You are on page 1of 6


Suggested Answers
Intermediate Examinations - Spring 2010
A.1 (a) The key factors which would make it necessary for business organizations to introduce changes in
their organizational structures are:

i. Technology: Technology includes machinery and equipment, computers, accounting

procedures, work processes and mode of delivery of services to clients etc. Changes in
technology can therefore have far-reaching affects on the production / marketing processes,
methods and cost and thus require changes in organizational structures.

ii. Products or Services: Changes in the type of products or services demanded by the customers
require organizations to change their organization structures to produce products/services
according to the changes in the preferences of customers for new products and services.

iii. Management and Working Relationships: Changes in the mission, culture, policies and
requirements of work skills necessitate changes in the organizational structures. These include
creation or deletion of departments and divisions, more flat organizational structures and further
delegation of authorities and responsibilities with changes in reporting patterns and work flows.

iv. State of the Economy: Changes in the overall economic conditions call for changes in the
organizational structures of businesses as they seek to expand their operations to obtain
advantages from a growing economy in order to maintain and further consolidate their
competitive advantage in the market. In times of down turn in the economy, businesses contract
their organization structures and realign the working relationships to reduce their expenses.
v. Globalization: The increasing globalization of businesses leading to their overseas expansion
requires revamping of organizational structures to avail the advantages of location of business
and also to capture new markets. Businesses modify and redesign their organizational structures
to meet the challenges of globalization and achieve their missions in the context of the changes
in global vision.

vi. Competition: Keeping abreast of the competitors and staying ahead of them is essential for
survival of the organization it could be creating an alternate distribution system for faster
delivery or other value addition services, with increasing competition a successful organization
needs to be flexible and able to respond quickly to these changes.

vii. Social trends: The social trends don’t remain static the organization may have to change its
structure, strategy to be sensitive to the growing trends.

(b) Strategies to be adopted for overcoming the Resistance to Change are:

(i) Education and Communication: Provide information through various communication methods
and tailor it to create an environment of trust and thus convince the employees of the need for
change and seek their help to reduce group resistance.

(ii) Participation and involvement: Invite inputs from all those affected by the change and assure
them that they can make meaningful contribution to the process of change. Employees who have
participated in the decisions will be less averse to the process of change.

(iii) Building Support and Commitment: Management can reduce employees’ fears and resistance
to change by providing them training in new skills and taking other similar facilitation

(iv) Negotiations and Agreement: Offer incentives and trade-offs to those affected by the change in
exchange for acceptance of change.

Page 1 of 6
31-Mar-10 9:09:21 AM
Suggested Answers
Intermediate Examinations - Spring 2010
(v) Identify Individuals who are willing to Accept Change: Individuals with positive attitudes
and high levels of tolerance are more willing to accept changes. Organizations can facilitate the
change process by identifying such individuals and reduce the resistance to change through
them. These individuals often serve as role models and induce others to accept changes without
much resistance.

(vi) Coercion: This entails direct use of threats or force on those individuals who adopt more
negative attitudes and strongly resist the change process. The use of force includes withholding
of promotions or benefits, unfavourable transfers and pay cuts etc.

A.2 (a) In the case of a threat of last minute breakdown or collapse of the negotiation process, the following
measures may be adopted:

(i) Offer a comprehensive and convincing explanation of the reasons why the concessions sought
by the other party cannot be accepted.
(ii) Express willingness to review the matter or concessions or benefits sought by the other party, in
the future.
(iii) Attempt to close the deal by offering some benefits in the future by giving additional
concessions or benefits in an ancillary contract while finalizing the main contract.
(iv) State discreetly the consequences of failure to reach an agreement and emphasize the advantages
and benefits of concluding the deal without any further loss of time.

(b) The important task that a person presiding a meeting is expected to perform are as follows:

i. keep the meeting on track at all times according to the set agenda
ii. encourage the members to participate and make meaningful contributions
iii. steer the meeting to keep the discussions on course but without monopolizing the discussions
iv. conduct the meeting strictly in accordance with the agreed rules
v. Close the meeting by reiterating all the important points and decisions reached in the meeting.
vi. Sort and interpret the discussions without imposing in his/her own views

A.3 The barriers which create impediments in the process of effective delegation are:

(i) retention of maximum authority by the managers and lack of willingness on their part to transfer
authority to subordinates.
(ii) delegation of inadequate authority and thereby restricting the ability of the subordinates to perform
(iii) lack of skills among the managers to direct and control the subordinates.
(iv) lack of confidence and trust in the subordinates.
(v) lack of skills and expertise among the subordinates.
(vi) scope of the authorities and responsibilities of the task are ambiguous to the subordinates
(vii) lack of resources to complete the task.
(viii) inadequate incentives and weak motivation on the part of the subordinates.

A.4 (a) Request for Proposal (RFP) is a formal document that describes a project, or need for service and
invites prospective bidders to propose solutions.

Page 2 of 6
31-Mar-10 9:09:21 AM
Suggested Answers
Intermediate Examinations - Spring 2010
A Request for Proposal should contain the following important information:

(i) Description of the work to be performed with adequate details.

(ii) Method of submission of the Proposal i.e. on prescribed form to be delivered by hand or by
registered post, etc.
(iii) Mention of the last date and time for submission of the Proposals.
(iv) Terms relating to payments, such as advances or not, interim payments and any other material
terms and conditions.

(b) The Headings of Paragraphs contained in a typical Proposal are:

(i) Reference or Authorization for the (ix) Methodology of Handling the Proposal
Proposal (x) Qualifications of Personnel
(ii) Table of Contents (xi) Time Schedule
(iii) Proposal Summary (xii) Cost
(iv) Purpose or Objective (xiii) Glossary
(v) Problem or Need (xiv) Appendices
(vi) Background (xv) Reference List
(vii) Benefits of the Proposal (xvi) Name of Primary Contact Person
(viii) Description of the Solution
(c) The essential qualities of a well-prepared Proposal are:

(i) the purpose of the Proposal is stated clearly

(ii) the problem or need for the Proposal is understood and defined clearly.
(iii) the suggested solution offered in the Proposal is workable and in the best interests of the
(iv) the Proposal is honest, factual and objective.
(v) the benefits to be derived from the proposal outweigh the costs.
(vi) Contains a time schedule including the milestones/checklists of the projects
(vii) Contains a list of the cost and the resources involved in completion of the project

A.5 (a) Non-verbal communication involves those unspoken stimuli in the communication process that are
generated by the actions of both the source (sender) and the recipient(s) of the message and have
potential message value for the source or receiver (listener).

The important characteristics of non-verbal communication are:

(i) Non-verbal behaviour also has a communication value. Everything about an individual’s
appearance, such as body movements, facial expressions and every nuance of voice has potential
to convey meaning to the recipients.
(ii) Quiet often, non verbal communication more powerfully communicates people from impressions
of others. In fact, when non-verbal behavior appears to contradict a verbal message, the spoken
words carry less weight than the non-verbal clues.
(iii) Non-verbal communication primarily expresses attitudes – Non-verbal behaviour implies how
the other person feels about the state of things e.g. general interests, preferences, disagreements
and dislikes.
(iv) Non-verbal behaviour has universal cultural dimensions – certain types of non-verbal gestures
and behaviour are universal – like expressions of happiness, fear, surprise, anger or contempt
while certain non-verbal behaviour are different in different cultures.
(v) Non-verbal behaviour may be interpreted differently by different persons.

(b) Upward Communication flows from lower levels to higher levels in the organizational hierarchy.

Upward communication provides feedback to the managers and keeps them informed of the progress
towards the achievement of the organizational goals and problems faced by the subordinates in the
performance of their duties. It also informs the managers how the subordinates feel about their jobs,
Page 3 of 6
31-Mar-10 9:09:21 AM
Suggested Answers
Intermediate Examinations - Spring 2010
morale, co–workers and the organization.

(c) In learning organization there exists a shared vision; communication from the lower level to the upper
level is encouraged without any fear of criticism and punishment. The learning organization has a
relatively flat organizational structure encourages openness and reduces boundaries between people.
Upward communication is one of the characteristics of the learning organization as all the people
work together to achieve the organizations vision before their own personal self- interest or
departmental interest, they are open to suggestions criticism, new ideas and are encouraged to take
chances Therefore, a culture of more frequent and candid upward communications and exchange of
ideas is an essential characteristic of a Learning Organization.

A.6 (a) Managers are often reluctant to provide feedback to their subordinates due to following reasons:

(i) Fear of the other person’s reaction as negative feedback from managers can evoke defensive and
emotional reactions in subordinates.
(ii) In case of decisions involving subjective judgments, the manager may not be able to offer
objective information, if the other person contests the basis of the feedback.
(iii) Employees tend to have inflated assessment of their own performance and even if average
feedback is provided, employees are likely to perceive it as biased.
(iv) Most managers prefer to be a coach or a mentor rather than being a judge and forming opinions
about others.
(v) Managers work hard to develop good working relationship with employees and don’t want to
risk spoiling it, could result in the employee becoming demotivated or even angry causing
disruption the spirit of the department.

(b) Steps which a manager may take to make the feedback more acceptable to subordinates, in difficult
situations, may be as follows:

(i) Seek permission to provide the feedback. Ask if it is an appropriate time or if the subordinate
would prefer to select another time and place.
(ii) Use a soft entry. Do not give the feed back immediately – give the person an opportunity to be
prepared for the potentially unfavourable feedback.
(iii) Offer a straightforward and simple feedback as it is effective in most of the cases.
(iv) Advise the subordinate that the change in behaviour would have a positive impact and outcome.
(v) Convince the subordinate of the need to change the behaviour pattern. Determine a time frame to
review progress after a suitable period.
(vi) Try to convince the sub-ordinate that he is capable of achieving the desired results and highlight
his positive points also.
(vii) In the event the problem persists, further clarifications may be necessary. More pointed
feedback and even disciplinary action may be considered.
(viii) Permit the evaluated person to participate in the feedback making it more into a two way
problem solving exercise rather than an evaluator telling exercise.

(ix) Feedback should list the goals, goals accomplished and not the performed characteristics, avoid
making personal comments about their personality attitude or values.

(x) The frequency of the feedback should be more and not just once a year which will help create
awareness of the employee rather than facing a direct blow.

Page 4 of 6
31-Mar-10 9:09:21 AM
Suggested Answers
Intermediate Examinations - Spring 2010
A.7 (a) Management by Objectives is a process by which specific goals are set for the whole organization and
each individual unit within the organization. These goals form the basis of planning and managing the
organizational activities and rewarding the efforts. MBO involves considerable participation at the
various levels of management and the subordinates in setting of the goals.

(b) The steps in the process of establishing goals and plans by the MBO approach are:

(i) Define the attainable objectives in term of their contribution to the total organization.
(ii) Determining overall objectives and action plans, linking the short term plans with longer term
plans and goals.
(iii) Establishing specific goals for the departments, individual units and individuals.
(iv) Formulating action plan.
(v) Implementing the plans and creating effective control systems.
(vi) Reviewing the progress at regular intervals.
(vii) Appraising the performance.

A.8 Answers will vary. However, the answers should cover the following points.

(i) Name of the Palm Tree College of Business and address

(ii) Date
(iii) Mention of Name and address of the Dean
(iv) Subject of the Letter
(v) Reputation of Palm Tree College of Business as a premier learning institution
(vi) Create interest of the Dean by mentioning the participation of important businessmen and
enthusiasm of the students and the faculty to listen to the Learned Speaker
(vii) Suggest possible date/time or seek suggestion from the Dean
(viii) Logical and cohesive presentation of the ideas
(ix) Correct grammar, spellings, tense consistency and vocabulary
(x) Complimentary close
(xi) Name and signature of the sender
(xii) Enclose a brochure of the Palm Tree College of Business to elicit interest of the Dean

A.9 (a) The important steps involved in the preparation of written messages are:

(i) Identify the purpose of the message: The sender should have clear objective of the message
and the purpose of writing the message. It includes conveying information, providing rationale
for any action or decision, giving instructions and seeking advice etc.

(ii) Analyze the audience: The written message should be prepared keeping in view the attitudes,
needs and cultural traits of the receiver. The format of the message, selection of words should be
in accordance with the accepted norms.
(iii) Select the ideas: The idea to be conveyed in the message should take cognizance of the needs of
the receiver depending on the situation and ensuring that the main points are stated clearly.

(iv) Support the ideas with data: The ideas must be substantiated by specific facts, figures and
evidence to support the statements contained in the message.

(v) Organize the message: The message should be organized to facilitate the recipient in
comprehending the message and eliciting a positive response. Messages which are prepared with
irrelevant and confusing information or inappropriate presentation of main ideas would fail to
achieve the proper results.
(vi) Style used: style is defined as putting the right words in the right order; it involves choices
about vocabulary used, syntax and the tone of the message.
Page 5 of 6
31-Mar-10 9:09:21 AM
Suggested Answers
Intermediate Examinations - Spring 2010

(b) The steps to be taken for preparing a well-planned negative message and also retaining goodwill of
the receiver are:

(i) Use a Buffer: A buffer is a neutral or positive statement designed to soften the impact of the
negative message. A good buffer makes the reader more receptive to the negative message.

(ii) Offer an Explanation: Offering of a sound reason prepares the ground for the reader to accept
the refusal. Explanation includes giving convincing reasons why the matter must be handled
differently from the expectations of the reader.

(iii) Avoid emphasizing the Refusal: The refusal message should not be over emphasized, although
it should be clearly stated in the message.

(iv) Present an Alternative or Compromise: Offering an alternative option would give the reader
a different perspective and create an impression that the sender cares about the reader and has a
positive and helpful attitude.

(v) End with a Positive Statement: The ending of an unfavourable message should be on an
assuring and positive note with a reader-friendly closing.

(c) Agenda of a business meeting is a list of topics to be discussed or transacted during the course of the
meeting. The agenda is usually sent to the participants, well in advance of the meeting.

A.10 (a) In an Autocratic style of Leadership, the leader makes all the decisions independently and gives
orders. The leader expects that the orders would be obeyed by the subordinates without any questions
or resistance.

(b) The advantages of Autocratic style of Leadership are:

(i) There is a strong motivation in the manager exercising this style of leadership to achieve results.
(ii) Prompt and effective decisions can be reached under autocratic style of leadership.
(iii) Subordinates with less competence do not have to participate in planning and decision making
and are satisfied to carry out the orders given by the leader.
(iv) Some individuals prefer to work under a centralised authority in an environment of strict

The disadvantages of Authoritative style of Leadership are:

(i) The manager is interested only in the immediate results and has no concern for the subordinates.
(ii) The decisions are made unilaterally and do not draw on the skills and expertise of the
(iii) The subordinates are often suppressed and are required to submit to the demands of the leader.
(iv) The autocratic leader places more reliance on negative motivation of the subordinates.
(v) One way communication, it does not ensure whether the orders have been understood properly
until afterwards
(vi) It doesn’t encourage initiative and commitment from the subordinates.


Page 6 of 6
31-Mar-10 9:09:21 AM