Fundamentals of Management (FOM)

Class Test – 1

Duration: 1 hour
Marks: 20 Marks

Note: Assume suitable missing data, if any.

Ques. 1) (A)
(i) Sona Coms is in the business of vehicle manufacturing. The company has the same unit
producing both scooters and cars. There are no separate incharge/plans/execution resources for
different divisions. The working of two divisions overlaps which leads to confusion among the
employees regarding the reporting as well as differentiation of work.
Which principle of Fayol is violated here? Why?
(3 marks)

(i) Differentiate between Unity of Command & Unity of Direction.

(2 marks)

Ques.1) (B) Read the following case and answer the following questions on the basis of the
same:

Walt Disney Company was established in 1923 by Walter Elias Disney and his brother. The Walt
Disney Organisation (including its subsidiaries), is a globally diversified conglomerate having
business operations in following segments: Themed Products, Theme Parks, Media Networking,
Experiences, Studio Entertainment (Marvel, Lucasfilm), Live Action Films, Animated Movies,
Television Shows, Cruise Lines and Direct-to-Consumer & International (DTCI).

Since the 90s, Disney has been receiving a lot of backlashes from all over the world for
exploitation of its workers regarding work hours, wage rates, working conditions, etc. Many
human rights organisations have also alleged that the products manufactured and sold by the
company has been manipulated that are created in sweatshops in China, Bangladesh, and Haiti.
The National Labor Committee (NLC) revealed in a January 1996 report that Disney's "Mickey
Mouse" and "Pocahontas" pyjamas were manufactured in a Haitian factory that was paying its
workers 12 cents per hour (which was too low as compared to the minimum wage level
prevailing in the country). After the exposure of this news, the factory owners raised the wages
to around 28 cents an hour (this wage level was in compliance with minimum wage rate defined).
However, a follow-up investigation revealed that employees were still living "on the verge of
despair," because the plant owners were still underpaying them. The employees were shocked
when they found that the Pocahontas outfits were sold in the United States markets for around
$10.97 (which was almost equivalent to nearly five days' pay). All of above has resulted in high
rate of employee turnover at Disney.

(a) In the above case “The National Labor Committee (NLC) revealed in a January 1996 report
that Disney's "Mickey Mouse" and "Pocahontas" pyjamas were manufactured in a Haitian
factory that was paying its workers 12 cents per hour (which was too low as compared to the
minimum wage level prevailing in the country)”. Identify the two Fayol’s principles of
management that are being violated in the above case. Explain.
 (2 marks)
(b) In the above case “All of above has resulted in high rate of employee turnover at Disney.”
Identify the Fayol’s principle of management that is being highlighted in the above case. Explain
its importance.
(1 mark)
(c) Planning is looking ahead and controlling is looking back. True/False. Explain in brief.
(1 mark)

(d) According to Herzberg, pay, status, job security, working conditions, and quality of
leadership are _______________ factors while achievement, recognition, advancement,
responsibility, the work itself, and personal growth possibilities are ___________ factors.
(1 mark)

Ques.2) Attempt any ‘two’: (Explain with examples)

(a) ‘Centralisation’ versus ‘Decentralisation’ versus ‘Delegation’
(b) Management is both an Art or Science

(c) Maslow’s Hierarchy of Needs Theory

(d) Managerial Roles – Henry Mintzberg
(5 Marks each)