oniy on the hemming of dresses —_ 37 A service advisor in a car workshop sho schedules his/her cars for the day, attend ‘them and decides on the best way to solve the cars” problems __ 38. A dress designer who. designs a dress, selects material to ai dress, and finishes it to perfection ke the dress, sti 38. A service mechanic in a car workshop who changes engine oil, brake Muid, ete, accords a toa highly specified procedure __ Consider the case of ARab, who isthe captain ofthe Hawaiian ericket team, Outcomes of his ‘ perjorunee on the feld that are relevant to him are “retention of captaincy’ and “iors advertising contracts for endorsing products”. Ad contracis are sore endearing, to"AStaby than Captaincy Retention (7 vs, 5 on a the same scale), aS they bring in more money and fame ant requires less work 26 be done. Aftab figures that if he can perform at « very high level, in the nent feyv matches;:tHé odds are three in ten that he will retain his captaincy. Getting ad contracts are easier (eck Te 55 in ten). However if he performs in an average manner, the odds for captaincy retention Sanit: ad contracts ase one in ten and two in ten respectively ‘Aftab is-highly certain that he can perform on an average level. Out of téh perforinaiccs ihe Bast, x have been average. However out of those ten, only two Rave. been. Ingh performances Use Expectancy theory of Motivation to determine how and whether Aftab will pécform. a: an averagehhigh level of performance, Answer the following questions accordingly: 40. Valence of Advertising Contracts for ARab is a5 b 7 «6 a3 . : ~ . 4 tetrumentality that’ Aftab’s av rage performance will lad to advertising contracts ig a 0.) b. 03 c. 06 402 42, Valence of Captaincy Retention for Aftab is a3 b7 6 do320/07/2007 14:25 91-124-3061412 MCKINSEY & 00. INDIA PAGE 50/58 eos Bad 44, Instrumentality that ARab's average performance wil lead to Captainey Retention is a Ot b 03 ce 06 402 45, Insteumentality that Aftab's high performance will lead to Captaincy Retention is a Ol b 03 « 06 4 02 46:-Expectaney for high Performance is, . 2 06 bv, 03 ce 02 . dL 48, Valence of High Performance for Aftab is a 12 b 63 «32 419 43, Valence of Average Performance for Aftab 's ald vrs, 63 oe ar 419 430, Aftab will be motivated to perform a. High b, Average ¢. Neither high nor average LowIndian Institute of Management Calcutta EPBM-VII Mid Term Examination,2007 BS-I Time: { hour Marks-100 Instruci Each question carries 2 marks ni: Please read each question carcfully and CLEARLY circle your answers on the question Paper. No examinee is allowed to icave the examination hall during the examination. This ig a closed book examination and cach question carries two marks. All the Best! ‘The process by which people filter out most stimuli so that they can deal with the ‘more important ones is referred to as. interpretation perceptual extraction perceptual organization perceptual selection Bege Sheila has been telephoning job applicants after reviewing their resumes in order to select: few to fly out to company headquarters for job interviews. In her bref aiscussion with Maharoof. she noted that his voiee had a heavy nasal quality to it Although he had an impressive resume and presented some good ideas about how to improve the organization. she was unsure whether or not to offer him an interview She had a gut feeling that he probably would not fit into her team very well. If Sheila ‘wanted to both control costs and guard against the possible problems associated with Perceptual errors, she should probably Invite Maharoof for an immediate interview with members of her team b. Trust her initial judgment, since she feels comfortable with it c. Call Maharoof back and explain her reservations to him in order to assess his reaction. 4. Have one or more members of her tcam phone Maharoof to discuss the job ané Set their opinions of him before making a final decision on whether to inter iow him/ 4. Interviewers have a tendeney to compare job candidates to ther candidates jnterviewed at the same time rather than to some absolute standard. This is an ‘example of a(n) _ for in perception. cexpectaney similarity contrast continuity ae ee 4. Which of the following is not appropriate advice to increase the accuracy of person perecption: : a a, Do not generalize from a single trait to many traits. ‘6. Do not assume that a single behavior will show itself in all situations. cc. Donot place too much reliance on physical appearance. 4. Donot compare your perceptions with those of others. 5, Jamal has been particularly impiessed with the ercative problem solving skills ‘demonstrated on the job by Saced, ‘whom he hired six months ago. While Jamal is aware that Saced has had a few minor disagreements with his team members and has mnissed a few mectings, he feels that his overall performance nevertheless warrants the highest possible rating, on the performance appraisal required at the conclusion of the company’s probationary employment period. Jamal may be experiencing the perceptual error of. halo effect. stereotyping expectancy effect self-fulfilling prophecy ecg 6. Mf the boss perceives a subordinate as a strong performer. all of the following behaviors are more likely except: Treats mistakes as learning opportunities, Solicits opinions from subordinate, Gives subordinate routine assignments, May frequently defer to subordinate’s opinions in disagreements 7, Alawyer is defending a client charged with premeditated murder. Several winesses fobserved a fight herween the client and the vietim. in which the client pulled a gun tnd shot the victim five times, The sawyer especls to Fevene a cuinviciton, Bu os hoping to convince the jury that manslaughter is the only appropriate convictior since the act was committed in the heat of passion, Apparently. the lawyer is hoping the jury will make an) __ ‘concerning the behavior of the client. a internal attribution b. external attribution self-serving bias error 4. fundamental auribution error10 2 erento ate Se ein RE Members of a student team in Professor Basu’s organizational bchavior class have approached ber with a problem, The team members are complaining that Samer s member of their team. has been late or absent for almost all team meetings and | therefore should receive a lower grade on the team project. Professor Base concludes that Samecr had the same opportunity to panicipate as everyone elee on the team, and therefore assigns the lower grade without consulting Sameer. In this decision Professor Basu may have demonstrated a. projection b._ the self-serving bias ¢. the self-fulfilling prophecy 4. the fundamental attribution error Rahul had an opportunity to attend an India-Pakistan game on the night before his gatanlzational behavior final exam. He decided that he had studied enough by that Tea and went ofF to enjoy the game with his fiends, A vwcek later, he dseocered that he had gonten a grade of "D" in the final exam. Rahul then concluded ther onan as 50 hard, his grade wouldn't have been any better even if he had studied more. Rahul has probably just experienced: a. the fundamental attribution error b. the self-fulfilling prophecy ©. projection 4d. the self-serving bias Developing a leaning organization includes all except a. fecling attached to a job. b, making programmed decisions €. developing a commitment to work 4. developing a taste for risk-taking, ‘Team learning is more important than individual only minor docisions are made in groups. b most important decisions are made in groups © groups arc less effective 4. top management makes strate saming because. decisions ‘Mule working the night shift, Aarti was wamed by his super sor. Cher that he looked very tired, and that he should be sure to wet enowel, sleep during the day so {at he would pot fall asleep while on the job at might. Tinree wecks Ince Chery! {cum ae asleep in the break room. and fired him for sleepin on the ol Aarn at ie hl i Aatti's pereeption iMhistrates the pereapty 1 projection Si epiicat deiense © expecianey effect a halo effect/ 3 An organization has just announced that it will be laying off 10% of its manufacturing workforce. with layof¥ decisions based upon Supervisor's evaluation of employee performance {i.c., the more poorly performing workers are to be laid off). Supervisors should be careful to avoid ___in their judgments about employee performance if they hope to avoid Charges of discrimination or wrongful discharge by disgruntled employees a. projection b. the self-serving bias the self-fulfilling prophecy 4. the fundamental attribution error All of the following can improve the quality of an organization's decision-making except: a. listening to dissenters b. engaging in groupthink. ©. maintaining a diverse top-management team. d. devil's advocacy In order to promote effectiveness, a manager should strive to attain all of the following characteristics in his or her groups except 2. Members are willing to receive help from one another and to give help to one another. b. Members engage in an equal amount of task-oriented and self-oriented role behavior, ©. Members are able to diagnose individual and group processes and improve their ‘own and the group’s functioning, 4. Members know why the group exists and have shared goals. The conformity that emerges when like-minded people reinforce the tendency to interpret events and information in similar ways. This is called a. groupthink b. devit’s advocacy ©. experimenting 4. rational decision-making At 3M product managers submit ideas to a committee that challenges the size of the market or the cost of manufacturing, This approach is called a. devil's advocacy , rational approach 4. unstructured approach are people who have an interest or claim in an organization, in what it does, and in how well it performs a. Stakeholders b. Organizers c. Technicians19 2 4. Forcign officials ‘The characteiistic of groupthink called __ leads members to ignoré the ethical consequences of their decisions self-censorship collective rationalization self-appointed mind guards belief in the inherent morality of the team Jeffrey is the appointed leader of a cross-functional team composed of very bright individuals who are investigating methods of improving quality in’a specific line of company products. The team has identified a problem that Jeffrey has never seen before. and is having difficulty understanding. Under these circumstances, it is most likely that: team productivity will decline team cohesiveness will increase an informal task-oriented leader will emerge in the tear an informal relations-oriented leader will emerge in the team All ofthe following are among the contingency variables most often suggested as influences on a leader's behavior except: structure and tasks of the team, department, or organization b. leader attributions regarding employee behavior c. employee's personal characteristics d. team’s characteristics A lady colleague has met with a motor accident while driving ber own car. You have been driven by this colleague a number of times, and you ave found ber driving to be safe and cautious. Your first reaction is “She must've been driving like a madcap ‘0 have met with the accident”. You are making what kind of an auribution in this 3. Situational attribution '. Dispositional attribution Both situational and dispositional 4. None of the above The above is a typical example of which kind of attribution bas” Fundamental Attribution Error Actor-Observer effect Both a and b 2 sone of the above Consider the ease of Afiab, who is the captain of the Honolulu cricket team, Outcomes of his Performance on the ficld that are relevant to him are “recention of captaincy" and “more advertising contracts for endorsing products”. Ad contracts are, more endearing to Afb than Capiainey Retention (7 vs. 5 on the same scale), requires iess work to be done as they bring in moce money and fame and. a Aftab figures that if he can perform ata very high level. in the nest few matches, the odds are three in ten that he will retain his captaincy, Getting ad contracts are easicr (odds are six in ten). However if he performs in an average manner, the odds for captaincy retention and ad ‘contracts are one in ten and two in ten respectively ‘Aftab is highly certain that he can perform on an average level. Out of ten performances in the past, six have been average. However out of those ten, only two have buen high performances. Use Expectancy theory of Motivation to determine how and whether Aftab will perform at an averagelhigh level of performance. Answer the following questions accordingly: 24. Valence of Advertising Contracts for Aftab is as b 7 ©. 6 43 25. Instrumentality that Aftab’s average performance will ead to advertising contracts is a Ol : b. 03 © 06 d 0.2 26. Valence of Captainey Retention for Aftab is a S b 7 © 6 d 3 27. {nstrumentaity that Aftab’s high performance will lead to. advertising contracts is a 1 b 03 c 06 d 02 28. Instrumentality that Aftab’s average performance will lead to Captaincy Retention is a Ol b 03 c 06 4. 02 29, instrumentality that Aftab’s high performance will lead to Captaincy Retention is a OL b. 03 © 06 d 0.2 30, Expectancy for high Performance is a 0632 b os «02 a ol : Expectancy for Average Performance is a 06 b 03 < 02 400 Valence of High Performance for Aftab is a 12 & 63 © 37 aig Valence of Average Performance for Aftab is: a 12 b. 63 © 57 a 19 Aftab will be motivated to perform a. High b. Average c. Neither high nor average &. Low . Which of the following statements about power and authority is false: 2. Although closely related, the tems power and authority do not mean the same thing. Authority is power legitimated within the organization, Power is narrower in scope than authority. 4. Authority applies to fewer behaviors in organizations than docs power {shita is upset, During her coffee break, she was complaining about the pompous sad arbitrary behavior of Anzar, her boss's assistant. in keeping people that he doesn't !ie from effective contact with her boss. Anzar overheard ber comment and glared a “er menacingly. Now Ishita is afraid that she will have more difficuly: in geuing a Sur ‘opportunity to present an idea that she has been developing to her bos: [shit is apparently afraid of Anzar’s: power authority Mechiavellianism zone of indifference Abhishek has heard through the grapevine that his Kiss is ping to ke asked > ass-ae. + Person fom his work unit to a prestigious task force within the next SiN ron assignment will provide a rare opportunity to demonstiate technical skills +2 the w38, 39, organization, and work w K force, Abh to the ek hi influenced primarily by his boss's undesirable proieets that his boss behavior is beu a referem b. expert © reward 4, legitimate Gaurav has just been assigned by this month. He complains to a. legitimate & reward coercin, «, 4. referent Among the interpersonal while — Power depend much more on personal by the person a. legitimate and ex b. reward. ©. coercive. exper, 4. expert and refer h members of uy sources of power, been working lots of s has had trouble a: his boss to go out of tows his friend, "This is reall Power, PPer management In hopes of being assigned Overtime and volunteering, for Gaurav's behavior pert; reward, coercive, and referent “oereive, and legitimate, expert and referent and referent; reward and legitimate fent; reward, coercive, and legitimate ly unfair, Bot more hours log signing. It appears that Abhishck’s ——___ power, on his fourth business trip Anybody in the aged away from I guess I'l just go is being primarily Power have organizational bases ‘characteristics brought to the job Professors with. community: in- level of studem onde once in e-commerce and entrepren t Order-to lower cf ‘th this information, and argued ip if he could hire more adjunct ‘curship from the local business4 networks coercion knowledge decision making a b c. a In 1999, The Darwin Zone, a mid-sized automobile dealership. found that it was able to increase its market share quickly’ and dramatically by creating and maintaining a site on the World Wide Web, listing features and prices of both new and used vehicles. While ‘most of te organization's competitors were aware of the potetal offered by the Web, they were unable to respond as quickly because they did not have enouth programmere with the necessary skills to develop and maintain their web pages. Mike Darwin, the Presideot of The Darwin Zone, had made it a point to constantly develop the competencies of his programmers so that they would always be at the ewting edge of technology. Mike was thus able to succeed by having an appropriaie number of Froeremmers on his staff with the necessary array of competencies to respood quickly 10 {his oppomunity. In this ease, we can attribute the success of Mike's 1909 plan to increase market share primarily to his use of. as power. 2. resources B. knowwiedge ©. decision making, networks: 2. All of the following arc among the characteristics of managers and employees who are ffective in their use of power, except they understand the sources of power and effective methods of using them they temper their use of power with maurity and self-coatrol they understand legitimate behavior in acquiring and using power they tend to specialize in the use of a few power sources and iafluence strategies ‘The Everlasing Flashlight Company has discovered that a recent sakes decline for a Specific prot is partly the result of customer dissatisfaction withthe ea failure rate of we product. ‘The production manager attbutes the eath fallure rie to quale Problems in sveral ofthe components. which are obtained from diferent suppliers. The rewheamnne manager, however, argues that the problem lies in the design of the bresict. The marketing manager arguss tht demand for th: procuct is cropping a5 a fesul of less expensive competition from overseas. In order to ideas the mont effective solution fo ts sales dectine in the most efficient manner. it souls probesh be best 16 use a self-managed team cross-functional team functional team all ofthe above would probably be equally efficient ang effect've in sch ing this problem ee .44 48, 46. 47, 48, Frederick has just becn appointed Char of a committee with 15 members. Frederick should probabiy place ____ emphasis on the use of formal rules and procedures in order to be effective. high moderate to high moderate to low low aege Cheryl, who has just been appointed Chair of a committee with 6 members, should probably place ‘emphasis on the use of formal rules and procedures in order to be effective. high moderate to high moderate to low low . eese Madan, the plant martager, tells Anika, the production manager: "It is imperative that this ‘order be shipped before the end of the week. Do whatever it takes to get the order out on. time." However, when Anika tries to schedule her team for overtime so that the order can be completed on time, the Human Resource department informs her that Madan issued a directive the previous week stipulating that no overtime be allowed because of ‘overruns in the personnel budget. Anika seems to be experiencing: a. role overload b. interrole conflict c. person-role conflict 4. intrasender role conflict Madan, the plant manager, tells Monica. the production manager: "It is imperative that this order be shipped before the end of the week, Do whatever it takes to get the order out on time." However, when Monica trics to schedule her team for overtime so that the order can be completed on time, the Human Resource department informs her that corporate headquarters issued a directive the previous week stipulating that no overtime be allowed because of overruns in the personnel budget. Monica seems to be experiencing __conflict steasender role b. intersender role c. person-role @- interrole Inderdeep was recently offered a promotion trom his position as an assembly line worker 6 that of a firstine supervisor. In spite of the fact that he considered the offer to be a real honor. and felt that management personnel make a valuable contribution to the ‘company. he refused the promotion. When asked why. he stated that he didn't want to geta 49. bet er is jends on the vollzy-ball am. caught an the middle between management and his good fri . ST er chan ave nesombly line workers. I appears that Inderdeep refused the promstion because he feared the experience of: a. imerrole conflict b. intrasender role conflict cole overload cole ambiguity Line managers may’ perceive benween the demands of their superiors for increased output and the requirements imposed upon them by staff personnel that make this more difficult. a. imersender role conflict b. person-role conflict ¢. imtrasender role conflict . none of the above is correct Sameer. a supervisor, enters the company break room just in time to see a loud argument escalating between tvo of his subordinates, Prabjt and Brutus. Both men are shouting at each other, and Brutus is waving his fists at Prabjit. Sarncer attempts to intervene. but Brutus continues to shout and wave his fists, demanding an apology from Prebjit.. Barus threatens: “I'l pulverize the scrawny wise guy if be doesn't apologize for that remark. Go ahead and fire me-sec if I care! Prabjit says that his remark was made in wal innocence, and has beea misinterpreted by Brutus. He insists that it would be inappropriate for him to apologize for Brutus inability to understand his appropriate use of the English language. Under these circumstances, it would probably be most appropriate for Prabjit to use a(n) style of conflict handli avoiding forcing accommodating compromising pooeIndian Institute of Management Calcutta EPBM-VII Mid Term Examination,2007 BS-I Time: 1 Hour Marks-100 Each question carries 2 marks Instructions: Please read cach question carefully and CLEARLY circle your answers on the question paper. No examinee is allowed to leave the examination hali during the examination. This is a closed book exdmination and each question carries two marks. All the Best! 1, The process by which people filter out most stimuli so that they can deal with the ‘more important ones is referred to as: interpretation perceptual extraction Perceptual organization perceptual selection Bese 2. Sheila has been telephoning job applicants after reviewing their resumes in order to select:a few to fly out to company headquarters for job interviews. In her brief discussion with Maharoof. she noted that his voice had a heavy nasal quality to it Although he had an impressive resume and presented some good ideas about how to improve the organization, she was unsure whether or not to offer him an interview She had a gut feeting that he probably would not fit into her team vory well. If Sheila wanted to both control costs and guard against the possible problems associated with perceptual errors, she should probably Invite Maharoof for an immediate interview with members of her team. ‘Trust her initial judgment, since she feels comfortable with it ¢. Call Maharoof back and explain her reservations to him in order to assess his reaction. d. Have onc or more members of her team phone Maharoof to discuss the job and get their opinions of him before making a final decision on whether to interview him.5. 6. 7 erg. have a tendency {0 compare job candidates to other, candidates dered at the same time father than ro some absolute standard.’ This is an example of a(n) ____ error in pereeption ay expectancy Sb similarity ¢, contrast); nh ‘continuity Which of the following is not appropriate advice to increase the accuracy of person perception: <.526 4 . a, Do,not generalize from a single trait to many traits. “b Dosnot aséuine that a’ single behavior will show itself in’all’situations:* @, Donat place tog much reliance on physical appeatance. a Do not compare your perceptions with those of others. Jamal has been particularly impfessed with the ercative problem solving skills Jjamonstrated on the job by Saced, whom he hired six months ago. Wile Jamal is, sete that Saced has had afew minor disagreements with bis team members and has araed a few meetings, he feels that his overall performance nevertheless warrants the highest possible rating on the performance appraisal required atthe conclusion of the company’s probationary employment period. Jamal may be experiencing the perceptual error of: halo effect stereotyping expectancy effect self-fulfilling prophecy eee If the boss perceives a subordinate as a strong performer. all of the following ‘behaviors are more likely except: a. Treats mistakes as learning opportunities ’b. Solicits opinions from subordinate. ¢. Gives subordinate routine assignments. S May frequently defer to subordinate's opinions in disagreements. lawyer is defending a client charged with premeditated murder Several witnesses observed a fight between the client and the victim, In which the client pulled a gun seenthot the victim five times, THE lawsyei eapscts 10 feeeive a cue Se ui hoping to convince the jury that manslaughter is the only appropriate conviction, since the act was committed in the heat of passion. Apparently. the lawyer is hoping the jury will make a(n) ‘concerning the behavior of the client. a internal attribution b, externabattribution cc selfiserving bias error d. fundamental attribution error8 Members of 2 student team in Professor Basu's organizational behavior class have approached her with a problem. The team members arc complaining that Sameer, a member of their team, has been late or absent for almost all team mectings and therefore should reccive a lower grade oni the team project, Professor Basu concludes that Sameer had ihe same opportunity to participate as everyone else on the team, and therefore assigns the lower grade without consulting Sameer. In this decision. . Professor Basu may have demonstrated: projection the self-serving bias the self-fulfilling prophecy the fundamental attribution error Rahul had an opportunity to attend an India-Pakistan game on the night before his ‘organizational behavior final exam. He decided that he had studied enough by that time, and went off to enjoy the game with his friends. A week later. he discovered that he had gotten a grade of *D" in the final exam, Rahul then concluded that the exam was so hard, his grade wouldn't have been any better even if he had studied more. Rahul has probably just experienced: the fundamental attribution error the self-fulfilling prophecy projection the self-serving bias Developing a learning organization includes all except fecling attached to a job. making programmed decisions. developing a commitment to work. developing a taste for risk-taking, ange Team leaming is more important than individual leaming because: 2. only minor decisions are made in groups. b. most important decisions are made in groups. c. groups are less effective, d. top management makes strategic decisions . While working the night shift, Aarti was wamed by his super sor. Cheryl. that he looked very tired, and that he should be sure to get enough sleep during th that he Would not fall asleep while on the job at night Three weeks later. Chery! found Aarti asleep in the break room, and fired him for sleepmg on the job Aarti 10 mnishir ont ace tam Bash, wad tha { Perception sHlustrates the perceptual error of waming, Aarti 4 projection serceptual deiense © expectancy effect J halo effect13. An organization hag just announced that it will be laying off 10% ofits manufacturing workforce, with layot¥ decisions based upon supervisor's evaluation of employee perforimancs (i.c., the more poorly performing workers are to be laid off). Supervisors should be careful to avoid ___ in their judgments about ‘employce performance if they hope to avoid charges of discrimination or wrongful discharge by disgruntled employees. i projection the self-serving bias the self-fulfilling prophecy : the fundamental attribution error aoge 14, All of the following can improve the quality of an organization's decision-making except: : listening to dissenters. b. engaging in groupthink. ¢. maintaining a diverse top-management team. 4. devil's advocacy. 15, In order to promote effectiveness, a manager should strive to attain all of the following characteristics in his or her groups except 2. Members are willing to receive help from one another and to give help to one | another. b. Members engage in an equal amount of task-oriented and self-oriented role behavior. ¢. Members are able to diagnose individual and group processes and improve their ‘own and the group’s functioning. 4: Members know why the group exists and have shared goals. 16. The conformity that emerges when like-minded people reinforce the tendency to interpret events and information in similar ways. This is called a, groupthink b. devil's advocacy experimenting 4, rational decision-making 17, At3M product managers submit ideas to a committee that challenges the size of the market or the cost of manufacturing. This approach is called a. devil's advocacy * . rational approach 4\ unstructured approach Iso . arespeople who have-an interest or claim in an organization, in what it docs, and in how well it performs. a. Stakeholders b., Organizers <. Technicians4. Foreign officials 19" The characteristic of groupthink called leads members to ignore the ethical consequences of their decisions, self-censorship | collective rationalization self-appointed mind guards belief in the inherent morality of the team aooe 20, Serey is the appointed leader of a cross-functional team composed of very bright individuals who are investigating methods of improving quality in'a specific line of company products, The team has identified a problem that Jflrey has never seen before, and is haviig difficulty tinderstanding. Under these circumstances, itis most likely that: : a. team productivity will decline b. team cohesiveness will increase i ¢. an informal task-oriented leader will emerge in the team i an informal relations-oriented leader will emerge in the team 21, Allof the following are among the contingency variables most often suggested as i inflaences on a leader's behavior except: H ‘a, structure and tasks of the team, department, or organization b b. leader attributions regarding employee behavior q c._employee's personal characteristics : } d. team’s characteristics i 20, Allady colleague has met with a motor accident while driving her own caf. You bave F ‘been driven by this colleague a nuinber of times, and you bave found ber driving to i te safe and cautious. Your first reaction is “She must've been driving like a madcap Hl to have met with the accident”. You are making what kind of an attribution in this $ case? Situational attribution oe : a b.Dispositional attribution < Both situational and dispositional ‘ 4. None of the above ‘The above is a npical example of which kind of atinbution bias” i 2, Fundamental Attribution Error b Actor-Observer effect © Botha and b None of the above Consider the case of Aftab, who isthe captain of the Honolulu ercket tearm. Outcomes of his performance’on the field that are relevant to him arc “retention, of eaplamecs * and “more everieing contracts for endorsing products”. Ad contrac age ire endearing to Afab than Captaincy Retention (7 vs. $ on the same scale), as they bring in morc money and fame and requires less work to-be done.a vory high level. in the nest few matches the odds aFe vey. Getting ad contracts are easier (odds are six in we manner, the odds for captaines retention and a ‘Aftab figures that if he ean perform at the will retain his captait forms in an avera ‘and two in ton respectively revel. Out of ten performances in [Ata is highly certain that fe can perform On 80 average | the past, six. have. been average, However vat of those ten, only two have been high Use Expectatiey theory of Motivation (0 determine how and whether Aftab will perform at an eerage/high level of performance. Answer the following, questions accordingly 24, Valence of Advertising Contract for Aftab is a 5 b7 «6 a 3 25, instrumentality that Aftab’s averse performance wil lead to advertising ‘contracts is a Ol : b, 03 c. 06 4, 02 96, Valence of Captaincy Retention for Af=D is 25 bt. c 6 a3 27 Instrumentality that Aftb’s high performance will lead to advertising contracts 15 a, OL * b. 03 06 4. 02 28, instrumentality that ARab’s average performance will lead to Captaincy Retention is a Ol b. 03 c. 06 4. 02 29. tnstrumentalty that Aftab’s high performance will lead to Captaincy Retention is a Ol b. 03 c, 06 a. 02. 30. Expectancy for high Performance is a 06 x 4 231. Expeetaney for Average Performance is p! a 06 b. 03 . ee 02 Hi d: 0 : 32. Valence of High Performance for Aflab is 12 63 37 19 pose 33. Valence of Average Performance for Aftab is: a 12 b 63 © 57 a 19 34. Aftab will be motivated to perform a. High b. Average ¢. Neither high nor average d. Low 35. Which of the following statements about power and authority is False: a. Although closely related, the terms power and authority do not mean the same thing, b. Authority is power legitimated within the organization, ¢. Power is narrower in scope than authority. . 4. Authority applies to fewer behaviors in organizations than does power 36, Ishita is upset. During her coffee break, she was complaining about the pompous sad arbitrary behavior of Anzar, her boss's assistant, in keeping people that be doesn't! from effective contact with her boss. Anzar overheard her comment, and clued at ser menacingly. Now Ishita is afraid that she will have more difficulty in geaing a Sir opportunity to present an idea that she has been developing to her boss [shizz is apparently afraid of Anzar's: power ; j authority . Machiavellianism : zone’of indifference aoge 37 Abhishck has heard through the grapevine that his tess i going to ty as person from: his work unit to a prestigious task force within the Devt six assigitment Will provide a rare epportunity to demonstfaiz technical skillsorganization. and work with members of apper management. In hopes of being assigned (0 the task force. Abhishek has been working lots of overtime and. volunteering. for undesirable proyeets that his boss has had trouble assigning. It appears that Abhishck's behavior is bemy influenced primarily by his boss's ____ power. a. referom : ‘b. expert © reward ds legitimate 38. Gaurav has just béen assigned by his boss to go out of town on his fourth business trip: this month." He complains to his friend, “This. is really unfair. Anybody in the department could handle this assignment, and I've got more hours logged away ‘from home than anyone clse! 1 Suppose I could ask the boss to, find somebody else. I know she wouldn't hold it against me if I told her I couldn't go out of town again this month, | don’ think all this éxtra effort will pay off for me in the long run. But I suppose the old slave driver has the right to givé me whatever assignments she sees fit. I guess I'l just go and do my job...as usual." It seems probable that Gaurav’s behavior is being primarily influenced by his boss's power. . legitimate reward coercive referent aege 39, Among the interpersonal sources of power, power have organizational: bases, white power depend much miore on personal characteristics brought to the job a. legitimate and expert; reward, coercive, and referent b. reward. coercive, and legitimate; expert and referent ©. coercive. expert, and referent, reward and legitimate d._ expert and referent; reward, coercive, and legitimate 40. The Dean at Manipal University was pressuring Vijay Ramannan, the chair of the Business Department, to increase class sizes in their highly popular e-commetce and entrepreneurship courses. Professor Ramanan logged onto the university’s intranet and checked class sizes in departments across campus, discovering that those in the Business Department were already much: higher than the university average. He then spoke to colleagues both on- an afFcamnue and iicenwsend shat the sumbor of adianct Preult used. in other departments at Manipal University as well as in business departments at other schools was typically much higher than those made available by the Dean to his department. Professor Ramannan confronted the Dean with this information, and argued that the universix’s overall-revenues would actually go.up if he could hire more adjunct Brofessors.with experience in e-commerce and entreprencurship from the local business Fommunitys in-order-to tower class sizes and offer more sections, thereby increasing the ‘level of studentsatisfaction with their courses. After somé consideration, the Dean ~ agreed! 10 ty Professor Ramannan’s plan. This instance of influence seems to employ all of the following sources of power exceptnetworks coercion knowledge decision making eoge 41, In 1999, The Darwin Zone, a mid-sized automobile dealership. found thai it was able to increase its market share quickly and dramatically by creating and maintaining a site on the World Wide Web, listing features and prices of both new and used vehicles. While ‘most of the organization's competitors were aware of the potential offered by the Web, they were uable to respond as quickly because they did not have enough programmers with the necessary’ skills to develop and maintain their web pages. Mike Darwin, the President of: The Darwin Zone, had made it a point to constantly develop the competeacies of his programmers so that they would always be at the cutting edge of technology. Mike was thus able to succeed by having an appropriate number of programmers on his staff with the necessary array of competencies to respond quickly to this opportunity. ta this case, we ean attribute the success of Mike’s 1999 plan to increase market share primarily’ to his use of as power. a resources b. knowledge decision making, networks 42. All ofthe following are among the characteristics of managers and employees’ who are effective in their use of power, except: they understand the sources of power and effective methods of using them ‘they temper their use of power with maturity and self-concrot they understand legitimate behavior in acquiring and using power they tend to specialize in the use of a few power sources and influence strategies apse 43. The Everlasting Flashlight Company’ has discovered that a recent” sales decline for a specific product is partly the result of customer dissatisfaction with the earty failure rate of the product. The production manager attributes the carly failure rate to quality problems in several of the components. which are obtained from different suppliers. The new engineering manager, however, argues that the problem lies in the design of the Product. The marketing manager argues that demand for the product is dropping as 2 resuk of less expensive competition from overseas. In order to ident solution to this sales decline in the most efficient manner. it woul use a self-managed team cross-functional team functional team all of the above would probably be equally efficient ané effective in solving this problem anes44. Frederick has just been. appointed Chair of a committee with 15 members Frederick should probably’ place, ‘emphasis on the use of formal rules and procedures in: order to be effective high wees modérate to:higy moderate to low’ Towers REESE #. Send a " Spee teta ys ye Soy + 45. Cheryl, who: has just been appointed Chair of a committee with 6 members, should probably place «emphasis on the use of formal rules and procedures in order to be effective: ees a. high - b.- moderate'to:high ~ c. moderate to low d. low . . . 46. Madan, the plant manager, tells Anika, the production manager: “Its imperative that this order be shipped:before the end of the week. Do whatever it takes'to:get the order out on. time,” However, when Anika tries to schedule her team for overtime 0 that.the order can be completed .on time, the Human Resource department informs. her that Madan iseued a directive the previous week stipulating that no overtime be:allowed because of overruns in the personnel budget. Anika seems to be experiencing: a. role verdad" * + ‘ wos b. interrole conflict” ¢. person-rolé'conflict 4. intrasender role’conflict 47; Madan, the lint manager, tells Monica, the production manager: "It is imperative that this order be shipped before the end of the week. Do whatever it takes to get the order cout on time:" However, when Monica trics to schedule her team for overtime so that the order can be completed on time, the Human Resource department informs her that corporate headquarters issued a directive the previous week stipulating that no overtime be allowed because of overruns in the personnel budget. Monica seems to be experiencing conflict +, intrasender rate b. intersender role c._ person-role 4. imerrole 48." Indefdesp was tecently offered a promotion trom his position as an assembly line worker * {a that of a firsteine supervisor. In spite of the-fact that he considered the offer to be @ réal'honor.and felt that management personnel make valuable contribution to the ‘company, he refused the promotion When asked why, he stated that he didn't want to get oau nine midds betcen management and his good friends of the volley bal at all of whom are.assembly line workers. It appears that Inderdeep refused the promotion’ bacas@ he feated the-experience of: “a. imerrole conflict b.- intrasender role conflict ¢. «role overload 2d. tole ambiguity 49. Line managers may perceive benveen the demands of their superiors for ‘increased output and the requirements imposed upon them by staff personnel that make this more difficult. a, imersender role conflict b._ person-role conflict c. imrasender role conflict 4. none of the above is correct $0. Sameer. a supervisor, enters the company break room just in time to see a kud argument escalating between two of his subordinates, Prabjit and Bromus. Boch men are shouting at ‘each other, and Brutus is waving his fists at Prabjit. Sameer attempts to intervene. but Brutus coatinves to shout and wave his fists, demanding an apology from Prabjit.. Baus threatens: "Tl pulverize the scrawny wise guy if he doesn't apologize for that remark. Go ahead and fire me—see if I care!” Prabjit says that his remark ‘was made in total innocence, and has been misinterpreted by Brutus. He insists that it would be inappropriate for him to apologize for Brutus’ inability to’ understand his appropriate use of the English language. Under these circumstances, it would probably be most appropriate for Prabjt to use a(n) style of conflict handling: , avoiding forcing accommodating compromising aogecaught in the mid 49, tween management and his good friends of the volleyball team, all of whom are assembly ling workers. It appears that Inderdeep refused the promietion, becalise he:feared:the experience of- ote ‘a. imerrole’conflict b.. intrasender role conflict ¢._ role overload 4. role ambiguity Line managers may perceive benveen the demands of their superiors for increased ourput and the requirements imposed upon them by staf personnel that wake this more difficult a. intersender role conflict b. person-role conflict ._intrasender role conflict d. none of the above is correct |. Sameer. a supervisor, enters the company break room just in time to see a loud argument escalating between two of his subordinates, Prabjit and Broms. Both men are shouting at each other, and Brutus is waving his fists at Prabjit. Sameer attempts to intervene. but Brutus coatinues to shout and wave his fists, demanding an apology from Prabjit.. Barus threatéas: “I'l pulverize the scrawny wise guy if he doesn't apologize’ for that remark Go ahead and fire me—see if I care!" Prabjit says that his remark ‘was made in total innocence, and has been misinterpreted by Brutus. He insists that it would be inappropriate for him to apologize for Brutus’ inability to understand hié appropriate use of the English language, Under these circumstances, it would probably be most appropriate for Prabjit to use a(n) style of conflict handling, avoiding forcing accommodating compromising nog“4 15, 16. ____¢)_Ensure profitable eption for everyone. 7, 20, a4 Lack of understanding by Faninees a) Choice, suspicious farmers can still sell at the Mandi bb) Provide clear value ©) Ensure protitable option for everyone 4) Honour existing trust, build on existing social structure . Suspicion of new cheating a) Provide clear value ) Choice, farmers could use the information still sell at the Mandi €) Ensure profitable option for everyone ¢) Honour existing trust, build on existing social structure Fears of middlemen (Commission Agents) a) Provide clear value 6) Choice, suspicious farmers can still sell at the Mandi 4) Honour existing trust, buil ‘on existing social structure Mliteracy a) Ensure profitable option for everyone b) Honour existing trust, build on existing social structure ©) Simple systém 4) Incremental rollout Technology risk a) Incremental rollout 5) Honour existing trust, build on Babsting social structure ©) Simple system 4) Provide cleat value tn ferms of Porters five forces model ITC's eChoupal initiative is an example of how informanon technology can a) Raise the entcy barrier b) Reduce threat of substitution, ©) Reduce customer's bargaining power 4) Reduce supplier's bargaining power Which of the following statements best describes “ERP driven BPR" @) fi target processes ofthe organization are driven by the ERP package features b) Information technology plays the role of Enabler $) Te ERP is customized to suppor the target processes. which, have been derived independen This apprdachis tes popstar than the "BPR dnwven ERP” appienen ‘An ERP packags's customized to support a company’s specific structure and procestes to a) Back end coding b) Parameterization ©) Front-end coding, 9) Designing the database from sezaich23, 24, ts core 1s.a a). Transaction processing system b) Decision suppor system €)Excciitive information system 4) Departmentat information system The "AS-IS" ond “TO-BE" phases are part of which of the following stages of an ERP implementation project? a) Design b) Construction ©) Analysis 4) Implementation : ‘Which of the following statements is NOT true in thie context of ERP? 4) It is classified as "packaged software" . b) is classified as “custom software” ©) Cost involved in customizing an ERP is insignificant as compared to the cost of the package itself 4) this basically similar to the "Best of Breed” approach. By implementing an ERP organizations primarily a) Tighten their respective value chai b)_ Raise the entry bamer ©) Reduce threat of substitution @)_ Reduce rivalry among the competitors END23, 24, in itseore sa 3 a) ‘Transaction processing 1) Deciston support syster ¢) Executive information system dd) Departmental information system ’ ystem ‘The "AS-IS" and "TO-BE" phases are part of which of the following stages of an ERP implementation project? a) Design b) Construction ©) Analysis €) Implementation : ‘Which of the following statcments is NOT true in the context of ERP? '2) Itis classified'as “packaged software” b) Itis classified as “custom software” * ©) Cost involved in customizing an'ERP is insignificant as compared to the cost of the package itself d) It is basically similar to the "Best of Breed” approach. By implementing an ERP organizations primarily a) Tighten their respective valuc chain by, Raise the entry barner w ¢) Reduce threat of substitution &) Reduce rivalry among the competitors END «7 In DP-era business fiems used information technology primarily for -a) - Improving efficicney of information-intcnsive clerical tasks by) Creating new business ventures ont of existing operations €} Connecting with suppliers towards § more efficient supply chain 4) Allof the above ‘ ~ Inthe DP era who were the primary use? of information systems a) Funetional area managers b) Clerks in the accounts department c) End-users 4) Computer specialists 9 The main change that came about in the Micro era was that ~~ 2) barge mainframe computers got replaced wwith-miero-computers-——-—-—- . b)__End-users became owner of information ©) Computers got connected over a network . 4) Departments got budgetary authority to purchase IT directly - 10, _Itcan be claimed that the main fall out of the Micro Era was 3) EDPs started losing their importance b) Islands of information started forming, sometimes containing conflicting data <). Micro computers proliferated rapidly ghroughout the organization aande 11” lyon were te choose one single objective oF ITC forthe eChoupal initiative then that would be 30 Doing something for the society ') Showing the world what India can do €). Growth for the International Business Division . 4) Breaking the Mandi system of trading 12, HTC's echoupalinitinave demonstrates that 3) Introducing information technology in Incian villages is easy 5) Information intensity of valuc chain is of no concern inthe Information age 8) Internet can be used to rase the entey barrier t0 an industry 4) Imtemet can be used to deconstruct traditional industry value chains {nats eChoupal inivative ITC followed ccnatn principles to overcome the barriers to implemeniaticn, For Example “incremental roll-out” was used to overcome the barrier “potential high cost’, Questions 13-1 ‘mention fow such barirs, ln each case your have to identify the most significant principle deploved 13 Enirenched pracuces 21 Honour casting trust. build on existing social structure "1 Simple systent 1 Ineressental vale 281 Choice suspicious Farmeds ean still sell at the Mande20/87/2007 14:25, Pace 36/58 91-124-3861412 MOKINSEY & 0D. INDIA ‘ EPBM-V Macroeccaomics Answer both the questions Time: one hour Explain how and why even though individually all the members of the household Sector may want to save more, all of them.togethet would seve the same amount. ‘The government is planning 10 undertake a big highway project in a supply constrained economy. It is considering the following funding options, i) Loan fromRBE ii) More income tax from households iii) ~ Loan from World Bank Rank these funding in order of your preference. Briefly just your ranking,INDIAN INSTITUTE OF MANAGEMENT CALCUTTA EXECUTIVE PROGRAMME IN BUSINESS MANAGEMENT (EPBM.- VII) MID TERM EXAMINATION, 2007 ‘Statistics For Managerial Decisions Full Marks: 100 Answer ALL 5 questions Time: 1 Hour This question paper contains FIVE. questions. Marks for each question are given in parentheses, Suppose 1% of the members in population suffer from a particular disease. There is a test to detect the disease, For any member undergoing the test, a positive test result is Supposed to mean that the individual has the disease, but the test is not perfect. For People with the disease, the test misses the diagnosis 2% of the time; that is it reports a false negative, And for people without the disease, the test incorrectly tells 3% of them that they have the disease; that is, it reports a false positive. A person, picked at random ‘from the population, undergoes the test. (2) What is the probability that the person will test positive? (B) If the test comes back positive, what is the conditional probability that the Person is actually suffering from the disease? [10 + 10= 20 marks} 2. Amarried couple decides to have children ual they get a girl, but they agree to stop with @ maximum of 3 children even if they haven't gotten a girl yet. Assume equal probabilities for a newborn child to be either a boy or a girl Let X be the total number of children of the couple, and Y be the number of girls out of them. Calculate the following: (@) The probability distribution of X (0) The probability distribution of Y (©) The Mean of X (d) The Mean of Y (e) The Standard Deviation of X (f) The Standard Deviation of Y. [S+5+3+42+3+2=20 marks} ‘The total rainfall (measured in inches) in a summer is normaily distributed with mean 10 inches and standard deviation 4 inches, If rainfall in a particular summer is under 4 inches, the agriculture department declares it a drought. If there is a drought in two consecutive summers, the agriculture department declares an emergency in food Production. Assume weather conditions are independent from one summer to the next (3) Fini the probabiiigy coud ibe tiv ciougit: ia a pasticutar suiamer (b) Find the probability that there will be no drought in the next four summers (©) Find the probability that in a four year period no emergency is declared {tis given that area under a standard normal distribution between Z = O and Z = 1.50 is 0.4332. [4 +64 10= 20 marks}Pace 25/58 MOKINSEV & CO, INDIA | 3061412 20/07/2007 14:25 91-124-3e614 ENDLAN INSTITUTE OF MANAGEMENT Calcutta, NAME ‘ Woe . Registration No, Batch EPBM I Corporate Finance Time: 60 minutes Please answer all the questions '. The expected dividend is Bs 2°50 for a share of stock priced at Rs, 25 ‘What is the cost of new equi: if Mostation costs are 10% and Jong tem growth rate'ig dividends is projected to be 827 a) 15% 7 b) 16% we. c). 18% 4) 19% a) Max (0, K- $1) -p ») -Max (0, Sr. K) ©) ~Max (0, K- $1) +p Forward contract on a currency is used for 8) . Hedging the exchange date tise” 5) Speculation dn the exchange rate movements [ “) Mediing but also canbe used for specuinnn Shon sellicy oF ar assei means §) Selling the asset in small quantities, &) Selling the asset without owing jt 6) Selling the asset after buving iZove7/2007 14:25 91-124~3061412 MOKINSEY & GO. INDIA Exchange traded derivative securities are a) Standardized products. b) Tailor-made products. c) Some standardized and some tailor-made, 6 ‘The most expensive source of capital is a) Debt b). Retained Eamings ¢) New conimon stock 7. The basic objective of corporate financial management is to: a) Increase shareholder value 'b) Increase net profit of the corporation. ©) Increase EBIT 8, An American call can be exercised on 2) Some dates diring the contract perias ‘ bv) At the end of the contract period. ©) Any date within the contract period 1:9 Suppose the direct quote for Sterling in New Yorkis 1.3110-5. Then the direct quote for dollars in London is: a) 7110-5 b) 2.6220-30 ) .7625-8 d) 1.3110. 10. The objectives of working capital management are: : a) To improve liquidity of assets, b} To improve profitability of operations ¢) To improve liquidity with minimum loss of profitability 11, One basis point equals: 2) 01% b) 1S c) 10% d) 001% ns EATS 12, Capital market covers the following a) American Depository R b) Term Loan, ©) Preference shares. 4d) Commercial paper.20/87/2007 14:25 91-124-3061412 MCKINSEY & CO. INDIA Pace 27/58 r¢ foliowing 13 least tikely tu iA@uence 4 firm's cost says ai? General Economic conditions. b) Marietability of the firm's securities, ¢) Amount of financing the firm sequices. d) The exchange on which the firm's stock is traded. 14. A shor call position means 2) Right to buy an asset, 1b} Obligation to sell an asset. ¢) Right to sell en asset. 15. The overwhelming majority of foreign exchange tran actions involve 1a) Multinational corporations buying and selliny “oreign exchange. b) Importers ané exporters buying and selling fe ign exchange ¢) Banks buying and selling foreign exchange. 4) Governments buying and selling foreign exchanse. 16. A company's 5100, 8% preferred is currently selling for "65, if new shares are issued the Moatation costs will be 6%. What is the compay’s cost of prefer) - equity? 8) 8.0% b) 3.0% ©) 16.0% 4) 108% 17. A company is planning a $50 mittion expansion. The expansion is to be ftianced ‘by selling $20 million ia new debt and $30 million in new commion’stetk.: The before-tax required retum on debt is 9% and 14% for equity. If the company is in the 40 percent tax bracket, what is the company’s marginal weighted average cost ‘of capital? a) 9.0% b) 10.0% 0). 106 d) LS 18. Which of the following is NOT a cash flow that results the decision to accept a project? a) Sunkcosts » 10 Sate 6 py Opportanity édsts 2) Changes in working capital d) Shipping and installation cosis. 19, When evaluating a new project, the firm should NOT consider which of following factors 4) Changes in working capital atributable to the project 'b) The depreciation expense shield on the new oroject,20/07/2007 14:25 91-124-3061412 MCKINSEY 8 CD. INDIA PAGE e} Whe cur at vait.s of any eauipmen be reple ‘ 6) Previous expenditures associated with » marker test to determine the feasibility of the project. 20. The NPV profiles of two projects intersect because the projects have different 2) Sizes and different lives b) IRRs and different tives ¢) RRs and different costs of capital 4) Sizes and different costs of capital 2, Which of the following statements about NPV ang IRR is FAL! 2) The IRR can be positive even if the NPV is negative. b) The NPV method is not affected by the multiple [RR problem, c) When the IRR is equal to the cost of capital, the NPV will be zero. 4) The NPV will be positive if the IRR is less than the cost of capital 22. Which of the following statements is FALSE? The discounted payback method! 2) It Bequently ignores terminal values b) Itcan give conflicting results with the NPV. ©) The petiod is generally shorter than the regular payback d) The period is the time ii takes for the present value of the project cash inflows to equal the cost of the investment. 23. Which of the following statements about net present value (NPV) snd intemal rate, 6f return (IRR) is FALSE ? a) The discount rate that gives an NPV of zero is the project’s IRR. b) The IRR is the discount rate that equates the present value.of the cash inflows with the outflows ©) On snutually exclusive projects, ifthe NPV method-and the IRR method give conflicting signals, you should use the IRR to select the project 4) The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method assumes that they ere reinvested at the [RR. 24, Which of the following statements about pay back period method is FALSE: The 2)’ Payback period provides a rough measure of a project's liquidity and risk. b). Payback method considers all cash flows throughout the entire life of a project +. €)» Cumulative net cash flow is the running total through.time of eproject’s cash flows. - . 4) Payback period is the’numbér of years it takes to recover the original cost of investment. . 25. Assume a firm uses a constant WACC to select investment projects raiher than adjusting the projects for risk, If 0, the firm will tend to a) Reject profitable, low-risk projects and reject unprofitable, high-risk20/07/2007 Pace 29/50 14:25 91-124-3061412 MOKINSEY & CO. INDIA b)jecept proftable, low-risk projects and ceject unprofitable, high-risk rojects ° Accept Profitable, low-risk projects ead accept unprofitable, high-ri projects ©) Reject profitable. low-risk projects and accept unprofitable, high-risk projects. 26 The firm's target capital struzcure is consistent with which of the following? 2) Minimum cisk b) Minimum cost of equity (ts ©) "Maximum EPS 4) Minimum WACC. 27, Which of the following statements is TRUE? The optimal capital structure 8) Minimzes the weighted average cost of capital (WACC) and maximizes The share price . b) Minimizes the cost of equity end maximizes the WACC. ©) Minimizes the cost of debt, the cost of equity, and the WACC. 4) Js. found by determining the debt-equity mix that inaximizes expected earnings per share (EPS) 28. Which of the following statements about cash flow analysis is FALSE? a) A sunk cost is one-that has already occured b)_ Financing charges are considered as in the inctemental casti flow‘analysis ©), Ketwo projects are independent, the fact that tvey have unequal lives docs ~ not affect the analysis : 4) An incremental cash flowy represents the change in-the firm's total:tash flow that occurs as a direct result of teking 2 project. : 28. Which of the following statements about capital budgeting is TRUE? 4) Since capital budgeting is based on cash flows rather than net accounting income, changes in non-cash bal i not relevant to the analysis. 5) Han investment project would make use of property which the fiem Cotrenty evn, the project should not be charged withthe opportunity cost (rental income) of the property, ©) When calculating ash flows for a projet, you shoiild include ifteredt 7 oo Gpaymene, os! ° ) Any cash flow that can be’ budgeting project analysis Classified as incremental is relevant in capita 30. Jayco, Inc. currently has a debtasset (D/A) tatio of 33.33 percent but feels its cptinsal D/A ratio should be 16.67 percent. Sales are currently $750,000, and the {otal assets turnover (sales/asses)is 7.5, IFJayeo needs to raise $106,000e0 expand, how should the expansion be financed so a5 to produce the desired debt ratio? Finance158 20/07/2607 14:25 91-124-3061412 MCKINSEY & CO. INDIA PAGE 30/5 cay “ig 31. What should an analyst recommen 'besee oa the following information fortwo AL tautually exclusive projects? "Project [Invescement at=0_! Cash Flow ar IRR NPV at 12% | - ___3$3,000 H 55,000 66.67% | $1464.20 7 a 2S18.000 535.000 30.00% "1 $3,392.86; a) Reject A and reject B b) Accept A and ceject B ©) Reject A and accept B d) Accept A and accept B. 32. All else being the same, the constant growth dividend discount id model implies thet a stock's value will decrease for all of the following reascns Itoften results in hierarchy overtoad. . 4 Te cannot work in small organizations Whit is likely to be she resuitifa domestic company thet manefactures four different types of products changes from a functional structure fo a divisional structure? Lower fixei costs Berter. coordination within a product area between different functional areas More technical deve!opment within functional arcas More centraiized decision making20/07/2007 14:25 91-124-3061412 MOKINSEY & 00. INDIA pace 55/58 30, 31 Service organizations can achieve their greatest economies through a. centralization of services. >, geographic concentration, ¢. __ disaggregation into small units Jocated close to customers. , ¢. centralized decision making, The technology employed by an oil explorer of using an “internal divining rod” to deci evhere'to begin drilling operations would be called a(n) technology 2 routine b. craft engineering ‘ high analyzability ‘The general pattern in technology reséarch is that when technologies are rolirine’ independent, and well defined, then a. ‘use organic structures with less control, fewer procedures, decentralizedidecision making, and face-to-face communications. + ‘a sociotechnical approach should be used. mechanistic-structures with tighter control, formalized procedures; centtiized decision making, and written cominunications are appropriate. ven 4. coordination must be achieved through CIM: alyzable, ‘Assume you are the supervisor of workers who have very limited education and ¢xpecience, and that their work is routine. Generally you would ° be able to handle only a narrow span of control, strive for low centralization and low formalization. vse the human relations model, be able to have a wide span of control Sebring works for a college that offers correspondence courses. She works in the mailrooz: eparment stuffing envelopes withuthe replies éf professors to. students, ‘She'then sealsithe envelope’ and puts therm in an, ovrgoing bin., She finds that on.this job sli has.2 lor oF ti for dajdreaining, “You WOuld expect the organizational structure in her départment shoulé be & mechanistic b. organic c¢—_highin variety. 4 unanalyzable2e/e7/2007 14:25 91-124-9961412 Leg a cooled interdependence iprocal interdependence e highest evel of team inverse; MOKINSEY & CO. INDIA Page 56/58 What isthe majer got! of an organization during the ersrepreneurial cowth Goal-setting Survival Complete organizational structure ge of the life cycle? 47, Which of the fotlowing is nat a dimension of bureaucracy thas Weber envisioned 2s desirabic? a, Rules and procedures bb Specialization and division of labor c. —_ Hierarchy of authority 4. Trained employees 58, Danish Kaneria is the CEO of a medium-sized manufacturer of bedding and blankie Kaneva insists on making all decisions a5 © styles that are manufacture, the CYP of material that will be used in each, the sources from whom the company will purchase yare 00s, shvead, and button, and the shippers the company will use. Which of the following terinsidescribes this-company? a. Elaboration stage bv. Centralization co Formalization . dt" © Stahidardization . 59. Jefftey isthe manager of Mirchandani Consulting, a consulting company composed of professionals from different fields. In such a company, Jeffrey would be wise 10 2. bring the organization imniediately into revitalization 5. have little forsnalizstion «se as much authorigy 2s much as possible. 5. discourage honzontal communication because it violates the chain of command ‘49 “Which of the following is (are) manifestasion(s} of corporate culture? a Legends » Ceremonies Stories d, All of the above-2e/07/2007 14:25 91-124-3861412 MCKINSEY # CO, INDIA PAGE 527/58 20. A company that wishes to maintain the basic functional strec 2, butis having difficx coordinating crass departments because of growth: a b © 4 should install horizontal linkages should realize that the functional structure cannot work and abandon it for a inatr: tay find it necessary to abolish liaison roles. can profit most by adding more functional deparimen ‘An organization's domain is: a > the set of positions and departments within the organization. the bvildings.and grounds that are owned or leased by the organization in which inputs are transformed into outputs the organization's niche that has been staked out for itself with respect to products, services, and markets served. : the technical core that is buffered by other departments so thatit cai operite as a closed system Which of the following is a proper dimension of the framework for assessing'enviténimemal vuncenainty?: ° a » « 4 Stable-unstable Loose-tight Known-unknown High competitiveness-low competitiveness ‘Trend-serting toy companies or high-fashion clothing manufacturers have't conuiion, a b 4 Boundary-spanning roles. a b. an environment thet is stable but complex, therefore requiting a mechanistic structure. * an organic stricture, from which we can reason that the environment is highly uncertain a lerge number of dissimilar external elements, which remain about the same o\ time an environment that is simple but unstable, creating relat ly high uncertainty prirharily fink data to information buffer the manufacturing department from outside intrusion that would interfere with efficiency bring ino the organization information about environmental changes, ‘move the firm t0 internationalism.porer/2e87 14:25 1-126~3061412 MOKINSEY & CO. INDIA pace 50/58 scan auto devierstip service department 10 (2 directly (@ the mecha 2 manager 15 Allowing customers rather than fe & Se Eis anexample of creating a buffering role b. is creating a boundary-spanning role, 4 will make the company less fluid, ‘will make the company less responsive to customers. 26. In organizations characterized by very and environments, almost no managers ate assigned to integration roles. e simple, stable b, “simple, unstable . < complex, stable 4. ‘complex, unstable fi 277, Organizations in rapidly changing environments tend t9 Nave management Er (" aiGterentiated b. mechanistic organic ody, ; dependent 28, _. production represents mechanization and standardization one step Beyond those in : aastembly line a Cojtinuous process b, “Large-betch cc. __ Technical complexity 4c, = Smalk-bateh 29, The awesome advantage of FMS is that a, it requires little training to use. >. there is little employee involvement. . © ons product can be produced a atime, making it easier for employees to operate 4. products of different sizes, types, ans customer requirements freely intermingle o% the assembly line,____ INDIAN INSTITUTE OF MANAGEMENT CALCUTTA UNECUTIVE PROGRAMME IN BUSINESS MANAGEMENT (EPBM. IV) Statistics For M: ull Marks: 100) Answer ALL § questions Time I Howe | tis known that S0% of the passengers of an airline are Indians The rest are obviously foreiyners The passengers arrive at the check-in counter at a random order. Consider the first four passengers who check- in for the Might It the fxst passenger is an Indian then we write | for him or her: otherwise we write F The amie thing. is done fir the second, thied and fourth passengers This gives a sequence of length four consisting of and F For example, ifall the first four passengers are foreigners then we get FFFF On the other hand, if the first and fourth passengers are Indians and the second and the third passengers are foreigners, then we get the sequence IFFI, In any such sequence, an F-run is an uninterrupted chain of F's preceded a im is defined: Let X and Y denote ihe numbers of F- and I- runs respectively. Thus iyith the sequence IFFI. we have X=1 and Y=2 since the ” and last members of the sequence give two Trains whereas the two middle members yield an F-run {Here are some more examples corresponding to several other possibilities for the sequence formed by the first four passengers [saa NOY ] |2 Onthe desk of an execut x Complete the following table showing the answers PIM = 3) PIM = 4) P(M= 5) P(M = 6) P(M=7) POY-X> 4) PIM-X> 2) ud oe there are five leters with page lengths 2,4,6,8 and.10. Three letters are ked up at random and without replacement Let A. B and C be the page lengths of the selected letters. minimum(A.B,C) and Y = maximum (A,B,C) Define M as the arithmetic mean of X and Y. Bx 10= 30]3A comorate house lable shows the scares On some sales apritude before (X) and after (¥) the programme [Executive no] 2 73 a cae Cy 7 iy | 7 Complete the following table showing the answers arranged 10 send 6 sales executives fO¢ some taining programme “The followin x72) Tem ‘Answer ‘Arithmetic mean of X Arithmetic mean of YT Standard deviation of Standard deviation of Y ‘Covariance between X and V Contelation cbefficient | between X and ¥ i Least squares linear t Fouression equation of Y on X | wu Foon a0 examination in statistics 10 students in one class showed a mean grade of 80, with a standard deviation of 8, while 12 students in another class showed a mena grade of 76 with a standard deviation of 10. Using 19% tevel of significance, determine whether the firs ‘sr0up is superior to the second group It is siegn thatthe | percentage point of distribution for 20, 21 and o> degrees of freedom are respectively 2.528, 2.510 and 2.489 respectively: 5 A felts makeing federation claims that not more than 4% of the {Gador sample of 600 apples contained 36 damaged apples Using a 5% level-of significance, test the 1.645 Claim of the federation. {1 is given that 5% val Os) apples supplied is damayed A hues of Z is Lis}20/07/2207 14:25 91-124-3061412 MOKINSEY & CO. INDIA Pace 34/58 INDIAN INSTITUTE OF MANAGEMES:T CALCUTTA EXECUTIVE PROGRAMME IN BUSINESS Ma AGEMENT (EPBM- V) Statistics For Managerial Decisions Full Merks: 100 Answer ALLS questions Time: 1 Hour This question paper conta FIVE questions. Marks for each question are given ip pitenth: 1. Companies provide training to employees for various seasons including employee iva" cenification, quality and process improvement. In a nations] survey of companies, suppose « reported that 56% of the responding companies named employee retention a5 a tep reasor, 29: tuaining. Suppose 36% of the companies replied that they use itzining for process improvernen and for employee retention. In addition, suppose that of the companies that ‘Use training 20: process improvernent, 90% use training for employee retention A company that uses taining + randomly selected. * a) What is the probabitity that the company uses training for employee retention.and aot for process improvement? by If it is known that the company uses training for employee retention, probability that it uses training for process improvement? 3 ©). What is the probability that the company uses training for process improvement? 4) What is the probability that the company uses training for employge retention or process improvement? - ©) What is the probability that the company neither uses Wining for employee retention nor. uses training for process improvement? 4), Suppose it is known that the company does not use training for process ithprovernent. ‘What is the probability that the company does use treining for employee retention? ~ (6 £5 = 30.snarks} Only 1% of all households ia a city do not have colour television set. A television markésing analyst randomly selects 200 households from the city a) How many households would he expect to not have 2 colour television set? b). What is the probability that 8 or more households do not have a colour television set? ©) What is the probability that between 2 and 6 households (inclusive) do not have a colour television set? (34545216 marks] You may use Poisson or normal approximation. Its given that @”” = 0.135. Also given thet the area underthe standard normal curve between 2 0 and z = 2.84 is 0.4977 3 1 what is. the {A population i normally distnbvted, with a méan of 25.45 end a standard deviation of 3.8: Wha: is the probability of each of the following? 4) Drawing a random sample of size 10 and obtaining 2 semple mean of 22 or more v) Drawing a random sample of size 4 and genting a sample mean of more than 26. Iis given that erea under 2 standard normal distribution berween z = 0 and given values of are a follows: for z= 1.21: area = 0.3869: for 2='1.34 area= 9.4099: for z= 0.38: area = 0.1486: 9 for 2= 067: area = 0.2686. (7 +7 = 14 marts}-cthe transportation arods used 1 “lesan comingency table represents (Fequency counts oF types of transporasion sed by the sighing and ti cocipater hardsare industdes, Analy the dat by using she Chisauage es Pevndependence fo decennine whether type of idusiy 1s independent of tansporation mode Use 1% level of si we. MEKINSEY, 8 00. INDIA pece 35/58 tage Suprose the Fem's produaion sierager rand veders, with a sample standard deviation uraber of orders is down. Write (20 marks} ship goods independent of «ype of industry? Suppose the sfreance is given thet tabled 1% chi-square values for 2 and 6 degrees of freedom are respectively 9.2104 and 16.3119. (20 marks] (LL ransporration Mode | | industry {Publishin: anpuiter HardwareIndian Institute of Management Calcutta EPBMIV Microeconomics hour Total - 50 marks Marks obtained Name, Reg.No. wv Closed Book, ‘There are two soctions for this examination. Answer all goestons ia the allotted spaces ia the question paper itself. Make sure to write your name and registration number on the question paper before hhanding it in. Answers marked out with pencil will not be accepted. All rough-work should be done on the question paper itsllSECTION 1. Fill the blanks with the appropriate numbers/words. (Two marks each unless mentioned otherwise) (40 marks) 1. The equation of the demand function for potatoes is Q* = 28 - 0.04P and the equation of the supply curve for potatocs is Q' = - 2 + 0.16P. (@) The equilibrium price in the market for potatoes will be Rs. andthe equilibrium quantity will be potatoes. Next, the government imposes a price ceiling of Rs.200 for oranges and agrees to purchase as many tons of potatoes as the growers will sell to it at « price of Rs.200, () After the government imposes the price ceiling, it will have to purchase tons of potatoes. 2. The demand function for a good X is Q? = 60 - 3 ¥ ‘consumer income. Then good X is ‘O.01M, where M is the (average) (normaVfinferior). * 3. When the price per banana was Rs.2.20, the number of apples sold was 1200 per week But when the price of a banana rose to Rs.2.75, the quantity of apples sold increased to 1800 per week, (a) The cross-price elasticity of apples with respect to bananas (using the arc-clasticity method) is oe (b) Apples and bananas are (complements/substitutes). 4; Saif has the option of either working on his own land as a farmer or being employed as 2 supervisor in Amir’s farm. The table below lists the various costs and revenues for the two options in a given period of time: First option: Self-employment as a farm: | Revenue Costs } Revenue from sales of produce 1500 | Seeds and fenilizer 90) Capital costs 80 | Hired labor 70} Total revenue 1500 | Total costs 240 | Second option: Employment as a supervisor in Amir’s farm | Salary 1600 _[ Travel costs 400 } (@) The opportunity cost of employment as a supervisor for Saif is Rs. (b) Employment as a supervisor generates an economic (profivioss) of Rs for Saif.5. Fill the gaps in the table below: (%4 mark for each gap ~3 marks in all) Quantity of variable | Total ouput Marginal product of] Average product of input le input variable input o o 2 L 200 2 250) 3 i 130) 6. A firm's production function is given by Q = 3K", where K denotes capital and L labor. Capital is fixed at 16 units in the short run, the price of capital is Rs.30 per unit and the price of labor is Rs.5 per unit (b) The short run total cost of producing 48 units of output is Rs. 7. Suppose that you own the XYZ Co, and produce and sell safety-pins in a perfectly competitive market. Currently you produce 2000 packets of safety-pins and sell them in the market at the prevailing price of Rs.3 per packet. Your company incurs a total cost of Rs, 12,000 and a fixed cost of Rs.8000, {a) If you continue to produce 2000 patpets, your (Profivioss) will be Rs, (b) You should (continue to produce 2000 packets/shut down production) §. Consider a game where each of two firms A and B has three advertising strategies - ‘ow, medium and high budgets. The payoffs are in Rs. crores per year r | B Low budget _{" Medium budget_[” High budget Low budget (60,45) G5, 50) (45,35) A’ | Medium budget (50,35) (65,30), (30,25) High budget (45,10), (60,20) (50,40) |) The only Nash equilibrium in this game is for A to choose. (low/medium/high) and for B to choose (low/medivavhigh)9. Itis known that one out of every five computers is defective. The defective ones, however, cannot be identified except by those who own them, Risk-neutral buyers are ready {0 pay a maximum of Rs 30,000 for a non-defective computer if they are sure of the quality. In the absence of verifiability of quality, the market price of any computer is Rs.28,000, How much are the buyers ready to pay for a defective computer if its quality can be verified at the time of purchase? 10, Write T (for True) or F (for False) in ink against each of the statements below. No explanation is required, (I mark for each answer ~ 3 marks in all) {a) [time periods are short enough and buyers can rationally anticipate the seller's behavior, a monopolist selling a durable good will end up with a price equal to MC. (TH "(BY A tionopolist ice parte en sheknowsthe == distribution of buyeraypes, but not demand curves of individual buyers.” ~ Tm) ~ Wd (©) Ifa natural monopoly is forced to price at marginal cost, then it will just break even (TIF)Section Il. (10 marks) The Wall Str *[T]here is the macabre case of "Nub Cit town that insurance investigators decline to identify by its real name because of continuing disputes over claims, Over 50 people in the town have suffered ‘accidents’ involving the loss of various ind appendages, and claims of up to $300,000-have been paid out by insurers. estigators are positive the maimings are self-inflicted; many witnesses to the ‘accidents’ are prior claimants or relatives of the vietims, and one investigator notes that ‘somehiow they always shoot off parts they seem to rieed least." Identify in economic terms the problem noted by The Wall Street Journal. Discuss the problem in more general terms and its solutions. Confine your answer to this page, otherwise marks will be deducted.Indian Institute of Management Calcutta EPBM VII Microeconomics Total - 40 marks Time: 1 hour Marks obtained, Name. Reg.No.. Closed Book. ‘Answer all questions in the allotted spaces in the question paper itself. Make sure to write your name and registration number on the question paper before handing it in. Answers marked out with pencil will not be accepted, {All rough-work should be done on the question paper itself.Multiple Choice Questions Marks: 2x20=40 Time: 1 hour Select only one alternative as the “best” answer and circle it. If you select none or more than one, no marks will be given. 1. A microeconomist might study each of the following EXCEPT a the effects of rent control on housing in New Delhi. b. how college student makes financial decisions. ¢. how tariffs on shoes affects the shoe industry. 4. the effect on the economy when unemployment rates change. 2. If Rahul receives a decrease in his pay, we would expect a. Rahul’s demand for each good he purchases to remain unchanged. db. Rahul's demand for normal goods to increase. ©, Rahul's demand for luxury goods to increase. d. Rahul's demand for inferior goods to increase. 3. Suppose that a decrease in the price of X results in less of good Y sold. This would ‘mean that X and Y are a. complementary goods. b. normal goods. * ¢. substitute goods. . 4. inferior goods. 4. You have decided to purchase a new Santro. A friend tells you that Hyundai will be offering a Rs.10,000 rebate on Santros starting next month. Asa result of this information your demand a coulld shift either right or left. b. for Santros shifts right today. ©. curve will be unaffected. d. for Santros shifts left today. 5. The next question is based on the following table: ‘An Increase in Supply | A Decrease in Supply An Increase in A B Demand A Decrease in c D Demand __ a, b. c a.9 1 agama 6. A price ceiling will only be binding if tis set 7. Suppose the price of a packet of pins is reduced from Rs.1.45 to Rs.1.25 and, as a result, the quantity of pins demanded increases from 2,000 to 2,200 packets. Using the midpoint (are-elasticity) method, the price elasticity of demand for pins in the given price range is a. 2.00. b. 155, ©. 1.00, d. 64, 8. Ifa change in the price of a good results in no change in total revenue, a. the demand for the good must be elastic. b. the demand for the good must be inelastic. ¢. the demand for the good must be unit elastic. d. buyers must not respond very much to a change in price. 9. Ifthe cross-price elasticity of two goods is negative, then those two goods are a. substitutes. b. complements. ©. normal goods. d. inferior goods. 10. When a good is excludable it means that one person’s use of the good diminishes another person’s ability to use it people can be prevented from using the good. . ‘no more than one person can use the good at the same time. everyone will be excluded from obtaining the good, ae oP 11. Abraham wants to start his own business. The business he wants to start will require that he purchase a factory that costs Rs.300,000. To finance this purchase, he will use Rs.100,000 of his own money, on which he has been earning 10 percent interest. In addition, he will borrow Rs.200,000, and he will pay 12 percent interest on that foan. For the first year of operation, what is the explicit cost of purchasing the factory? a. Rs.12,000 b. Rs.20,000 ©. Rs.24,000 d. Rs.44,000— 4 12, Let L represent the number of workers hired by a firm and let Q represent that firm's quantity of output. Assume two points on the firm’s production function are (L = 12, @= 122) and (L = 13, =.130). Then the marginal product of the 13th worker is 8 units of output 10 units of output. 122 units of output. 130 units of output aoge 13. Ona 100-acre farm, a farmer is able to produce 3,000 tons of wheat when he hires 2 workers. He is able to produce 4,400 tons of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product? a. The farmer is able to produce 5,600 tons of wheat when he hires 4 workers. b. The farmer is able to produce 5,800 tons of wheat when he hires 4 workers. c. The farmer is able to produce 6,000 tons of wheat when he hires 4 workers. d. All of the above are correct. o) 14, A certain firm produces and sells staplers. Last year, it produced 5,000 staplers and sold each stapler for Rs.8. In producing the 5,000 staplers, it incurred variable costs of Rs.30,000 and a total cost of Rs.55,000. In producing the 5,000 staplers, the firm’s average fixed cost was a. Rs b. Rs c. Rs. d Rs8 15. When a firm in a competitive market produces 10 units of output, it has a marginal revenue of Rs.8.00. What would be the firm’s total revenue when it produces 6 units of output? a. Rs4.80 b. Rs.6.00 c. Rs.48.00 d. Rs.60.00 16. A monopoly firm has the total cost function TC = 2Q + 41. It faces the inverse demand function P = 8 - 2Q, a. Hf regulation requires the firm to set a price equal to marginal cost, then it breaks ever require nity loss of 41 If regulation requires the firm to set a price equal to marginal cost, then it makes'a loss of 50. dOo 17. The shape of the average total cost curve above reveals information about the nature of the barrier to entry that might exist in a monopoly market. Costs ($) Average total cost Quantity of Output Which of the following monopoly types best coincides with the figure? a. ownership of a key resource by a single firm b. natural monopoly ¢. government-created monopoly. 4. None of the above are correct. 18. Ayesha, a homeowner, buys too few fire extinguishers relative to what her insurance company would prefer, a. This describes an adverse-selection problem. b. This describes a moral-hazard problem. c. Ayesha can be regarded as a principal; her insurance company can be regarded as an agent, 4. Ayesha must be regarded as irrational in that her benefits from buying fire extinguishers are just as great as the insurance company’s benefits. 19. Lyngdoh and Modi are roommates in a hostel. How clean their room is depends on whether they “work” or shirk”. Their payoffs are as follows: Both shirk: Each gets 2. One works, the other shitks: The player who shirks gets 3, the other gets 1. Both work: Each gets 4 In a sequential move game, (a) Wienadeh: moves first. i: civ whick is ente fn whiet (b) if Lyngdoh moves first, the subgame perfect equilibrium is one in which both “work”. (c) if Modi moves first, the subgame perfect equilibrium is one in which both “shirk”. (d) if Modi moves first, the subgame perfect equilibrium is one in which Modi “shirks” and Lyngdoh “works”20. Each year the United States considers renewal of Most Favored Nation (MFN) trading status with China. Historically, legislators have made threats of not renewing MEN status because of human rights abuses in China. The non renewal of MFN trading status is likely to involve some retaliatory measures by China. The Game below reflects the potential economic gains associated with a two-outcome game in which China may impose trade sanctions against U.S, firms and the United States may not renew MFN status with China, The following table contains the dollar value of all trade flow benefits to the United States and China under two trade-relationship scenarios. China Impose trade sanctions against U.S. firms Do not impose trade sanctions against U.S. firms United | Don't renew MFN | U.S. trade value = $65 b US. trade value = $140 b States _| status with China _| China trade value = $75 b_.| China trade value = $5 b. Renew MFN USS. trade value = $35 | U.S. trade value = $130 b status with China_| China trade value = $285 b_| China trade value = $275 b Pursuing its own best interests, China will impose trade sanctions against U.S. firms only if the U.S. does not renew MEN status with China. ange . only if the U.S. renews MEN status with China. “regardless of whether the U.S. renews MEN status with China, |. None of the above are correct; in pursuing its own best interests, Chine will in no case impose trade sanctions against U.S. firms.20/07/2007 14:25 91-124-3861412 MOKINSEY 8 0D. INDIA Pace 02/58 Indian Institute of Management Calcutta : EPBMV Microeconomics Time: J hour Total. 30 marks Marks obtained ee nee Reg.No._, \ tion. Answer all questions in the allotted speces in the qucstion;paper itself. Make sure to write your name and registration number oa tix: question paper before handing it in, Answers mrked out with pencil wiil not be accepted, AU rough-work should be done on the question paper itself20/07/2007 14: 91-124-3061412 MOKINSEY & CO, INDIA PAGE 03/58 CTION E. Fill the blanks with the appropriate aumbers/words, (Two marks each nies mentioned otherwise) (40 marks) «. The equation of the demand function for potaioes is Qf = 50 - BP and the equation of the supply curve for potatoes is Q'=- 17.5 + 10P. Price is in rupees per ton and quantity is in sons. 3 s oe {a) The equilibrium price in the market for potatoes will be Rs. and the equilibrium quantity will be tons of potatoes zy ‘Nest, the govemment imposes 2 price floor of Rs.4.75 for potatoes and agrees to purchase 35 many tons of potatoes as the growers will sell 1 i at a price of Rs.4,75 4 {) After the government imposes the price floor. it will heve'to purchase tons of potatoes, (6 maris) 2, The demand funetion for a good X is Q* = 60 ~ 2P - SM, where M is the (average) consumer income. Then good Xis _ (normaVinferior). (t mark) 3. Maitg:slongca demand curve, quantity demanded-decredses'8 percent when price ingreasks TOspercent, @ fe (a) Zhe price elasticity of demand is : (b) Given the price elasticity calculated in part (a), demaind is at (claptic/neiasticluntary elastic) elong this ponion of the demand curve oe (4 marks) 4, Saif has the option of either runaing his own pan shop of being employed as a supervisor in Amie’s factory. The table below lists the various costs and cevenues for the two options _ia agiven peiiod of time: {Figs optita! Self-employment as a Pan shop owner Revere \ Costs Revenue front sales of pan 1500 | Pans 160, Capital costs 0. & tai TeVENUE 1500_| Total costs 250 Second option: Employment as a supervisor in Amir’s factory . “Salary 1690 _| Travel costs = {300} & 31 The opportunity cost of employment as 2 supervisor for Saif is Rs 2s 1 Employment as a supervisor generates an economic. (profitfloss) of for Sail (6 marks) see ch Recta20/87/2087 14:25 91-124-3061412 MCKINSEY & 09. INDIA 5. Fill the blanks ia the table below: (%4 mark for exch blank 3 nizrks) Total output [Marginal piodiier Gr] Average product of. { | variable inpor | iable input i o i oO i naan nat es + 230 t 5 ye" i 2 age | oT i 3 ! ete 20 pee 6. A firm's production function is given by Q= 6KLYS, where K denoves capital and L Tabor, Capita is foced a 16 units inthe shox un, the pice of cesta is Rs.A0 per unit anc the price of labor is Rs. 5 per unit (a) The fixed cost of production is Rs. (0) The shor nin total cost of producing 480 units of output i RS. ¢ (4 marks) 7, Suppose that you own the XYZ Co. and produce and sll sefery-pins ina perfectly competitive marker, Currently you produce 2900 packers of sefery-pins aud sellithat cere athe prevailing price OfRs.3 per packet. Your company incurs a tow eastof Rs.12,006 and a fixed cost ‘of Rs.4000. (a) you continue to produce 2000 packets, your _| (protivloss) ill be Rs. Luts f . £ (b) You should - {continue to produce 2000 packels/shut down production) (Gmgrke) $. Two computer firms A and B are planning 10 markei nenwork systems for office information management, Each firm can develop either a high-quality system (H) or. Tov quality (L) one. The resulting profits 10 each firm for the alternative stratesie» are (the first number in each cell refers to A's payoff) ee FirmB 1 a L (30,30) i ' i t 1 t (30,60) (20,20) “The owo Nash equilibria for this game are and (S marks}20/07/2007 14:25 91-124-3061412 MCKINSEY & 6D. INDIA Pace 05/58 2, Ic is known that one out of every three computers is defective The defective ones, however, cannot be identified except by those who own them, Risk-neutral buyers are ready 10 pay 2 maximum of Rs 30,000 for a non-defective compurer if they are sure of the quality, In the absence of verifiability of quality, the market price of any computer is Rs.28,000. How much are the buyers ready.to pay for a defective computer if its quality ean be verified at the time of purchase? @ marks) 19. A monopolist faces the demand function P= $00.10, his cust is C= 300 + Q.1F forced 10 follow MC pricing his price will be and wxatput svt! be (dmarks) 11: Wite T (for True) of F (for False) io ink against each of the statements below. No explanation is required . Texime periods are short enough and biyers can rationally anticipate the seller's *Q@AAVior, a monopolist selling a durable good will end up with a price equal to MC. wT) (&) ‘Adfionopolist will practice perfect price discrimination when she knows the ‘didffibuition of buyer types, but not demand curves of individual buyers, (TF) (2 marks)20/07/2007 14:25 91-124-3061412 MCKINSEY & 0D, INDIA PAGE 96/88 Section Ii, (10 marksy %s Fire insurance gives people an incentive ro comuit arson, especialy f they are % operating a failing business cuid decile thar they'd raiher heave the ees from the inguranee proceeds on the buildings than the buildings themselves. Mony. perhaps moni police investigations of arsen are the result of leads from suspicions insurance adjusters More generdily, insurance may encourage riskier behavior. such ay sloppy fire prevention. For example, the expectation: then je:teral government elisasrer aid will conve seems 10 encourage she residents of Mealibn. California to let bushes cone trees grOW rt heir houses, raiviig the risk of fre.” Identify in economic terms the problem noted in the passage given above. Discuss the problem in more general terms and its solutions. Confine your answer to this page, otherwise marks will be deducted.20/07/2007 14:25 .91-124~3061412 MOKINSEY 8 0D. INDIA Pace 21/58 INDIAN INSTITUTE OF MANAGEMENT CALCUTTA ONE YEAR EXECUTIVE PROGRAM IN BUSINESS MANAGEMENT (EPBM ii) MARKETING MANAGEMENT L TIME: 60 Minutes NIKE: RUNNING OVER THE COMPETITION geographic market. or developing Zoprozches its mission with ‘the nihdedness of an athlete training for ccnpetici wnatever the task, the goal is always thé sere 3 peak performance, one that leaves no doubt as to who best is. Thet's because at Nike, winning isa't nereél corporate philosophy-it's the company's business. “this brand is all about building products for athletes, “high> performance products, very authentic products,,” innovative products, bringing new technology to athletes so they can perform better-at a higher level in their sports” éays"Bi11 Reitz, global director of advertising development at’Ni¥s Liz Dolan, the company’s marketing director, puts it in even more basic tefrhsi-" WE have a really incredibly simple mission, which is, “serve'the athlete.” IC yob'resin product development that means you have to make sure that the products really work that they're really great for whatever sport you are assigned to. If youre in the communication’ ‘area: it meens thet you have to communicate with an authenticity about the sports experience. what athletes know to be true of what it feels like to win a basketball game, or tun s arathon, or whatever.” This near-obsession with authentic athletic performance’comes raturally to the Beaverton, Oregon. conipany started in the 1960s by Phil Knight, « spons tmtbusiast and runner who believed the needs of serious athletes were being. neglected by Tides and Puma, the German companies that dominated the athletic shoe industry With the help of Sill Bowerman, hhis former track: coach atthe University of Oregon... Knightiser out develop 4 shoe that would maka difference in ‘accunnet's perforinanes, ‘The resi as they say,is history. Nike has become a dominant player in ‘sports appare! With track, besketbll, tennis, and other traditional sports in the “sein” column, Nike recently has turned is attention Lo building its franchise tm soccer, cricket, rugby, hockey. and incline skating, among others. After all, Dolan expisins, being & global sports brane ‘equires an intensely local focus. Being 2 global brand is extremely importat to Nike because its home wiarkeh the United Sues ie nsaing saturation, According to John Horan ofthe nawsleuer Sporting Gonds tellivenge, sporting-goods chains have overexpanded and proit imgrgins ae threatens* — pore7/2007 14:25 91-124-3061412 MOKINSEY 8 OD. INDIA Pace 22/58 Nien Nike announced ths cond quater camings in 1997 would not live up to Wall Goat's expectations, its stock dropped 13 pereént, With these spurs at home, Nike has t0 poke overseas there it has orly 27 percent of sales compared to 43 percent in the U.S. to generate additional revenues. But going overseas is nota sure win for Nike ‘Understanding what sports the people in {2} country play, and then being great at those coors. that's alwweys the challenge In the U.K, for instance, we are a really good aeeetbatt brand, but thee don't play that there, And we are 2 really g20d tennis brand, dat thew kept telling us. “Other than the two weeks during Wimbledon, nobody in the UK “calls caret about tennis.” So in the UK. soccer is what they play. Rugby is what they vay So we had to really concentrate on being great at to soorts that were mot really vomethinw shat came fm our American tradition at all, That ook years of, product evelopment and talking to consumers about, "What does this spor really mean to you “shen you play it, and what does it really mean to you when you watch it?” ‘The brand Sreibutes for Nike in the (LK. are the same—we really want to be the authentic sports Srand-—but the sports thet are the building blocks for that are very different in the U.K. than they would be in the United States or than they would be in Japan.” Outside the United States soccer is the main sport, and Nike has pursued the soccer player and fan with a vengeance, In the United States, Nike has signed a multiyear ontract with major league soccer that calls for it to spend $3.75 million 3 year to sponsor Sof the league's 10 teams, In addition, the conteact contains a clause that allows Nike to fetain sponsorship of half of the League's teams as it expands. Overseas, Nike spent $20 rnilfion in a sealed bid process to sponsor the Italian national teem. During last year’s European championships, it bought up all the billboards around stadiums where matches were held, effectively imdermining the event's official sponsor, Umbro. In the spring of 1997, it sponsored a worldwide soccer tour that featured top teams, .1\ has also spent «nillions on globsl advertising campaigns and signed leating national soccer stars such as Erie Cantona (captain of the ‘national champion Manchester United soccer team in the UK) to highly lucrative contracts. But nothing matches Nike’s sporsorship agreement with the Confederacao Brasil de Futebol, Brazil's soccer federation, which cost the company a breath-taking $200 million. Why Brazil? It won the 1994 World Cup soccer match, The contract 1s @ 10-year deal that includes appearances in Nike-produced exhibition matches and commurity events, Nike will supply Brazil's national teams with sports Kits. In return, the teams will participate in five annual friendly soccer games thet Nike is arranging, and to which Nike ‘retains the television rights. Nike will also have access to training clinics in Brazil and to the infrastructure of the game, Nike has applied the same technical skill and drive to soccer shoas that it applied to the basketball shoes.” For example, when Nike couldn't find equipment for testing the best stud configurations and traction in cleatee serre- shoes, it decided to build its own The aod! i$ t0 crease che “saNd's bast soccer shoe, but shed wont ha easy. Fist, he Eompetition isn't yet ceady to roll over and play dead. Adidas retains sponsorship ot many top teams and players, including the national teams of Germany, Spain, and France. It also sponsors World Cup 1998, with the rights to sell official soccer balls and spons apparel. Further, Adidas has invaded Nike's home turf, sponsoring three U.S. teams and featuring players from those téams in its U.S. advertising, “We don't think that enybody20/07/2087 Pace 23/58 MCKINSEY @ 0, INDIA 3061412 14:25 91-124~-30614) Rect, Maz 2 US on the product side," says Peter Csandai, en Adidas spokesman, Reebok, Nike's main competitor in the US., has also signed contracts with at least 30 Professional soccer clubs throughout the globs, instead they ere atiacted by individual spons sec ard mountain biking. Within wo year: rpm ict for snosboard boo's in 1995, for example, Vans has become, ‘argest company inthe business. So, it's in a position co make a meee Nike Saumpetition is not Nike's only problem; some of its actions haven't lef fans cheering sitet. Signing bad boy Erie Cantona genereted a lot of crite and infuriated tie Renae aablishment in the UK. In 1986, Nike flew eight of soccers horton layers is Tunisia to lm an advertisement in which the-athletes competed agen me S2vil- Not fas been taainis a6 drew angry leters from many offended fens. Even the Brau) ox Nike is going in and almost encouraging teams to break contracts, Gorman, president of Puma North America Finally, Nike is better. Many pro players continue to Umbro, Puma, and especially Adidas, Just the tast few years like Nike "Says James R. not ali soccer athletes are convinced set their equipment from companies such os ‘hich has been part of the spon for: decades, noe Sill with over $8 billion in sales in 1997, Nike remains the biggest playée in the ganie Adidas is @ distant second with $3 billion, With its free spending, Nike appears 16! hava Shanged the economics of the game. Nike intends to be the mints fone supplier of Soccer peer by World Cup 2002, but so far its eforts have produced only $200 million in annual sales, It has a long way t0 go before it scares a ‘match-winning goal in the'global soccer market. Questions for Discussion 5 Whats Nike's mission and how does the company accumplish it? 2, Using either the Boston Corsulting Group of GE Matrix 2pproach, énalyze Nike's business: ponfglio. How would you ‘characterize its’ basketball) running, and “soccer businesses? What is Nike's growth srategy? What are Nike's markets and h: it reach these markets? ‘ois Nike positiones in these markets? How docs \What is Nike's proposed positioning in the global soccer market? Describe the company’s global soccer marketing mix?20/07/2007 14:25 © 91-124-3061412 MOKINSEY & CO. INDIA Pace 24/58 ‘ ‘What merketing recommendations would you make te help Nike achieve its quest” for global soccer dominance? How serious is the threat of a firm like Vans? Is Nike likely to be successful in global soccer? snurces: Linda Himelstein, “Tke Swoosh Heard ‘Round the World.” Business Week, May 12, 1997, p. 76-80: “In the Venguard: Trainers, Sneakers, and Shoes”, The Economist, June 7, 1997, p. 62, Geol Dyer,"Nike Puts [ts Hands on Ultimate Trophy”, The Financial Times, December 14, 1996, p. §, and Patrick Harverson, “Putting ‘Their Shirts on Soccer Deals”, The Financial Tines, November 1, 1997, p. 15.PAGE 32/58 20/07/2087 14:25 91-124-3e61412 MOKINSEY @ CD, INDIA ’ INDIAN INSTITUTE OF MANAGEMENT CALCUTTA, ‘ONE YEAR EXECUTIVE PROGRAM IN BUSINESS MANAGEMED:T (ZPBM -1) Human Resource Management 12) What are the different ypes of varieble pay’ (Do not wre mare than 25 words) b) What are the commonly observed performance ra than 7 words) 8 errors? (Do not write more ©) What are the criticel processes involved ia r. cruitment and placement system? (Jdo hot write more than 3 sentences) PS 10 be taken by the individuals focusing 61, 7 Do not write more than 3 sentences) 4d) What are the three important broad ste, themselves for managing their careers ©) What are the main elements of 2 Performance management system? (Do not write ‘more than 6 words) 1) What ace the different forms of competency? (Do not write more than’ wird’) 8) What are the dimensions need to be taken into consideration for managing equity of Feward system? (Do not write more than 6 words) hy What are the requirements of an effective appraisal system? (Do not write more thai § words) i) What are the different sources of inter: al and external recruitment? (Do not write more than 25 words) All the following questions nist be answered tothe point Each question carries 2 sineaieg a) What have been the critical learnin; reviews, from the case Talent Revi b) What is reward? ig, with regard to conducting performance ‘ew at Honeyreell, discussed in the class 3. a) Explain the role of HR sy b) Explain HR's value py discussed in the class. ystems ir. implementing strategy ofa firm? ropasition with reference tothe Sears Roebuck example,20/07/2087 14:25 91-124-3061412 MCKINSEY 8 CO. INDIA PAGE 33/50 4.2) Why it is cost-effective to seiect candidates for central comperencies? b) How do the organisations help the individua's manage thir careers’? chWhy variable pey is becoming more popular in today's » orld?terpretations of concluded that sitive treatment of employees improved cit motivation and productivity. bureaucratic organizations stakeholder approaches, scientific, mamagerent Hawthorne Studies fhe goal of Joka Cooperative Society to apture 25% of the convenience market tusiness in IIM Calcutta is an example of (a) goal. + official b. operative generic 4, legitimacy The strategy tries to maintain a table business while innovating on the periphery. L reactor b. prospector s. analyzer d. defender A strategy can reduce rivalry with competitors and fight off the threat of substitute products because customers are loyal to,the.company’s brand. Ineenzrins Inandne oie focused defensive differentiation Bobby Barista is a researcher in the R&D deparment at 3M. Part of her job is to read technical and scientific journals, and to attend conferences to find out what new developments ss. wowing. When sie doing this part of her job she is carrying out a role. a. buttering, >. mainrenance c. boundary spanning. managerial ~ 14, The primary level of analysis in organization theory is on the with some concern for the and the a. departments, employees, environment b. organization, environment, departments ¢. environment, organization; departments d._ organization, envionment, individual 15, The _____is composed of norms and values from stakeholders. institutional environment population ecology ‘organizational ecosystem institutional isomorphism 16. Which of the following from Miles and Snow's Strategy. Typology best matches with strong capability in research; a decentralized structure, and an emphasis 6n flexibility: a. Reactor. b. - Low-cost leadership. ectations rather thai the démand of work activities. ¢ formal structure and design process is rational with pect to workflow and products. vodward's classification “of technology (into te clusters’ of organizational technologies) was sed on a scale that measured: © stumbet of employees in te span of control interdependence of tasks. technological complexity of the organization's hnical coe. variety and analyzablity of tasks within cach ‘actmerit. a aracteristics of service techinology include all of following except Ber cespainse time is acceprable. at and kniowiledge- intensive tomer interaction is generally higher. y is peyceived and difficult to measure. football, the interdependence miay be termed: Ned beéause management must select individud ts and dewslop: their its sential because plays are un sequeriially and events ing thé plays occur sequentially Procal because mut sts fe pats 4 sporadic, because it is realy a, game Ofte talents. 31 Which of the following is (are): manifestation(s) of corporate culture? a. Legends b. Ceremonies c Stories . All'of theabove 32, An example of the rite of integration in ‘cofporate culture is: a, Awards given to employee-of-the-month b. Unpaid’ tiree week orientation and. taining, ec prospective (acw) employees c. Office Valentine party 4d. Onganization development activities 33. It. Bas been found that a learning organization ® has a strong organizational culoare characterized by the following value(s): a the whole is more important than the part, and boundaries between parts are minimized“ external strategic focus with continual thoughts of whit others are doing that’s ight. Jife-titne employment fo¢ workers at every level (unless ‘a work rule is violated) 4d. allof the above 34. Explicit knowledge includes: a. investing time at meetings in the sharing of stories acd leaming of histories b. a strong “feel” for the corporate culture: ©. development of a clectrome document system du codifies, stores, disseminates, and allows reuse knowledge. channeling individusl expertise to peovide crea: advice on problem solving, with new pendurte hag excellent nkage relevant sectors in the external enviroaniesrr specialtzation hocizontalfinkay , boundafy spanning 4. coordination mit the Head f'the Marketing ia Mumbai came his coiiaterpart in Kolkata. Although he bad ed.well afte? thie hour the office was supposed to ‘most of die employees including his counterpart tot ‘reached! office. Amit was very astonished as ality was’ valued very highly io their company. accotiats: for this complete disregard for | wality.at die Kolkata Office? ack of cilearal sirength ‘ifferences in subculture daptability culture prevailing in the company tan cultuce at the Kolkata office prestavrant has so much conflict between the and the wait staff that they hire a supervisor to € communication between, the two functions. hhave created a(a)__. direct contact level in the hierarchy Db. integrating role d. task force hich of the following is tue about the struggle for nce, a principle derlying the population sy model? xecialists ate able to reallocate resources intemally to lapt to a charging environment, whereas generalists ' ‘eneralists are méce competitive than specialists in the vecow :tea in which their domains overlap. he toy company Mattel, which markets 2 broad cange toys, s considered a specialist. ve struggle is most intense among new organ 1 survival frequencies are eclated 10 enviconmental ctors, ations, BC, 4 company operating in multiple locations, ruld not respond quickly to the needs of different ‘gions: because they had all of the following Neept: ieentealized decision-making, 40. Which of the following is nor a potential source ¢? conflict between subunits? a. Pooled interdependence Differences in goals © lacompatihle performance exteria di. Bureaucratic factors 4 ___ refers to the. aumber and vatiety of products and services a company offers, as well as the oumber and variety of regions, countries, aod markets it serves. Economies of seale b. Market potential Scope 4. Development stage 42, All of the following, except alliances used for global expan: wholly-owned subsidiaries bb. joint ventures & consortia licensing 5 are typical 43. What is the major goal of an organization du the entrepreneurial stage of the life eycle? Growth Goal-setting Survival Complete organizational structure 44, Departments emerge and are established, along with a beginning division of labor, ia a new: established hierarchy at which stage in the lif cycle? Enteepreneunal bb. Formalizasion Collecnviry ilaboration 45. A form of organization called _____ has emerged that is uiade up completely of professionals 5 rscident commanders ae ib clan members . e formal collaborations ssional pacnerships 5Which -of the: change? ioral pitt, and'then another. ales ‘terms in the ma 1 techfology ° to eas "NOhich of che following is not given as an + essentialtelement for successful change? ‘Adoption. b. Need . Re¥ources d. Competition + Buildiog a global presence ‘expands an organization's scale:of operations, enabling it to realize: economies of scale. economies of scope: Factors of production. its international development stage. The transnational model is characterized by: using shared ° vision “and values to achieve coordination in.this horizontal structure. being one step short. of the matrix in exploiting both global and local’ advantages for the > Corporation as. well as multiple interrelated competitive issues. has: a single headquarters and a single center of control for each country and for each product line. * there is no single corporate headquarters, but there isa clear hierarchical responsibility. As organizations become more differentiated, with multiple products, divisions. tepartments, and positions scattered: across qwmerous countries, managers face a remendous challenge. owl lifferentiation ategrition levelopment31/58 20/07/2007 14:25 91-124-3061412 MCKINSEY & 60. INDIA PAGE INDIAN INSTITUTE Of MANAGEMENT CALCUTTA ONE YEAR EXECUTIVE PROGRAM IN BUSINESS MANAGEMENT (EPBM 1! STRATEGIC MANAGEMENT TEST. Time: 60 minutes Date: 7™ Aprit Answer both the questions (Closed Book Examination. ) 1. What drives change in industry structure? Can firm strategy playa role in pushing the industry to its potential structure? Answer with references to cases discussed in the class, (Maximum 250 words), 2. What are the risks associated with product-market diversification! Discuss with reference to Reliance Industries Growth ‘Swratesyyalhe 1990s. Re20/07/2007 14:25 91-124-3061412 MCKINSEY & CO, INDIA PAGE 37/58 FENANCIAL ACCOUNTING PROGRAMME: EPBM-V Maximum Marks: 100 Time Allowed: | hour This is a closed beok examination. Attempt all questions Figures in the bracket indicate marks for a question. fa) ® © (a) 3. Tick (W) the correct one: The following is a part of financial statements:- (@ __Directors* Report (ii) Notesto accounts Gi) Auditors! Report Bills receivable is:- (i) anasset Gi). a liability (il) anincome Civ)’ equity Cash equivalent includes highly liquid investments with a inatutity period up to-- ().- 45 days - Gil) 90 days Gi) 180 days (iv) None of the above Equity is- (iy f+ Exeess.of liabilities over assets Gi)’. Excess of assets over liabilities (iid) Excess of expenses over income {ivy Excess of income over expenses Which of the following is not a fundamental accounting assumption:- (i) Materiality (ii) “Accrual (ii) Consistency iv) Going concern Which of the following is an indicator of liquidity.2e/er/2ee7 14:25 91-124-3061412 WOKINSEY & 00. INDIA, (iy Current ratio (ii) Debt equity ratio Gil) Imterest coverage ratio (a) Operating margin is a profitability indicator bused on:- a) Sales Gi) Capital employed (ii) Equity (iv) Total income: (h) The following is not a leverage ratio: (i) Debt equity ratio (it) Debt ratio’ (ii) ROI () PLE multiple is computed with:- (Profit and-equity (ii) Market price per share and equity (iii) Market price and earning per share (iv) Profit and earning per share @ — Adigher debt ratio is: (i) always good (ii) always bad Gi) can't say (8) Which of the following statements is correct? (i) a company cannot pay dividend in the absence of profit. Gi). a company cannot use general-reserve.to pay dividend, (iii) 2 company cannot use revaluation reserve to issue bonus shares, ()) Interest payable (but not yet paid) on dues to supplier is. (i) an operating expense (ii) a pon-operating expense (ii) not an expense at all (m) In the accounting equation, where de you show the item “Advance to Suppliers” G) Asset (ii) Liability Gil) Equity PAGE 38/58ore7/2e87 14:25 91-124-3081412 MOKINSEY & ©O. INDIA fay What might change in equity indicate? (i) a profit/oss (ji) fresh issue of shares Gi) repurchase of shares (iv) all of the above (0) A financial transaction is: (i) an event. (ji) measurable in monetary tems, : : Gi) oust affect che financial position ofthe business entity, {iv) all of the above {iv)__ only {i) and (i) of the above (p) fssve of borus shares is not reflected in (i) Balance Sheet | : Gi) Cash Flow Statement (iii) All of the above (q) 1fROL is:15% , debt ratio 60% , and interest impact (PBIAT/PAT) is 1.25, how much is the Rerum on E (ROE) (18% Gi) 30% (ii) 25% (2) IROL borrowing cos, whieh ofthe following relationships is sue: (i) ROE>ROL (ii) ROESROL (iii) ROE=ROL (6) A long term lender shall look the folowing rave before deciding to lend: {i) Debt equity ratio (ii) Current ratio (iii) Financial Slack (@) When other income is grater than non-operating exes “().PAT margin will bechighe: than operating profit shargit (Gi) Lower than operating profit margin, ‘on, the number of outstanding shares 15 $ fa) If pet worth of a company is Rs. 250 milli is the price-to-book multiple? million and market price Rs. £50, how much (yo cis (iii) 3 (SPIFERS is RS.5; pay out ratio 40%, and dividend yield BY, how amuch is the market price per share20/07/2007 1 ci) Rs20 {ry hs 28 Rs40 (os) A shor term Jender is interested in the following ratio: (i) Debt service coverage ratio (ii) Current ratio i) ROL (iv) all of the abov: (x) When collection period is 30 days, inventory holding period 60 days and suppliers 25 91-124-3061412 MCKINSEY & CD. Credit 45 days; the net working capital eycle is of: (i) 10 days. (ii) 135 days Gil) $3 days, (iv) 65 days INDIA PAGE a0/ (y) The market capitalization of a company is Rs, 2500 crore, equity ratio is 50%: prices to-bo0k ratio is 1.25. How much is the outstanding debt of the company? (i) Rs. 1500 crore Gii) Rs, 2000 crore Gilly Rs. 1800 crore. 2 From the following details, prepare the cash flow statement of J year ended 31 March 2005: Balance Sheet 1 31.3.2005 [ 37.3, 2004 Paid up share capilal_| 600 7200 General Reserve 171850 1500 Securitiespremium | 175 200 Profit & Loss balance | 225 | 420 Secured Loan, L875 | 370 Unsecured Loan 1 800 700 TOTAL SOURCES i 4728 | 4080 ‘Gross block T5000 | 4300 Less: Accumulated | i dep. i_+2450 2000 ‘Net Block. 2550 2300: Capital WIP i500 200 Hinvestments, $50) 600} Inventories 770__| 560_| Receivables 550 660} F Cash and bank Hl 1 balances 165 175 | Loans & advances. 255 180! Tess: Creditors -300 -250_| (25°2) orth 3820/07/2007 14:25 91-124-3051412 MCKINSEY 8 00. INDIA Less: Provision for ! tx s0_|_75 Lesa: Proposed iadend 240 | 60 Mise. expongie [100 TOYA t {areuications | 4725 | aos Other dea (2) During the year, shares were hough baka face valu. () Mise. expenditure include discount on issue of debeniures.Dissount on issue sdebemores are adjusted against secures premium, (2 lntecest paid during the year Rs. (60, inerest received during the year Rs, 26 (@) Advance axis included in Loans & advances. Generally, tw provided tory paid. {) No income tax assessment vas completed during the yer 2004-2005 (0 Lnvestments are sold ata profit of Ra.25 during te yea (@) During the year, tad assets (gross block Rs 300) were sold for Rs 280 atx prof j of Rs. 150. (81646) beeMOKENSEY & CO. INDIA Pace 42/se 91-124-3861412 1 vesure | Pretwtiseg Seg ate, ae 2: ee eta ary cman Males aH