164 s&INDUSTRIAL MGMT

VBDENGG. ECONOMICS&
(B..E
Q.12. Explain the process of liberalization in India. UNIT-IV
DEFINITION ANDFUNCTIONS
S-04 ONS
(EE MANAGEMENT
[0.22, P-152]
Q.13. Explain globalization with respect to cure
OF
Induan
economic scenario. S-03(EN Explain the evolution of management with
OR What is the process of Globalization? How is it achi Q.1. respect to
hieved of thought. W-02,03 (EN),S-04
IS-03(EE various schools (EE)J
OR "Globalization has come to stay, Discuss with refere
ferences R Define management, Elaborate the term 'management
Indian economy. W-03 (EN), 04 context of various schools of thought.
(EB thecontex
Q.23, P-154) Ans.In the simplest way, management may be definedas the
Q.14. What is meant by privatisation? What are are undertaken to convert disorganized resourg
Bunenyarious efforts that
for and against privatisation? machines, and money into a useful enterpris
men. materials,
OR Comment on privatisation and its necessity in Indi tells us what management does in a
However, this definition only
Economy. [W-02 (ENJutshell and it does not elaborate on the nature of management.But,
W-02 (EN)
T0.24, P-156] hefore analysing the nature of management, the different schools of
Q.15. Explain the steps taken by Indian Government in management thought should be understood. The various schools of
Disinvestment of various PUS's and state its relevance in Modem management thought are the different approaches to management by
context. S-03 (ENJ leading management thinkers,

0.25, P-158] Schools of management thought: The following are the

various schools of management thought:
1. Functional School or Productivity Approach: This
pproach views management essentially as a process of planning
Tganising, directing, and controlling to achieve the desiredresults. It

also called as the concept of Scientific Management solution by

Fredrick W.Taylor in on
1910. In this approach, atention is laid
earning how to produce in abundance.
. Behavioural School or Behavioural Approach:- The chaiet

thinkers Mayoand
associated with the Behavioural school are Elton
managers can lean
SDerger. This approach stresses that
a great psychology
deal from arious behavioural sciences like
sociology
ociolon
behaviour. It studies the
etc. The prime focus is on human
VDENGG.EECONOMICS& EN,EE)
165
&INDUSTRIAL MGMT. (B.E.
 MICS &INDUSTRIAL MGMT. (B.E. EN, EE)
& INDUSTRIAL MGMT ENGG 167
VBD ENGG. ECONOMICS .(B.EEN VDD
166
Various
definitions of management by leading thinkers:
affects the organization with and through
th.
unified views
way management hun
no unified
views of authorities on what
between individna
groups and individuals are no are the
resources. Relation in There CanCtions and what 1s management exactly. These
in this management
area of study approachch.
workplaces is the prominent opinions and approaches have led to various
differences es of
Qualitative school or the decision making approach thinkers. Some of them are as follows:
3.
decisions,
different
definitions by dif
with the way managers make I aims manage is to forecast,
deals only Fayol: To to plan, to
the quality deci 1) Henry
to improve of lecisin
analysing managerial decisions command, to co-ordinat and to control".
ganise, to
making. A right decision
goes a long way in increasing the oworganiscF.W.Taylor:- Management is knowing exactly what vow
2)
organization. then seeing that they do it in the best and
productivity and profitability of an to do and
want men
4. Systems approach:- In this approach the focus is on
t cheapest way
Managino "Management is a multi-purpose organ
entire organization, i.e. input process, and output. 3) Peter Drucker:-
managm manages a manager, and manages
company is viewed as a system. The various moves that that manages a business, and
make -borrowing capital, planning production, controlling qualitworkers and work".
interrelated. B Lundy:- "Management is principally a task of
hiring executives, procuring orders, etc. are all 4) James
and controlling the etforts of
moves in terms of an overall system, a muci nlanning, co-ordinating, motivating
relating all these
other towards a specific objective.
stronger and co-ordinated force can be developed. " Managing is the creation and
Koontz and O'Donnell:
5. Contingency approach:- This approach
recognises
t 5)
environment in an enterprise
wnere
in a constanl maintenance of an internal
ynamic and ever-changing nature of management in groups can perform
efficienty nd
is no single bs ndividuals, working together
atering business environment. It stresses that there group goals.
be da ciectively towards the attainment of
wayto manage circumstances. Instead, what ought to
in all ituatio
in a particular situation is contingent upon the needs of that
tainf Henry
Managing an enterprise is too complex, dynamic and uncel management given by
the principles of
makes Slate
quick solutions. Nevertheless, its contingent quany Fayol
and explain in brief.
schools principlesof
challenging and rewarding. Thus, all these above the following 14
definitia Ans. Henry Fayol put forward
management thought can be integrated into a generalised
generaliseu u management:-
has
work/specialization:- Fayol
|
ous
of management as "Management is a distinct, continu
1. Princip of division of shop floor
orgar
process of allocating human of an
and material inputs advocated
directint not only to
apply
ealed that this principle should as
by various managerial functions of planning, organisi6 work-managerial as well
ever-changie management, but of
and controlling to achieve pre-determined goals in an to all kinds
technical.
work environment"
 ECONOMICS & INDUSTRIAL MGMT. (B.E. EN, EE) 169
168 VBDENGG. ECONOMICS & INDUSTRIAL MGM ENGG.
G
ECONG
de corps:- Espirit de corps mean unity
2. Principle of discipline:- Fayol says that
BD inle of Espirit
Principle
disc 12.
agreements and the rganization.
organie This is an extension of the principle of unity of
is
represents respect for strength.
forward that team work and co-ordinated
agreements and penalt is Fayol puts
discipline needs good superiors, fair command organizational working.
It mean extremely important for
3. Principle of unity of command:- efforts are Fayol says that managers should
Principle of initiative:-
subordinate should receive orders from one superior onlv 13. to take initiatives at
ego and permit subordinates
4. Principle of authority and responsibility:- Authoi
ority
and their

responsibility are inter-related and go hand- in-hand. work of tenure of personnel:- Fayol says
Principle of stability
5. Principle of centralization:- Fayol say the degre
deer 14.
an organization has a
management must ensure that personnel n
centralization of authority varies from organization to manage
organizati that
hat turnover rate is extremely
stable tenure. A high employee
It should be such that it gives the best possible productivity. long and
nproductive and bad
for any organization.
chain
6. Principle of scalar chain olf command:- Scalar

command means a chain of authority from the highest to the long nature and scope of management. Also
0.3. Explain the
of comm an art, or a science, or a
ranks. Subordinates should follow the scalar chain
discuss whether management is
(EE)J
while working.
[W-02, 03, S-03, 05 (EN), S-04
profession.
considering
management can be elaborated
7. Principle of order- This principle means everythinga Ans. The nature of
recognized as a process. The
everybody should be arranged in a systematic and orderly manner the fact that it has been widely

remuneration bring out the nature of management-

following points
O. inciple ol fair remuneration:- The
It is the art of getng
so th 1. Management is a social process:-
proyces in an organization should be fair and prompt establish a pattem of
ngs done through other people. It aims to
employees and employers are satisfied. to do. All these
one should do and what one expects other
9. Principle of subordination of individual intera erestat
gro OTS are directed towards achieving a result or objective
general interest: In any organization, the interest o It is an ongoing
4Management is a continuing procesS:-
should be held above the interest to
of an individual. here are alwavs new mouths to feed, fresh minds
10. Principle of unity activities S.T present
of direction:- All those Stimulate and more people to govern. The satisfaction of
rection. tomorrow
fulfil the same goal should be
integrated- in planning and o
needs
simply means an opportunity to aspire for a better
the planning-
11. Principle of subordinates 3. Manageme It represents
equity: While dealing with is a cyclical process:-
This
managers should adopt Isuretha Cuon-contr of activities.
a kind and just attitude. This wI
Teplanning cycle. Thus, it is a flow
brings
the subordinates are loyal and out the dynamic
devoted to the organizatlou nature of management.
 ECONOMIc
MICS & INDUSTRIAL MGMT (B.E. EN,
ENGG.
EE)
171
INDUSTRIAL MGMT.
MGMT. ( ROManagement as an an art: As an art,
170 BD ENGG. ECONOMICS &
(B.E. management
process- Thee entire
EN, nowledge. is the
Management is a complex entire process tion of
applicatio As an artist, a manager
4.
divided into distinct and rate sub-proces
separate sub-Dr
cal
of pacica experience intuition and judgement- relies
management can be knowledge, especially
directing, staffing, ponhis
or elements like planning, organising, , controlling
Cor adecision.
dec The managerial function of
taking a direction,
communicating. wtile
hile co-ordination
Organising and vation
communication, and control emphasize
process:- Manapen the
5. Management is a purposive ement oti nature of management.
It is directed towards
purposive, i.e it is goal-oriented. the
tic
Management as rofession:- As a profession, management
pre-determined goals or purposes.
achievement of peculiarities:
t 1s a universal process following
6. Management is universal?- n two the
to has specialised body of management theory and philosophy.
necessary ecom
sense; firstly, management is in all social and onomic A
activities and secondly a manager has to pay attention to each n b)
Development of management tools (for eg. statistics,

the entire management process. conometrics, business law, management accounting, etc.)
netrics, busin
7. Management is co-ordination:- The essential nature of Senarate discipline of learning and special management
management is to co-ordinate all activities and resources in an
(thachools.
organizational setup, viz. men, machines, materials and money (the ey d) Functional specialisation
in management, (for e.g. finance,
four M's of management).
marketing, human resource development, etc.)
a
Management -an art, science or a profession:- The nature
management e)Professional business management associations.
of can also be examined by analysing whether it is a
profession.
Thus, management is a science, an art and also a
science, an art, or a profession.
increasing
Management as science:- It is not an exact science like
a Scope of management:- In the moderm world of
Physics, Chemistry, etc. because basically management deals with commercialcomplexities, the scope of management has increased
human beings whose behaviour is ever changing and is nat temendously. It may be studicd under the following heads:

predictable. Hence, management is an inexact science. Managemenl management is not

) Nature of enterprise:- The scope of
is also a developing science. Over the years, the subject-matter o y restricted to factory, shop or offices. It has a universal
management has included within its scope certain principles anu
cation in all simple and complex organizations, private firm,
elements, which have universal application in various human
activities. Thus, it can be said that management is a science as it nas
Coporations, non-profit organizations such as hospitals,
training
centers, etc.
a theoretical base of knowledge. A manager as a scientist reees o
2. Area is not only
the existing theory and philosophy of management and develops ne o of management: Management
management management of
knowledge, new principles and new schools of thought. The functou of business but its scope includes the
Mana
anagers,
of planning and organising emphasize the scientific nat e
of
workers, customers, suppliers, work environment, etc
management.
 172
AL MGMT.SE.B
VBD ENGG. ECONOMICS & INDu TRIAL MGMT. ECONOMI & INDUSTRIAL MGMT.
(B.E ECONOMICS (B.E. EN, EE)
ENGG.
G.
wia 173
3. Subject-matter of management:- The wide scop RD b) Advantages of decentralization :
management is evident in the subject-matter atter of managemen
m
Reduces burden of chief executive:- Well-planned
directing, staffing, o-ordinating and
short, planning, organising. decentralization reduces the burden of responsibilities
dequat from
budgeting form the subject matter of management. an organization on the chief executive.
Thus, the chief
parts of a
4. Inter-disciplinary approach:- Management has an all sufficient relief from work- pressure and also he
i ecutive gets gets
disciplinary approach. For instance, the study of manageme plan ahead.
enough time to
like
requires a study of other disciplines economics, sociolo Enables greater emphasis on product and market:- In
() a
psychology, maths, law, etc. etitive market, it is essential that a company offer the
price and the best of quality. For this, it is necessary to be
best of ice
Q.4. Write short notes on - constantly aware ofthe
prevailing prices and quality trends in the
a) Advantages of centralization. Decentralization enables the management to procure these
market.
b) Advantages of decentralization. subordinates.
data as
and when required through
Ans. a) Advantages of centralization. of managerial abilities: In a
(i) Promotes development
) Promotes leadership: - Centralization retains the authoniontralized
de
organization, subordinates are given opportunities
with the superior and thus it promotes leadership qualities inhere they can develop their managerial potential.
manager. (iv)Improves employee morale:- Decentralization enables a
i) Provides for integration of efforts- The entire operatin hieh degree of participation. Thus, managers are also in a better
of an enterprise with respect to its various departments, funçtions to motivate their subordinates. Highly motivated employees
position

etc. can be effectively integrated into one with adequakalways have tremendous morale and loyalty towards their work.
centralization. (v) diversification:- In case of a diversified
Facilitates
(i) Facilitates uniform action:- Centralization is extremel business, i.e. diversification in terms of products or markets,
beneficial in certain areas like buying. personnel and advertisinedecentralization is extremely advantageous. The capacities oft top
especially for a multi-national company. The important decisto uanagement are not over-burdened and they have to look after only
taken by a central administrative authority can be uniform the major
problems, if any.
implemented by all the operating units.
o
(iv) Enables efficient handling of emergencies- In Case Function of management: -

tion
emergencies, i.e. when quick decisions are to be taken, centraliau D.Differentiate between administration and management.
(W-03 (EN)
is extremely desirable. Ans.
 ECONOMIcS &INDUSTRIAL MGMT.
MGMT (B.E. ECONOMIcS &iIND AL MGMT. (B.E. EN,
174 VBDENGG. EN,ER DENGG, EE)
175
Administration Managenment What are the various elements of management?
Basis of Q.6. What
Management functions are universal.
Distinction OR They are
Administration is concerned Management
ent is with situation
situations," Explain.
1. Definition the pplicable to all
execution of policy pplicable
IS-03 (EE)J
with the determination of
the corporate policy,
the co- within the limi, o
limits setun
"Management is a continuous process."
OR Discuss what

finance, by the administrationre the functions of management. W-03 (EE)J

ordinationof are n
and the employment recognition ot management as
production and distribution, Ans. The a distinct social
of
the settlement of the the organization for the
process
aiven rise to a functional approach to management. This
compass of the organization particular objects Se possible a subdivision of the entire process of management
makes
and the ultimate control of before it.
into various
var elements. Elements of management are also known as
the executive. into

2.Basic concern The basic concerns of

The basic concern of tions of
functions of management. The major functions of nanagement are as
administration is policy- management is the follows.
making. It determines the implementation of Planning, 2. Organising, 3. Directing, 4. Communicating
goals or targets to be policies framed by the Controlling.
and 5.
achieved. administration.
The flow of the management process begins with planning.
3. Functions Planning and organising are Motivating and

the main function of controlling are the main However, a manager pertorms all six functions simultaneously or
administration functions. several times during the working day.
4. Management It relates to top-
It relates to middle and
level management. lower level Planning
management.
5. Usage The term administration is The term management Controlling
Organising
generally used in the IS generally used in
government or public sector private sector.
6. Examples Collectors, Commissioners, General Managers
Communicating
Vice-chancellors, Ministers, | Managing Directors

Registrars, Chief Justice, Departmental Managers Directing

Flow of function or elements of management
etc. Administration is the etc. Management is the
master of the industry. Itservant of admini
or
1. Planning [W-02, S-04 (EN)]:
lanning Planning is the stepping
provides various factors/ stration. It gets salary
u
stone
of manage predetermined courSe or
inputs of production and in a part of profit in gement process. A plan is a
actior
to Planning includes
lieu of their service' profits. its services.
objectives,
omplish the determined objectives.
It involves
s *gies, policies, procedures, programs, etc.
 OMICS & INDUSTRIAL MGMT. (B.E.
ECONOMI
EN, EE)
ENGG. ECONOMICs & INDUSTRIAL MGMT. DENGG. 177
176 BD (E.EEN,
iftthis is not feasible, he
ER
ision makingi tiontoget
hence decision ack on course or,
bad readjusts his
making choices out of various alternatives, measuring progress,
proces of comparing it with
This plans
said to be the heart of planning. plans is called controlling.
correct
corrective action
means activating
2. Organising:- Organising the plan ndtaking
mechani
Organising means providing a tramework or a offne planning. What are the characteristics of
for Q.7 a
implementing a plan. It involves assigning the various asks to
plan? W-02 (EN)J
different people and to co-ordinate their forts and resources good
Characteristics of a good plan:
Ans.
large enterprise, organising process leads to department following are the essential characteristics of a good plan:
The
divisions, each of which has its particular mission. The process of
a Precise
objective: A good plan has clearly laid out the
organising has two aspects ) technical, and (ii) behavin
Oural
precise
obiectives. These objectives may be for the overall
Technical aspect provides an organization structure or hart, recise
poration and also for individual function or department.
describing the authority-responsibility relationship. Behavioual arpor
social arrangement an
n Simplicity:- A good plan is extremely simple to understand
aspect projects the in organization, i.e. it

and to delegate.
focuses attention on the people who work in the organization and
ii) Adaptability:- A good plan is never rigid. It is always
their needs.
fexible and has enough adaptability for new and unforeseen
3. Directing:- Directing means guiding managers, workers and
conditions.
the work by means of motivation, leadership, effective
iv) Balanced:- A good plan is well-balanced. It gives equal
communication and proper co-ordination. A good manager should
have the capability to issue orders and instructions without arousing
emphasis to all vital areas ofbusiness.
feasible.
resentment or opposition and without hampering the workers v)Reasonability:- A good plan is reasonable and it is
It has a realistic nature.
creaivity and initiative.
4. Communicating: In organizational management,

communi-cating represents the flow of information from top t0 Q.8. What is planning? Discuss the nature of planning
IS-03, W-03(EN)J
bottom, from bottom totop as well as horizontal or sideways on the
process of
same level of organization. Effective communication is vital to n Ans. Planning is the first function in the

organization's output and also for its healthy growth and funetioning gement. It involves () Analysing the present situation,
5. Controlling:- A manager must measure his progress if he
Assessing the future, (iii) Determining various objectives
and
has to achieve the pre-planned objectives. When he discovers ta Sdis, (iVv) Developing alternative courses of action to achieve
ctive goals, (v) course of
operations are not proceeding according to plan, he takes correc Deciding or selecting the best possible
action.
 sINDUSTRIAL MGMT. ECONonlICS & INDUSTRIAL MGMT. (B.E.
ENGG. ECONOMICS& EN, EE)
178 BD (B.EEN,ER ENGG. 179

is a ntinuos process because

t
D Future-oriented: Planning is generally
future-oriented.
In business, planning 7)
dynamic. Planning ormulated in advance and they show precisely
requires knowledg are what an
business environment is Plans achieve in a given
wants to period. Thus, planning gives
Since planning involves making enterprise
vision, foresight and wisdom. se
an
to enterprise.
alternatives; its essence lies
lies in decisin irection ofgrowth
choice out of different in dire
be
the
Continuous Process: Planning is a continuous process.
making. 8)
so because planning involves continuous collection,
Nature of planning:- The following characteristics descreThis is
evaluation d selection
of data. It is present at all times, at levels
the nature of planning
areas in an organization. All managerial functions involve
1) Focus on objectives- Planning places focus oT the andat all
accomplishment of objectives. Under the function of planning. Roualanning
planning.

are laid down and the ways and means to achieve them are chalt
ked DECISION MAKING:
Out. process of
0.9. Explain the decision-making in
2) Primacy of planning:- Primacy of planning means that W-03 (EE)
management.
planning is the first and foremost managerial function. All other Decision-making means forming a conclusion about a
Ans.
functions of management, i.e. organising, communicating, directing
ngsiuation after considering various alternatives. A decision represents
and controlling follow the function of planning. what must be done and what must not be
aCourse of actior regarding
3) Pervasiveness of planning:- The managerial function of
done
planning is all pervasive in an organization. That is, planning In any organization, decisions have to be taken
everyday on
pervades all levels of management and all functional areas various issues in each area of business. Every action in
business
of
organization. decision-making. It is said that all managerial functions are
requires

implemented through decision-making. A manager faces various

4)Accuracy and economy:- The focus of planning
accaracy of forecasts. Also, planning should
be such that
maximum results at minimum costs.
is on
it gives
allematives at each step and he has to select the most profitable and
ciectave alternative. Thus, at every step a manager has to go through

5) Recognition of limitations:- Planning should be done wnie lthe process of decision-making. The life of a manager 15 a perpetua
choice-making activity.
keeping in mind the various limiting men,
factors such as money,
materials, machinery and management. rocess of decision-making:- The process of decision
haking may be
6) Flexibility:- Planning the divided into six broad steps
must be flexible in nature so that - a proDIem
plans may be adopted easily and quickly nental Defining the problem: The first step is to define
to changing environme accurately
Curately and in clear terms. A problem well-defined is a problem
problem wei
conditions. half-solved.
 MICS&INDUSTRIAL
ECONOMIC &INDUSTRIAL GNT.
GMT. (8.E.
(B.E. EN, EE)
AL MGMT. ENGG.
180 RD ENGG. ECONOMICS & INDUSTRIAL MGMT. (BE
(B.E. EN,
RO operations. Such decisions are known
181

2. Determination of alternative solutions:- Next variou

E abjectives
es
and as basic,
mmed and strategic
decisions. They are
altemative solutions to the identified problem are determined generally
taken by
d.
management. For instance, all production decisions
3. Evaluation of alternatives:- The various alternativ
tives op are made
against each other.
the anagement. Even a ght error in such decisions
management.
analysed, compared and evaluated the top may
4. Selecting the best alternative:- The best ernative
by
provecostly tothe enterprise.
i ecision-making:- Modern management
selected. The selected alternative decides the course of action
tion to Aids to techniques
be managersin the process
followed. great help to of decision-making.
ier
techniques include break-even analysis, operations research,
5.Activating the alternative:- The selected alternative is then hse
These
converted into effective action. n order words the seles
Clected imulation,
elected linear programming, gaming theories, etc. However,
in
manager is still the decision maker.
alternative is implemented. final analysis
fina He makes the
the
6. Follow-up: Implementation of the, selected altematie decision. For this, he uses his experience, his knowledge, his
requires proper follow-up to achieve the desired results. The decision and his skill of judgement all of which cannot be replaced
intuit
can be quickly modified if the follow-up gives any indications of by any
mathematical technique.
changes to be made.
For selecting the best alternative, four criteria are considered: Q.10. What steps are involved in the process of planning?
a) The risk involved in and associated with following each IS-03, 04 (EN), S-03, 04, W-04 (EE)]
course ofaction is evaluated against the expected gains. Ans. Planning process:- The various steps that are involved in
b) The alternative should provide greatest benefit with the least theprocess of planning are:-
effort or expenditure. 1. Situation or environment analysis:- An indepth analysis of
c) The aternative should be most suitable to the time when thetbe present situation or the ervironment (external and intemal) is the
decision is being taken. ist step in planning. It gives a clear insight into the various factors
d) The alternative should be backed by efficient resources Which
ot will affect and interact with the operation of a plan. The
men, money and materials and management. OrS in the external environment are technology, market price
Decision-making and uncertainty:- Decisions related to petition, social, economic and political conditions. The factors in
problems and situations involving high uncertainty element are very he
emal environment are relatively controllable and they are
delicate. They require greater skill and power knowledge,
of judgeme fi
hance resources, human resources, etc. at the disposal
ofthe
compared to routine decisions. Decisions of high uncertainty have
ve
firm,situation analysis
or environment analysis reveal SWOT
tremendous strategic values. They may affect vitally the busine ie. engths,
weakness, opportunities and threats.
 INDUSTRIAL MGMT
BD ENGG. ECONOMICS
&
s.E.EN, ECONOMICS&
OMICS & INDUSTRIAL MGMT. (B.E. EN, EE)
182
ENGG. 183
of objectives:- On the basis of.
f environme D uncertain & therefore a plan should
2. Determination Future is be flexible &
goals and objectives are determined which (3)
analysis, various provi adaptable o the changing conditions. It should be accomodative.
organizational activities. Objective maximum
a pathway for the give provide for utilisation of reso rces.
meaningful
ve
t should
direction to a firm and make its
activities and effeci emphasis to all important aspects of
(5) It sl ould give business.
thus determined are: Overall corporate objective &growth
The objectives ould increase prosperity ofthe enterpri
objectives at each leve (6) It
well as divisional and departmental
notes on:-
management. o.12. Write short
3. Development of strategies:- The next step in the process of a)
Importance of planning. [W-03 (EN)]

planning is the development of relevant and appropriate strategieses to

Advantages of planning.
b)
achieve stated ends. The best possible way to achieve a specific aim c) Limitations
of planning.
is determined. Ans. a) Importance of planning:- The importance of planning
4. Development of action plans:- Based on the objectives and modern day
day business is tremendous. In view of the growing size,
in modern
in
strategies, action-plans are developed which specify thefollowing: increasing complexities of modern business, planning has
) Overall time limit of the action plan, become a boon. The
following points bring out clearly the

(ii) Allocation of various jobs to relevant persons or importance of planning.

direction of growth:- Planning
departments, and ) Planning provides the
future,
(ii) Schedule of work to accomplish the plan targets within the enables an organization to know its present standing assets
capitalize the
specificed time limit. opportunities and risks, develop best possible means to
objectives.
5. Controlling:- Controlling is said to be the other half ofopportunities and to meet the risks to achieve its
decision making
planting. It means evaluating and measuring the results with the () Planning provides an overall common
overall
plan. If deviations are noticed then necessary corrective action attorm:- Planning involves the development of an
1s

taken or readjustments are made in the plan. Thus, controlling leads

Corporate plan. Thus, each department in an organization can work in
to corrective planning. uL Lowards achieving the common corporate goals and objectives.

(ii) insights into the business

Planning provides
potential
Q.11. What are the characteristics of a good plan?/S-04 (ENI ronment:- Through planning, it is possible to identity
and pro based on such
Ans.(1)A good plan should be dable
simple, easily understanda ve opportunities and threats. The plans
and based on clear & well-defined Concrete
objectives. information are better and more effective.
(2) It should provide necessary
guideline & standard
bf
. lanning provides performance
standards: Planning
performance. provides actuat
specific standards of performance against which the
 & INDUSTRIAL MGMT. ONOMICS &INDUSTRIA MGMT. (B.E.
VBD ENGa. ECONOMICS (B.E
(B.EE a. ECON EN, EE)
184
us. planning
Thus, planning
E, RD ENGG.
emergencies and situations demanding
185

performance is measured and evaluated. providest (ii) For quick

no scope for planning. In such
effective control. there is
ecisions, there
cases, planning
to cope-up decisions.
decisions.
(v) Planning readies an organization and ad only delay
uld encourage a tendency towards
to changes:- An organization functions in a dynamic envi nning may inflexibility
(iv)
once the plans are established.
which influences its functioning. Plannin prepares an organis
organizati inctance to change,
reluctance
meet and adapt effectively to ever-changine ar Extensive planning for long periods in adv
to anticipate ) is
is unpredictable and uncertain. To that
environmental conditions.
IDpractical
as the future
is lost. Thus, planning does not insure
ages extent, the value of a plan
b) Advantages of planning:- The 1ollowing are the advantape
of planning. uncertainty. It may also encourage a false sense of
t risk or
against
(i) Optimum utilisation of resources is achieved. Unproducie risk or uncertainty.
security against
work and wastage of resources is minimized.
(i) Planning'enables an-organization to remain competitive What are the elements of planning?
Q.13.
with other rivals in the industry through planned improvements and
OR What are the various
types of plan?
timely action regarding quality of product or service, marketing et. Ans. The various elements of planning or the various types of
(11) Planning prepares management for contingencies plan are:
Forewarned is forearmed. 1) Objectives:- They are the plans for the future which aim to
(iv)Planning enables an organization to be suitable for future. provide direction for later activity. Objectives follow a hierarchy, i.e.

() Planning provides for an orderly and smooth flow of work primary or basic objectives (overall corporate objectives) are
as various objectives, goals, policies are predetermined.
dtermined by the top management and departmental objectives are
(vi) Planning enable quick adaption to keen competition or
determined by each departmental head within the framework Oof basic
fast-changing environmental forces. Thus it assures survival
u
objectives.
Effective management is always management y
Dy
growth of an organization.
objectives.
c) Limitations of planning: The limitation of planning are
follows:- ) Policies: A policy is a standing plan or an answer
recurring
problems. It helps to keep work in line
win
() Generally, for small and medium size concerns pra anagerial
statement
proves costly and may not be
a feasible activity. Cnt objectives. Policies take the form of general
to lead the
towards
ii) The output of planning depends upon the quality ol npul. gerial activity through proper channel
objectives.
this within. If
For instance, computer programmers
have a good expression for g, e.g- a firm has a policy of promotion from
For
GIGO, i.e. garbage in, garbage given to existing
employees naturally the first preference is
if they are eligible.
 & INDUSTRIAL
AL MGMT.
186 VBD ENGG. ECONOMICS MGMT
(B.E.EN & INDUSTRIA MGMT. (B.E.
cONOMICS EN, EE)
ENGG. 187
3) Rules: A rule is the
simplest type of plan. It require
rean
It D Discuss the definition and scope of organising
(or
to aa sit.
with respect to Q.14
specific action be taken or not taken Situation.
organization). What are the special functions performed
and specific than a policy and it dictates the way
i organizations?
by a
more rigid
good
activity is to be or not to be done. Rules are essential for discipline
discinlk the steps in planning. [S-04 (EE)I
OR Explain
4) Procedure: A procedure is a standing plan which After formulating the specitic objectives and goals in the
e After
Ans.
prescribes a sequence of steps which must be followed to nerf oma process of planning, the next step in the process of management is to

particular work. A procedure ensures uniformity and high stand Organizing helps a manager to unite the work of different
andard nize.
resources in order to achieve goals
of performance. peopl and
process of combining the
5) Programme:- It is a single use plan which gives step.h. Definition:- 1. "Organization is the
-by-
wOrk which individuals or
groups have to perform with facilities
step approach to guide action necessary to reach predetermine
so performed provide the
programme necessary for its execution, that the duties
targets. A procedure tells how it is to be done, while a co-ordinated
best channels for efficient systematic positive and
tells what is to be done.
application of available efforts." 0.Sheldon -

6) Schedules:- Schedules establish the time sequence of the

co-ordination of the
2. An organization is the rational
work to be done. It specifies the time when each of a series of actions achievement of some
activities or roles of a number of people for the
should occur. authority
common explicit purpose or goal, through an hierarchy of
7) Budgets:- A budget is a projection (forecast) and a plan E.H.Schien.-
and responsibility."
which defines anticipated costs of attaining an objective. It may be basic
Scope of organization:- An organization has certain
stated in terms of time, materials, money or other units requiredto eiements around which it revolves. These elements determine the
perferm work and secure specified result. A budget is also used 25 SCope of organization and they are
control device. 1. Identifying and grouping the work into jobs.
division,
8) Forecasting:- It is a systematic approach to probe the lu Skillfully assigning these jobs to appropriate
n the basis of knowledge / departments
sections and individuals.
information. It may be
detegatduy
a) Extrapolation, Designing the hierarchy, i.e. providing authority,
b) Economic forecasting, CO-ordination
and and communication.
working
4. Provision for a goal
c) Marketing research. of facilities and equipments
environment.
Forecasting is based on emises
assumption or planning P The explained by examining
itinitspe
regarding future happening. of organization may also be process.
two0 1) A structure and 2) A
pects of existence, viz.
 ECONOMICS &INDUSTRIAL MGMT. (B.E.
ECON
ENGG. EN, EE)
INDUSTRIAL MGMT. (B,E
188 VBD ENGG. ECONOMICS &
D objectives: An organization 189
Unity of must have
The above mentioned elements
pe of organizing
determine the scope orga a) unity of
there should be a common organizational
str bjective,i.e.
considering it as a process.. While vieWing organizing as a structure clearly defined for each department
goal. This
should be
itsscope encompassess the various organizational forms forms such
such as gaul
and for each
anization structure so that all efforts
line, line and staff, committee and project. position in an focussed are
tnea
In a broad sense, two element are always invariably used
same goal.
Inonthe Principle of specialization:- There
should be a thoughtful
organizing: dividing the work into jobs, and taneously b)
division of labour. This facilitates
ensuring that these separate clusters of work are linked togethe precise
f into and functional
a term effort to achieve organizational goals. pecialization, which enhances productivity.
Special functions of a good organization: Principle of co-ordination:- The division of labour must he
1. Maximisation and optimization of outputs through efficient upplemented by efficient co-ordination and synchronizationto
management of man-machine system. achieve
Chid common goals. Co-ordination helps to integrate the basic
2. Operation of an effective and smooth communicationmaerial functions of planning, organization, communication
and
network. Control.

3. Skillful division of work such that there is proper division of

d) Principle of scalar chain of command:- It is a very
labour. Apart from this, the jobs alloted should be such that they
important principle of organization which explains the line of
ensure maximum job satisfaction for the workers.
uhority and responsibility. The degree of responsibility and
4. Creating an organizational image such that it generates
Tesponding authority decreases in relation to the levels of
public confidence. Even the employees develop a sense of belonging
ganiZation structure, from relatively complete responsibility and
to the organization.
uhority at the top level to relatively little or limited responsibility
5. Providing scope for growth and diversification of an

ud authority at the lowest level. Authority flows downwards from

organization by encouraging creativity in its work, accountabiliny the
he top
to
to the bottom
amongst its workers and by preparing management for quick whereas responsibility and accountability flow
adaptations to changes in the environment. Thus, organizationisthe rds
hierarchy
from the bottom to the top. There is a scalar chain or
linking all
foundation of management. bottom. members of the organization from top to

ation?
inciple of
Q.15. What are the various principles of orga
of authority:- delegation or principle of decetralization of
le
Explain the principle of unity of command and the prineiple Delegation
IS-04(ENI perations egation simply means assigning part of the work ot
simpl
scalar chain command. or manag
Work dnagement to others. Every time a manager deiegaics
Ans. Principle of organization are the basic guidelines l to a subor
ordinate, three actions are either expressed or implied-
effective organization. They are:
 ECONOMICS &INDUSTRIAL MGMT.(B.E.
ONOMICS EN, EE)
ENGG
ENGG. 191
INDUSTRIAL MGMT. (B.E
VBD ENGG. ECONOMICS &
9D
EN,ER RD of control creates a tall and centralized
Narrow span
190
1.e. he es
indicates What
what work
what multiple levels of management.
) The manager assigns duties, th oganizatio withorganization with Wide span gives
multiple
subordinate is to do. tralized or
decentralized levels of management
rtain right to
he assigns certain effective
effective communication:- Forthe
(ii) He grants authority, i.e. the Principle of smooth
i) organization
organization
subordinate to fulfill his duties. functioning of
an it is imperative
that the
in accepting an assignmens network is extremely effective.
(ii) He creates an obligation, 1.C.
unication
communicat
onm
subordinate takes on an obligation to his bos
to complete his ink Exception principle or principle f management by
k) by exception permits a manager
Principle of equality of authority and responsibility:.-ThiThis
exce
tion:- Management to
If.KCep
i concentrate on the crucial elements of process and not to bother
a
means that authority and responsibility should always
be equal. we

assign a person duties, we ought to furnish

him with
vith ene supervising every small routine. Routine activities of
about
authority - no more and no less, to
carry them out. cleared through superiors. Only exceptional or
rdinates are not
shoula
g) Principle of unity of command:- An organization standard types of ivity require approval of the boss.
aim at securing maximum etticiency of its resources.
Wastages
0 Principle of flexibility;- An organization should have
should be minimised. enough flexibility to quickly adopt to changing circumstances
clarifies
h) Principle of unity of command:- This principle without any dislocation.
implies
the authority-responsibility relation in an organization. It
to
that one person should receive orders from and be responsible Q.16. Define and explain the term 'delegation'. What are
more
only one superior. Thus, no one in the organization should have
the three element of delegation?
personal
than one boss. This ensures and instills a sense of
Ans. Definition:- "The entrustment of a part of the work, or
regarding
responsibility in a person for results. There is no confusion Tesponsibility and authority to another, and the creation of
There this facilitates a
the directions and orders from the superior.
- Allen.
1he ntability for performance is known as delegation."
healthy relationship between the superior and the subordinate.
of a Meaning:- Delegation means granting authority by a superior
principle of unity of command is vital to the success
organization. ate to perform a particular job/assignment. It is the most
manageme nt process in organizing. Delegation is necessary because a
() Principle of span of control or span of
decentralizatio person
(S-04):- This principle influences the delegation:and organization.
leve He annot handle the entire workload of an
higher
of authority. According to this principle, no superior at a has to entrus
rust certain work and authority to others to share
his
ntrol
should have more than six immediate subordinates. Span Worklog
orkload absence.
abily diso it enable the running of business in his
is affected by the following factors:- (i) nature of work, (i) Thus, himself and
organization n and thr
ugh delegation, a manager multiplies
manager and his subordinates, (ii) efficiency of els results
through others.
(iv) staff help.
 ECONOMICS & INDUSTRIAL MGMT. (B.E. EN, EE)
192 ENGG 193
VBD ENGG. ECONOMICS & INDUSTRIAL MGMT. (B.E.
EN,EE
ffon of the executive pyramid: The uppermos
R9 Organizatk
Elements of delegation:- Three action are involved in cutive pyramid has the top management
execut
the (board of
the
process of delegation which are known as the 3 elements pountof the chief executive) who initiates the process of
of directors and
delegation: next level in the hierarchy is the upper middle
delegation.
1. Responsibility:- The assignment of responsibility is the f execuveand their deputies). Next
tneir deputies). Next in
in the
st agement (senior the
action in the process of delegation. A responsibility may be certAin middle
mido management (head of departments) and finally
amidis the
function work or duty assigned responibility the agement (generally foremen and supervisors). Thus, An
1s created by the lower
the
helOw pyramid there is a well-defined network of
superior. executive
an
2. Authority:- In order to perform the assigned work, certain ihility, authority, and accountability from the top to the
Tesporn

powers and rights are required. These powers and rights are granted boftom.

by the superior who delegates. The sum of these powers and right is An important
point in the process of delegation is that even
receives authority from the superior, the
known as authority. Authority. is the right. to make decisions and though the subordinate
superior still retains the
final and original authority.
power to issue orders on behalf of the organization. There must be a
balance between responsibility and authoity as granted to him while
Q.18. Explain the important benefits l advantages of
performing a job. Thus, accountability flows upwards through the
delegation.
chain of command. A subordinate is accountable to only one
Ans. Importance of delegation:- Delegation is the most
immediate superior single accountability is necessary for discipline
importantaspect in the process of organising men and resources in
and proper co-ordination.
anyenterprise.
Delegation is important because:-
Thus, responsibility. authority, accountability are the three
1. Distribution of work load:- An individual has limited
pillars of delegation. They arè interdependent and equally important
energy and time.
He alone cannot accomplish all task of an
The process of delegation will be effective only when the three
cerprise.In order to accomplish more work, he has to distribute his
pillars are well balanced with each other.
OTk load among his
subordinates. The only way to achieve this is
through
delegation.
Q.17. How is the executive pyramid created by delegation: 2.
Specialisation:
Due to growing complexities and
Ans. The executive pyramid is created through delegation techniques
at work, specialists are needed. Hence work has to be
redelegation in an organization. There are various levels o delegated
to specialists in concerned fields.
management in an organizatiónal structure. The process 3.
for gement of geographical dispersed business:- Large
delegation creates a chain of command which provides channels 1 organizations
ve various branches and plants which are
have
the flow of authority (downwards); he flow of accountabinuy Beographically d
(upwards and egationly
(upwards) and the flow of communication (upwards
dispersed. To manage these branches and plants,
is the best possible
downwards). way.
 VBD ENGG. ECONOMMCS & INDUSTRIAL MGMT.
194 (B.E.EN ECONOMICS & INDUSTRIAL MGMT. (B.E.
ENGG.
ENGG EN, EE)

motivati D
provides.
4. Motivation to employees:- Delegation
195
entralization (extensive elevation):- When
delegation
the employees share authority an organization, it is said to be is
to the employees. As auh
y widespread
d in a
responsibility in an organization, they develop greater interest
idespreau hority is systematically delegated to the
decentralized
ization lowest levels
their work. organization in all its functions and
divisions,
in an
1s, under
5. Development of managerial abilities
The
e process decentralization, the subordinates role as decision-maker
is
delegation enables executive at different levels of management
manao
increased.
participate in the decision-making process. Thus, it helps in
1.
Centralization and decentralization both
both refer
refer to
to the
the degre
degree
development of managerial abilities in the employees. delegation of authority and responsibility. Under centralization
of
Benefits/ advantages of delegation:- degree of delegation is done; while under decentralization,
lesser
1.Without delegation, an enterprise would be a one-man dhow delegation is done.
high degree of
"Thus, delegation enables the formation of an organization. 2 Absolute centralization means there is no subordinate and

2. Delegation enables a manager to concentrate more onhig organization structures.

hence no
real profession, i.e. management. He can delegate the routine 3. Generally, in a small company higher degree of
to subordinates. centralization is required.
3. Delegation provides enough time and space to plan, motivae
4. There must be a proper balance and equilibrium between
and control. centralization and decentralization.
4. Delegation provides an opportunity to the subordinates to
show initiate and develop themselves on the job. Q.20. Mention the important forms of internal organization
5. Delegation makes it possible to accomplish more with lss usually found in business enterprises.
organizations
worries and confusions. OR Discuss the line and staff type of internal
and compare organizations. Thus give their
it with functional
centralization and relative [W-03 (EE), S-05 (EN)J
Q.19. Explain the concepts of advantages.
organization mean the
decentralization. [W-04, (EE| Ans. The various forms of internal
in various
Ans. Centralization and decentralization are the terms
used n
dierent types of organizational structure. The difference
delegation of authority
S Of organization lies in the pattern of
the context of delegation of authority.
and allocation
Centralization (minimum delegation):- When authority 1 of duties and responsibilities.
internal organizations
lization. e Tollowing are the important form of
delegated, then it is said to be centralized. Under centrala
cetuinsually found in business enterprises.
certa
at
authority is deliberately and systematically withheld -
organization: In organization there,
IS direct
a
the a line
control point in an organization. Under centralization,
Line each level with those
Clationship connecting the positions at
subordinates role as decision-maker is reduced.
 196 VBD ENGG. ECONOMICS &INDuSTR
MGMT
above and below in the hierarchy. Thus, there is a
(B.E.E LNGG.
MICS&INDUST
EcONOM MGMT. (B.E. EN,
EE) 197
recognized 0LNGG p committees and ad-hoc
advisory (temporary or standing
ofcommand, i.e. a simple authority relationship
ship between
between th
ch mittees,
committees,
the supe es.
and the subordinate. Technically, it describes a
'scalar nciple' permanent)
a line organization, authority (orders and instructions) 7.
Task forces:- A task force is a temporary organization. It
downwards and accountability tlows upwards in consists of a
team of experts which is formed to solve a problem
a direct
lo consists
oint effort
patten hrough joint effort when the solution is beyond the power of one
between the top management and the first line managers,
experts in the task force are executives who are
2. Functional organization: This type of organization er. The
ion selected from their regular posts and appointed for temporary work
based on specialization in management i.e.
each function force. When the solution to the problem is found, the task
administrated and directed by a specialist/group ofthetask
of specialists. Pa
functional organization is hardly seen today. It has Pure force isedissolved.
dissolved.
histor
only oncal
importance. ol direction in management.
0.21. Explain the meaning
3. Staff organization:- In a staff organization two9pestypes aHow Mowis isitimportant to aan organisation?
important to (S-03 (EN)J
staff, viz. staff assistant and staff specialist help the line authority to managerial function. It is only
carryout the work effectively. The staff has no formal authority. Ans. Direction is an important
ie h nroper direction that an administrative decisions can be
pOwerto givecommand. Staffauthority is purely advisoryorserviverted into concrete action. Every managerin an organisation
oriented. receives direction from his supervisors and also gives direction to his
4. Line and staff organization:- This form of organization subordinates.
utilises the advantages of both the line organization and the Definition :"Direction is not issuing orders and instructions
functional organization The line and staff organization consists of by a superior to his subordinates, but it includes the process of
additional functional specialists to simple line organization. guiding and inspiring them.

5. Project organization:- In project organization, a group Meaning of direction:- Direction is a continuous managerial
different specialists work undera project managerto achievespecilie unctions.It is present at all levels of management.In avery simple
objectives within a certaintime limit. The project team of specu nse, direction means
directing or channelising human eforts in an
is answerable only to the project co-ordinator until the projetganization to achieve organizational mission and objectives as per
the administrative
finished. decisions.
are
6. Committee organization:- In practice, commtecs Eiements of direction: -There are basically three significant
evels
leveb iements of direction:-
formal part of the organization structure and are found at all
is
1.Communication,
management hierarchy in large companies. A commitce
10
2.Leadership
Formally organised group of individuals who meet repel cutive and supervision.
exce 3.Motivation
consider some problem or problem area. There are and morale boosting
 cONOMICS & INDUSTRIAL MGMT. (B.E. EN,
EE) 199
ENGG
INDUSTRIAL vees
motivated:- An important
qBD ENGG. ECONOMICS
&
Keeps emplo
MGT (B.E.EyRD
198 aspectof
process of directior 5. motivatio
motivation. A motivated employe
Important features of the direction 1S
per
proper is an asset to
direction
by all managers,
ers, i.e.
1.It is a function pertormed at organIsation.

levels of an
organisation. allany
2. A plan or a
decision comes into action only after
22.What are the principles of direction? What are the
direction has been given for its implementation. requirements of good direction? IS-03,04, 05 (EN)]
That is, it continues
ential
3. It is a continuing function. irougho following are the rious principles of direction
Ans. The
the life of the organisation.
Principles of unity of ommand:- A person must get
4. The process of direction starts
at the top managemens 1.
leve
It follows the hierad ons from one superior only and he should be answerable to
and goes down to the bottom level. hierarchyinstruc
organisational structure. that
superior only.
communication:- The direction
5. Direction involves effective communications, dyna
dynam 2.Principle of effective and

leadership, alter supervision and proper motivation to the huma instructions should be effectively communicated to all concerned. It
factors. means that they should be understood in exactly the same meaning as
Importance of direction:- The importance of direction to communicated,
they were
organisation is clearly brought out in the following words
a proper and efficient control
Marshall Dimock' who has called direction as "the heart 3. Principle of control:- Without
directi mechanism, the process of direction will not achieve succesSs.
administration. According to him, the more effective the
aims be a
greater would be the organisational productivity. 4. Principles of dynamic leadership:- If manager
and
The following points very well illustrate the importance good director then he has to be a dynamic leader. The charisma
direction: confidence of a dynamic leader instils great confidence in the
1. Direction is the activating force: Proper direction a subordinates
too.
guidance is the starting point of work in an organisation. Witho
5. Principle of maximum individual contributions:
anydirection, the plans and policies will remain only on paper individual
binds togethertCon should be such that it ensures maximum
2.ntegrates human efforts:- Direction
contributions.
efforts of Management personals across the organisation.
that th organizational goals:-
3. Extracts human efforts:- Proper direction ensures Tnciple of integration of ground
utiEffective
individuals in an organisation give their maximum conut direction should utilize the group efforts such that they do
towards attainment of organisational goals. goals and
ct with the organizational goals. Group
4. Achieves organisational goals:- Good direction is aalways rganizatio
gnational goals must be intelligently integrated.
guarantee that the effots of the individual goals.
 ECONOMICs && INDUSTRIAL MGMT. (B.E.
INDUSTRIAL McA cS EN, EE)
ENGG. ECONOMICS & NT.(B.E 201
200 BD DENGG.
EN ivating and supervising employees
Leading, in their
Controlling: 2
Q.23. Explain the concept
of managerial control What
a work Comparing actual performar with the established
different elements of
control?
the 3 performance, and
to communication in Management. undards of
OR Barriers corrective action wherever necessa
w-03 (EN), S-04, W-04 (P Taking
4.
als of effective control:- In order to be effective
management starts with planning
nning. Essent
Ans. The process of Vano mechanisms must have certain characteristics. They are:-
goals and objectives D.. lan trolling
plans are formulated to achieve Controls should be such that
they are understandable to the
hopes.
without corresponding controls are opt to be hollow
1.
In orde organization.
has counl people in an
to make managers really effective,
planning to be
pledwi i.e. the implementation of
should be economical,
22. Controls should
controlling.
should not be costly.
Aims of controlling:- The primary aim of controlling is conu Control should be flexible in nature so that they can be
3
t
ensure that the results achieved are as close as possible to ftbctiveeven when there are some unforeseen changes in the plans.
planned results. A secondary aim is to provide timely informatia not only detect deviations from
A control system should
4.
that may bring about revision of plans. Thus, plans are achievedol plans;but also show the way to corrective action.
It means that controls
through effective managerial controls. Controls should be forward looking.
5. potential/actual deviation early
Definition of controlling:- Koontz O' Donnell has defind
should be such that they can detect
should
control as," The measurement of accomplishment against the cnoughto allow quick corrective action. In short, controls
standard and the correction of deviation to assure attainmenteRable the organization to be proactive.
techniques:- There
objectives according to plans". Dilferent forms of managerial control
techniques, ranging
Elements of control:- There are six elements of control, viz, are many different forms of managerial control
are appli
Authority, Knowledge, Guidance, Direction, Constraint a
fom simple
from ones to quite complex ones. They
whal as finance,
Restraint. In order to be able to control, a manager must know
ferent functional areas of an organization such
all
the situation is, what it should be and how to correct it, Oeo
s he
personnel, etc. However, the basic aim of
,marketing,
must have the authority to take the appropriate action. S 1S the same. To determine variations
from the estabiisicu
whiC Slandards and omissions.
Process of controlling: There are some basic steps and to take prompt actions to rectify errors
o
ievement Various dndforms of managerial control techniques are:
constitute the control mechanism. They enable the achieveu
the aim of controlling. Thus the elements of controlling are 1.Annual operating budget,
in a 2. Break-even
1. Settling standards of performance strategic poO1u
at analysis,
3. Ratio analysis,
organization,
 cONOMICS &
ECONOMICS IND IAL MGM1.(8.E. EN, EE) 203
ECONOMICS&INDUSTRIAL M ENGG
VBD ENGG. MGMT. y18D terest in the application of scientific methods
interest
(BE
202
review technique), who took to
(Program evaluation and ylor realised the detects of the industrial management
4. PERT ment. He
unugement in
programming and pondered over the practical method of
5. Linear his time making
vOgueat
6. Inventory
control, that it would add to the prosperity of both
so the
scientific
dhe workers. Thus sCientific management is the
7.Quality control, employers and
form
systems, nploy on
organisation and procedure evolved by a process of scientific
8. Logistics control
9. Computer systems
control, etc. of
of an and analysis rather than by tradition or the process of
investigatio
ylor was considered to be the Father of Scientific
Tay
and error.
0.24. What is Scientific Managenment? What a
al people call scientific management as
Management', and some
contributions of Taylor to it? IS-03,S-04(Eloris
Taylorism' also.
Ans. The term Scientific Management implies, fromitcVn te was only Taylor who clearly perceived the extent to which
name, the application of science to management of industrial units., cientific method could be applied to the problems of manufacturing.
.
is also an attitude and philosophy which rejects the traditional ysten first, he joined industrial establishment as a machinist. Within
of management or rule-of-thumb methods. In olden days, wha wh
he entered Midvale Steel
WorkS as a machine shop labour
single entrepreneurs were engaged in producing goods personah
Vears a clerk. By attending privately
and very soon raised to the position of
they were intent upon manufacturing their goods quich engineering, thus
aninstitute he could secure a master's degree in
economically and perfectly as they were directly benefited by
becoming a full-fledged engineer. He later
joined Bethlehem Steel
saving in time and effort. But now this class of sole entrepreneusi
as chief engineer. All his experiences in different companiesin
pushed to the background by the joint stock companies carrying eCo,
gave
iom different positions starting from machinist to chief engineer
production on mass scale. The immensity of operations of these
men him ample opportunity for studying the traditional process of work,
COmpanies necessitated the employment of numerous
the observing their defects, experimenting new methods and inventing
4ssignment ot duties at different level and supervision over
employees. Gradually the employees" individual attention declindcientific methods of work.
were
as the cale of operations increased
s
resulting in the appointment o Taylor saw that the workers were wasting time while they
SOme superVisory officials like foremen,
inspectors, etc. On the on engaged in the manufacturing processes. He noticed two main causes
and, the workers were not interested in the economy of either ttor the loss
of time. Firstly, the workers were deliberately slack in
or resources, but just did their learnt from
their work. The reasons for this slackness, Taylor
had ica
duties as they had performing

traditions asthey were not the direct beneficiaries of such e

Aplaned were () the basis of wage payment was t
They felt that there from the d Was
traditions as they were no not conducive some of
beneficiaries of such economy. need lo to hard work; (i) workers feared that
They felt that there was nono them
would felt that
them to strive hard or show Winslo be retrenched if they work hard; (ii) they also
OC retr
their best. It was Federic
 ECON
oNOM EN, EE)
204 VBD ENGG. ECONOMICS & INDUSTRIAL MGMT.
MGMT
(B.E. ENGG 205
from
efficiency on their part would only benefit th
the
EN, 9D
manageme
9management, ent, tight from planning and organising to directing
right
greater and
employ depende on effective communication.
dependent
reduction in output as are Any lapse
Taylor regarded this deliberate equivalen trolling, in
eatio
ation at any strategic point proves disastrous
rprised
stealing on the part of the workers. He was also surprised
communicati for an
toseeth organization can achieve anything
..ation.
rganization. No without the
the employers paid no attention to this deliberate wastaoe
tage. Second
meaningful communication. Effective communicationis
the methods used for performing the task were very upport of
ude an
Crudesupp which binds an organization together. Successful
n dge
unscientific, so that even an honest willing worker could dhe
the direction depend
direction
otprodi notivation and
depend upon the flow of understanding
to the maximum of his capacity. Taylor found that most of thetodk s aen in an organization. One-to-one communication is
between very
and apparatus used were not fitted. The managers too Wera securing employees interest and response in an
effective n
awake to their responsibilities for the many delays and wastages on. Co
organization. Communication1s said to be effective when the
Taylor, with the help of his associates H Gant, HK ormation is received by the receiver in exactly the same meaning
Hathaway, H. Emerson, and F.B. Gilbreth investigated on sender. Certain principles of
the as it was forwarded by the
problem of inefficiency and came to the conclusion that in mmunication should be followed in order to achieve effective
comparison to what was possible with scientific control, the variogeommunication.
communication.
industries were working at about 50 percent efficiency. He stated tha Principles of communication:-
it was the primary duty of every employer to develop by scientific The principles of communication are as follows:-
investigation, the best method of work and teach it to the worker
1.
Principle of clarity:- The language used to communicate
who should follow the same for good results. The traditional rule-of messages
must be clear, concise and distinct.
thumb must be given up.
2.
Principle of attention:- The receiver must be fully attentive
whilelistening to or while receiving the message so that he/she may
Q.25. Explain the importance of communication in understand it correctly.
management. IS-03, 05, W-04 (EN), S-03, W-04 (EB)
Ans. Communication is an exchange of facts, opinions, ideas
3. Principle of
integrity and sincerity: Adequate
i COmmn
or emotions between two or more people
to bring about mutuu murication about the company and its future to the workers
understanding and confidence. The ability Communicalte
commun thema sense of security and integrity towards the company
to
communication:- Informal
effectively is a critical element of effective management. Each
managerial position is a centre of communication. He
a Tinciple
Commu
of informal
dOn (in the form of grape, gossips etc.) is always present
communication is extremely important in management. as a
dlOn. They can be constructively and wisely used
Role/Importance of communication:- Every aspc aspect SUpr
ary channel for communication alongside the formal
management requires good communication. All Channels.
functo
 INDuSTRIAL MGMT
MT.(B.E. ECONOMICS& & INDUSTRIAL MGMT. (B.E.
ECONOMIcs
206
VBD ENGG. ECONOMICS & EN,ER ENGG.
EN, EE) 207

to communication? 99REPEATED SKED UNIVERSITY OUESTIONS

Q.26. What are the Barriers
(S-03, W-04
(E the evolution of management with respect to its
(1) Organisational Structure;- Organisational hierach o.1. Explainthought
Ans. [W-02, 03 (EN), S-04
barrier for transmission of message. This is due compley
t h schools of (EE)]
impose a arious P-165
organisational structure having
many levels of superiors,
superiors specialist 0.1,
communication between Q.2. Explain the nature and scope of management. Also
staff, pretty long channels of whethe management
is an art, or a science, or a profession.
management. discuss [W-02, 03, S-03, 05 (EN), S-04(EE)
(2) Status:- To every position in the
management hierarchy
hios
P-169)
certain status is attached. The status reflects
some importane
ance to 0.3,
Q.3.Differentiate between administration and management.
the
person occupying the position by others.
Subordinates becomes
hes
[W-03 (EN)
conscious of this status which reflects in their relati tionshin
to express their opinion or I0.5, P-173
Subordinates do not feel free report their various elements of management?
What are the
errors. This hampers communication. This barrier can be avojided b 4."Management inctions are universal. They are applicable
by
OR
free flow of two-way communication. situations." Explain.
S-03 (EE)
(3) Language:- Language is a medium of communication to OR "Management is a continuous process."
all Discuss what are

Misinterpretation of this media results into a distortionininGunctions management

management. [W-03 (EE)
thefunctions of
Communication Languages is represented by words or symbols 0.6, P-175] characteristics of a good
Misunderstanding is caused by the meanings of words & symbols Q.5. Define planning. What are the
W-02, 04 (EN)]
because they carry different meanings. These different meanings lead plan?
plan?

todifferent interpretation. 0.7, P-177

nature of planning.
(4) Communication gap:- Communication gap is created Q.6. What is planning? Discuss the
S-03, W-03(EN)J
when an idea is not accurately transmitted from one mind to another
IQ.8, P-177]
when mutual understanding is presumed. The Communicators in management.
idea is not perfectly reproduced in the mind of the receiver. Thi Q.7. Explain the process of decision-making
W-03 (EE
leads to creation of communication gap. Such gap should be
recognized to minimize the same. It can be reduced by not omitng 0.9, P-179]
process of planning?
the communicators messages, the words carrying the same meanng .8. What steps are involved in the (EN), S-03, 04, W-04 (EE)
IS-03, 04
removing fear and distrust from the mind of personnel's.
it [Q.10, P-181]
(5)Faulty Listening:- Communication is possible only when plan? S-04 (EN)]
fully Q9. What are the characteristics of a good
is received bý the recipient in his mind. One should listen
one Q.11, P-182]
what speaker wanted to say, failure will create a barrier. Ever
Q.10. Write short notes on:-
has different frame of mind. He understands the things according to [W-03 (EN)
ings acco a) Importance of planning.
his mental capacity & try to evaluate them. This can be avo of planning
both speaker & listener mutually understands each other. vantages of planning. c) Limitations
Q.12, P-183]
 08 (B
VBDENGG. ECONOMIcs & INDUSTRIAL MGMTT.(B.E.
EN,
UNIT V
Q.11. Discuss the definition and scope of organising RKETING MANAGEMENT
formed b
organization). What are the special functions performed by a gaod
organizations? management. Explain
Define market the term
OR Explain the steps in planning. S-04 (EE) Q.1.
IQ.14, P-187) management' with respect to its nature and scope.
rketing
Mark
Q.12. What are the various principles of organization? Explaa [w-03 (EE), W-02, 03, S-05 (EN))
the principle of unity of command and the principle of scalarchain
cho ao
Discuss the important intluence of marketing in the
Command. [S-04(EN)
enterprises. W-03 (EE)
1Q.15, P-188 gb-systems of
Q.13. Explain the concepts of centralization and Ans
The scope of marketingis not limited to only products
decentralization. W-04, (EE] services. There are different concepts and entities which can be
Q.19, P-194) andse
marketed.
efectivelymatac
Q.14. Mention the important forms of internal organization fectively
usually found in business enterprises. Meaning of management:- Management is a continuous
OR Discuss the line and staff type of internal organizations and ocess, which involves planning, organising. directing and
compare it with functional organizations. Thus give their relative
controlling the programmes/activities of an enterprise to achieve pre-
advantages. /W-03 (EE), S-05 (EN)J
I0.20, P-1951 deternined goals.
Q.15. Explain the meaning of direction in management. How
is Meaning of marketing management: Marketing
it important to an organisation? IS-03 (ENJ anagement the management of all the marketing programmes of
is
Q.21, P-1971
an organisations goals. Thus,
Q.16. What are the principles of direction? What are the organisation in order to achieve
essential requirements of good direction? IS-03,04, 05 (EN)] narketing management involves planning, organising, directing and
Q.22, P-199 catrolling the marketing process to achieve profitable sales to
Q.17. Explain the concept of managerial control. What are the atisfy consumer
demand.
different elements of control?
OR Barriers to communication in Management.
Marketing management is directly incharge of formulating the
keting mix'
(W-03 (EN), S-04, W-04 (EE)J and conducting the marketing
process.
Q0.23,P-200
Q.18. What is Scientific Management? What are the nition:- According to the American marketing association,
contributions of Taylor to it? gmanagement is the process of planning and executing
S-03, 04 (EE)) beconception,
I0.24, P-2021 pricing. promotion, and distribution of ideas, goods
Q.19. Explain the importance of Communication n
nd services
to
ganisational Create exchanges that
satisfy individual and
hanagement. IS-03, 05, W-04 (EN), S-03, W-04 (EE) isational goals.
Q.25, P-204) cope
Scov
of marketing- The scope marketing may be viewed
Q.20. What are the Barriers to communication? dertwoheads, ung of
/S-03, W-04 (EE viz.
/0.26, P-206 VDENGG.
ECONOMICS 209
ONOMICS
& INDUSTRIAL MGMT. (B.E. EN, EE)
 ECONOMICS
NOMICS& INDUSTRIAL MGMT. (B.E. EN, EE) 211
210 VBD ENGG. ECONOMICS & INDUSTRIAL MGMT. uGG.
ENGG.
(B.E.
(B.E EN,
1. The types of entities which are marketed, and EEgD simply sell
elling; but in fact marketing is complete 'demand

2. The functions/tasks of marketing.

not
nt. The
chief tasks, hich fall under the scope of
1. Types of entities which are managem are as follows
marketed:- These eting
dentifying target markets and segmentation.
rOadh
divided into ten groups as follows
dly nke
1.
(G) Goods (e.g. food, clothing, housing and commodities) dentifying the target markets needs, wants, and demands.
2.

(it) Services (e.g. airlines, hostels, maintenance 3.

Developing a product or offering to satisfy the target
and repairs
lawyers, engineers, accountants, consultants, etc.) gurker's needs,
wants and demands.

ii) Experiences (eg. spending a week at a cricket Camp Providing value and satistaction to the target buyer.
camm 4.
4.ro
playing with some retired cricketers, climbing Mount Everest) Effectively developing a relationship-marketing network.
(iv) Events (e.g. the Olympics, World cups, company sith customers, supplierS, and distributors' in order to retain their

anniversaries, major trade shows, artistic performances, etc.) ong-term preference.

(v) Persons (i.e. celebrity marketing) 6. Deciding upon the most effective and efficient marketing
(vi) Places (different places cities, states, regions, and nations chanels. Marketing channels are of three types, viz.
compete actively to attract tourists, factories, company (a) Communication channels (e.g. Newspapers, Magazines,
headquarters and new residents.) Tdlevision, Posters, CD's, internet, radio, etc.)
(vii) Properties, which may be either real property, i.e. real (6) Distribution channels (e.g. warehouses, transportation
estate) or financial property (i.e. stocks and bonds) ehicles, distributors,
wholesalers and retailers); and
(vii) Organizations. (various organizations like companie, C delling channels (e.g. those distributors, retailers, and banks
universities, etc. actively market themselves to boost their public Urance companies, which facilitate transactions).
1. Establishing supply
image). a proper supply chain of suppliers who
like all the
ecessary raw final
(2x) Intormation- (For e.g. various informative magazines li
prodiuct.
materials needed to manufacture the
Competition Success Review', 'Auto India', 'Computers Today etc.)
Some 8. Marketing
(x) Ideas (Product/services are platform for conveying managemen also involves being aware of the
Various
idea or benefit. For e.g. Pav-bhaji masala is a product which is forcesop forces
operating in the marketing environment. These
te-
on the idea that the consumer will be able to cook delicioUs mpetition, and
technology, population, government policies
les,natural
bhaji. Thus, the product is not just marketed all by itself, but a forces,
Orces,political forces and cultural changes.
with an idea/benefit.)
of ecidin ne scope of marketing management extends
2. The functions/tasks of marketing The Scop each target market.
when Nature marketing- mix for management
marketing (or marketing management) is tremendous of marketing management :- Marketing
Marketing sboth
red. v
various tasks performed under marketing are considered. ascience scientific point of
and an art. Looking at it from the
 ECONOMIcS & INDUSTRIAL MGMT. (B.E. EN, EE)
212 VBD ENGG. ECONOMICS & INDUSTRIAL MGMT ENGG 213
B.EENEE VPD The objective of selling The objective
view, it is evident that it is not an exact science li
ience like Objective of
physi is profit through sales marketing
1anagement
chemistry, etc. This is because marketing management is o.
is
4) is profit
concet volume. through serving
with satisfying human needs and demands. Human man needs customer
demands are ever changing and theretore management dealing an demand.
complex human beings is bound to be an inexact sc wit Selling takes it for Under marketing,
of theidea
though the theoretical base of knowledge, laws
and principles
5)Role
promotional granted that the product 1s that the product should
essential in certain areas like market research, demand foreead s to be sold anyhow. sell by itself without
casting efforts any
budgeting., research-analysis etc; but when the final decision s Hence a lot of promotional efforts. The
iss to
te
taken then human judgement, intuition and experience play promotional efforts are product should be just
theupper
une
hand. It is here that marketing management becomes art
an An
put into selling. right for the buyer.
efficient marketing manager will use the theoretical knowledge
and Components Selling consists of sales Marketing consists of
facts as a scientist; but he will apply this knowledge as 6)
an artist to promotion, advertising discovering buyers needs,
the target markets to create and stimulate demand and to deliver
and aggressive securing demand,
superior customer values.
salesmanship. fulfilling orders,customer
Thus, marketing management is both - a science as well as an
satisfaction, and repeat
art.
orders.

Q.2. Distinguish between Marketing and Selling. 7) Conditions of 'Selling' is mostly seen'Marketing' exists in
[W-02, 03 (EN), S-04 (EE)| existence in conditions of surplus conditions of relative

Ans. production, surplus affluence or during

Basis of Selling Marketing capacity or when buyers' market, i.e. when

distinction market has not been supply exceeds demand.

focus
1) Focus In selling, the focus is In marketing, the surveyed properly
on the buyer's needs 8) Place of Marketing considers the
on the seller's needs Selling considers the
with customer
Selling starts with the Marketing starts customer as the starting
2) Starting customer as the end
analysis of buyer'snee
point existing product point of a transaction. point of a transaction.
marketing
3) Aim The aim of selling is to The aim of Customer is considered to
customers
convert the product into to satisfy the be the purpose of the
of the

cash needs by means

business.
product.
 214 L MGNT
VBD ENGG. ECONOMICS & INDUSTRIAL MGMT.(B
(B.E.E ECONON
ccONOMICs & INDUSTRIAL MGMT. (8.E. EN, EE) 215

Q.3. Describe 'Line and Staft organisation. Give ive itsmer RDENGG,
W-02,03(E
ucive to organisation's development:. Line and
and demerits. 4. co
conducive to individual growth and thus
Ans. Line and Stafff organisation is a combination of ation is
organisation

the line organisation and the functional organisation. In

bo stat promotes an organisation's development. This is of
promo
a ulimately it
times of complexities and dynamic
organisation, there is a recognized chain of command, ie a importance in the modern
Sitpe er
authority-responsibility relationship between the superior and environmental forces.
organisation:
subordinate. And in a functional organisation each functi tion Demerits of "line and stalf'
administered and directed by a specialist/ group ofspecialistsn
i Generally, conflicts may
Thus between line and staff:-
1. Conflicts
itional funcion
in a line and staff organisation' there is an additional due to some reasons like
functi
arise between line and staff personnel
specialists to simple line organisation. rice
techni terms which the line people may
staff executives speak in
Thus, the advantages of both - the line organisation and
may feel that staff is
understand; or the line executive
functional organisation - are combined. There is discipline with not
unin

undermining their authority; or in

general, the staff is educationally
of command and there is expert knowledge of specialists.
better qualified than the
line executive.
Merits of line and staf organisation:
is costly as compared
1. Expert knowledge on specific problems: With theeve 2. Costly: Line and staff organisation
ficld
increasing advancements in knowledge and technology, the enper to other forms of organisations. The services of experts and
knowledge of specialists offer a great help to the department heads
specialists come at a price.
in-depth
and personnel problems can be solved easily with Misunderstanding of authority-responsibility relation
-
3.
knowledge.
ship - If the authority-responsibility relationship is not clearly
2. Fruitful division of work:- There is a fruitful division
defined and well-understood, there are tremendous chances of mis-
work between the line and the staff. The line section looksafterte
and conflicts. Also, it has to be made clear
doing or executing function' and it is in-charge of implementing theanagement
Simultaneously that all managers have a relatively vital task to
plans and schemes prepared by the staff section and duly approved
by the line manager. The staff section performs the thinkng Pertorm-only then there can be a spirit of co-operation.
function' and it is in-charge of effective thinking, delioerl
planning .4. What are the various concepts of marketing under
ation the
3. Effective delegation:- In a line and staff organisatid whic
the ganization conduct marketing activities? Explain each
delegation of operational duties is to the line subordinates, one of
Thus
them.
delegation of administrative duties is to the staff subordinates.
OR What is the meaning
if an executive wants to relieve himself of some of his adminitrat of marketing concept? Describe
lin
theevolution IS-05(EN)I
burden, he may entrust it to a staff assistant rather than to his of marketing concepts.
OR
subordinate. wnat are the different philosophies/ orientations,
h guide a
company's marketing efforts?
 RD ENGG EcONOMICS & INDUSTRIAL MGAT
GMT.(BEB ECONOMICsa
cONOMICS &
INDUSTRIAL MGMT. (B.E. EN, EE) 217

OR Marketing research is the first step in develop

ENGG
velopine R0 tastes/needs and competition. Very little emphasis is
consumers
profitable business". How and why? S-03(E as rketing efforts.
OR How does modern Marketing concente pts differ aidon The selling concept orientation This concept was
ller
LW-04
id t3. 1930- 1950. This concept points out that
selling?
in the west during
Ans. Meaning of marketing concept -
Every (E
prevalent
a
will not purchase particular product on their own.
organi
has a distinct approach towards marketing management.This anisation has to undertake various selling and
organisation
Thedi
approach is based upon various considerations like hethers promotional effort to timulate more purchasing". Under this
tional eft
company wants to place more importance on the inter erests of selling techni
aggressive selling techniques and advertising are of prime
concept,
organization of the customers of society. Usually thesemtle appropriate example ofthis concept is the political
importance. An
conflict with each other. Hence, marketing activities have candidate. The candidateis aggressively marketed
toh vassing of a
caried out under a carefully planned approach. This
This approac
an political party through radio advertising, posters, banners
by the
philosophy of an organisation with respect to marketing s knovna pamphlets, oor to door campaigns, etc
ublic meeting.
Puby
insurance,
the marketing concept. It is the philosophy, which guid selling concept is generally practiced in case of
The
company's marketing efforts
eivinginformation, etc. Those firm who have over capacity of
Different concepts of marketing/evolution of markti production generally practice the selling concept
ukdi
concepts - since the industrial revolution, marketing are 4. The marketing concept/ orientation - This concept came
1. The Production concept/ orientations: The produ into being only in the mid- 1950. It is called the modem marketingg
concept (or philosophy or orientation) states that "consumers vl concept. The focal point of this concept is the customer and not the
an
prefer those products which are widely available and product. It emphasizes customer-oriented marketing process. Thus, it
inexpensive." The organisations which adopt the productia is different from the selling concept. Under the selling concept, the
orientation,concentrate on achieving high production efficiencyla needs of the seller are important, while under the marketing concept,
costs, and mass distribution. This concept works well n
the needs of the buyer are important

developing countries. It is also used when a company wans The Marketing concept states that
"an organisation should be
expand is market. It is the oldest marketing concept. more effective
than its competitors in studying the needs,
2.The product concept/ orientation : This
concep demand and values
of the potential customers and in producing
prevalent in the west prior to 1930. It states that "consumers oering the products, which will give the desired satisfaction
quality,
god to the customers."
customers
prefer those products, which are of superior
izatit The marketing
pertormance or have innovative features". Those Oga concept or philosophy has four pillars on which
which believe in the 'product concept' only ncentrate on inpr it stands-
lac 1. Target
their product(s) without giving proper attention to other market.
 218 BD ENGG. ECONOMIcs &INDUSTRIALMGMT.
MGAT
(BE. INDUSTRIAL MGMT. (B.E. EN, EE) 219
E cONOMICs &
Customer needs,
2. ENGG.
VBD does modern Marketing concepts differ from
3. Integrated marketing, and Q.5. How [S-03 (EE)
4. Profitability. Selling?
Thus, it starts with a well-defined target market,focusey Ans. Marketing
Selling
customer needs, coordinates activities of all depa the seller | Marketing starts with the
1Selling starts with
achieves profits by satistying customers. preoccupied all the buyer focusses constantly on
and is
The marketing concept with the needs of the the
needs of the buyer.
time
seller.
Starting point Target Market with the Under marketing all
Selling starts
2 activities activities and products take
corporation's existing
Focus Needs of the customers the direction from the
andproducts. consumer and his needs.
Marketing emphasises
Means Integrated marketing or system
3. Selling emphasises saleable
approach to marketing surpluses within the identification of a market
corporation; seeks to convert opportunity; seeks to convert
into cash'; 'customer needs into
Ends Profitability through products'
products; emphasises
customer satisfaction emphasizes getting rid of the
stocks; concerns itself with | fulfilling the needs of the
5. The societal marketing the tricks and techniques of customers.
concept/orientation Thi
getting the customers to part
concept gained popularity since 1965, under environmentl
with their cash for the
approach. The societal marketing concept broadens the scope ofte
products available with the
marketing concept. It states that. " an organisation should be more
salesman.
effective than its competitors in understanding the neds 4. Selling over-emphasises the Marketing concerns itself
demands and values of the potential customers and in providu exchange aspect without primarily and truly with the
them the desired satisfaction in such a way that the consume caring for the value value satisfactions that
and society's well-being is preserved or increased. Satisfactions' inherent in the should flow to the customer
nsible
This concept lays greater stress on socially Tespoi exchange. from the exchange.
antiy
marketing. An organisation should contribute not only to thequ
5.
Views business as a 'goods Views business as a
of life but also to the quality of life. The socC1al an producing process. customer satistying process".
considerations should be cared for while marketing ay
6 C seller determines what What should be offered as a
service. For e.g. various issues.like food, air and water po
bio degradable products etc have to be considered by the co
product' is to be offered. product is determined by
the buyer.
 ECONOMICs INDUSTRIAL
INDUSTRIAL MGMT. (B.E. EN, EE)
MICS & 221
220 VBD ENGG. ECONOMICS & INDUSTRIAL
AL MGMT.
MGMT. (B.E.
(B,E ENGG.
EN,ER a product? Evaluate the importance
The 'product' precedes the The product as
D What is price of
Q.6.
marketing effort; the consequence the marketing pros
marketing programnme.
of in
in a
the pricing
marketing effort becomes the marketing effort leads [S-03, 05, W-03 (EN), S-04 (EE)]
consequence of the product products the consumers Introduction:- Marketing is impossible without the
on hand. would actually want Ans.
to bv Price is the value of a product/service expressed
in their own interest. existenceoff price.
8. In selling; packaging is In marketing, it is seenfrom terms. When a buyer and a seller agree upon a price, only
ns. Wh
money
essentially seen as a mere the point of view of the in exchange transaction. All organisations (profit
ean be an
there can
protection or a mere container customer; it is designed uhen
t and non-profit
oriented) set prices on their products and
for the product. provide the maximum oriente
names ot prices. For e.g., price for
possible convenience andvices. Theto There are different
satisfaction to the customer. called 'tuition fees, price for the services of a
cation is
education 15

9. Cost determines price. Consumer determines price; fees'; price for land and building is
professional is called 'consultancy
price determines costs.
an or manager is called 'salary':
10. Transportation, storage and They are seen as vitalcaled'rent'; the price of executive
other distribution function are services to be provided tothe nricefor the use of borrowed money is called interest' and so on.
perceived as mere extensions customer not grudgingly. Generally, price is considered as the most important factor affecting
of the production function.
abuyer's decision.
11. The emphasis is on The emphasis is on an
'somehow selling'; there is no integrated approach through Meaning of price:- Price is the exchange values of a product/
coordination among the an integrated strategy Service
expressed in money. For a consumer, it stands for the value
different functions of the total covering product; promoudof the physical
product as well as the bundle of expectations or
marketing task. pricing and distribution.
All departments of theactions
associated with that product. The various expectations
12. Different departments of the
business operate as separate business operate in cIose eatter-sales service, technical guidance, replacements, credits,
the sole accessories,
integration with warranty, etc.
watertight compartments.
producing
purpose of
Or a marketer,
satisfaction. price is equivalent to total product offering. It
consumer includes
practising
practisine the physical
13. In firms practicing 'selling' In firms product. plus a brand name, a package delivery,
marketing is the CFredit,
exchange
production is the central 'marketing' facility etc.
the entire
function; sales is a central function; In a marketing
organised around
urketin
marketing-mix. programme, price is an element of the
subordinate or secondary company is
function. the marketing functio
t
is the only element of marketing mix, which generates
 &INDI
ECONOMICS & INDUSTRIAL MGMT. (B.E. EN, EE)
ECONOMICS
MGMT. 223
222 VBD ENGG. ECONOMICS & INDUSTRIA MC (B.E. ENGG.

(1.e. product, promotios

tion and
EN 99 Place
revenue. The other elements p Product 1. Channels of
generate costs. . Brand
Quality
distribution
2. Coverage area
most flexible element. whichcan 2 Design
(2) Moreover, price is the
3. Marketing- Mix 3. Assortments
quickly. Style
changed and/or adjusted 4. for a target market 4. Locations
Features
price is the most challengingpro 5. Packaging 5. Inventory
(3) On the other hand, 6. Transport
6.
facing an organisation. The price of
a product or produet 7. Sizes
pricm Services
ctive markeim 8.
must be accurately handled in order to achieve effectiva 9.
Warranties
10. Returns
results.

Price
Promotion
Q.7. Write a short note on 'Marketing mix'. 1. Personal selling
1. List Price
(W-02, 03, 04, S-03, 04 (EN), W-04 (EE 2. Discounts
2. Sales promotion
3. Allowances
3. Advertising
Ans. Various tools and activities are used in the processd
4. Terms of Credit 4. Public relations
marketing to generate a desired response from target markets 5. Payment periods 5. Direct marketing
such tools and activities are jointly termed as 'Marketing mix.
Definition: Marketing-mix is based on marketing research and market
"Marketing mix is the set of marketing tools that a firm usesinformation, Tt for each target market. Thus, the
is decided
pursue its marketing objectives in the target market" marketing- mix decision will naturally be changing according to
Elements components of marketing mix: [S-04(EBchanging marketing conditions and other environmental factors
McCarthy classified the various tools into four Dtechnical, social, economic and political) for each target market.
roducl
groups, which he called 'the four P's of marketing' 1. nus, in order to achieve a successful marketing response, the

2. Price, 3. Place, and 4. Promotion. ngmix decision must be accurately related to customer
demand,
A marketing manager is a
ents
ents Competition and other influencing factors.
mixer of all four elen
marketing. By mixing or combining the 4 Ps of market keting in t POtance of pricing:- Pricing is a very important decision
n any marketing when:
orogramme. This decision needs to be taken
most cost-effective way, he develops a profitable formula
0a firm
develops a new product, or
marketing operation. Gi) a or.
product into a new market,
Variables under each P of marketing The diffet
ntroduces
(ii) a firm
its regular
enters bids on new contract work
show Pricing
variables under each element or each P marketing as is priced low,
of marketing are
a mu
ust be accurate because if a product
of
 cONOMICS & INDUSTRIAL MGMT. (B.E. EN, EE)
ECONOMIC 225
224 VBD ENGG. ECONOMICS &INDuSTRIAL ENGG
ENGG.
ge1000.00 = 16/- and the target ROI is 20% then the
the unit cost
MGMT. (B.E. E
then the decision cannot be changed
so easily. On the
99 00
determined as follow
ntrary
priced product may end up being a failure Conts pricei is
desiredretur
orice
just because of its selling cost+estred retun X invested capital
price. Hence pricing must be carefully planned
from the
high hialn price = unit sales (in units)
very Selling
beginning
x10,00,000=
Pricing decisions directly affect the various Tinancial 0.2 Rs.20/
objectie
tives 16+. 50,000
=
ofan enterprise such as
1. Sales volume, 2. Profit margins, 3. Trade Thus, at a
per unit selling price of Rs. 20/- the target rate of
margins, 4.Ra
te will be achieved (provided the sales of 50,000 units
of return on investment, 5. Product image, 6. Advertising and sales saleun relurn of
of
209
0

promotion, 7. Market share, and 8. New product development. e

achieved).

Thus, pricing is an extremely significant element of marketino Perceived-value pricing:- In this method, the sellers costs
mix.
eting
.important for deciding the price of
a product. Instead, what a
ae not
lieves to be aproduct's' value' considered for pricing
is
customer
priced higher than its
Q.8. Explain the various methods of pricing a product. te product. Even though a prOduct is
up in the
S-03, 04, W-04 (EN)J|0mpetitors, the image of products, superior value built
is
OR What is cost plus pricing?
Ans. The various methods of pricing a product asomer's minds through advertising and sales promotion. Thus,
may be

explained as follows: buyers are convinced of the higher price.

1. Cost-plus or mark up pricing: In this method, an 4. Going-rate pricing or market based pricing Here, a
additional margin of profit is added to the per unit cost of production price mainly on the competitor's prices. The firm might
imbases its

to decide the selling price per unit. The additional margin of profitisstthe same price as that of the competitor or even higher or lower
known as 'mark-up. It is generally expressed as a percentage ban that. This is generally seen in oligopolistic markets. (e.g. steel

When the mark-up is based on cost, then the mark-upndustry,paper, etc.)

percentage is calculated as
Mark upup (in rupees)100
rupees) , Sealed-bid pricing This method is used when a firm
Cost price Dmis a sealed bid (tender) for a job. The firms price is based on

When the mark-up is based on selling price ; then the nm

ate of the competitors price rather than on its cost. The firm
Mark-up (in rupees)100
Kup rupees) ower winning the contract and hence generally it submits a
percentage will be price bid. But,
Selling price at the same time the price bid is not below cost.
price.
Usually, mark-up is stated as a percentage of selling ch a 9.9.Define
The selling price is set in suci and explain a channel of distribution. Which are
2. Target-return pricing: ofn
Ahe
differen
rate of reu
manner that it enables the firm to get its target marketing? channels of distributions generally used in
in business
investment W-04 (EE)]
investment (RO). For e.g.. if the W-03, S-04, 05 (EN), S-04,
 MGMT ECONOMICs
226 VBD ENGG. ECONOMIcS & INDUSTRIAL GMT.i(B.E.EN, ENGG.
s& INDUSTRIAL MGMT. (B.E. EN, EE) 227
E
of various cho.annes 8D Sale through traveling sales force,
OR Explain the relative importance
b) through manufactures own retail shops.
distribution. ale
distribution in marketing, are the channel is generally suitable for industrial
Channels of
Ans. channels type of This goods
flow from the very specitic. This channel is not popular
pathways through which goods and services produc
whose
buyers are for a
for consumer goods.
to the ultimate consumers. wider
market, 1.e.

Traditionally, the channels of distribution included nly Manufacturer - Retai -Consumer channels:
t channe) goods move from the manufacturer to the
'channel,
merchant, middlemen, agents and brokers. However, underhe In this
nel of
modern concept of integrated marketing, a channel of distribution
distribus: where theul imate consumer can purchase the goods.
tailer from
is retail
considered to be a system of flow:- holesaler is by-passed in this channel. Hence, the manufacturer
The

1.Flow of goods and people, perform the functions of a wholesaler such as storage,
has to

2.Flow of ownership and risk of loss, insurance,

transport, inventories, etc.
This channel is suitable when goods
are perishable and speedy
3.Flow of information,
buyers are large retailers, for e.g.
4.Flow ofpromotion, ordering, payments, and financing, and ictribution is essential. Also when
5.Flow of negotiations and transactions. departmental stores etc., this type of channel is preferred, e.g.
Components of a channel of distribution:- The variou automobiles, appliances, clothing, shoes, etc.
one or
3. Manufacturer-Wholesaler-Retailer-Consumer channel
people/ institutions which are connected to each other by
more marketing flows are the components of a channel d This is the most frequently seen channel of distribution. This
distribution. Generally, these components are:
channel is suitable when a manufacturer has a limited product line,

a) Producers/ manufacturers,
Iimited finance, when the product is durable and not subject to
Seasonal changes or changes in fashion, etc. and when the wholesaler
b) Merchant, middlemen such as wholesalers and retailers,
canprovide
brokers. a strong promotional support to the manufacturer's
c) Agent middlemen such as commission agents,
products).For e.g.
groceries, drugs, etc.
warehouse keepers etc.
d) Other facilitating agencies such as common
carriers. *Vanulacturer Agent - Wholesale-Retailer -Consumer
channel
bankers, advertising agencies, etc.
keting
Different channels of distribution generally used in marne s channel, the manufacturer uses the services of agents
who
distribute
the goods to wholesalers, who in turn sell to retailers
1.Direct sale channel or manufacturer-consumer cua
directy nere the ultimate consumers can purchase.
This is the shortest channel of distribution as a product is Suchchann textile mills (in
available or the ultimate consumer from the manufacturer. Surat, of distribution is widely seen in
Ahmeda
medabad) and also in agricultural marketing.
alternatives are possible in this channel The ager tasks and
a) Sale through advertising and direct marketing the
relieve the manufacturers of marketing
a
receive commissions on their sales.
 ECONOMICS&INI
INDUSTRIAL MGM ECONOMICS&& IND
INDUSTRIAL MGMT.
VBDENGG. (B.E. EN, EE)
228 (B.E.EN,E ENGG 229
Manufacturer-Wholesaler-Consumer channel .
89 Marketil environment:-During depression,
a shorter and
5. 4.
by--passed. The consume preferred. During boom, the choice of available
In this channel, the retailer is directly channel is
heaper
approach the wholesalers to make their purchases. In such case, wide. Technological advancements like cold

consumers are generally large and

institutional buvere
such
e the Annels isbetter packing
hannels
cilities,
materi
cking materials,
storage
faster modes of communication
houses, hospital
hosni 1siderable impact on distribution channel decisions.
government, consumer co-operatives, business S,
als, etc. have consi
all Competitors:- The use of a channel by
competitors also
5.
0.10. Which factors intluence /govern the choice of ences the
channel decisions for a producer.
channel of distribution? W-04(EE
Ans. The most basic fators which govern the selection a Q.11. Write a short note on discounts and allowances.
channel of distribution is the cost of the channel. Various other Ans,
Discounts and allowances are price concessions offered to
important factors are: nders or buyers in the form of deductions from the list price or from
1. Nature of the product:- nature of the product,nt of bill or invoice. They are forms of indirect competition.
The
determines to a large extent the choice of a channel of distribution The
various forms of discounts and allowances are:
For e.g., a delicate and perishable product, a speedy and short
1. Cash discounts -
It is a price reduction to buyers who pay
channel of distribution is needed. Durable goods can be moved
afall cash or by cheque within a short period. The period to avail
through longer and diversified channels etc.
the cash discount is usually 10 days. Cash discount is calculated on
2. Nature of market:- Goods which are consumer goods
amount due after deducting trade and quantity discounts from
require a retailer as the consumers are numerous and they purchasenet
list or catalogue price.
in small quantities. For industrial goods, the retailer maymany al
be

eliminated. When the market size is large, there can be 2.Quantity discounts:- It is a price reduction to those buyers
channels, while in a small market, direct selling is convenient and uy in large quantities. They can be offered on a non-
profitable. The size and average frequency of customers orders as ve
basis (i.e. on each order placed) or on a cumulative basis
onthe number
influence the channel decisions. of units ordered over a given period).
Buying habits of the consumers also effect the selection o 3.Trade
discounts/functional It is given to those
ping
discounts-
channel. For e.g. desire for credit, preference for one-stop shop
who
ayment
buy for resale, e.g.
wholesaler or retailer. It is given
in
demand for personal services, etc for marketing
rovio erform. functions which these traders are expected t0
3. Specialisation of middlemen :- If middlemen can pro
the
the desired specialized services, then they are included in
included 4.Seaso
channel. The various services desired form middlemen are a
stroll
al
hobuydurin
buy
discounts-It is a price reduction to those buyers
during
promotional support. high market penetration and
successtu
asonal c Slack season. For e.g. hotels and airlines offer
discounts
marketing to wholesalers. in slow selling periods.
 ECONO
cONOMICs
ENGG.
ative
ertising- (1.e. to inform consumers about a
O Informati benef
benefits);
services and its
INDUSTRIAL MGMT. (B. E. EN,
230 VD ENGG. ECONOMICS &
Bo

5. Allowances
aroduct/ advertising (i.e. to persuade and convince the
advertising:-
Persuasive
and superiority of a
(a) Promotional allowances These are payments or price
priea (c) regarding the effectiveness
ence
reduction towards dealers for participating in advertising and sale.
es uger product/brand)
window splayular
displawiular pro (1.e. to remind the people to
support program, e.g. advertising allowance, y Reminde advertising
which are in the
allowance, free samples, free display materials etc.
(d) product. It is used for product,
urchasea
particular
uctions
(b) Trade-in allowances:- These are price reductions granted long time).
buying a new one. rketfor a concerned with the advertising
for turning in an old item when Money :- This factor is
Discounts and allowances are very common in wholesale
and 2)
company. The various
aspects to be considered are
a
retail trade of manufactured goods. udgetof
:- (New product generally requires
stage
Product fe-cycle
(a) a lower advertising
concept of 'advertising' in advertising; while established brands have
Q.12. Define and explain the urge
developed?
markeling. How is an advertising program udget)
base:- (Products having high
W-02, S-03 (ENJ(b) Market share and consumer
in nilnd for developing anetshare and high consumer
base require lesser advertiSing
OR What factors should be kept
cxpenses as a percentage of sales).
advertising program?
advertisements- Products
OR Explain the importance of ratio analysis. () Competition and crowd of
to be noticed.
IS-03, 04, W-03 (EE); S-04, U5 (ENIaving heavy competition need heavy advertisement
program Berore Aso, if there is a crowd of advertisements in the market, a product
Ans. Development of an advertising
proceeding to develop an advertising program, it
1s necesSaly
ll have to be heavily advertised.
the target market and the motives of
the buyers. For
every
d) Advertising frequency:- Greater frequency of an
identify
target market, the advertising program has to be
different, Dee ertising requires higher budget.
different. Image establishment:- (Commodity class products like
the needs and demands of the markets are
Factors to be considered while developing
program -Five major factors or decisions
an adver
are necessary
s
ge)
colas, etc. requise heavy advertising to establish a distinct
M's
3)Message
developing an advertising program. They are known
as the five
and desired
- The advertisement message should be such that
Media results
of advertising Mission, Money, Message, s are achieved. To develop a creative strategy, there
IOur steps, viz.
Measurement. an lecr
clion;
Message generation, message evolution and
the objectives and aims
o message
1) Mission It means execution; and social responsibility review.
may De Media 4)
advertising program. Typically, advertising objectives in a
Tedia
channe
involves deciding the most cost-effective
This
certain level of sales nel and the frequency It also
(a) Sales goals:- (i.e. to achieve a of the advertisement.
certain market within acertain time);
 INDUSTRIAL MGMT. (B.E. EN,
ONOMICS & EE) 233
232 VBD ENGG. ECONOMICS & INDUSTRIAL MGMT. ENGG.
(B.E. E
EN,
E D constumers can get not only goods at lower price but also
involves deciding the timing of the chosen media and whe Thus, quan
ere to standard
quality and quantity.
ard qualny
allocate the chosen media in terms of geographical area, i.e.
dsofAdvertising has educative value also. It teaches us to adopt
whe
i.e. whether
heth
to opt for advertising in local newspaperS only or in national dailt 6. life and a higher standard of living. It can educate the
dailies
etc. ways of life
life.
demand quality of
5) Measurement: This means evaluating whether
a unity to
advertisement was effective or not. One aspect of measurementie
messages are created.
isto
evaluate the communication effect of an advertising (1.e. whether Q.14 Explain how advertising
created awareness, knowledge, or preference for a product). Anotbe
it
OR What is the strategy to select an appropriate
ner
aspect is to measure the effect on sales due to an advertisement gdvertisingmessage?
Introduction:-advertising message has to be
An
Ans.

Q.13. Explain the importance of advertising in theineloped with creativity

because the message must catch the
target audience. In addition to being creative, the
competitive market. [W-04 (EE) Mtention of the
Ans. Importance of advertising message must be presented to the audience in the most effective
. Advertising stimulates production, employment and icomefomat and in a socially responsible
manner. Thus, advertisers have
o follow a specific strategy or procedure to create an effective
leadingto rising purchasing power and better 1living standards.
2 Commercialization of inventions, accelerated public advertising message.
acceptance of innovations, new products, etc. can be realised only Strategy for creative message generation- There are four
due to effective mass communication or advertising main steps
to create an advertising message, viz. 1. Message
3. Informative advertising enables consumers to secure relevant gneration, 2. Message evaluation and selection. 3. Message
and adequate information about all rival products and their relative Ccution, and 4. Social responsibility review.
merits. Thus, advertising helps consumers to exercise their rightto 1.Message generation
choose and buy a product or service intelligently. 0The advertising message should be selected
and mass (n) Generally,
4 Advertising facilitates mass production the consumersS base a message on the
w apectation
distribution. Thus, facilitating lesser unit cost of oroduction as of benefits from the product.
u
as lesser unit cost of distribution. Scientific management reduces particular The nature and tastes of consumers, how they use a
product
cost of distribution. Marketing research can be used to reduce
u
THessage and the nature of the product is also important for
ising generation.
cost of all components of the marketing mix including advertisiug
0newhich 1al alternative ad themes are created so as to select
the
Reduction in costs enables corresponding reduction in prices.
5. Advertising builds up brand preference and brand loyalty.
the
. is
Message
excellent.

these possible keen competition unless u evaluation and selection:

the long run are not under () The alternative
improved by oy the itheach messages are to be evaluated and compared
brand quality is maintained and steadily improved other.
manufacturer. a (i) The
criteria used for evaluation of a message uc
ability, ,exclusiveness
and believability of the message
 ECONOMICS & INDUSTRIAL MGMT. (B.E. EN, EE)
ENGG.
235
234 VBD ENGG. ECONOMICS & INDus AL MGMT.
(B.E.EN, D Agent
middlemen, such as commission agents, brokers,
(iii) Market research is undertaken to decide whichmessap arehouse-keepersb) etc.
has the maximum appeal with its target audience. facilitatin agencies, Such as common
her facilitating
All other carriers,
3. Message execution:- agencies, and so on.
kers,advertising
) The selected message should be presented to the aud nce channel includes both the manufacturer and the
in The rate of
the most appropriate style, format, tone and words. onsumer as well as intermediaries. These components are
(ii) There are various execution styles for a message likemtimate
ike linkedin the channel system by one or more of the marketing flows,
or image, fantasy, musical, personality symbol, scientific eviden efer of
transfer of title or ownership, physical movement of
technical expertise etc. such as
chandise, transmissions of
marketing information and the flow of
(iii) The factors to be considered for an apPpropriate formata oerchau payment of prices and other
other dues.
form of
the am of payment dues.
advertisement size, colour of the advertisement and pictures oney in
Directing and controlling function of management:
illustration responsibility not only of
(iv) The tone of the advertisement must be appropriate. Various a)Directing: The managers have the
nlanning and organising the operations but also of guiding and
tones may be: positive tone, humorous tone, subtle tone, etc.
su supervising the sub-ordinates. This is the managerial function of
( The words of an ad should be memorable, creative and
direction. Direction has three essential components:
that they are quick on catching attention.
a) Issuing of orders and instruments.
4.Social responsibility review b) Guiding and teaching sub-ordinates in the proper methods of
(G) The advertising should be within the social and legal noms
WOrk.
(ii) False and deceptive advertising should be avoided
(111) A socially responsible advertisement means that the c)Supervising the subordinates to ensure that their
any nance contirms to the plans.
advertisement must not hurt the sentiments of ethnic groups,
b) Controlling: In- terms of managerial functions, contro
caste/community/race or special interest groups.
consists of the
steps taken to ensure that the performance of the
Q.15. Write short notes on:
gnSation confirms to the plans. Unless the management is able to
) Channel of distribution, (ii) Directing and contro of tOurse C of the objectives of the organisation clearly and chalkout the
action for their attainment, effective control is not possible.
function management, (iii) Advertising and (iv) Methou (ENI he
/W-02 Teatures of the process of control is that it is forward
costing. iat.b0okir
marketing oking. t Amanager
Ans. () Channel of distribution: In the field of which Ahem
anager can study the post, note the pit falls and avoid
through in future
channels of distribution indicate routes or pathways sumes to prevent their recurrence.
goods and services flow, or move from producers to institutions
cO ii)
Nolved,vi
Advertising: In the marketing of every product, 4Ps
are

Thus, distribution channel is set of marketing

ved,
HOWn
viz. product,
PrOduct, prices, promotion and place. These
are als0
movo as
participating in the marketing activities involved in the hird the 4P's of any marketing mix. Advertising is a part of
OT an
the
othe P i.e. Promot
the flow of goods or services from the primary producc which omotion' of a product. Thus, advertising is a tool,
is
ultimate consumer channel components are: E o promote a
product in the target markel.
a) Middleman, such as wholesalers and retailers.
 STRIAL MGMT. (B.E. EN, EE) 237
236 BD ENGG. ECONOMICS & INDUSTRIALMGMT.
MGMT
(B.E. ENGG.
ECO

Meaning of advertising Advertising is a

is a fors
E wD
Various
methods of costing are:-
form
communication. The basic purpose of advertising
sing is
is to
to make
of
n Output or single costing:- This system is applied in those

a single commodity, so that there is a

target audience and the public aware about the exis undertakings
ardakings
which produce
nce
production. This system is applicable to mines,
product/service. Other purposes may be to persuade and con natural unit
of
ement works, paper mills, dairies, breweries,
target audience to purchase the product/service. Sometimss collieries,
steel w
advertising is also used for educational purposes. For e.g. factories, etc.
hber factorne
to spreu rubber
Departmental cost accounts:- This method of costing is
messages regarding the ill effects of tobacco, certain
ain diseases 2.
diseac.

Thus, not only business firms, but also non-profit and pubi Used where
e a factory is
divided into a number of departments and it
ascertain the cost of ach department separately.
desired to
organizations make use of advertising s accounts are usually associated will single cost
rtmental cost
Advertising is always a paid form of mass-communicatio
accounts.
because the advertiser has to pay for the space or time in which t
3. Contract or
terminal costing:- This method is suitable for
advertisement appears. ontractors who receive definite
orders for execution. Contract cost
of each cotract from time to time
Definition of advertising- "Advertising is any paid form aounts disclose the accurate cost
non personal presentation and promotion of ideas, g00ds. or servic during its course of completOn.
of a product
Process costing:- Where the manufacture
4.
by an identified sponsor". it is desirable to
involves several process or operations and where
Distinguishing features of advertising
know the cost of each process of production, process costing method
(i) It is non-personal, i.e. there is no personal face -t0- fae is employed.
communication. as a
Job costing: When each individual order is regarded
D.

ii) It is paid communication, i.e. the advertiser or the sponsu 00 and as a separate unit for costing purposes, then job cOsting
has to pay for it to the concerned media owner. method is
used. For e.g., an automobile garage undertaking repairs ot
(11) It is in various forms, i.e. it reaches to many peopie y a printing press, etc.
time. Multiple or composite costing:- It is suitable to those
0.
busines
(iv) It is in various forms, i.e. print media, audio advetisen CS Which produce a number of articles having relation with
T.V., internet etc. eanother either in the method of production or in the stores and
an materials
iv) Method of costing: The general principles of cosu used in production. e.g. Hosiery goods, leather goods,
production
from of books, etc.
universally applicable. However, the method of costing differs
sting.A 1.Operating
ndustry to industry. There are many different methods of cost or working cost method:- It is applied to those
wwhich Takingswhich rather than produce
a
COsting
business concern chooses that system or method of costl Commodity. perform Some service
suits its nature, conditions, requirements and size. Ompani
ompanies,
e.g. Public utility concerns like electricity boards, gas
railways.
etc.
 VBD ENGG. ECONOMICS & INDUSTRIAL MGM & NDUSTRIAL MGMT. (B.E. EN, EE) 299
ECONOMICS
ECcor
ENGG
8. Batch costing:- In case of factories which havehave
topro to D number of exposures (E) is given by - E-RxF
to make a product, pro Total
large number of parts in order prodtuct
undeakes )
knownas the groSs rating point (GRP),
production of each part in batches. Hence, the ost of
cost of each
act is
ot cxposures
exposures (WE) are given
Weighted number
number of
batch D (WE) are given by
For e.g. factories Weighted by

lot is ascertained separately. manufacaring )

cycles, cars, etc. RxFxI
9. Standard costing method: This method of costin iuortiser has to decide within his budget, the most cont-
advertiser
The
concerned with the comparison of actual performance wilith pe ombination of reach, frequency and impact
a tive
arranged budget or standard and the analysis of the financial fective
Choosing a media type
any deviations (called variance) therefrom. This method permi 2.
advertiser has a wide variety of media to choose from. It
management to investigate the reasons for these
se variances.
variances. IIt iis () An
necessary to
know the capacity of a particular media type to
known as a system of cost control or cost ascertainment
is required reach. frequency, and impact. Also the costs,
deliver the
should be ascertained so
Q.16. What are the various decision that need to betalkens Kendantages and limitations of each medium
select a media for advertising? advertising budget may be properly allocated among
(EE)the
OR Explain what is media selection and how it is done.
different media.
Ans. Process of media selection consideration of
Media selection means finding the most effective meia () The selection of a media type involves the
med arious factors. For e.g. where a product is to be advertised, the
channel to carry the advertising message. The process of
variousfactors considered are the media potential for
demonstration,
selection involves five basic steps, viz.
1. Deciding the reach, frequency and impact of teyisualisation, explanation, believability and colour. Similarly, where
advertisement, cost is important then newspaper advertising is relatively the
2. Choosing a media type cheapest.
3. Selecting a specific media vehicle,
(1) The different types of available media are newspapers,
4. Deciding on the media timing, and
5. Deciding on the geographical allocation of the media.
television,
direct mail, radio, magazines, outdoor advertising.
1. Deciding the reach, frequency and impact o eephone advertising, internet, newsletters, brochures, etc.
advertisement eholos
iv) media types also include best-selling paperback
or housc books,
) Reach (R) is the number of different persons movie theaters.
movie videotapes, catalogues, data sheets,
etc.
exposed to a particular media schedule at least once durug S. Selecting a specific media vehicle z
specified time period. Decifiel
deciding the type of media, an advertiser has to select
t
(ii) Frequency (F) is the number of times within the sp amost
time period that an average person or household is exposeuto
t cost-effective
media vehicle within the chosen media.
(i) For this, an advertiser estimates of
message. audience needs to have proper
(ii) Impact (I) is the qualitative value of an exposure size, cost
perthousand audience quality, composition of the audience and
given medium. persons reached by vehicle.
a
 240 VBD ENGG. ECONOMICS & INDUSTRIAL
uISTRIAL ECONOMICS& lINDUSTRIAL MGMT. (B.E.
241
MGMT.
MGMT e
(B.E. ENGG.
4. Deciding on media timing-
EN
0 their respective reach, cost, frequency level and
basis of
) An ad vertiser has to decide the timing
ing and
and scbédule onthe Then he
onthen he can decide
the most cost effective medium or
using the chosen media. mpact.
media to advertise.
bination of
combin
(ii) The timing and schedule is to be decided om media, their advantages and limitations The
on
on macrolew Types of
as well as on a micro level. with their respective advantages and limitations
various media types
(ii) On a macro level, the season or the period
durine ue follows
the media is to be used is decided. areas
re
Media type
Advantages Limitations
(iv) On a micro level, it is decided whether Flexibility, timeliness, Short life, poor
to go in Newspapers
continuous advertising or intermittent advertising during excellent coverage of reproduction quality,
the ch
chosen
season. local markets, broad utility effected by
5. Deciding on the geographical allocation of acceptance, high illiteracy, absence of
the media
(i) An advertiser has to roughly decide the extent o credibility, mass use, audio element.
geographical area hat he wants to cover for his advertisi low cost
Accordingly, he decides the geographical allocation of the chose2. Magazines Longer life, geographic Some Waste
and demographic circulation, no
media.
selectivity. guarantee of
(ii) If he wants a national level advertising (known as "nationul
believability: prestige, position, higher cost
buys") then he will place advertisement on national TV networksa
high-quality per contact, longer
in rationally circulated magazines.
reproduction. and purchases lead-
(iii) If he wants to advertise in regional TV channels a
time.
regional editions of magazines. 3. Direct
mail Personalization, Relatively high cost,
(iv) Similarly, for local advertising (known as "local bu audience selectivity, | advertiser may not
he will advertise in local newspapers, magazines, radio or oui minimum waste in have proper mailing
sites. circulation; flexibility; list receiver may
Thus. after taking all the above-mentioned major decisiol. can provide detailed consider it to be
process of media selection is said to be over. information; no direct junk mail.
competition with rivals
their
Q.17. What are the various types of media? State matter: timing can be
/S-03(ENI4.Newsletters adjusted.
respective advantages and limitations.
advertis
: Very high selectivity; Costs could run
Ans. Introduction There are a wide range of
mparethen full controls; relatively away.
nedia available in the market. A media planner can compa
low costs.
 ONOMICS&INI
INDUSTRIAL MGM (B.E.
INDUSTRIAL EN, EE)
VBD ENGG. ECONOMIcS & ENGG.
MGMT. BEENEE ENGG 243
242 (B.E a0
oOUTDOO
ADVERTISING:
Flexibility:; full control: Overproduction
5. Brochures Long life; low cost; Limited
can dramatize message could audience
lead low competition; high selectivity:
runaway cannot
costs. repeat exposure; have a long
message.
6. Yellow pages High reaches; low cost High competitio general and wide
excellent local long ad appeal.
purchase
coverage. lead time
creative
limitations. Q.18. How is the etfectiveness of advertising measured/
eraluated? [W-03, (EN
A) AUDIO MEDIA: OR What are
the ifferent methods of measuring the
1. Radio Very wide appeal: Lack of ectiveness of an
advertisement ?
VIsal
suitable even for element, lower Ans. Broadly speaking, there are two aspects of evaluating an
illiterates low cost; attention than T.v dvertisement viz. (i) its communication effect and (i) its effect on
high geographic and non-standardized
sles.
demographic
selectivity;
rate structures low -
Communication effect It measures the communication
repeat memory value. fiectiveness of an advertisement. That is, whether the advertisement
advertising is possible.
husbeen successful in creating awareness, knowledge and preference
2. Telephone Many users Relatively high costs
the advertised product/ service.
opportunity to offer a unless volunteers are fir
personal touch. used. To evaluate the communication effect, 'communication effect
TSearch' or 'copy testing' is used. 'Copy testing' can be done before

n advertisement is put into media (pre testing) and after it is printed

B) AUDI0-VISUAL MEDIA : r broadcast (post-testing)

1. Television Combines sight, sound High costs, no Methods of communication effect research :- There are three
and motion; high span of messages ajormethods of advertising pre-testing
exposure
attention: mass reach'| fleeting Consumers are asked to rate
8)Direct rating method
audiencelemative
product demonstration less
Veadvertisements on various features such as an
possible; suitable even selectivity. hvertiseme
Sattention,
behasvior read-through, cognitive, effective and
forilliterates. strer
literacy aad rengths. The higher the rating, the higher the
effectiveness
2. Internet High selectivity, Computer hter anadvertisement.
low
interactive possibilities; must; relatively b)Port-foliottests-Consumers are asked to view or listen to a
some
relatively low cost 1sers in
no. of users pontfoli
of Ads for asked to
countries. they wish. Then, they are
as long as tney
very
ecve the ds. Higher recall level means that an Ad is
effectv
and consumers
can remember it.
 ECONOMICSs & INDUSTRIAL MGMT. (B.E. EN, EE) 245
244 BD ENGG. ECONOMICS ENGG
ries. Then, the territory-wise sales are noted
& INDUSTRIAL MGMT.
GMT.
(B.E.
(BE EN,EE
territories.
c) Laboratory tests RO sales
The physiological reaesteactions vaTous effect of advertising is known.
consumers such as heartbeat, pupil dilation, erspiration, qus the
perspiration down
and more and more companies are interested in
pressure, etc to an ad are measured using equipments, Ho bloo days
nts. Howeve sales effect of advertising expenditures instead of
laboratory tests can only measure the attention getting nmeasuring
communication effect.
power o
Post testing the communication impact of only the
a comn
Ompleteg kno Define sales promotion and elaborate on the
campaign is also done. If the advertisement fails to achieu 19.
at factors have contributed
to the rapid growth of
targeted level of communication effects then the reasons years? S-03, 05, W-04 (EN)J
for fait
promotion in recent
can be analyzed. sales
gles
Introducti :- Just as advertising is a part of promotion
Ans.
(ii) Sales effect To evaluate an advertisement, its effee promotion is also a part of promotion of a product.
on product, sales
sales is also measured. It means finding out what sales are ofa sales promotion is a tool used for promotion of a
erated
othe ords,
by an advertisement which increases brand awareness, by 15% h consumers and traders.
and productamount the
brand preference by 10%. However, measuring the effect on salesi alesis Definition- "Sales promotion consists of a diverse collection
more difficult as compared to measuring the communication effecetincentive tools, mostly short term, designed to stimulate quicker
Durchase of particular products or services
This is so because sales is influenced not only by advertising but alo tor by consumers

due to other factors like price, competition, product features, productthetrade."

quality, etc. Meaning Sales promotion includes those marketing
In case of direct marketing situations, it is easier to measure ivities other than advertising. publicity, and personal selling that
the sales-effect as compared to other forms of marketing gonote or stimulate consumer purchasing and dealer effectiveness.
advertisements. liis different from advertising. While advertising offers a reason to
Methods of measuring sales effect of an advertisement:- 1here buy a product, sales promotion offers an incentive to buy. The
are two approaches to measure the sales impact of an advertise: arious incentives offers may be samples, price-off, premiums, free
goods, trade
a) Historical approach, and shows, exhibitions, etc.
b) Experimental approach. There are three aspects of sales promotion V1Z.
past sales u
a) Historical approach:- It involves correlating COnsumer promotion (through various tools like free
technques coupons, cash refunds, reduced price pack, gifts,
past advertising expenditures using advanced statistical discount
prizes,
Thus, the effect of each individual medium on sales can
be evalu reefree trials, etc.etc.))
2 *promotion (through various tools like allowances, Iree
Trade
and it can be known which medium is the most effective. g00ds,
prices off,
approach, compuu etc.)
b) Experimental Approach: Under this 3. Business
expei
rimenl
tools and sales force promotion:- (through various
design advertising experiments. For e.g. an advertising like
Into repres
like
trade shows and conventions, contests for sales
budgel presentatives,
may be designed by allocating unequal advertising and specialty advertising.
 246 RD ENGG.ECONOMICS & INDUSTRIAL MGMT.e ECONOM MICS
&INDUSTRIAL MGMT. (B.E. EN, EE) 247
Factors favoring growth of sales promotion:. EEN ENGG.
repurchas rate of occasionalbuyes
various factors, which have contributed to the iont Thete ulates thei
the growth
growth 3.t Properly planned and wcll-projected sales promotions
promotion in recent years. These factors may of
internal factors and external factors. Internal factors
be ore 4. a
4 enhahe imageof particular brand in the eyes of the
include
e ly c
aly
) Top management's have started accepting osuDers. atly increase tha market shares of those
sales nro promotions
as an effective sales tool Sales
5 Swhich
5. ch have high
brand dissimilarity
(ii) Product managers are increasingly qualified products, advantageous and cheaper for
to use promotior tools
promotion by competitors sale 6 Sales reneurs as they cannot offer huge advertising
entreprene
(iii) Consumers are becoming price sensitive al-scale
(iv) Trade demands more deals and incentives from hudgets
and incentives
promotion helps smaller brands securing additional
manufacturers 7. Sales displays,
(v) The efficiency of advertising is declining due to rising clf-spaceand added
co promotions often help manufacturers to adjust to short-
and legal restraints etc. 8. Sales
supply and demand.
Thus, sales promotion as a tool of stimulating more purchase emvariatíons in greater awareess of prices
is gaining importance day-by-day. 9. Sales promotions promote
among
consumers.
for salesmen
10.Sales promotions create talking point
Q.20. What are the objectives of sales promotion? sense of satisfaction and pride to
11. Sales prormotions give a
IS-03(ENJ customers as they consider thermselves smart shoppers when they
Ans. The different tools, which are used for sales promotion,
akeadvantages of various incentives.
fulfill different objectives. For e.g. free samples encourage
consumer trial exhibitions and trade fairs provide opportunities far
Q.21. What factors are to be considered while deciding a
new products to catch the attention of consumers and resellers et stralegyfor sales promotion?
On a broader level, sales promotion as an element of marketing mi
OR What major decisions are to be taken in using sales
has two chief objectives, viz: promotion ?
1. To stimulate buying by the ultimate consumers and Ans.There are six main factors or decisions to be considered
as well a
2.To increase selling efforts and intensity by dealers while deciding
a strategy for sales promotion. They are
the sales personnel. . Deciding the objectives of sales promotion.
Other objectives of sales promotion - The following
are u
2. Selecting the tools.
various purposes or objectives of sales promotion
attention to ne 3.Developingthe program of sales promotion.
LSales promotions are used to attract
products or towards any improvements in the existing product sellerss10
Protesting the program.
sc
2. Sales promotion offers a good opportunity to the Implementation and control of the program, and
tive
reward their loyal customers by giving them some incen
6. Evaluating
the results.
purchase.
 248 WD ENGG. ECONOMICS & INDUSTRIAL MO
GMT. OMICS&INDUSTRIAL MGMT.(B.E. EN, EE)
ECONOMICS 249
(BE.B ENGG.
1. Deciding the objectives of sales y80 program for sales promotion:- While
yeloping a
marketing objectives of an organisation ve di
give direction 3 sales promotion prOgram several
factors have to be
nw. to eveloping a s
objectives of sales promotion. The objectives of sales velopi
as
Consideredsuch
depend upon the target markets requirements.
Minimum size of the incentive to be offered;
Generally, objectives for consumers a) i.e. whether the incentiveis
are: Conditions for participation,
() Encouraging purchase of bigger units, or only for some select groups of customers.
offered toeverybody frequency.
(ii) Creating new users, duration of promotion and its
c)Time incentive offered is a
(ii) Maintaining brand loyalty. Distribution vehiclee (it for e.g. the
d)
Objectives for retailers are: distributed in the package,
ount coupon. then whether it will be
) Persuading retailers to carry new items and higherinvento advertising);
nventby mail or in
levels, Timing of the promotion; and
e)
(11)Encouraging off-Season buying. includes the administrative
budget. It
Total sales- promotion
(ii) Encouraging stocking of related items, cOst and the incentive
cost multiplied by the expected number of
(iv) Gaining entry into new retail outlets etc. units that will be sold on the deal.

Objectives for sales force are 4. Pre-testing the program:- The sales promotion
program

0) Encouraging support of a new product or model, should pretested to determine its effectiveness. For a national
be
(ii) Encouraging more prospecting, level campaign the pretesting should be done in selected market
(ii) Stimulating off- season sales. alternative strategies. Pretesting may be done by using
arcas with
2. Selecting the tools:- The tools used for sales promoinlCORsumer's
opinion about alternative programs or by running trial
into categories, viz.
3 tests.

a) Consumer promotion tools (sample, coupons, Casn

.Implementing and controlling the program:- Proper plans
offers, gifts, prizes, reduced-price packs etc.) should
be prepared for the
and successful implementation and control of
0) rade-promotion tools (these are used for relaieo each
Spromotion program. The implementation plan must cover
wholesalers and include price-off, allowances, free goods, elc the lead-time
mation. and sell in time Lead-time is the time required to
c) Business and sales force promotion tools (informat prepare
reactionso the program
prior to launching it. Sell in time begins with
C) Experiments:- Experiments mean finding out Out
galthe
the promotional
to and ends when almost 95% of the deal
these tools arc u motivatete merchandiselaunch
sales promotion. Experiments mean Used
are sold.
business leads, to impress and reward customers, and to
Sales force for greater achievement.
and
6.
Evaluating
results :- To evaluate the results of a sales
promotion ruating the res
These include trad
conventions, sales contests, specialty advertising. e ogram.the following methods can be used:-
 INDUSTRIAL
250 VBD ENGG. ECONOMICS & INDUSTRIAL
MGNT. MICS&INDUSTRIAL
ECONOMICS & IND MGMT. (B.E. EN,
B.EEE
8.E.B ENGG.
EE) 251
In this method, the
a) Sales data method:- data is )
obti DLY ASKED UNIVERsITY QUESTIONS
from various firms engaged in market research. On the basis
data, marketers can analyze which type of people take advantage
ofth pe
RER
efine
marketing management. Explain the
Q.1. management' with respect to its nature
term
and scope.
sales promotion, their purchases before and after the promotion Marketing [W-03 (EE), W-02, 03, S-05 (EN)]
b) Consumer surveys:- Consumers are
ee
contacted Discuss the important influence of marketing in the sub-
thei OR
opinion and reactions are recorded. For e.g. how many of then enterprises. [W-03 (EE)
coul stems of
recall the promotion, what was their opinion about it, how (0.1, P-209)
did Distinguish between Marketing and Selling.
benefit them, how did it affect their brand-choice behavioura Q.2.
.Th [W-02, 03 (EN), S-04 (EE)]
method provides marketers with detailed finding out reacti
of 10.2, P-212
people in the form of sales by deliberately changing 0.3. Describe Line and Staff organisation. Give its merits and
incentives in different markets or at different times. demerits.
[W-02, 03 (EN)]
I0.3, P-214]
0.4. What are the various concepts of marketing under which
organization conduct marketing activities? Explain each one of them.
OR What is the meaning of marketing concept? Describe the
evolution of marketing concepts. [S-05(EN)
OR What are the different philosophies/ orientations, which
guide a company's marketing etforts?
OR "Marketing research is the first step in developing a
profitable business". How and why? S-03 (EE)
OR How does modern Marketing concepts differ from selling?
S-03, W-04 (EE)]
1Q.4, P-215
.5. How does modern Marketing concepts differ from
Selling?
IS-03 (EE)
(0.5, P-219

.6. What is price

ICing in a marketing
of a product? Evaluate the importance ot
programme.
[Q.6, P-221]
[S-03, 05, W-03 (EN), S-04 (EE)]
Q.7.Write
a short note on 'Marketing mix.
Q.7, P-222] W-02, 03, 04, S-03, 04 (EN), W-04 (EE)J
Q.8.
xplain the various methods of pricing a product.
OR What
is IS-03, 04, W-04 (EN)]
Q.8, P-224]cost plus pricing