Name : LAVANYA A/P MUTHUSAMY

Matric No. : 2022021070029

Program : DIM-BIB-BL (Diploma in Management)

Examination : FINAL February 2022

Subject : BMG10103 - Practices of Management

Date & Time : 12 Jun 2022 02:30 PM - 05:30 PM

Q1) Centralization and Decentralization are the two kinds of designs, that can be tracked down in
the association, government, the executives and, surprisingly, in buying. Centralization of power
implies the force of arranging and navigation are solely in the possession of top administration. It
implies the convergence of the relative multitude of abilities at the peak level. Then again,
Decentralization alludes to the dispersal of abilities by the top administration to the center or low-
level administration. It is the appointment of power, at every one of the degrees of the board.

To decide if an association is concentrated or decentralized incredibly relies upon the area of

dynamic power and the level of dynamic power at lower levels. There is an endless discussion
between these two terms to demonstrate which one is better. In this article, huge contrasts among
Centralization and Decentralization, in an association is made sense of

Meaning of Centralization

A turn area or gathering of administrative faculty for the preparation and independent direction or
taking exercises of the association is known as Centralization. In this kind of association, every one of
the significant freedoms and powers are in the possession of the high level administration.

In prior times, centralization strategy was the most usually polished in each association to hold every
one of the powers in the focal area. They have full command over the exercises of the center or low-
level administration. Aside from that individual initiative and coordination can be viewed too as
work can likewise be disseminated effectively among laborers.

Nonetheless, because of the convergence of power and obligation, the subordinate representative's
part in the association is reduced in light of the relative multitude of right vests with the
administrative center. In this way, the lesser staff is just to follow the orders of the top chiefs and
capacity in like manner; they are not permitted to take a functioning part in the dynamic purposes.
In some cases hotchpotch is made because of abundance responsibility, which brings about rushed
choices. Administration and Red-tapism are additionally one of the inconveniences of centralization.

Meaning of Decentralization

The task of specialists and obligations by the high level administration to the center or low-level
administration is known as Decentralization. It is the ideal inverse of centralization, wherein the
dynamic powers are assigned to the departmental, divisional, unit or focus level chiefs, association
wide. Decentralization can likewise be said as an expansion to Delegation of power.

As of now, because of the expansion in contest, directors take the choice with respect to for the
designation of power to the subordinates. Because of which the utilitarian level directors have an
opportunity to perform better, as well as opportunity of work, is likewise there. Besides, they share
the obligation of the great level supervisors which brings about speedy independent direction and
saving of time. It is an exceptionally compelling interaction for the development of the business
association, as for consolidations and acquisitions. In spite of the fact that, decentralization needs
authority and coordination, which prompts wasteful command over the association. For a
compelling decentralization cycle, open and free correspondence in the association should be there.

Contrasts Between Centralization and Decentralization

• The unification of abilities and specialists, in the possession of significant level

administration, is known as Centralization. Decentralization implies dispersal of abilities and
specialists by the high level to the utilitarian level administration.

• Centralization is the efficient and predictable grouping of power at main issues. Dissimilar to,
decentralization is the efficient appointment of expert in an association.

• Centralization is best for a little measured association, however the huge estimated
association ought to rehearse decentralization.

• Formal correspondence exists in the brought together association. On the other hand, in
decentralization, correspondence extends every which way.

• In centralization because of the convergence of abilities in the possession of a solitary

individual, the choice takes time. Running against the norm, decentralization demonstrates
better viewing decision going with as the choices are made a lot nearer to the moves.
 • There are full authority and coordination in Centralization. Decentralization shares the
weight of the high level supervisors.

At the point when the association has deficient command over the administration, then
centralization is carried out, though when the association has full command over its administration,
decentralization is executed.

Q2) Traditionally after issuing staff with an employee engagement survey, the way many
organisation’s dealt with that feedback, was simply to hand it over to managers with no
clear way forward.
In contrast, with an effective employee engagement action plan in place, each manager
should be given best practice guidance and recommended actions to focus on, to help drive
improvement within their teams.
To be effective employee engagement action plans should look to include steps such as the
following.

• Frequent and consistent issuing of engagement surveys

In an ideal world, it would be simpler if the signs of disengagement were exactly the same in
every employee. This would make it quicker and easier to identify and resolve.
Alternatively, you don’t want to wait until your employees broach their problems with you
directly. Usually by this point most of them will be at the end of their tether and ready to
leave, with many acting on this, no matter how much you try to change their mind.
The more effective way to handle this is to issue frequent and consistent employee
engagement surveys, which will help you to pick up key any areas of discontent before they
get to this point of no return.

• Analyse your survey results

This is a key area in your action plan, with the feedback you’ve collected offering you a
roadmap for moving forward.
As soon as your responses start coming in, study the feedback in detail, digging deep for any
trends or correlations in the data. Make a note of scores you’ve used for any metrics.
Drilling down into the data in this way, can help you to uncover valuable insights that you
might not pick up with a hastier review. And with a more granular evaluation, you’ll be able
to see subtleties in categories where you have scored high.
Through the sophisticated dashboards that are available with our survey tools, you will be
able to pick up these more intricate details.
 • Select your focus area
Once you’ve completed your survey analysis it’s time for your directors, senior managers
and HR professionals to get to work on your initial employee engagement plans.
Through collaboration they should collectively be able to identify the chief touchpoints for
improvement that will effect change across your organisation. Next, they need to look
through your employees’ suggestions and filter out plans that you could feasibly implement.
Additional questions that could help identify areas for you to focus on include.
Are there any problems you could resolve with simple changes and minimal effort?
What key areas have the most significant impact on your employee engagement?
Do you know where your highest scoring areas are and how you can improve them even
further?
What are your lowest scoring areas, and what would it take to fix them?

• Create focus groups to devise solutions to issues

Your survey data can only take you so far with drawing up an effective employee
engagement plan. The people that can really help you with this are your staff.
So, having identified your key areas of focus, it’s time to start looking at solutions.
It can help to create focus groups for every target area you have identified. Then within
these groups, discuss any factors that could impact your score, looking at solutions and
possible bottlenecks you need to address.
There are many benefits to be gained from working in such groups. Besides challenging
assumptions, they also help pave the way in reframing challenges to newfound
opportunities. A simple way to do this would be through posing questions similar to the
following.
How and why do we struggle in this particular area?
What are some of the steps that this organisation can take to help this outcome?
In the ideal future, how could we have done this differently?

• Define the actions you’ll take

Next you need to define the actions you need to take to carry out your employee
engagement plan. It can help to outline these in a document covering.
Any actions and engagement activities you’re committed to
Which people are responsible for carrying out your action plan
Project deadlines
How you will measure the success of your plan
 • Communicate what you’ll be improving
Communication throughout is crucial. Not only does it ensure your engagement plan is not
forgotten, but it also helps to keep staff engaged. However, be sure to remind teams of
their accountabilities, while giving credit where it’s due and regular progress updates.
Remember, keeping your workplace informed of the progress you’ve made, will play a
significant role in ensuring your action plan’s success.

Q3) Introduction
Industrial relations refer to the ways in which employees and employers relate within an
organization. The relations include interactions covering human resource management, employee
relations, and union relations. The relations arise from interactions between individual workers,
between workers and their employers, and the interactions that employers and employees have
with bodies formed to protect their various interests
The relationships are articulated in various ways involving the workers. Industrial relations have
been regarded as a study of the rules governing employment, and they give directions on how the
rules are changed, interpreted, and administered. There are different theories that explain the
different inclinations of the industrial relations Theories of the workplace relations
Unitary theory
It views the organization as having one source of legitimate authority, having a unified authority, and
a loyalty structure. The relations are placed on common values, interests, and objectives. All
organizational participants are viewed as a team who share a common destiny. In unitary theory,
conflict is seen as evil and destructive.
Therefore, it should be avoided at all costs. Conflict is believed to be caused by mismanagement and
poor communications. Trade unions are outlawed and viewed as an illegitimate source of authority.
They are seen as an intrusion competing for employees’ loyalty. In this theory, organizations exist in
perfect harmony and all conflict is unnecessary
Conflict / Pluralist Theory
The theory recognizes that employees and managers have different objectives, which create a
conflict of interest in the workplace. The theory argues that conflict is inevitable, rational, functional,
and a normal situation at the workplace, which is then resolved through compromise, agreement
and collective bargain.
Trade unions are viewed as legitimate and are not causes of conflict, but emphasizes on competition
and collaboration in the workplace. This theory is the most efficient means of institutionalizing
employment rules as it creates a balance in employee and management power
Marxist Theory
The theory reflects a wider class of conflict between capital and labor. It shows that
workplace relations are a reflection of the incidence of societal inequalities and the
inevitable expressions about them in the workplace. Conflict is inevitable, and capital seeks
to reduce costs while employees seek fairer price for labor.
Conflict will only cease by revolutionary changes in the distribution of property and wealth.
According to the theory, trade unions should raise revolutionary consciousness of workers
and union leaders who accommodate managers betray the workers. Bargaining power gives
little solutions and gives leaves important managerial powers intact Systems theory
This is a general theory of industrial relations. It states that industrial relations is a sub-
system of a wider society that has four elements. These elements include the following:
a) Actors: they include the employers, employees, their representatives, and government
agencies
b) Environmental contexts: this includes technologies, markets, budgets and distribution of
power.
c) Procedural and substantive rules governing the actors.
d) Binding ideologies and common beliefs that encourage the actors to compromise.
The systems approach holds that behavior is as a result of the structure and processes of the
system

Social action theory

The theory views the relation from the individual point of view and motivation. Each
member of the organization has his/her own goals and views conflict as normal and a part
of an organization’s life. Social actions arise out of the expectations, norms, attitudes,
values, experiences, situations and goals of an individual.
The social action approach is important in weakening the fatalism of the structural
determinations and stresses. In this case, the individual retains some power and freedom.
Industrial relations have been shaped and benefited largely from the theories by the major
theorists. The industrial relations all over the world have been improved for the common
good of all the stakeholders in the organizations (Hall, 17). They are also important for the
achievement of organizational and individual goals.
A sound industrial relations systems represent harmonious relations more cooperative than
conflicting. They also create better environments for economic growth. They require
policies that govern them
Collective Bargain
This is the process through which the employees come together with the aim of
championing for their rights. This is achieved through a system of shared responsibility and
decision making between the labor force and the management. Collective bargaining
involves the Union as the workers’ representatives, and management as the employers’
representatives. Collective bargaining has four elements that make it a complete, which
include the following:
a) Legality: the contract being negotiated must be a legal agreement.
b) Economic perspective: the contents of the bargain must specify the terms and conditions
of employment regarding salary, wage increment, and other benefits.
c) Must be between two parties: the agreement is between labor and management.
d) It is a system involving shared responsibility and decision making.
Collective bargaining ensures the improvement of workers’ standards of living through fair
remuneration and good working conditions, guarantees security of tenure, and employee
promotion on the basis of merit.
It allows for participation of the labor force in running an enterprise through the decision
making and control management. It also allows for ease and fair dispute management and
other employment issues settlement.
Historical background
Trade unions were initially established in the United States in the 1700s. They were meant
to safeguard the welfare of the workers. Many other unions were formed in other countries
in the world thereafter.
In the past, many employees came together to form unions. They were brought together by
their areas of expertise. Thus two categories of labor unions emerged. These included:
Crafts union and industrial unions.
Crafts union was formed by workers specialized in a certain trade while the industrial unions
were formed by workers in the various industries. Some of the major unions at the time
included the National Labor Union organized in 1866 and the Nobel Order of the Knight of
Labor in 1869.
In the 19th century, courts were antagonistic to unions as they were seen as restraining
trade by violating the laissez-faire capitalism core principle that states should not support
interferences in business. The conflict that existed for there to be antagonism was between
freedom of association, which gave people a right to form associations, and freedom of
voluntary exchange in markets, which objected any form of market contracting opposing
unions.
There was a change when the Wagners Act passed in 1935. Some of the elements of this Act
included the establishment of clear rights of workers to form unions, protection in
organizing activities for preventing employers from unfair practices and unfair bargains. The
Act led to the establishment of a National Labor Relations Board (NLRB).
This changed the attitude of the federal governments about the legitimacy of the collective
organizations by workers. During the 1950s, there was a dramatic expansion of unions.
With the rules in place, unionization reached its peak in 1953 with regard to the private
sector. In the 1970s, there was the uneasy truce between unions and employers, which
showed new competitive pressures. The only group served by the unions is employees and
they have not accomplished their aspirations as the employer is set against giving workers a
voice and power in the various organizations
Unions have been of better help, and workers under unionized institutions wish to retain
their unions. In addition, those who are not unionized would wish to register in unions given
a chance. There are numerous benefits that came through the unions.
The Union membership has been on the downward trend since the last two decades of the
20th century. This can be attributed to the fact that the unions have accomplished their
missions and made working condition better. In addition, there has been a fall in the
number of blue-collar jobs.
This can also be attributed to increase in the labor laws that aim at enhancing the workers’
plight. There are other factors that have led to this trend. The number of unionized workers
is still high all the same
Stages of Union development
Labor unions are usually organized on several different levels. Local Unions are formed to
champion for the welfare of employees in a given region. This may include a city, state, or
regional block. The national union is known to be the umbrella union of all other small
unions within a country.
There is also the international level. However, it is not all the unions that have this element.
It is made up several national unions whose bases are the local unions just like the national
unions. The top level labor union organization is the federation, which is made up of many
national and international labor unions.
The federation level is an umbrella union that synchronizes and facilitates the functioning of
other small unions. It also champions for political representation of the unionized workers
Roles of the Unions
Labor unions have power that emanates from the collective power of its members.
Therefore, they articulate issues that are facing their members and are mandated to
perform certain responsibilities (Khan, 79). Their roles range from national development,
environmental issues. Unions play a big part in national development as they are the
catalyst of social change and justice. They are responsible for harmonious industrial
relations and contribute greatly to human resource development
Catalyst of social change and justice: Well organized union yields tremendous power. When
the powers are properly used, they convert into agents of social change and justice. They
have successfully uplifted the economic status of workers consequently changing the social
positions of the masses.
Harmonious Industrial relations: with the influence they have, they are in a position to
dictate the nature industrial relations. Without the strong influence of these unions, it is at
times hard to harmonize the relations between employers, employees, and the government
agencies
Existence of harmonious industrial relations is manifested by lack of strikes, disputes, and
lockouts. Harmonious industrial relations, attracts political stability, incentives in business,
and natural resources are made available attracting investors to do business where these
unions exists.
Development of human resources: In developing human resource, unions have been very
instrumental in effecting changes and improvements in developing nations that are in the
transition period from agriculture to industrial economies. It accelerates the change in
attitudes of the labor force
Consequently, this has effects on the workforce quality and the quality of its work. New
attitudes include safety awareness, time keeping, teamwork and open mindedness. The
union also facilitates and accelerates the pace of adapting for workers from their initial
orientations to the current orientation, creating a productive, and competitive workforce.
They play a big role in training, education and skill building to empower the workforce
Poverty alleviation: Khan noted that the struggle against poverty is one of the missions that
unions focuses to eradicate all over the world (79). In addition, they have always involved
the strategies of poverty alleviation. Unions make representations to governments and
international agencies.
They campaign for policies that can assist in poverty eradication. They organize workers and
assist them in creating smooth employee employer relations through providing channels for
employees to voice their grievances enforcing mutual agreements (Khan, 81). These
platforms ensure that workers get fair terms and conditions of work, as well as fair
remunerations for their labor services.
The alternative poverty alleviation policies include organizing unemployed youths into the
informal sector of the economy, funding women, and establishing groups and associations
for the peasant farmers and other small scale workers in the society
Role for Public Health and Sustainable Development: Interest in the overall state of the
environment has been manifested by both employers and employees. They have ways in
which to treat those infected with HIV/AIDs and other diseases for the common good of
everyone at work and for productivity purposes of the workforce.
Arguments in favor and against unions
Arguments in favor of unions
a) Public workers get a good pay such that strikes are less, and there is continuity of work.
b) They protect workers from various company abuses, creating for them favorable working
conditions.
c) The unions establish long-standing employment relationships. The relationship is among
the employers and employees. The relationship has positive implication for both parties.
d) Unions provide a platform for workers to advocate for benefit remuneration, benefits,
and acceptable working environments (Hall, 52).
Arguments against Unions
a) They can escalate prices for consumers. In this case, employers may be compelled to
increase remunerations in which case the burden is to be shouldered by clients.
b) Unions constrain skilled employees from being recruited. In this case, the unions tend to
hold workers in their positions in the name of securing their jobs, even those that are not fit
for the jobs.
Non fit employees are often protected from layoffs and being fired. Thus, new positions are
hard to open up in the labor market.
Conclusion
With the many changes that have occurred over the years in the society, unions need to
change their structure in order to accommodate the dynamic changes that are occurring in
the world today. Historically, the unions were viewed as bodies for workers’ welfare and
rights.
They have now become major instruments of national development. As years pass by, the
roles of unions will continue to evolve, change, and increase to accommodate the changes
in the world. Unions have been instrumental in shaping the destinies of their mother
nations and their citizens.

Q4) Creating Organizational Control Systems

In addition to creating an appropriate organizational structure, effectively executing strategy depends on the
skillful use of organizational control systems. Executives create strategies to try to achieve their organization’s
vision, mission, and goals. Organizational control systems allow executives to track how well the organization
is performing, identify areas of concern, and then take action to address the concerns. Three basic types of
control systems are available to executives:

(1) output control,

(2) behavioural control, and

(3) clan control.

Different organizations emphasize different types of control, but most organizations use a mix of all three
types.
Output Control
Output control focuses on measurable results within an organization. Examples from the business world
include the number of hits a website receives per day, the number of microwave ovens an assembly line
produces per week, and the number of vehicles a car salesperson sells per month (Figure 9.16 “Output
Controls”). In each of these cases, executives must decide what level of performance is acceptable,
communicate expectations to the relevant employees, track whether performance meets expectations, and
then make any needed changes. In an ironic example, a group of post office workers in Pensacola, Florida,
were once disappointed to learn that their paychecks had been lost—by the U.S. Postal Service! The corrective
action was simple: they started receiving their pay via direct deposit rather than through the mail.

Many times the stakes are much higher. In early 2011, Delta Air Lines was forced to face some facts as part of
its use of output control. Data gathered by the federal government revealed that only 77.4 percent of Delta’s
flights had arrived on time during 2010. This performance led Delta to rank dead last among the major U.S.
airlines and fifteenth out of eighteen total carriers (Yamanouchi, 2011). In response, Delta took important
corrective steps. In particular, the airline added to its ability to service airplanes and provided more customer
service training for its employees. Because some delays are inevitable, Delta also announced plans to staff a
Twitter account called Delta Assist around the clock to help passengers whose flights are delayed. These
changes and others paid off. For the second quarter of 2011, Delta enjoyed a $198 million profit, despite
having to absorb a $1 billion increase in its fuel costs due to rising pricesOutput control also plays a big part in
the university experience. For example, test scores and grade point averages are good examples of output
measures. If you perform badly on a test, you might take corrective action by studying harder or by studying in
a group for the next test. At colleges and universities, students may be put on academic probation when their
grades or grade point average drops below a certain level. If their performance does not improve, they may be
removed from their major and even suspended from further studies. On the positive side, output measures
can trigger rewards too. A very high grade point average can lead to placement on the dean’s list and
graduating with honors.

Arthur Erickson, noted Canadian architect, graduated from University of British Columbia and was
commissioned to design the Museum of Anthropology there, which opened in 1976. It was inspired by the
post-and-beam architecture of northern Northwest Coast First Nations people.

Behavioural Control
While output control focuses on results, behavioural control focuses on controlling the actions that ultimately
lead to results. In particular, various rules and procedures are used to standardize or to dictate behaviour
(Figure 9.18 “Behavioural Controls”). In most states, for example, signs are posted in restaurant bathrooms
reminding employees that they must wash their hands before returning to work. The dress codes that are
enforced within many organizations are another example of behavioural control. To try to prevent employee
theft, many firms have a rule that requires checks to be signed by two people. Some employers may prefer
non-smoking employees, as cigarette breaks can take as much as 40 minutes out of a workday, plus higher
absenteeism and associated health costs for smokers.Output control also plays a significant role in the
university experience. An illustrative (although perhaps unpleasant) example is penalizing students for not
attending class. Professors grade attendance to dictate students’ behaviour; specifically, to force students to
attend class. Meanwhile, if you were to suggest that a rule should be created to force professors to update
their lectures at least once every five years, we would not disagree with you.
Outside the classroom, behavioural control is a major factor within university and college athletic programs.
The Canadian Collegiate Athletic Association (CCAA) governs college athletics using a set of rules, policies, and
procedures. CCAA members, all players, and coaches are expected to follow the standard guidelines and
principles of the CCAA Code of Ethics, and failure to comply will result in disciplinary action. Some degree of
behavioural control is needed within virtually all organizations.

Creating an effective reward structure is key to effectively managing behaviour because people tend to focus
their efforts on the rewarded behaviours. Problems can arise when people are rewarded for behaviours that
seem positive on the surface but that can actually undermine organizational goals under some circumstances.
For example, restaurant servers are highly motivated to serve their tables quickly because doing so can
increase their tips. But if a server devotes all his or her attention to providing fast service, other tasks that are
vital to running a restaurant, such as communicating effectively with managers, host staff, chefs, and other
servers, may suffer. Managers need to be aware of such trade-offs and strive to align rewards with behaviours.
For example, wait staff who consistently behave as team players could be assigned to the most desirable and
lucrative shifts, such as nights and weekends.Clan Control

Instead of measuring results (as in outcome control) or dictating behaviour (as in behavioural control), clan
control is an informal type of control. Specifically, clan control relies on shared traditions, expectations, values,
and norms to lead people to work toward the good of their organization (Figure 9.20 “Clan Controls”). Clan
control is often used heavily in settings where creativity is vital, such as many high-tech businesses. In these
companies, output is tough to dictate, and many rules are not appropriate. The creativity of a research
scientist would be likely to be stifled, for example, if he or she were given a quota of patents that must be met
each year (output control) or if a strict dress code were enforced (behavioural control).Google is a firm that
relies on clan control to be successful. Employees are permitted to spend 20 percent of their work week on
their own innovative projects. The company offers an ‘‘ideas mailing list’’ for employees to submit new ideas
and to comment on others’ ideas. Google executives routinely make themselves available two to three times
per week for employees to visit with them to present their ideas. These informal meetings have generated a
number of innovations, including personalized home pages and Google News, which might otherwise have
never been adopted.

Some executives look to clan control to improve the performance of struggling organizations. In 2014, Rogers
Communications CEO Guy Laurence formally unveiled his plan to revitalize growth at the country’s largest
communications firm. The strategy, dubbed “Rogers 3.0,” aimed to improve the customer experience and use
the company’s assets—which include everything from magazines to the Toronto Blue Jays—together in a more
effective way. Laurence explained the issues he believed the company struggles with, and how his plan will
address them. The reorganization is aimed at focusing on better customer service by bringing together all of
the elements of customer experience—10,400 staff—into a single unit reporting to him. In plans to improve
customer service to business and enterprise customers, Rogers has split out consumers from enterprise users,
believing there’s a growth story in enterprise. Finally, Laurence said that Rogers’ stable of sports, broadcast,
and publishing properties would differentiate the company from its telecom peers and commented, “I believe
content is the most important part of our mix” (Castaldo, 2014).

Clan control is also important in many Canadian cities. Vancouver has the steam clock and Wreck Beach;
Toronto has the CN Tower and the Blue Jays; Edmonton has the Oilers and West Edmonton Mall. These
attractions are sources of pride to residents and desired places to visit for tourists; they help people feel like
they belong to something special.
It is worth noting that control systems, once embedded in an organization, become very difficult to change.
Control systems emerged within an organization, not by accident, but in response to the firm’s need to
monitor employees’ work to encourage high performance. Changing results metrics is an invitation for gaming
the data with employees finding innovative ways to ensure that the data shows they are performing at the
expected level, while behaviour and clan culture are notoriously difficult to change, often taking a decade or
more to truly change. New senior executives often tweak control systems in an effort to improve performance.
However, the time required to actually implement such changes often exceeds the executive’s tenure with the
firm—thus the phrase.

Q5) The Four Types of Economic Utility

In the field of behavioral economics, we often come across the term utility (see also key insights from
behavioral economics). In this context, utility refers to the perceived value (i.e., usefulness) an individual
receives when they purchase a good or service. There are four different types of utility: form utility, place
utility, time utility, and possession utility. The extent to which these utilities affect purchase decisions depends
on the individual. Nevertheless, it is safe to say that all of them can have a significant impact. Therefore, firms
have an incentive to maximize the perceived utility of their products to attract more customers and maximize
revenue. Hence, we will look at the four types of economic utility in more detail below.

1. Form
Form utility is created by the design of the product or service itself. The more precisely a good or service is
targeted towards customer needs and desires, the higher its perceived added value (i.e., form utility) will be. In
other words, form utility is obtained by transforming customer needs into products or services. To do this,
companies analyze their target markets and survey potential customers to find out what they need. This
information can then be used to align product features with actual customer needs. Thus, form utility can be
created through things such as high-quality materials, ergonomic design, or a wide selection of options to
chose from.

To give an example of form utility, think of a car manufacturing company. We’ll call it Super Cars. In theory,
this company could sell all the parts of their cars separately. However, by assembling the parts (and
manufacturing cars), Super Cars adds significant value for their customers and thereby increases form utility

.2. Place
Place utility can be obtained through the process of making a good or service more easily available to potential
customers. The easier it is to purchase a product, the more attractive it becomes. Thus, place utility has a lot to
do with distribution channels and the physical locations at which goods or services are sold. Additionally, some
economists argue that even things like the discoverability of the product on the internet through search engine
optimization affects place utility. After all, a wide variety of goods and services can be bought online these
days.

Going back to our example from above, let’s assume Super Cars is an American company. If its cars are sold
exclusively within the US, buying a Super Car is not very attractive for Europeans. However, if the company
decides to open dealerships across Europe and sell Super Cars overseas, the availability (i.e., place utility) of its
cars for European customers increases.

3. Time
Time utility is created by providing easy availability of a good or service at the time when customers need or
want it. The more easily and quickly a product can be purchased (and used) at that time, the higher its
perceived time utility is. In addition to that, time utility is always high in times of scarcity. Hence, a company’s
supply chain management has a significant impact on time utility. Among others, this includes processes such
as logistics and delivery as well as storage. Companies are continually improving their supply chain
management, which has led to services such as same-day delivery and 24/7 availability.

In the case of Super Cars, one way to increase time utility would be to reduce delivery times. Customers often
have to wait several weeks or even months for a new car. However, many of them need their vehicles as soon
as possible. Thus, if Super Cars manages to reduce delivery times by even just a few days, its cars become
more attractive to potential customers.

4. Possession
Possession utility describes the benefits that can be derived from owning and using a specific product.
Generally speaking, the more “useful” a product is to an individual, the higher its possession utility will be. In
some cases – especially according to marketing theory – the term possession utility is also used in the context
of facilitating possession, i.e., through easy payment methods such as credit cards or leasing contracts. The
reasoning behind this is that a simpler acquisition process usually leads to a higher perceived value of a good
or service.

For example, possession utility can be created whenever a client is handed the keys to their new Super Car.
Simply because from that moment they have possession of the car and are free to do whatever they want to
do with it. Additionally, Super Cars can create possession utility by offering leasing contracts, which make it
easier for potential customers to get access to a new car.

Q5)
Corporate Social Responsibility (CSR) is when a company operates in an ethical and
sustainable way and deals with its environmental and social impacts. This means a careful
consideration of human rights, the community, environment, and society in which it
operates.

Importance of Corporate Social Responsibility

It’s incredibly important that your company operates in a way that demonstrates social
responsibility. Although it’s not a legal requirement, it’s seen as good practice for you to take into
account social and environmental issues.
Social responsibility and ethical practices are vital to your success. The 2015 Cone
Communications/Ebiquity Global CSR study found that a staggering 91% of global consumers expect
businesses to operate responsibly to address social and environmental issues. Furthermore, 84% say
they seek out responsible products wherever possible.

As the above statistics show, consumers are increasingly aware of the importance of social
responsibility, and actively seek products from businesses that operate ethically. CSR demonstrates
that you’re a business that takes an interest in wider social issues, rather than just those that impact
your profit margins, which will attract customers who share the same values. Therefore, it makes
good business sense to operate sustainably.

Benefits of Corporate Social Responsibility

The benefits of CSR speak volumes about how important it is and why you should make an effort to adopt it in
your business.

Some clear benefits of corporate social responsibility are:

1. Improved public image. This is crucial, as consumers assess your public image when deciding
whether to buy from you. Something simple, like staff members volunteering an hour a
week at a charity, shows that you’re a brand committed to helping others. As a result, you’ll
appear much more favourable to consumers.
2. Increased brand awareness and recognition. If you’re committed to ethical practices, this
news will spread. More people will therefore hear about your brand, which creates an
increased brand awareness.
3. Cost savings. Many simple changes in favour of sustainability, such as using less packaging,
will help to decrease your production costs.
4. An advantage over competitors. By embracing CSR, you stand out from competitors in your
industry. You establish yourself as a company committed to going one step further by
considering social and environmental factors.
5. Increased customer engagement. If you’re using sustainable systems, you should shout it
from the rooftops. Post it on your social media channels and create a story out of your
efforts. Furthermore, you should show your efforts to local media outlets in the hope they’ll
give it some coverage. Customers will follow this and engage with your brand and
operations.
6. Greater employee engagement. Similar to customer engagement, you also need to ensure
that your employees know your CSR strategies. It’s proven that employees enjoy working
more for a company that has a good public image than one that doesn’t. Furthermore, by
showing that you’re committed to things like human rights, you’re much more likely to
attract and retain the top candidates.
7. More benefits for employees. There are also a range of benefits for your employees when
you embrace CSR. Your workplace will be a more positive and productive place to work, and
by promoting things like volunteering, you encourage personal and professional growth.