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L AT ES T
2022
EDITION
Management and
Organisational Behaviour
[Electronics and Communication Engineering]
B.Tech (R20) (JNTU-Kakinada)
B.Tech : II-Year II-Sem

Prepared by : SIA Team of Experts
Total Pages : 144
Salient Features
 Book Contents Exclusively Prepared for JNTU University
 Conforming to the Latest R20 Curriculum Prescribed by the (JNTU-Kakinada)
 Every Unit Comprises of Essay Questions with Solutions
 Subject Dealt in a Simple and Easy to Understand Language
 Exhaustive Coverage of Topics from Examination Point of View
 Frequently Asked Questions and Important Questions, List of Important Definitions
 Latest Question Paper with Solutions Included
 Focus on Mid Exams along with Externals
 Includes Model Question Paper with Solutions as Per Latest Exam Pattern
 Includes two Guess Papers along with their References
 Unit-wise Solutions to Latest and Previous Exams Question Papers along with their References
 Maximum Questions were Asked from SIA Books in Final Exams, Many Students Scored High Marks
in All Subjects After Studying from SIA Books
Books Available for B.Tech II-Year II-Sem (JNTU-K)
- Electronic Circuit Analysis

- Linear Control Systems
- Analog Communications
- Management and Organizational Behaviour
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Management and Organisational
Behaviour
(ECE) B.Tech. II-Year II-Sem ( JNTU-Kakinada )
Contents
Introduction to the Subject
Syllabus as per R20 Curriculum
List of Important Definitions L.1 - L.3
MID - I & II (Objective Type & Essay Questions with Key) M.1 - M.8
Latest Exam Question Paper with Solutions
August/September-2021 (R19) (Set-1) S.1 - S.6
Model Question Papers with Solutions (As per the New External Exam Pattern)
Model Paper-I MP.1 - MP.1
Model Paper-II MP.2 - MP.2
Model Paper-III MP.3 - MP.3
Model Paper-IV MP.4 - MP.4
Guess Papers with Solutions GP.1 - GP.4
Unit-wise Questions with Solutions

Unit No. Unit Name Question Nos. Page Nos.
Topic No. Topic Name
Unit - I Introduction Q1 - Q25 1.1 - 1.22
1.1 Concepts of Management and Organization Q1 1.2
1.2 Nature, Importance and Functions of Management Q2 - Q5 1.2
1.3 System Approach to Management Q6 1.6
1.4 Taylor’s Scientific Management Theory Q7 - Q8 1.6
1.5 Fayol’s Principles of Management Q9 - Q10 1.8

1.6 Leadership Styles Q11 1.10
1.7 Social Responsibilities of Management Q12 - Q14 1.11
1.8 Designing Organizational Structures – Basic Concepts
Related to Organization Q15 - Q19 1.12
1.9 Departmentation and Decentralization Q20 - Q22 1.16
1.10 Management By Objectives (MBO) – Meaning, Process and
Concepts Q23 - Q25 1.19
Frequently Asked and Important Questions 1.22
Unit - II Functional Management Q1 - Q29 2.1 - 2.30
2.1 Human Resource Management (HRM) – Definition, Objectives

and Importance Q1 - Q2 2.2
2.2 Concepts of HRM Q3 - Q4 2.5
2.3 Basic Functions of HR Manager Q5 2.7
2.3.1 Manpower Planning Q6 - Q7 2.7
2.3.2 Recruitment Q8 - Q9 2.8
2.3.3 Selection Q10 2.10
2.3.4 Training and Development Q11 - Q13 2.11
2.3.5 Wage and Salary Administration Q14 - Q15 2.13
2.3.6 Performance Appraisal Q16 - Q18 2.14
2.3.7 Grievance Handling and Welfare Administration Q19 - Q20 2.17
2.3.8 Job Evaluation Q21 - Q24 2.18
2.3.9 Merit Rating Q25 2.23
2.4 Marketing Management – Concepts of Marketing Q26 - Q27 2.25
2.4.1 Marketing Mix Elements Q28 2.27
2.4.2 Marketing Strategies Q29 2.28
Important Questions 2.30

Unit - III Strategic Management Q1 - Q22 3.1 - 3.22
3.1 Strategic Management and Contemporary Strategic Issues Q1 - Q2 3.2
3.2 Mission, Goals, Objectives, Policy, Strategy and Programmes Q3 - Q9 3.3
3.3 Elements of Corporate Planning Process Q10 - Q11 3.8
3.4 Environmental Scanning Q12 - Q13 3.11
3.5 Value Chain Analysis Q14 3.12
3.6 SWOT Analysis Q15 - Q16 3.14
3.7 Steps in Strategy Formulation and Implementation Q17 - Q18 3.15
3.8 Generic Strategy Alternatives Q19 3.17
3.9 Benchmarking and Balanced ScoreCard as Contemporary

Business Strategies Q20 - Q22 3.18
Frequently Asked Questions 3.22
Unit - IV Individual Behavior Q1 - Q25 4.1 - 4.22
4.1 Perception – Definition and Perceptual Process Q1 - Q4 4.2
4.2 Impression Management Q5 - Q6 4.6
4.3 Personality Development Q7 4.7
4.3.1 Socialization Q8 4.8
4.4 Attitude – Concept, Process, Formation and Positive Attitude Q9 - Q11 4.9
4.5 Change Q12 - Q13 4.11
4.6 Learning Q14 - Q15 4.13
4.6.1 Learning Organization Q16 - Q17 4.15
4.6.2 Reinforcement Q18 4.17
4.7 Motivation – Definition, Process and Motives Q19 - Q20 4.17
4.7.1 Theories of Motivation: Maslow’s Theory of Human

Needs, Douglas McGregor’s Theory X and Theory Y,
Herzberg’s Two-Factor Theory of Motivation Q21 - Q25 4.18
Frequently Asked and Important Questions 4.22

Unit - V Group Dynamics Q1 - Q15 5.1 - 5.14
5.1 Group – Definition, Characteristics and Types of Groups Q1 - Q2 5.2
5.2 Stages of Group Development Q3 5.3
5.3 Group Behavior and Group Performance Factors Q4 - Q5 5.4
5.4 Organizational Conflicts – Concept, Reasons for Conflicts,

Consequences of Conflicts in Organization and Types of
Conflicts Q6 - Q8 5.6
5.4.1 Strategies for Managing Conflicts Q9 5.8
5.5 Organizational Climate Q10 5.9
5.6 Organizational Culture Q11 - Q13 5.10
5.7 Stress – Causes, Effects and Coping Strategies of Stress Q14 - Q15 5.12
Important Questions 5.14

Introduction to the subject
The subject ‘Management and Organisational Behaviour’ is a combination of two major concepts i.e., management,
organisational behaviour. This subject bring awareness in students regarding fundamentals of management and
organisation. Management is a process which deals with planning, organizing, directing and controlling organizational
resources for achieving organizational goals. Organizational behaviour refers to the behaviour of individuals and
groups within organizations and the interaction between organizational members and their external environments.
Unit No. Unit Name Description

This unit includes topics like Management and Organizational
Concepts of Management and Organization, Nature and Importance
of Management, Functions of Management, System Approach to
Management, Taylor’s Scientific Management Theory, Fayol’s
1. Introduction Principles of Management, Leadership Styles, Social
Responsibilities of Management, Designing Organizational
Structures, Basic Concepts Related to Organization,
Departmentation and Decentralization, MBO, Process and
Concepts.
This unit includes topics like Human Resource Management
(HRM), Concepts of HRM, Basic Functions of HR Manager,
Manpower Planning, Recruitment, Selection, Training and
2. Functional Management Development, Wage and Salary Administration, Performance
Appraisal, Grievance Handling and Welfare Administration, Job
Evaluation and Merit Rating, Marketing Management: Concepts
of Marketing, Marketing Mix Elements and Marketing Strategies.
This unit includes topics like Strategic Management and
Contemporary Strategic Issues: Mission, Goals, Objectives,
Policy, Strategy, Programmes, Elements of Corporate Planning
3. Strategic Management Process, Environmental Scanning, Value Chain Analysis, SWOT
Analysis, Steps in Strategy Formulation and Implementation,
Generic Strategy Alternatives, Benchmarking and Balanced Score
Card as Contemporary Business Strategies.

This unit includes topics like Perception, Perceptual Process,
Impression Management, Personality Development, Socialization,
Attitude – Process – Formation – Positive Attitude, Change,
4. Individual Behaviour Learning, Learning Organizations, Reinforcement Motivation –
Process – Motives, Theories of Motivation, Maslow’s Theory of
Human Needs, Douglas McGregor’s Theory X and Theory Y and
Herzberg’s Two-Factor Theory of Motivation.
This unit includes topics like Types of Groups, Stages of Group
Development, Group Behaviour and Group Performance Factors,
Organizational Conflicts – Reasons for Conflicts and Consequences

5. Group Dynamics
of Conflicts in Organization, Types of Conflicts, Strategies for
Managing Conflicts, Organizational Climate and Culture, Stress,
Causes and Effects and Coping Strategies of Stress.

Syllabus
UNIT-I
Introduction: Management and Organizational Concepts of Management and Organization – Nature

and Importance of Management, Functions of Management, System Approach to Management –
Taylor’s Scientific Management Theory, Fayol’s Principles of Management, Leadership Styles, Social
Responsibilities of Management. Designing Organizational Structures: Basic Concepts Related to
Organization – Departmentation and Decentralization, MBO, Process and Concepts.
UNIT-II
Functional Management: Human Resource Management (HRM) Concepts of HRM, Basic Functions of
HR Manager: Manpower Planning, Recruitment, Selection, Training and Development, Wage and Salary
Administration Performance Appraisal, Grievance Handling and Welfare Administration, Job Evaluation and
Merit Rating – Marketing Management: Concepts of Marketing, Marketing Mix Elements and Marketing
Strategies.
UNIT-III
Strategic Management: Strategic Management and Contemporary Strategic Issues: Mission, Goals,
Objectives, Policy, Strategy, Programmes, Elements of Corporate Planning Process, Environmental
Scanning, Value Chain Analysis, SWOT Analysis, Steps in Strategy Formulation and Implementation,
Generic Strategy Alternatives. Bench Marking and Balanced Score Card as Contemporary Business
Strategies.
UNIT-IV
Individual Behavior: Perception-Perceptual Process – Impression Management – Personality Development –

Socialization – Attitude – Process – Formation – Positive Attitude – Change – Learning – Learning Organizations
– Reinforcement Motivation – Process – Motives – Theories of Motivation: Maslow’s Theory of Human Needs,
Douglas McGregor’s Theory X and Theory Y, Herzberg’s Two-Factor Theory of Motivation.
UNIT-V
Group Dynamics: Types of Groups, Stages of Group Development, Group Behaviour and Group
Performance Factors, Organizational Conflicts: Reasons for Conflicts, Consequences of Conflicts in
Organization, Types of Conflicts, Strategies for Managing Conflicts, Organizational Climate and Culture,
Stress, Causes and Effects, Coping Strategies of Stress.
List of Important Definitions L.1
List of Important Definitions
UNIT - I
1. Management
According to Koontz and Weihrich, “Management is a process of designing and maintaining an environment in which
individuals, working together in groups, accomplish efficiently selected aims”.
2. Organization
According to Oliver Sheldon, “Organization is the process of combining the work that individuals or a group have to
perform with the facilities necessary for its execution, that the duties so performed provide the best channels for efficient,
systematic, positive and coordinated application of the available effort”.
3. System
A system is an assemblage of things connected or interrelated so as to form a complex unity.
4. Leadership
According to Koontz and O’ Donnell, “Leadership is defined as influence, the art or process of influencing people so that
they will strive willingly towards the achievement of group goals”.
5. Social Responsibility
“Social responsibility refers to the businessmen’s decisions and actions taken for reasons at least partially beyond the firm’s
direct economic or technical interest”. – Keith Davis.
6. Organizational Chart
Organisation chart is the graphical representation of structural relationship among different functions and the persons
responsible for that function.
7. Departmentation
The segregation of the office administration or the production facilities or finance and marketing into individual channels
so that efficient supervision takes place in a channelized manner is called departmentalization.
8. Decentralization
According to Allen, “Decentralization applies to the systematic delegation of authority in an organization-wide context”.
In other words, it is the division of decision-making authority in an organized manner.
UNIT - II
1. Human Resource Management (HRM)
According to Milkovich & Boudreau, “Human Resource Management is a series of decisions that affect the relationship
between employees and employers; it affects many constituencies and is intended to influence the effectiveness of employees
and employers”.
2. Human Resource Development (HRD)
According to Leonard Nadler “HRD is a learning experience which is organised for a specific time, and designed to bring
about the possibility of behavioural change”.
3.. Personnel Management
According to E. Dale Yoder, “Personnel Management is that phase of management, which deals with the effective control
and use of manpower as distinguished from other sources of power”.
L.2 Management and Organisational behaviour [JNTU-Kakinada]
4. Industrial Relations (IR) 12. Marketing
According to Bethel and Smith, “Industrial relations is According to EFL Brech, “Marketing is the process of
that part of management which is concerned with the determining consumer demand for a product or service,
manpower of the enterprise whether operate, skilled motivating its sales and distributing it into ultimate
worker or manager”. consumption at a profit”.
5. Recruitment
13. Marketing Management
According to Dale S. Beach, “Recruitment is the
development and maintenance of adequate manpower In the words of ‘William J. Stantom’ – “Marketing
resources. It involves the creation of a pool of available management is the marketing concept in action”.
labour upon whom the organization can depend when it
needs additional manpower”. 14. Marketing Strategy
6. Selection According to Philip Kotler, “Marketing strategy is a set of

objectives, policies and rules that guide overtime firm’s
According to Dale Yoder, “Selection is the process in
marketing efforts”.
which candidates for employment are divided into two
classes those who are to be offered employment and those
who are not”. UNIT - III
7. Training 1. Strategic Management
According to Michael J. Jucius, “Training is a process ‘Samuel.C. Certo and J. Paul Peter’ defined strategic
by which the aptitude, skills and abilities of employees
management “As a continuous, interactive, cross-
to perform specific jobs are increased”.
functional process aimed at keeping an organisation as
8. Performance Appraisal a whole appropriately matched to its environment”.
Dale S. Beach defines “Performance Appraisal as the 2. Mission

system of evaluation of the individual with regards
to his/her performance on the job and potential for Thomson (1997) defines mission as, “the essential
development”. purpose of the organization, concerning particulars”.
9. Job Evaluation 3. Goal
“Goals are the targets attributed by features which an

According to Edwin B.Flippo, “Job evaluation is a
systematic and orderly process of determining the worth organization wants to achieve”.
of a job in relation to other jobs”.
4. Policy
10. Job Analysis
A policy is a set of rules, guidelines and procedures for
According to US department of labour, “Job analysis is smooth functioning of the business.
the process of determining, by observation and study and
5. Corporate Planning
reporting pertinent information relating to the nature of
a specific job. It is the determination of the tasks which Corporate planning can be defined as the process of
comprise the job and of the skills, knowledge, abilities
formulating the corporate mission, scanning the business
and responsibilities required of the worker of a successful
performance and which differentiate one job from all environment, evolving strategies, creating necessary
others”. infrastructure and assigning resources to achieve the
given mission.
11. Merit Rating
6. Benchmarking
According to Edwin B. Flippo, “Merit rating is a
systematic, periodic and so far as humanly possible, an Benchmarking is a systematic and a structured approach
impartial rating of an employee’s excellence in matters in which a company compares its operations and internal
pertaining to his present job and to his potentialities for a processes against those in best performing companies
job”.
outside the industry.
Warning: Xerox/Photocopying of this book is a criminal act. Anyone found guilty is LIABLE to face LEGAL proceedings.
List of Important Definitions L.3
UNIT - IV
1. Perception
According to Stephen P.Robbins, “Perception can be defined as a process by which individuals organise and interpret their
sensory impressions in order to give meaning to their environments”.
2. Impression Management
According to Rao and his colleagues, impression management is defined as “the process by which people attempt to control
and manipulate the reactions of others to create images of themselves or their ideas”.
3. Personality
According to Gary Johns, “Personality refers to a relatively stable set of psychological characteristics that influence the
way we interact with our environment”.
4. Attitude
According to Reitz, “Attitude is persistent tendency to feel and behave in a favourable or unfavourable way towards some
object, person or ideas”.
5. Job Satisfaction
Job satisfaction refers to the positive outcomes of job experience of an employee.
6. Learning
According to David Loudon and Albert Pella, “Learning can be viewed as a relatively permanent change in behaviour
occurring as a result of experience”.
7. Motivation
According to Dubin, “Motivation is the complex force that keeps a person at work in an organization. Motivation is
something that moves the person to action and continues him in the course of action already initiated”.
UNIT - V
1. Group
According to Marvin E.Shaw, “Group is, two or more persons who are interacting with one another in such a manner that
each person influences and is influenced by each other”.
2. Organizational Conflicts
According to James D. Thompson, “Organizational Conflict is that behaviour by the organizational members which is
expanded in opposition to other members”.
3. Organizational Climate
According to Edgar Schein, “Organization Climate is a pattern of basic assumptions, invented, discovered or developed
by a give group as it learns to cope with its problems of external adaptation and internal integration that has worked well
enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel
in relation to those problems”.
4. Organizational Culture
According to Deal and Kennedy, “Culture is the single most important factor accounting for the success or failure of an
organization”.
5. Stress
According to Robbins, Stress is “a condition in which an individual is confronted with an opportunity, constraint or demand
related to what he or she desires and for which the outcome is perceived to be both uncertain and important”.
MID - I & II M.1
MID - I & II
Objective Type and
Essay Questions with Key
M.2 Management and Organisational behaviour [JNTU-Kakinada]
Objective Type
Unit - I
1. _______ consists of Board of Directors, chairman and chief executive officer. [ ]
(a) Top level management (b) Middle level management
(c) Lower level management (d) Both (a) & (b)
2. _______ means achieving team spirit and unity of action among the subordinates for achieving common
business objectives. [ ]
(a) Planning (b) Staffing
(c) Organizing (d) Co-ordinating
3. _____ is not a principle of Henry Fayol. [ ]
(a) Division of Work (b) Unity of command
(c) Development of workers (d) Unity of direction
4. In _______ leadership style, leader allow the group members to take part in decision making. [ ]
(a) Autocratic style of leadership (b) Participative style of leadership
(c) Free rein style of leadership (d) Democratic style of leadership
5. In ________ method, departmentation is done on the basis of variety of products which are produced by
the organization. [ ]
(a) Customer departmentation (b) Process departmentation
(c) Product departmentation (d) Functional departmentation
6. The concept _______ was introduced by Peter Drucker in 1954. [ ]
(a) Management By Objective (MBO) (b) Organisational structure
(c) Social responsibility (d) System approach to management
7. _____ is also called as Scalar Principle. [ ]
(a) Span of control (b) Formalization
(c) Work specialization (d) Chain of command
8. The process of systematic delegation of authority in an organization is referred to as ________. [ ]
(a) Departmentation (b) Decentralization
(c) Specialization (d) Formalization
9. KRA’s stand for ________. [ ]
(a) Key Review Areas (b) Key Result Areas
(c) Key Ranking Areas (d) Key Rating Areas
10. __________ means “donot interfere”. [ ]
(a) Laissez faire (b) Esprit De corps
(c) Free rein (d) None of the above.
KEY
1. (a) 2. (d) 3. (c) 4. (b) 5. (c)
6. (a) 7. (d) 8. (b) 9. (b) 10. (a)
MID - I & II M.3
Unit - II
1. _________ is the process of receiving and welcoming an employee when he first joins a company. [ ]
(a) Induction (b) Placement
(c) Recruitment (d) Selection
2. _________ is the movement of an employee from one job to the other job of same nature. [ ]
(a) Role playing (b) Incident training
(c) Job rotation (d) Internship training
3. BARS stand for _________. [ ]
(a) Behaviourally Anchored Ranking Scales (b) Behaviourally Anchored Rating Scales
(c) Behaviourally Accurate Ranking Scales (d) Behaviourally Accurate Rating Scales
4. The objective of _________ Act is to give security to employees during uncertainties which effect their
earning capacities both temporarily and permanently. [ ]
(a) The Employee Provident Fund Act (b) The Minimum Wages Act
(c) The Employee State Insurance Act (d) The Workmen’s Compensation Act
5. _________ is also called as job comparison method [ ]
(a) Grading method (b) Ranking method
(c) Factor comparison method (d) Paired comparison method
6. _________ is one of the marketing strategies wherein the firm’s offerings are tailor-made i.e., based on
the requirements of an individual customer. [ ]
(a) Product market fit (b) Customer service
(c) Segmentation (d) Mass customization
7. An organized statement which represents the duties and responsibilities of a job is referred to as _________. [ ]
(a) Job description (b) Job analysis
(c) Job specification (d) Job evaluation
8. In ________ method, an employee is appraised by his supervisors, subordinates, peers and customers. [ ]
(a) Management By Objectives (MBO) (b) Critical Incident Method
(c) 360 Degree Appraisal Method (d) Behaviourally Anchored Rating Scales (BARS)
9. Most of the times, the employee’s performance is appraised by ________ so that bias problem doesn’t arise. [ ]
(a) Peers (b) Consultants
(c) Supervisors (d) Mangers
10. ________ is an act of increasing the knowledge and skill of the employee for doing a particular job. [ ]
(a) Selection (b) Development
(c) Training (d) Recruitment
KEY
1. (a) 2. (c) 3. (b) 4. (c) 5. (b)
6. (d) 7. (a) 8. (c) 9. (b) 10. (c)

Unit - III
1. A continuous process of effectively relating the organization’s objectives and resources to the opportunities
in the environment is _____. [ ]
(a) Marketing management (b) Human resource management
(c) Strategic management (d) Financial management
2. ____ refers to the targets attributed by features which an organization wants to achieve. [ ]
(a) Goals (b) Program
(c) Strategy (d) None
3. A _____ is a set of rules, guidelines and procedures for smooth functioning of the business. [ ]
(a) Vision (b) Policy
(c) Mission (d) Objective
4. In which of the following strategy, firms try to increase its market share by providing goods/services at
the lowest price in the market. [ ]
(a) Corporate level strategy (b) Low cost strategy
(c) Focus strategy (d) Differentiation strategy
5. _____ is a process of formulating the corporate mission, scanning the business environment, evolving
strategies, creating necessary infrastructure and assigning resources to achieve the given mission. [ ]
(a) Corporate planning (b) Resource planning
(c) Strategic planning (d) None
6. Tactical planning focuses on _____. [ ]
(a) Control (b) Coordination
(c) Forecasting (d) Organizing
7. What does ‘S’ stands for in SWOT analysis? [ ]
(a) Shortage (b) Superior
(c) Strengths (d) Saturation
8. Which of the following come under generic strategy alternatives? [ ]
(a) Expansion strategy (b) Stability strategy
(c) Retrenchment strategy (d) All the above
9. _________ is a systematic and structural approach in which a company compares its operations and
internal processes against those in best performing companies outside the industry. [ ]
(a) Benchmarking (b) Balanced scorecard
(c) JIT (d) Six sigma
10. The process by which strategists monitor the environmental sectors for determining the opportunities and
threats of their firms is called _____. [ ]
(a) Value chain analysis (b) Competitor analysis
(c) Environmental analysis (d) None
KEY
1. (c) 2. (a) 3. (b) 4. (b) 5. (a)
6. (b) 7. (c) 8. (d) 9. (a) 10. (c)
MID - I & II M.5
Unit - IV
1. _______ occurs when the perceiver judges a person on the basis of characteristics of the group to which he
belongs. [ ]
(a) Halo effect (b) Stereotyping
(c) Attribution (d) First impression
2. In __________ tactic of impression management, an individual pretends to be dumb. [ ]
(a) Supplication (b) Ingratiation
(c) Self-promotion (d) Exemplification
3. In _______ stage of personality development, the parent teaches the child, the characteristics such as punctuality,
cleanliness and orderlines. [ ]
(a) Anal stage (b) Oral stage
(c) Latency stage (d) Genital stage
4. Cheerfulness, optimism and confidence are the characteristics of people with _______ attitude. [ ]
(a) Neutral (b) Negative
(c) Positive (d) Work related
5. _______ change, focuses on enhancing organizational effectiveness by modifying competencies and other
values of organizational members. [ ]
(a) Technology (b) Structure
(c) People-focussed (d) Work-flow
6. _______ is the reason why people resist change. [ ]
(a) Fear of losing status and power (b) Uncertainty
(c) Fear of being manipulated (d) All the above
7. ________ theory states that an individual learns through observation. [ ]
(a) Classical conditioning (b) Operent conditioning
(c) Social cognition (d) Social learning
8. A motive is said to be _______ if it is physiological and unlearned. [ ]
(a) Primary motive (b) Secondary motive
(c) Intrinsic motive (d) Extrinsic motive
9. _______ talks about negative and positive behavior of people. [ ]
(a) Maslow’s theory of human needs (b) Herzberg’s two-factor theory of motivation
(c) McGregor’s theory X and theory Y (d) Both (a) and (c)
10. ___________ for anything arises when a person or an individual feels a psychological and
physiological imbalance. [ ]
(a) Need (b) Drive
(c) Incentive (d) Motive
KEY
1. (b) 2. (a) 3. (a) 4. (c) 5. (c)
6. (d) 7. (d) 8. (a) 9. (c) 10. (a)

Unit - V
1. Conflict is a feeling of _______ among parties. [ ]
(a) Motivation (b) Satisfaction
(c) Disagreement (d) Understanding
2. ________ is a degree of attachment of the members to their groups. [ ]
(a) Group cohesiveness (b) Group dynamics
(c) Group behavior (d) Group status
3. _________ group includes family, friendship or neighbourhood. [ ]
(a) Primary group (b) Formal group
(c) Secondary group (d) Reference group
4. Conflicts between groups, departments or sections is referred to as _______. [ ]
(a) Intra-group conflict (b) Inter-group conflict
(c) Inter-personal conflict (d) Intra-personal conflict
5. _______ strategy cannot be used to manage the stress at individual level. [ ]
(a) Physical exercises (b) Relaxation techniques
(c) Role clarity (d) Cognitive therapy
6. In _________ stage of group development, members become fully functioning and devote themselves
completely to achievement of taste. [ ]
(a) Storming (b) Norming
(c) Adjourning (d) Performing
7. A set of assumptions, values, beliefs and norms that are shared by organizational members are called
as _______ [ ]
(a) Organizational culture (b) Organizational climate
(c) Organizational design (d) Organizational structure
8. When a majority of members in the organization share a set of core values, it referred to as _________. [ ]
(a) Strong culture (b) Participative culture
(c) Dominant culture (d) Subculture
9. _________ affects the group performance. [ ]
(a) Composition (b) Size
(c) Cohesiveness (d) All the above
10. ________ effects include low performance, increased absenteeism, consumption of alcohol, uneasy
sleeping etc. [ ]
(a) Physiological (b) Behavioral
(c) Psychological (d) Both (a) and (c)
KEY
1. (c) 2. (a) 3. (a) 4. (b) 5. (c)
6. (d) 7. (a) 8. (c) 9. (d) 10. (b)
MID - I & II M.7
Essay questions with key
Unit - I
1. Define Management. Describe the nature and features of management. (Refer Unit-I, Q2)
2. Explain the levels of management and their functions. (Refer Unit-I, Q4)
3. Discuss about the functions of management. (Refer Unit-I, Q5)
4. Explain Taylor’s scientific management. (Refer Unit-I, Q7)
5. What are the principles of scientific management advocated by F.W. Taylor?

State its advantages and limitations. (Refer Unit-I, Q8)
6. Define management. Explain the 14 principles of management. (Refer Unit-I, Q9)
7. Define Social Responsibility. Discuss in detail Social Responsibility of Management. (Refer Unit-I, Q12)
8. What is an organizational chart? List out its characteristics, advantages and disadvantages.
(Refer Unit-I, Q16)
9. What do you mean by the terms Departmentation and Decentralization? Give example
for each. Differentiate between Departmentation and Decentralization. (Refer Unit-I, Q20)
10. Explain the various steps involved in the process of MBO. (Refer Unit-I, Q24)
Unit - II
1. Define Human Resource Management (HRM). Discuss its objectives and importance. (Refer Unit-II, Q1)
2. What is Manpower Planning? What are its objectives? What is the need and importance
of manpower planning? (Refer Unit-II, Q6)
3. Define Selection. Explain the process of selection. (Refer Unit-II, Q10)
4. Explain different methods of training in an organization. (Refer Unit-II, Q13)
5. Define Performance Appraisal. What is the need for appraising the performance? Briefly
explain the methods of performance appraisal. (Refer Unit-II, Q16)
6. Who will appraise the performance of employees and what is the basis of performance
appraisal? (Refer Unit-II, Q18)
7. Define Job Evaluation. What are its objectives and principles? (Refer Unit-II, Q21)
8. What are the essentials of successful job evaluation system? Explain the importance of
job evaluation. (Refer Unit-II, Q22)
Unit - III
1. What strategy is used at different levels of a business? Discuss the role of strategist in
the modern era. (Refer Unit-III, Q9)
2. Define Corporate Planning and describe the process of corporate planning. (Refer Unit-III, Q10)
3. Distinguish between strategic planning, Tactical planning and Operational planning.

What strategies can be used to improve sales. (Refer Unit-III, Q11)
4. What is Environmental Scanning? State its importance. What are the factors to be
diagnosed in external and internal environment? ( Refer Unit-III, Q12)
5. What is SWOT analysis? Explain the process of SWOT analysis. ( Refer Unit-III, Q15)
6. Describe the stages in strategy formulation and implementation. ( Refer Unit-III, Q17)
7. What factors need to be considered while formulating the strategy? What type of problems
may arise while implementing the strategy? Suggest some overcoming measures. ( Refer Unit-III, Q18)
8. Write about,
(a) Generic Strategy Alternatives.
(b) Strategic Alliance. (Refer Unit-III, Q19)
Unit - IV
1. Define Perception. What are its features? What factors influence perception. ( Refer Unit-IV, Q1)
2. Discuss Process of Perception. What are the differences between sensation and
perception? ( Refer Unit-IV, Q4)
3. Define Impression Management. What are positive and negative impressions? ( Refer Unit-IV, Q5)
4. Define Personality. Discuss the stages of personality development. ( Refer Unit-IV, Q7)
5. Write in detail about socialization. ( Refer Unit-IV, Q8)
6. Define Attitude. What are the types of work related attitudes? How can understanding of
attitudes help managers be more effective? ( Refer Unit-IV, Q9)
7. What is change? List out the three categories of change. What are the forces influencing
change? ( Refer Unit-IV, Q12)
8. What is Learning? What are its characteristics? How can an understanding of learning
help managers be more effective? ( Refer Unit-IV, Q14)
9. What are the various types of motives? Explain. ( Refer Unit-IV, Q20)
10. Explain the similarities and differences between Maslow’s Theory and Herzberg’s theory
of motivation. ( Refer Unit-IV, Q25)
Unit - V
1. What do you mean by the term “Group” and “Group Dynamics”? Why do people from
groups? What are the characteristics of a group? ( Refer Unit-V, Q1)
2. What are the stages of group development? ( Refer Unit-V, Q3)
3. What is organisational conflict? Discuss the causes or reasons of organisational conflicts. ( Refer Unit-V, Q6)
4. Discuss the consequences of organisational conflicts. ( Refer Unit-V, Q7)
5. Explain different types of conflicts. ( Refer Unit-V, Q8)
6. Discuss the steps of socialization for maintaining organizational culture. ( Refer Unit-V, Q13)
7. Define Stress. What are the various causes and effects of stress. ( Refer Unit-V, Q14)
8. What are the copying strategies for stress. ( Refer Unit-V, Q15)
August/September-2021 (Set-1) Question Paper with Solutions S.1
Code No: R1922046/R19
II B.Tech. II Semester Regular Examinations

Set-1
Solutions
August/September - 2021
Management and Organizational Behavior
(Electronics Communication Engineering)
Time: 3 Hours Max. Marks: 75
Answer any FIVE Questions each Question from each unit
All Questions carry Equal Marks
---
1. (a) Explain the nature and importance of management. [8] (Unit-I, Topic No. 1.2)
(b) Discuss about F.W. Taylor’s Scientific Management Theory. [7] (Unit-I, Topic No. 1.4)
OR
2. (a) What are social responsibilities of management? [7] (Unit-I, Topic No. 1.7)
(b) Explain about decentralization and how it is simplify the organization structure. [8] (Unit-I, Topic No. 1.9)
3. (a) ‘Manpower planning plays major role as HR function’ Discuss. [7] (Unit-II, Topic No. 2.3.1)
(b) What do you mean by four P’s in marketing explain in detail? [8] (Unit-II, Topic No. 2.4.1)
OR
4. (a) Devise an appropriate appraisal system for personal selling sales team? [8] (Unit-II, Topic No. 2.3.6)
(b) Define job evaluation and explain the process of job evaluation. [7] (Unit-II, Topic No. 2.3.8)
5. (a) ‘A vision is too abstract to be of any practical value’. Do you agree with the statement? Why? [8] (Unit-III, Topic No. 3.2)
(b) What are the elements of corporate planning process? [7] (Unit-III, Topic No. 3.3)
OR
6. (a) What are steps in strategy formulation? Explain in detail. [7] (Unit-III, Topic No. 3.7)
(b) Define Value Chain Analysis and Describe how it helps managers to assess the strengths and weaknesses of their
firm. [8] (Unit-III, Topic No. 3.5)
7. (a) Define the term ‘perception’ and explain ‘perception process’. [8] (Unit-IV, Topic No. 4.1)
(b) What is Attitude and explain its various components? [7] (Unit-IV, Topic No. 4.4)
OR
8. (a) Define motivation. Elaborate Maslow’s hierarchy theory of motivation. [8] (Unit-IV, Topic No. 4.7.1)
(b) Discuss about the Mc Gregor’s Theory ‘X and Theory ‘Y. [7] (Unit-IV, Topic No. 4.7.1)
9. (a) What are the stages of group development? [8] (Unit-V, Topic No. 5.2)
(b) Define organizational conflict; how is conflict resolved? [7] (Unit-V, Topic No. 5.4.1)
OR
10. (a) Discuss the different types of group conflicts. [8] (Unit-V, Topic No. 5.4)
(b) Explain the different coping strategies for stress management. [7] (Unit-V, Topic No. 5.7)
S.2 Management and Organizational Behaviour [JNTU-Kakinada]
Solutions to August/September-2021, Set-1, QP

Q1. (a) Explain the nature and importance of management.
Answer : Aug./Sept.-2021, Set-1, Q1(a) M[8]
Nature of Management
For answer refer Unit-I, Q2, Topic: Nature of Management.
Importance of Management
For answer refer Unit-I, Q3.
(b) Discuss about F.W. Taylor’s Scientific Management Theory.
Answer : Aug./Sept.-2021, Set-1, Q1(b) M[7]
OR
Q2. (a) What are social responsibilities of management?
For answer refer Unit-I, Q12, Topic: Social Responsibilities of Management.
(b) Explain about decentralization and how it is simplify the organization structure.
Definition of Decentralization
For answer refer Unit-I, Q20, Topic: Decentralization and Q22.
Decentralization Simplify Organization Structure
Decentralization simplify the organization structure because in decentralization, delegation of authority takes place. In
decentralization, authority lies in the hands of many people instead of resting on one individual.
Q3. (a) ‘Manpower planning plays major role as HR function’ Discuss.
Manpower planning plays a major role as HR function,
For answer refer Unit-II, Q6, Topics: Manpower Planning/HR Planning, Need and Importance of Manpower Planning.
(b) What do you mean by four P’s in marketing explain in detail?
For answer refer Unit-II, Q28.
OR
Q4. (a) Devise an appropriate appraisal system for personal selling sales team?
Appraisal system for personal selling sales team involves following steps,
Step-1: Set the Policies for Performance Evaluation
Step-2: Select the Criteria for Evaluating Performance of Salespeople
Step-3: Set Performance Standards
Step-4: Measure Actual Performance with the Standards
Step-5: Review Salespeople’s Performance Evaluation
Step-6: Decide Actions and Control of Sales Management
Figure: Appraisal System for Sales Team

Step-1: Set the Policies for Performance Evaluation
The sales organization should set the basic policies before conducting performance evaluation of sales people. Some of
the policies identified by research studies are,
(i) Evaluating Frequency
Few organizations evaluate performance of sales people yearly once while others evaluate semi-annually or quarterly.
Quarterly performance evaluations facilitates frequent communications and improve performance.
(ii) Who Carryout Performance Appraisal
Performance appraisal of sales people mostly done by field sales manager.
(iii) Assessment Techniques
360-degree feedback is a widely used technique in case of performance appraisal of sales team. This technique involves
getting evaluative feedback from customers, employees, peers, superiors and subordinates. 360-degree feedback technique
helps in understanding customers and improving performance
(iv) Management By Objective (MBO)
Generally, sales manager along with sales person decide and set salesperson’s objectives. On the basis of sales strategy,
action plans are developed to attain set objectives.
(v) Source of Information
Many organizations gather information from various sources to evaluate the performance of salesperson. This information
can be gathered from sales reports, containing work plans, expense reports, call reports, lost business reports, new business
reports, local business etc.
Step-2: Select the Criteria for Evaluating Performance of Salespeople
The sales organization must select a category among,
(i) Outcome (or results) oriented perspective.
(ii) Behaviour (or activity/effort) oriented perspective.
(iii) Both outcome and behaviour oriented perspective.
Before deciding a criteria for evaluating the performance of sales people, sales organization need to select any one of the
above mentioned category of perspectives.
The criteria selected for evaluating performance of (b) Define job evaluation and explain the
salespeople may be, process of job evaluation.
(a) Qualitative Behaviour/Activity Bases Answer : Aug./Sept.-2021, Set-1, Q4(b) M[7]
This bases includes, personal efforts/skills, knowledge, Definition of Job Evaluation

personality and attitudes, customer relation, health and For answer refer Unit-II, Q21, Topic: Definition of Job
appearance. Evaluation.
(b) Quantitative Outcome/Result Bases Process of Job Evaluation
This bases includes volume of sales, orders, customers The steps involved in the process of job evaluation are,
and profit margin. Step-1: Perform Job Analysis
(c) Quantitative Activity/Behavioural Bases According to US Labour Department, “Job analysis is the
process of determining, by observation and study and reporting
This bases includes, direct selling expenses, customer pertinent information relating to the nature of a specific job. It
calls and non-selling activities. is the determination of the tasks which comprise the job and of
the skills, knowledge, abilities and responsibilities required of
Step-3: Set Performance Standards
the worker for a successful performance and which differentiates
Basically, performance standards can be set in terms of one job from all others”.
sales quotas. Few organizations call sales objectives, sales goals Step-2: Preparation of Job Description and Job Specification
or sales targets as performance standards. Setting performance Preparing a Job Description
standards is a challenging task but it is necessary to measure The data collected from the previous step is used to
against actual performance of salespeople. prepare a job description statement consisting of the job
contents in terms of functions, duties, responsibilities,
Step-4: Measure Actual Performance with the Standards operations etc. The employee is required to perform the
In this step, the actual performance of each salesperson duties, responsibilities and functions listed in the job
description.
is measured/compared with set performance standards.
The performance of salespeople can be measured by Developing a Job Specification
different methods. Sales manager evaluate each salesperson’s This step involves conversion of job description statement
performance on a regular basis and maintain a permanent record into job specification statement. Job specification
specifies the personal attributes of the employee like
for monitoring the progress of salespeople.
knowledge, skills, qualities, abilities etc., which are
Step-5: Review Salespeople’s Performance Evaluation required to perform the job.
Step-3: Rating the Jobs by using a Predetermined System
After evaluating the performance of salesperson, the
After the job description and job specification, a
performance review or appraisal meeting is conducted wherein
committee of managers and supervisors need to determine
sales manager discuss with salesperson regarding his/her relative worth of different jobs using various evaluation
weaknesses identified in performance appraisal. It is a difficult procedures. The most commonly used method is the ‘point
part of the sales manager’s job as it can be a very sensitive factor system’. The point factor system uses work related criteria
situation. Sales manager should inform sales person about time for evaluating the relative worth/value of each job. Such work
and location of performance review meeting. Prior to meeting, related criteria are known as compensable factors.
sales person is requested to review his or her job description Example
and the past performance. Both salesperson and sales manager In software companies, knowledge acts as a compensable
should take performance review in a positive way. Performance factor and various softwares are assessed based on
review helps the sales person in improving his/her performance. technology related knowledge.
Step-4: Creating a Job Hierarchy
Step-6: Decide Actions and Control of Sales Management
Based on job description, job specification and job rating,
Sales managers must use sales performance information listing of jobs need to be done. A job hierarchy is created based
for improving the performance of salespeople, sales teams and on the importance of the job i.e., the most important jobs are
placed at the top most level of the hierarchy followed by the
for improving the activities of the sales organization.
least important jobs.
In addition to this, performance information can be used Step-5: Classifying Jobs
to find problem areas, identify the reasons behind occurance of To make the entire job design process a simple task after
such problems and suggest corrective actions to sales manager rating, grades are assigned to all jobs. This helps to reduce the
to resolve such problems. job hierarchy to manageable levels.
Q5. (a) ‘A vision is too abstract to be of any (b) Define Value Chain Analysis and Describe
practical value’. Do you agree with the how it helps managers to assess the
statement? Why? strengths and weaknesses of their firm.
Answer : Aug./Sept.-2021, Set-1, Q5(a) M[8] Answer : Aug./Sept.-2021, Set-1, Q6(b) M[8]
No, I don’t agree with the statement “A vision is too
abstract to be of any practical value”. Definition of Value Chain Analysis
According to Kotter (1990), Vision is defined as For answer refer Unit-III, Q14, Topic: Meaning of Value
“description of something (an organization, a corporate culture, Chain Analysis.
a business, a technology, an activity) in the future”.
According to E1-Namaki, Vision is defined as “mental Assessment of Strengths and Weaknesses of the Firm
perception of the kind of environment an individual, or an Value chain analysis helps managers in assessing firm’s
organization, aspires to create within a broad time horizon
strengths and weaknesses. This analysis assesses the strengths
and the underlying conditions for the actualization of this
perception”. and weaknesses of the firm based on the primary and supporting
Based on the above definitions, vision can be simply activities performed by the firm.
defined as a perception of future events i.e., it is an imaginary Primary and Support Activities
view of the future. It helps to decide or to know where the
organization is going to be in future. It mainly deals with “What For answer refer Unit-III, Q14, Topics: Evaluating a
and Where” aspects of the company. Firm’s Value Chain: Primary Activities, Evaluating a Firm’s
Example: Vision of Amazon company, “Our vision is Value Chain: Support Activities.
to be earth’s most customer centric company; to build
a place where people can come to find and discover Q7. (a) Define the term ‘perception’ and explain
anything they might want to buy online”. ‘perception process’.
A vision is not to abstract to be of any practical value
because there are many benefits to a company that has a vision. Answer : Aug./Sept.-2021, Set-1, Q7(a) M[8]
Following are the benefits of a vision, Definition of Perception
1. Visions are motivating and stimulating.
For answer refer Unit-IV, Q1, Topic: Definition of
2. Vision promote long term thinking. Perception.
3. Vision highlights discontinuity, a step function, and
a jump in the lead so that the company will be aware Perception Process
of what it must achieve. For answer refer Unit-IV, Q4, Topic: Process of
4. Vision facilitates development of general individuality Perception.
and shared sense of intention.
5. Vision encourages risk taking ability. (b) What is Attitude and explain its various
components?
6. Visions are competitive, distinct, indigenous. As they
are practical in nature, they create sense in the market Answer : Aug./Sept.-2021, Set-1, Q7(b) M[7]
place.
Definition of Attitude
7. Vision indicates trustworthiness i.e., they are really
authentic in nature and can be used for the welfare of For answer refer Unit-IV, Q9, Topic: Definitions of
the people. Attitude
(b) What are the elements of corporate
Components of Attitude
planning process?
Answer : Aug./Sept.-2021, Set-1, Q5(b) M[7] Following are the components of attitude,
For answer refer Unit-III, Q10, Topic: Elements/Steps 1. Cognition/Cognitive Component
Involved in Corporate Planning Process.
This component includes the knowledge and
OR perception that are obtained either from direct exposure to
Q6. (a) What are steps in strategy formulation? the attitude object or from the information obtained from
Explain in detail. different sources, resulting in attitude cognition. This process
will in turn result in consumer beliefs i.e., the consumer
Answer : Aug./Sept.-2021, Set-1, Q6(a) M[7] perceives that the attitude object has few attributes and
For answer refer Unit-III, Q17, Topic: Stages/Steps that specific behaviour will result in certain consequences,
Involved in Strategy Formulation. particularly for consumer aspirants.
2. The Affective Component
This component denotes the feelings (or) emotions of a consumer towards a specific brand (or) product. The consumer
researchers regard these feelings (or) emotions as evaluative statements. These researchers suggested that the emotional state of
mind of the consumer has potential to influence their shopping experiences.
3. The Conative/Behavioural Component
This component of attitude helps in understanding the possibility that consumer will take a particular action (or) behave
in a specific manner with respect to attitude object.
OR
Q8. (a) Define motivation. Elaborate Maslow’s hierarchy theory of motivation.
Definition of Motivation
For answer refer Unit-IV, Q19, Topic: Definitions of Motivation.
Maslow’s Hierarchy Theory of Motivation
For answer refer Unit-IV, Q21, Topic: Maslow’s Theory of Human Needs.
(b) Discuss about the Mc Gregor’s Theory ‘X and Theory ‘Y.
For answer refer Unit-IV, Q22.
Q9. (a) What are the stages of group development?
For answer refer Unit-V, Q3.

(b) Define organizational conflict; how is conflict resolved?
Definition of Organizational Conflict

For answer refer Unit-V, Q6, Topic: Organizational Conflicts.
Resolution of Conflict
OR
Q10. (a) Discuss the different types of group conflicts.
Group conflicts can be divided into two types. They are as follows,
1. Inter Group Conflict
For answer refer Unit-V, Q8, Topic: Inter-Group Organizational Conflict.
2. Intra Group Conflict
For answer refer Unit-V, Q8, Topic: Intra-Group Conflict.
(b) Explain the different coping strategies for stress management.
Model Question Papers with Solutions Mp.1
R20
B.Tech. II Year II Semester Examinations
Model
Pa p e r 1
Management and Organisational Behaviour
( Electronics and Communication Engineering )
Answer any f ive questions one question from Each Unit
All questions carry Equal marks
(5 × 15 Marks = 75 Marks) Solutions

1. (a) Define Management. Describe the nature and features of management. (Unit-I / Q2)
(b) Explain Taylor’s scientific management. (Unit-I / Q7)
OR
2. (a) Define management. Explain the 14 principles of management. (Unit-I / Q9)
(b) What is an organizational chart and describe its characteristics? (Unit-I / Q16)
3. Define Human Resource Management. Explain the important functions of HRM. (Unit-II / Q2)
OR
4. What is Performance Appraisal? Why is it necessary to carryout performance appraisal? (Unit-II / Q16)
5. (a) What is Strategic Management? (Unit-III / Q1)
(b) What type of strategies to be used to improve sales? (Unit-III / Q11)
OR
6. Define Corporate Planning and describe the process of corporate planning. ( Unit-III / Q10)
7. (a) Define Perception. What are its features? What factors influence perception. ( Unit-IV / Q1)
(b) What are the different theories used for studying organizational behavior and
behavioral performance management? ( Unit-IV / Q15)
OR
8. (a) What are the principles of learning? Define law of effect. Explain reinforcement theory
in detail. ( Unit-IV / Q18)
(b) Explain Maslow’s need hierarchy theory. (Unit-IV / Q21)
9. (a) What do you mean by the term “Group” and “Group Dynamics”? Why do people from
groups? What are the characteristics of a group? ( Unit-V / Q1)
(b) Discuss the various factors affecting group performance. ( Unit-V / Q5)
OR
10. Discuss the consequences of organisational conflicts. ( Unit-V / Q7)

MP.2 Management and Organisational Behaviour [JNTU-Kakinada]
R20
Model
Pa p e r 2

1. Elaborate the importance of management in the globalized era. (Unit-I / Q3)
OR
2. Discuss the scientific manangement principles. (Unit-I / Q8)

3. (a) Compare and contrast HRM and HRD. (Unit-II / Q4)
(b) What do you understand by job evaluation? What are the principles of job evaluation? (Unit-II / Q21)
OR
4. Discuss the essentials of successful job evaluation system. (Unit-II / Q22)

5. Explain the process of environmental scanning. (Unit-III / Q13)
OR
6. Describe the stages in strategy formulation and implementation. ( Unit-III / Q17)

7. (a) What are the different impression management tactics used by individuals? What are
the ways to improve impression management? ( Unit-IV / Q6)
(b) What is meant by learning organization? How do you create learning organization? ( Unit-IV / Q16)
OR
8. Define Personality. Discuss the stages of personality development. ( Unit-IV / Q7)
9. Explain the various types of groups. ( Unit-V / Q2)
OR
10. (a) Explain different types of conflicts. ( Unit-V / Q8)
(b) What do you mean by “Organizational Culture”? What are its important characteristics?
Discuss the important dimensions of an organizational culture. c ( Unit-V / Q11)
Model Question Papers with Solutions Mp.3
R20
Model
Pa p e r 3

1. (a) Explain the levels of management and their functions. (Unit-I / Q4)
(b) Explain when decentralization need to be adopted by the organizations. (Unit-I / Q22)
OR
2. Underline the importance of responsibility of management to society. Give some

examples how some organisations implemented the same. (Unit-I / Q13)
3. (a) Describe the functions of HR manager in an organization. (Unit-II / Q5)
(b) Explain the point rating method and factor comparison method of job evaluation. (Unit-II / Q23)
OR
4. (a) Define merit rating and describe its methods elaborately. (Unit-II / Q25)
(b) Distinguish between selling and marketing. (Unit-II / Q26)
5. Explain briefly SWOT analysis. (Unit-III / Q15)
OR
6. (a) Define strategic management and describe the process of strategic management. ( Unit-III / Q2)
(b) What is Environmental Scanning? How is this important in present day context? ( Unit-III / Q12)
7. Discuss Process of Perception. What are the differences between sensation and perception? ( Unit-IV / Q4)
OR
8. Discuss the process of formation of attitude. ( Unit-IV / Q11)
9. (a) What are the stages of group development? ( Unit-V / Q3)
(b) What is organisational conflict? Discuss the causes or reasons of organisational conflicts. ( Unit-V / Q6)
OR
10. (a) What strategies can be used for managing conflicts? ( Unit-V / Q9)
(b) Discuss the process of creating an organisational culture. ( Unit-V / Q12)

MP.4 Management and Organisational Behaviour [JNTU-Kakinada]
R20
Model
Pa p e r 4

1. Discuss about the functions of management. (Unit-I / Q5)
OR
2. (a) What do you mean by Management By Objective (MBO)? Explain its features,
benefits and limitations. (Unit-I / Q23)
(b) Explain the various steps involved in the process of MBO. (Unit-I / Q24)
3. Explain different methods of training in an organization. (Unit-II / Q13)
OR
4. (a) Analyze the advantages of training and development programmes. (Unit-II / Q12)
(b) Explain the need for job analysis in an organization. (Unit-II / Q24)
5. (a) Explain Goals and Strategy of an organization of your choice. (Unit-III / Q8)
(b) Explain Generic Strategy Alternatives. (Unit-III / Q19)
OR
6. (a) Explain the strategy at different levels of a business. ( Unit-III / Q9)

(b) Discuss the external and internal environmental factors to be considered while
formulating the strategy. ( Unit-III / Q18)
7. Define Impression Management. What are positive and negative impressions? ( Unit-IV / Q5)
OR
8. (a) Write in detail about socialization. ( Unit-IV / Q8)
(b) Why do people resist change? What are some of the techniques for reducing resistance
to organizational change? ( Unit-IV / Q13)
9. What is group behavior? What are the foundations or basic concepts of group behavior? Discuss. ( Unit-V / Q4)
OR
10. Define organizational climate. Explain the factors and impact of organizational climate. ( Unit-V / Q10)
Guess Papers with Solutions GP.1
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B.Tech. II Year II Semester Examination Gu
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Answer all the Questions
(5 × 15 Marks = 75 Marks)
1. (a) Define the terms ‘Management’ and ‘Organization’. State the differences between management and
organization. Refer Unit-I, Q1
(b) Define management. Explain the 14 principles of management. Refer Unit-I, Q9
OR
2. Explain in detail systems approach to management. Refer Unit-I, Q6
3. (a) Define Marketing Strategy. Explain in detail various strategies of marketing. Refer Unit-II, Q29
(b) Define the terms “Grievance” and “Grievance Handling”. How will you setup machinery for redressing
the grievance? what are the steps in handling a grievance? Refer Unit-II, Q19
OR
4. (a) Define Marketing. How is it different from selling? Briefly explain the core concepts of marketing.
Refer Unit-II, Q26
(b) What do you mean by job analysis? What is the need for job analysis? Explain the relationship and
differences between job description and job specification. Refer Unit-II, Q24
5. (a) Define Benchmarking. State its types. What are the steps involved in benchmarking? Refer Unit-III, Q20
(b) Define Mission. What does a mission statement contain? Discuss the characteristics of mission
statement. Refer Unit-III, Q3
OR
6. (a) Define Corporate Planning and describe the process of corporate planning. Refer Unit-III, Q10
(b) What do you understand by value chain analysis? Explain its components. Refer Unit-III, Q14
7. (a) What are the different theories of motivation? Explain Maslow’s theory of human needs. Refer Unit-IV, Q21
(b) What is Learning? What are its characteristics? How can an understanding of learning help managers
be more effective? Refer Unit-IV, Q14
OR
8. What is change? List out the three categories of change. What are the forces influencing change?
Refer Unit-IV, Q12
GP.2 Management and Organisational Behaviour [JNTU-Kakinada]
9. (a) What do you mean by the term “Group” and “Group Dynamics”? Why do people from groups?
What are the characteristics of a group? Refer Unit-V, Q1
(b) What are the stages of group development? Refer Unit-V, Q3
OR
10. What strategies can be used for managing conflicts? Refer Unit-V, Q9
Guess Papers with Solutions GP.3
R20
D
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SIA Pu b
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Gu
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B.Tech. II Year II Semester Examination pa
t
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P v t. L
Answer all the Questions
(5 × 15 Marks = 75 Marks)
1. Explain Taylor’s scientific management. Refer Unit-I, Q7
OR
2. (a) What is an organizational chart? List out its characteristics, advantages and disadvantages.
Refer Unit-I, Q16
(b) Under what conditions decentralization should be adopted? State the merits and demerits of
Decentralization. Refer Unit-I, Q22
3. What is Marketing Mix? Describe the various elements of marketing mix. Refer Unit-II, Q28
OR
4. (a) Define Merit Rating. What are its objectives and methods? Explain. Refer Unit-II, Q25
(b) What are the different techniques of job evaluation? Explain each with merits and demerits.
Refer Unit-II, Q23
5. (a) Define Policy. State its features. Explain the differences between objectives and policies.
Refer Unit-III, Q7
(b) Define Balanced Scorecard. State its merits, demerits and applications. Refer Unit-III, Q22
OR
6. What is Environmental Scanning? State its importance. What are the factors to be diagnosed in external
and internal environment? Refer Unit-III, Q12
7. (a) Explain Douglas McGregor’s Theory X and Theory Y. Refer Unit-IV, Q22
(b) What are the major attitudes to organizational behavior? Explain. Refer Unit-IV, Q10
OR
8. (a) What are the common shortcuts used by managers to judge others? What strategies do you
suggest to overcome perceptual distortions? How can understanding perception help managers
be more effective? Refer Unit-IV, Q3
(b) How do theory X and theory Y differ from one another? List out the differences. Refer Unit-IV, Q23
GP.4 Management and Organisational Behaviour [JNTU-Kakinada]
9. Discuss the various factors affecting group performance. Refer Unit-V, Q5
OR
10. What is organisational conflict? Discuss the causes or reasons of organisational conflicts. Refer Unit-V, Q6
Unit-1 Introduction 1.1
Unit
1
Introduction
SI
A GROUP
Syllabus
Introduction : Management and Organizational Concepts of Management and Organization, Nature and Importance
of Management, Functions of Management, System Approach to Management, Taylor's Scientific Management Theory,
Fayol's Principles of Management, Leadership Styles, Social Responsibilities of Management. Designing Organizational
Structures, Basic Concepts Related to Organization, Departmentation and Decentralization, MBO, Process and Concepts.
Learning Objectives
After Studying this unit, one would be able to understand,

 Concepts of Management and Organization.
 Nature, Importance and Functions of Management.
 Systems Approach to Management.
 Taylor's Scientific Management Theory with its Advantages and Limitations.
 Fayol's Principles of Management.
 Concept and Styles of Leadership.
 Social Responsibility of Management.
 Concept and Key Elements of Organizational Structure.
 Process of Designing an Organizational Structure.
 Concept of Departmentation and Decentralization.
 Concept of Management by Objectives (MBO) and its process and Concepts.
Introduction
Management can be defined as "the process by which managers in an organization get things done through
the efforts of other people in grouped activities". Management is compulsory for every enterprise. The
existence of management ensures proper functioning and running of an enterprise. The important functions
of management are planning, organizing, staffing, directing, controlling, coordinating and decision-making.
The two main theories that have contributed to management are Taylor's scientific management theory
and Fayol's principles of management.
Organization is a social group created mainly for attaining specific objectives. The term organizational
structure defines the firm's formal reporting relationships, procedures, controls, authority and decision
making processes. The key elements in organizational structure are specialization, departmentation, chain
of command, centralization and decentralization, span of control and formalization.
Management by Objectives (MBO) is a comprehensive managerial framework that links several important
managerial activities in a systematic manner. The concepts in MBO include performance appraisal,
short-term objectives and motivation, long-range planning in the MBO process and systems approach to MBO.
1.2 Management and Organisational Behaviour [JNTU-Kakinada]
1.1 Concepts of Management and Organization

Q1. Define the terms 'Management' and 'Organization'. State the differences between management and
organization.
Answer :
Management
According to Harold Koontz, “Management is the art of getting things done through and with people in formally organized
groups”.
Management can be simply defined “as the process by which managers in an organization get things done through the
efforts of other people in grouped activities”.
Organization
According to Oliver Sheldon, “Organization is the process of combining the work that individuals or a group have to perform
with the facilities necessary for its execution, that the duties so performed provide the best channels for efficient, systematic,
positive and coordinated application of the available effort”.
According to Kountz and O’Donnell, “Organization is the establishment of authority and relationships with provision for
coordination between them, both vertically and horizontally in the enterprise structure”.
Differences between Management and Organization
The differences between management and organization are as follows,
S.No. Management Organization

1. Management is a process of developing and maintaining an Organization is a social group created mainly for attaining
environment in which individuals work together in groups specific objectives.
for attaining the organizational objectives.
2. Management is a part of organisation. Organization is a framework for management process.
3. Management is regarded as an art and science. Organization is a system.
4. Management mainly involves integrating and using the Organization mainly involves designing and maintaining
knowledge and analytical approaches created by other a structure of working relationships for attaining
disciplines. organizational objectives.
1.2 Nature, Importance and Functions of Management

Q2. Define Management. Describe the nature and features of management.
Answer : [Model Paper-I, Q1(a) | April/May-17, Set-1, Q2(a)]
Definitions of Management
Nature of Management
The nature of management can be understood from the following points,
1. Management is a Group Activity
Management is an essential part of a group activity as no individual can do all the work by himself, so he combines his
efforts with fellow beings and works in an organized group to achieve what he cannot achieve individually. Wherever there is
an organized group of people working towards a common goal, some type of management becomes essential.
2. Management is a Dynamic Function
Management is a dynamic function and it needs to perform continuously as it is constantly engaged in the adoptability of
the enterprise in an ever changing business environment. It concerns not only in moulding and adapting to environment but also
can bring in alteration to environment itself so as to ensure the stability of the organization.
3. Management is Goal-Oriented
Management with its group effort aims to achieve economic and social objectives and is concerned with establishment
and achievement of certain predetermined goals. The goal could be either increase of profit or expansion of sales.
4. Management is an Economic Resource
As we have seen that land, labour, money and technology are the basic requirements and factors of production which are
essential for production of goods and services. Management is also a factor of production and economic resource to co-ordinate
the other factors of production for achieving goals.
5. Management is Universal in Character
Management is omnipresent. It exists wherever there is a human activity. It may be a small firm or a multinational company
and it can be said that management has a universal application and can be applied in all organizations whether it is business, social,
religion, culture, sports, education, i.e., in every concern, management function is performed.
Features of Management
The following are the features/characteristics of management.
1. Organizes Activities
If a given activity is to be performed effectively by two groups of people, then it becomes the responsibility of management
to organize these groups such that they work together towards a common objective to attain the goals of an organization.
2. Sets Objectives
If an organization has to attain a result, it must have a set of objectives towards which the organized efforts are directed.
Without objectives, the organization will not have any direction.
3. People Oriented
Management works with and through people for getting the work done or achieving the objectives of the organization. i.e.,
the work is assigned to the subordinates at each level in the hierarchy and finally the work is actually accomplished by people at
the operational level.
4. Utilization of Resources
In order to achieve the goals, relationship among the available resources should be established. Resources include men, material,
money and machines. They must be available to persons who manage the organizations. Thus, the management is concerned mainly
with the proper utilization of manpower (human resources) which in turn utilizes other resources.
5. Decision Making
The question of decision making arises when there are alternatives. The management has to select any one of the alternatives
which will provide the desired results. So, it is very important that the decision maker in his decision making takes into consideration
all the factors and makes a decision which will profit the organization.
6. It is Needed at all Levels
Management applies to all levels of organization. The lowest level supervisor also performs the function of decision
making like executives.
Q3. Explain the importance of management.
OR
Elaborate the importance of management in the globalized era.
Answer : [Model Paper-II, Q1 | April/May-17, Set-4, Q2(b)]
The importance/significance of management in globalized era is discussed below,

1. Management Meets the Challenge of Changes
An efficient management can save the business from the risk brought in by the challenges of changes. There are frequent
changes taking place in business world which place the business in an unstable position.
2. Accomplishment of Group Goals
The achievement of objectives of a business depends upon three factors of management. These factors are proper planning
of available resources, adjusting possibility of business unit with existing business environment, the quality of decisions taken
and control of the business unit.
3. Effective Utilization of Business
There are eight “M’s” in the business, which are men, money, material, machines, methods, motivation, markets and
management. Management has control over other remaining M’s.
4. Effective Functioning of Business 1. Top Level Management
Some of the factors responsible for the effective Top management of an organization consists of Board
functioning of business are ability, experience, mutual of Directors, Chairman and Chief Executive Officer. Top
understanding, coordination, motivation and supervision. management integrates the functions of the whole organization.
Management makes sure that the abilities of workers are properly (a) Functions of Board of Directors
used and cooperation is obtained with the help of mutual
understanding. The functions of board of directors are,
5. Resource Development (i) Determining basic objectives and policies.
Efficient management is the life of any developed (ii) Selecting top executives and determining overall
business. The resources of the business may be identified and organization structure.
developed by the management. The term ‘resources’ include (iii) Approving budgets and appropriation of corporate
men, money, material and machinery. earnings.
6. Sound Organization Structure (iv) Checking and controlling top managers.
Management lays down the foundation for sound (b) Functions of Chief Executive
organization structure which clearly defines the relationship
The various functions of chief executive are,
between authority and responsibility.
(i) Formulating long-term plans and making strategic
7. Management Directs the Organization
decisions.
Management directs and controls the functioning of an
(ii) Integrating the efforts made by various departmental
organization just like the way a human mind directs and controls
heads.
the functioning of the human body.
(iii) Ensuring that actual work is proceeding according
8. Integrates Various Interests
to plans.
Each person has his own interest. These interests are
(iv) Integrating organization with the external
different in nature. Management takes help to integrate various
environment to maintain relations with various
interests to achieve the objectives of an organization.
agencies in the society.
9. Stability
2. Middle Level Management
The fluctuations of business are stabilized by the
management, which are caused by changing policy of the Middle management stands between top management
government, pressures on the part of competitors and changing and supervisory or lower management level.
preferences of customers. Functions of Manager
10. Innovation The various functions of manager are,
New ideas are developed by the management and (i) Performing various functions so that top
implemented in the organization. Better performance is achieved management gets enough time for integrating
through new ideas. overall functions of the organizations.
Q4. Explain the levels of management and their (ii) Cooperating among different levels of management.
functions. (iii) Training employees for better functioning.
Answer : [Model Paper-III, Q1(a) | April/May-17, Set-1, Q2(b)] (iv) Contributing towards functions of other departments
The three broad levels of management are depicted in the for achieving organizational goals.
below given management pyramid, 3. Lower Level Management
1. Top level management Lower management is concerned with efficiency in
2. Middle level management using resources of the organization. A supervisor supervises the
3. Lower level management. activities of workers directly in this level of management.
Functions of Supervisor
The various functions of supervisor are,
Chief Top Management
Executive (i) Planning the activities, classifying and assigning
jobs to workers.
Departmental Middle Management (ii) Guiding workers about work procedures.
Heads
(iii) Solving problems of workers related to their jobs.
Supervisors Lower Management (iv) Providing feedback to management about the nature
of work environment.
Figure : Levels of Management (v) Maintaining discipline among workers.
Q5. Discuss about the functions of management. 4. Directing
[Model Paper-IV, Q1 | May/June-14, Set-2, Q1]
Directing consists of guiding and supervising the
OR subordinates in activities. Management means getting work done
by others i.e., the subordinates have to be properly guided and
Explain coordination and control functions of
management. supervised in their respective jobs so that the common goal is
achieved.
(Refer Only Topics: Coordinating, Controlling)
5. Controlling
Answer : April/May-19, Set-1, Q2(b)
Controlling consists of making the results tally with
The basic or generic functions of management are as targets or achieving close correspondence between plans
follows,
and performance. It is the process of measuring the current
1. Planning performance of the employees and assessing whether the given
objectives are achieved or not. The various steps in controlling
Planning is outlining what, how, where, when and by
includes,
whom, a task is to be achieved. Everything is planned before
and a blue print is prepared. Planning is the opposite of random (a) Establishing of standard works.
action. Hence, as far as possible, a definite programme of
action is made, because it refers to the future and the future is (b) Assessment of actual work.
uncertain. The management takes help from research, facts and (c) Determination of deviation.
trend forecasts. Again planning is the pre-action stage and it is
the basis of all future actions. (d) Corrective action.
2. Organizing Controlling brings results nearer to the targets.
Organizing involves identification of activities 6. Coordinating

required for the achievement of the objectives of the firm and Coordinating means achieving team spirit and unity of
implementation of plans. Organizing is the function of making action among the subordinates for achieving common business
arrangement for all the necessary resources required to work objectives. In a business unit, hundreds of persons are busy
for achieving the objectives. It means, making arrangements in numerous different jobs at different places. But all are
for all six M’s (money, men, machines, material, marketing individually and collectively working for the same objective
and managing) of business. Therefore, it involves the called coordination. Need of coordination arises particularly
following steps, because of the existence of,
(a) Activities determination. (a) Numerous persons at work.
(b) Staff recruitment. (b) Sub-divisions and complexity of work.
(c) Work allocation. (c) Delegation of authority and responsibility.

(d) Authority and duty determination. (d) Chances of differences between executives and
specialists.
(e) Power delegation.
All these similar factors make it necessary for managers
3. Staffing to coordinate.
After the objectives have been formulated, the next step 7. Decision Making
in the management process is to procure suitable personnel for
planning the jobs. So staffing is the function which enables the Decision making is the most comprehensive and all
recruitment of suitable personnel. Staffing consists of various embracing function of management. The modern trend is to
sub-functions like: include the detailed functions of planning and organizing in
this one single function or to treat these various functions
(a) Manpower planning which decides the number and the as different aspects of this function called decision making.
kind of personnel required. Decision making means selecting one alternative out of two
or more alternative solutions. For example, planning means
(b) Recruitment is a sub-function which attracts suitable
selecting one future course of action out of various alternative
number of potential employees to seek jobs.
courses. Again business can be carried out in a number of
(c) Selection of the most suitable persons. alternative ways. Organizing implies selecting one out of these.
The same applies in respect of other functions like directing,
(d) Placement, induction and orientation. controlling, motivating and coordinating. Therefore, decision
(e) Training and development of employees. making summarizes all the managerial functions.
1.3 System Approach to Management Transformation Process
Q6. Explain in detail systems approach to The main task of managers is to transform the inputs
management. into outputs in an effective manner. Writers on management
look at the transformation process as a particular approach
Answer :
to the management. Writers on human behaviour look at the
System transformation process as interpersonal relationships, social
A system in an assemblage of things connected or systems and advocating decision theory. The most useful job
interrelated so as to form a complex unity. It is a whole composed approach of a manager is to use the managerial function of
of parts and subparts in orderly arrangement according to some planning, organizing, staffing, leading and controlling.
scheme or plan.
Communication System
Features of a System
Communication is an essential function of the managerial
The features of a system are,
process for two reasons as stated below,
1. A system is basically a combination of parts, subsystems,
each part may have various subparts. Thus, a hierarchy (a) It integrates managerial functions.
of systems and subsystems can be arranged. (b) It links the enterprise with external environment.
2. Parts and subparts of system are mutually related to each
External Environment
other, some more, some less, some directly, some indirectly.
Any change in one part may affect other parts also. Managers will regularly check external variables. They
3. A system is not merely the totality of parts and subparts but do not have the power to change the external environment but
their arrangement is more important, Thus a system is an they have to respond to it.
independent framework in which various parts are arranged. Output
4. A system can be identified because it has a boundary.
It is the task of managers to secure inputs for the
Identification of this boundary in the case of human
enterprise, transform them through the managerial functions
organisation facilitates the management of a system by
and finally produce the output.
differentiating those which can be controlled because
they are the parts of the system and those which cannot Re-energizing the System
be controlled because they are outside the system.
In the system model of the management process, the
5. The boundary of a system classified it into two parts, outputs become inputs again which is known as re-energizing
closed system and open system. the system. The new knowledge and skills of employees become
Model of Systems Approach to Management an important human input.
The model of the system approach to management is
the foundation for organizing managerial knowledge. The 1.4 Taylor's Scientific Management
enterprise receives inputs, transforms them and gives outputs Theory
to the environment as shown in the figure.
Re-energizing Q7. Explain Taylor’s scientific management.
the System [Model Paper-I, Q1(b) | April-18, Set-2, Q2(a)]
OR
Explain Taylor’s experiment and what he was
trying to achieve with those experiments.
Answer : April/May-17, Set-4, Q2(a)
F.W.Taylor is well known as the “Father of Scientific

Management”. Fredrick Winslow Taylor spent a lot of time
Figure: Model of Systems Approach to Management
for finding solutions to the problems on shop floors with an aim
Inputs to increase the efficiency. Taylor noted in his observations that
The enterprise receives inputs from the external the tools and equipments used by the workers on shop floors
environment consisting of human beings, capital income, were primitive in nature and the workers intentionally delayed
managerial skills and technical skills. Various demands are made the work. Taylor was able to support the workmen by giving
on the enterprise. For example, employees want benefits and solutions to the problems faced by workers on the shop floor as
security of their jobs. Consumers demand quality and quantity he himself spent his life time on a shop floor as a worker and
of the goods at lower prices. Suppliers want confidence that rose to the level of manager. Taylor developed and designed tools
goods will be bought in time and also want it to be safe. Stock and equipments which could reduce the fatigue of the workers
holders want high returns on their investment and also security by using standardized equipments which led to increase in the
for their money. efficiency and ultimately productivity of the shop.
Elements/Features of Scientific Management 2. Harmony in Group Action
Scientific management is the process of using scientific Group harmony suggests that there should be mutual
principles to analyze the work systematically to find solutions give and take situation and proper understanding so that group
for all the problems associated with it. The elements of scientific as a whole contributes to the maximum extent.
management suggested by F.W. Taylor are as follows,
3. Cooperation
1. Separation of Planning and Doing
Scientific management involves achieving cooperation
Taylor emphasized the separation of planning aspect from rather than chaotic individualism. Cooperation between
actually doing the work. He suggested that planning should be management and workers can be developed through mutual
left to the supervisor and the worker should emphasize only on understanding and change in thinking.
operational work.
4. Maximum Output
2. Functional Foremanship
Scientific management involves continuous increase in
Taylor evolved the concept of functional foremanship production and productivity instead of restricted production
based on specialization of functions, which could improve either by management or by workers. Taylor was against
the planning work sufficiently besides keeping supervision of inefficiency and deliberate curtailment of production.
workers
5. Development of Workers
3. Job Analysis
Development of workers to the fullest extent possible for
Job analysis is undertaken to find out the best way of
their own and for the cooperative highest prosperity is essential.
doing things with the least movements, using less time and cost.
Training should be provided to workers to keep them fully fit
This is determined by taking up time-motion-fatigue studies.
according to the requirement of new methods of working.
4. Standardization Advantages/Benefits of Scientific Management
Standardization should be maintained in respect of The following are the various advantages/benefits of
instruments and periods of work, working conditions etc. scientific management,
5. Scientific Selection and Training of Workers 1. It enhanced working methods and has brought increased
Taylor has suggested that workers should be selected productivity.
on scientific basis taking into account their education, work 2. In the scientific management period, the piece rate wage
experience, aptitude, physical strength etc. system and incentive systems came into existence.
6. Financial Incentives 3. It provided the base for work study and other methods.
According to Taylor, wages should be based on individual 4. It brought a significant change in the physical working
performance and not on the position which a person occupies. conditions of the employees.
7. Economy 5. It replaced the widely acceptable traditional rule of thumb
Taylor suggested adequate consideration to be given to approach.
economy and profit. 6. It brought many improvements in plant design, working
8. Mental Revolution methods and other related aspects.
Mutual cooperation between management and workers 7. It laid down a rational approach for measuring the
can be achieved through mental change from conflict to processes and tasks with considerable accuracy.
cooperation in both parties. 8. The observation of scientific management acts as the
Q8. What are the principles of scientific management foundation for Mc Gregor’s theory of X assumption
advocated by F.W. Taylor? State its advantages regarding people.
and limitations. Limitations of Scientific Management
OR Some of the limitations of scientific management are as
Discuss the scientific management principles. follows,
(Refer Only Topic: Principles of Scientific Management) 1. The principles of scientific management are mainly
concerned with operation-level problems. These
Answer : [Model Paper-II, Q2 | April/May-17, Set-3, Q2(a)]
principles neglect the managerial issues, which are very
Principles of Scientific Management important for managing an organization.
The following are the principles of scientific management, 2. Human desire for job satisfaction is neglected by this
theory.
1. Replacing Rule of Thumb with Science
3. This theory is often related to engineering than
Use of scientific method denotes precision in determining
management.
any aspect of work, rules of thumb emphasizes estimation.
Since exactness of various aspects of work like days fair work, 4. This theory assumes that people are rational and want to
standardization in work, differential piece rate for payment etc., fulfill their material gains. So, it emphasizes on economic
is the basic core of scientific management. and physical needs of the people rather than social needs.
1.5 Fayol's Principles of Management 5. Unity of Direction
Q9. Define management. Explain the 14 principles Unity of direction deals with the functioning of body
of management. corporate. There should be one common plan for one unity.
Unity of direction means one unit, one plan, whereas unity of
[Model Paper-I, Q2(a) | Jan./Feb.-15, Set-2, Q1]
command is defined as one person should have orders from one
OR boss only. Unity of direction is provided by body of corporate
Define management. Explain Henry Fayol’s organisation. Unity of direction neither exist nor flows without
principles of management. April/May-13, Set-1, Q1 unity of command.
OR 6. Subordination of Individual to General Interest
Describe the Henry Fayol 14 principles for
The interest of an individual person should not be
management.
permitted to prevail upon the general interests of the firm. Both
(Refer Only Topic: Principles of Henry Fayol for Management) the employee and employer should subordinate their interest to
Answer : April/May-17, Set-1, Q3(b) the general interest. Fayol suggested that,
Management (a) There must be an agreement between management and
Management can be simply defined “as the process by employee.
which managers in an organization get things done through the
efforts of other people in grouped activities”. (b) Constant supervision by superiors.
Principles of Henry Fayol for Management (c) Firmness on the part of superiors.
Fayol listed fourteen principles of management based 7. Remuneration
on his experience. Following are the principles of scientific
management, Remuneration is the price paid to the employees for
the services rendered by them to the enterprise. Remuneration
1. Division of Work should enable the employees to lead a satisfactory life and other
Division of work means dividing the work on the special offers like share or profits, festival bonus are paid to the
principle of specialization. The functions of management employees. Remuneration should be given based on the living
like planning, organizing, directing, coordination cannot be cost and capacity of the enterprises.
performed by one group of directors. These functions are to be
performed by the experts in the specific area. Specialization in 8. Centralization of Authority
decision making, policy formulation, controlling, leading would Centralization of authority means that the authority is in the
lead to more efficient and systematic working of the firm. hands of the centre i.e., the authority will not be distributed among
2. Authority and Responsibility different sections. Small concerns have absolute centralization
Authority and responsibility should go together. An because orders from the management goes directly to the
executive can do justice to his responsibilities only when he has employee. But in large concerns, the orders from the management
proper authority. Responsibility means accountability. Authority pass through different levels to reach the employee.
means right and power to act. Those who accept authority should 9. Scalar Chain
be willing to share responsibility when a person is authorized to
do a job, he will be responsible for his performance. Everybody Managers are a chain of superiors. There should be an
in the organizational structure must understand the limits of unbroken line of authority and command from highest level or
authority and responsibility. lowest rank.
3. Discipline T
Discipline is very important for the efficient functioning
of an enterprise. Discipline maintained among the officials
U
and subordinates at all levels can guarantee the fulfillment of

G
V
objectives of the management. Management involves direction

H
W
of efforts of people, has to be invariably matched by marked

discipline, among the people whose skills and energy are to be
channels in particular directions.
X I
4. Unity of Command
Figure: Scalar Chain
Unity of command means, employees should receive
orders from only one superior. If the individuals are assigned The diagram shows that T holds the authority on two
work under more than one superior, then performance and departments. T will give orders to U and U will pass onto V and
degree of the discipline will not be guaranteed, personnel will so on. T will also issue instructions to F, who will pass on these to
be confused, whom they should report. Effective exercise of G and so on. Now, If W wants to consult H, then W will approach
authority, responsibility, discipline among the individuals are V and V to U, U to T so it will take long time. Hence chain is
based on the management structure. necessary to make the communication fast and effective.
10. Order
This promotes the idea of keeping the right man at the right place. Order lines in work can be obtained by the management
through the suitable organisation of men and material. If proper utilization of resources and workers employed without proper
placement, then employed personnel will not be accurate and there will be a wastage of material and equipment.
11. Equity
Manager should deal with his subordinates with kindness and justice. This will make employees more loyal and devoted
towards the management and enterprise. Equity ensures cordial relations between employee and employer. The successful enterprise
depends on good industrial relations which are built on fair play.
12. Stability
Stable and secure workforce is an asset to the firm, because unnecessary labour turnover is costly. It indicates avoiding of the
frequent transfers of the employee before he settles down.
13. Initiative
Initiative is concerned with execution of a plan. Managers should secure initiative from the subordinates. The manager
should permit subordinates to exercise authority. This implies sharing of decision making authority with subordinates.
14. Esprit De Corps
This principle of management emphasizes the need for teamwork among the employees and shows the importance of
communication in obtaining such teamwork. Strength, stability, stature and reputation depends on the relations among the personnel.
Q10. Compare and contrast the Fayol’s principles of management and Taylor’s scientific management theory.
Answer :
The Fayols Principle of management and Taylors scientific management theory may be compared and contrasted as follows.
Comparison between Taylor and Fayol
The work of Taylor and Fayol is found to be significant as both focused on the fact that industrial progress completely
relies on the problem of workforce and their management. Both worked as executives in industry and aimed at improving the
management practice. Scientific methods were applied by both for solving the managerial problems. Practical experience served
as a basis for both of their ideas and they used books to express these ideas.
The comparison between both the Taylor’s and Fayol’s contributions reveal that Fayol’s theory is much more comprehensive
and is widely applicable when compared to Taylor’s theory. Taylor has used the application of science for solving the managerial
problems. The 14 general principles of management represents the major contributions made by Fayol. In fact, Fayol defined the
functions and qualities of a manager. Mutual cooperation among employers and employees was emphasized by both Taylor and
Fayol.
Since, more emphasis was laid down on the human factor, both have been criticised. Fayol’s theory was believed to be
exceptionally formalised and had broad view of management process. Inspite of its criticism, it has been considered as a core
management theory because of its vast scope even in the modern context.
Distinction between Fayol's Principles of Management and Taylor's Scientific Management Theory
The differences between Fayol's principles of management and Taylor's scientific management theory are,
S.No. Basis of Distinction Fayol's Principle of Management Taylor's Scientific Management Theory
1. Perspective This theory focused on the improvement of This theory focused on improving the efficiency
efficiency at the top level. His principles of at the lowest level. His principles of management
management move from top to bottom. move from bottom to top.
2. Nature of personality/ Fayol was a practitioner. Taylor was a scientist.
career.
3. Expression He used the title ‘a general theory of He used the title ‘scientific management’ for the
management’ for the expression of his ideas. expression of his ideas.
4. Concern It is concerned with the efficiency of The theory is mainly concerned with task,
administrators. worker and supervisors.
5. Emphasis It emphasizes on the managerial principles and More emphasis was laid down on standardization
principles of general management. of work and tools.
6. Focus This theory focus on improving the over all Its main objective is to increase the productivity
administration through the application of by simplifying and standardizing the task and
general principles. work practices.
7. Basis of formation The personal experiences translated into The scientific observations and experiments
universal truth is the basis of formation of serve as the basis of this theory.
his theory.
8. Unity of command The unity of command is maintained as one This theory violates the unity of command under
of the fourteen principles. functional foremanship.
9. Applicability It is applicable universally. It is applicable only in special situations.
1.6 Leadership Styles

Q11. What is Leadership and Leadership style? What are the different styles of Leadership?
Answer :
Definition of Leadership
According to Koontz and O’ Donnell, Leadership is defined as influence, the art or process of influencing people so that
they will strive willingly towards the achievement of group goals.
According to Peter F.Drucker, Leadership is the lifting of man’s visions to higher rights, the raising of man’s performance
to higher standards, the building of man’s personality beyond its normal limitations.
Leadership Style
The essence of leadership style is the traits, skills and behaviours which the leaders use while communicating with their
followers. Behaviour is regarded as the most important element of leadership style, as it is the behaviour which distinguishes a
leader from other persons. So, leadership style consists of the behavioural pattern of an individual who tries to influence others.
Leadership style includes two types of behaviours i.e., task related and relationship related behaviours. Task related leadership
style is concerned with accomplishment of task whereas relationship related leadership style is concerned with developing close
interpersonal relationships.
Different Styles of Leadership
The different types of leadership styles are,
1. Autocratic or Authoritarian style of leadership
2. Participative or Democratic style of leadership and
3. Free rein style of leadership.
1. Autocratic or Authoritarian Style of Leadership
In the autocratic leadership style, the leaders take decisions by themselves. Leaders are very confident in decision making
and they feel that the group members should act accordingly. Autocratic leaders mainly concentrate on completing the task, so
they are regarded as task oriented leaders. They set clear performance standards and dictate various aspects by framing rules and
regulations for their group members.
Thus, an autocratic leader makes independent decisions, instructs and informs the employees about their tasks and carefully
supervises them. In this type of leadership style, employees do not have freedom to participate in decision making.
2. Participative or Democratic Style of Leadership
In participative leadership style, leaders allow the group members to take part in decision making. This type of leadership
style is mainly characterised by involvement of employees in decision-making. A participative leader consults with the subordinates,
obtains their ideas and opinions and considers their suggestions at the time of decision making. These leaders work along with
their employees for solving their problems and not supervise them.
Participative leadership style includes different types of behaviours which are classified into three types,
(a) Consultative leadership style
(b) Consensus leadership style and
(c) Democratic leadership style.
(a) Consultative Leadership Style 2. Towards Consumers
In this type of leadership style, leaders meet with their The management should provide good quality products to
group members and discuss with them, before making the consumers at a reasonable price. It should provide accurate
a final decision. But, the right to decision making will and relevant information to the customers. It should avoid
remain with the leader. The leader has a serious concern offering harmful products and goods of hazardous nature.
for the employees suggestions, ideas and opinions.
3. Towards Workers
(b) Consensus Leadership Style
The management should adopt such policies which are
In this type of leadership style, a leader makes a decision
recognized by trade union, which create a sense of belonging
only after considering the opinions of his employees. The
and which improve the working and living conditions of the
leader here, gives more importance to group discussions.
workers. The workers should be paid fair wages and they should
The decisions taken by the leaders are sustained and
be treated properly.
supported by all their team members.
(c) Democratic Leadership Style 4. Towards Suppliers and Creditors
In this type of leadership style, the right to make decisions The management should arrange the amount of money
rests with the group members. The leader gives the within the time specified to repay the loans taken from creditors
needed authority to an individual or group for taking a and to pay for the supplies. It should fulfill all the obligations
decision. agreed and should have good relations with them.
3. Free Rein Style of Leadership 5. Towards the Government
Free rein leadership style is also known as “Laissez The organization should abide by all the laws of the
Faire” – a French word meaning “do not interfere”. The free government. It should pay all the taxes and other dues fully
rein leader delegates complete authority to their employees. in time. It should support the government in all development
These types of leaders do not take-up any responsibility, take activities.
lot of time for decision-making and do not give any feedback
to their employees. This style of leadership is mostly suitable 6. Towards General Public
for the employees who seek motivation and experience to do
The management should protect the interests of society
work. These employees are self-sufficient and do not need any
and support community development activities. It should behave
help or emotional support from their leaders.
with the people in a proper manner and should desire to improve
their standard of living.
1.7 S o c i a l R e s p o n s i b i l i t i e s o f
Management Q13. Underline the importance of responsibility of
management to society. Give some examples
Q12. Define Social Responsibility. Discuss in detail how some organisations implemented the same.
Social Responsibility of Management.
Answer : [Model Paper-III, Q2 | Nov.-15, (R09), Q1(a)]
Answer :
Definition of Social Responsibility Importance of Social Responsibility of Management to
Society
“Social responsibility refers to the businessmen’s
decisions and actions taken for reasons at least partially beyond Many organisations show the sense of social responsibility.
the firm’s direct economic or technical interest”. – Keith Davis. They consider the development of society as a part of their
commitment. They believe that some of their business profits
Social responsibility is “the managers responsiveness to
must be contributed towards the upliftment of society in terms
public consensus”. – A.Berle.
of community social or cultural development.
Social Responsibilities of Management
Company’s commitment to social responsibility helps
Social responsibility of a business is viewed as in building a strong image in target customer’s minds. Social
conducting its operations in a free and fair manner by responsibility improves the economic performance of the
discharging its commitment towards different segments as organisation. The corporates meet the community needs like
explained below, education, environment, arts, public health, social welfare etc.
1. Towards Shareholders To improve the corporate image, many companies such as
Ranbaxy, Bajaj auto, Telco, Infosys have taken initiatives for
It is the social responsibility of management to provide
the community upliftment. Infact, some companies have set-up
true and fair information to shareholders regarding the
their own community or social programmes.
functioning of organization, return on capital, profits earned
etc., in order to encourage them to either directly participate in Many private and public companies such as charitable
the management actions or to provide powers to intervene. It is trusts, educational institutions, non-government organisations
necessary to protect the interests of the shareholders. can involve in the process of society development.
Examples of Different Organizations that Implemented 3. Public Image
Social Responsibility Another argument in favor of social responsibility is
The following are few examples of organizations that that it improves public image. Each individual firm seeks an
implemented social responsibility for the development of enhanced public image so that it may gain more customers,
society. better employees, more responsive money markets and other
Example-1: TATA Group of Companies benefits. A firm which seeks better public image should support
social goals.
The Tata Group of companies, contributes to social
development as a part of its corporate policy. It involved itself 4. Avoidance of Government Regulation
in the following activities, Government is a massive institution with long arms.
1. Building community halls and school buildings. It seeks to regulate business in public interest. Government
2. Publicity of entrepreneurship and rural industry. regulation is costly and derives the much needed freedom in
decision making. Before government stretches its long arms,
3. Publicity in adult literacy.
business should discharge its obligations to society.
4. Offering health care facilities and other facilities to the
5. Better Environment for Business
visually disabled and under privileged people.
5. Encouraging woman and youth etc. Another argument favoring social responsibility is
that it creates a better environment for business. This concept
Example-2: Government of Andhra Pradesh rationalizes that a better society produces environmental
Lately, the Government of Andhra Pradesh undertook the conditions more favorable for business operations.
Janmabhoomi Programmes to develop essential infrastructure
Arguments Against Social Responsibility
such as community schools, health, Sanitation, Community
roads etc., as to fulfill the requirements of the community. Following are the arguments against social responsibility,
Example-3: Asea Brown Bovery (ABB) 1. Profit Maximization
The multinational company named Asea Brown Bovery The first and the most forceful argument disfavoring
(ABB) has undertaken the following corporate community social responsibility is that business has profit maximization
activities,
as its main objective. Business functions are economic and not
1. Providing books to children on water, air, soil, energy social. In business, managers and shareholders are motivated
etc, in the local languages. by maximizing profits.
2. Providing education to the children and wives
2. Lack of Social Skills
of employees with main focus on environmental
consciousness. Business managers are best at managing business matters
3. Conducting community development programmes at not social matters.
several factory locations all over India as to ensure health 3. Social Overhead Cost
care, adult education, family welfare in the villages.
Cost on social responsibility is considered to be a social
4. Working in co-ordination with the World Wildlife Fund
cost and it will not immediately benefit the business.
(WWF) in Baroda.
Q14. Explain Arguments for and against Social 4. Lack of Accountability
Responsibility. Another point of view is that the businessmen have no
Answer : direct accountability to the people.
Arguments for Social Responsibility
There are many arguments in support of social 1.8 D e s i g n i n g O r g a n i z a t i o n a l
responsibility. Some of them are explained as follows, STructures – Basic Concepts
1. Moral Responsibility Related to Organization
Modern business corporations have a moral responsibility Q15. What is organizational structure? What is
towards society. They should contribute some part of their the need for designing an organization?
overall resources for the betterment of society. What are the steps involved in designing an
2. Public Expectations organizational structure?
One of the most potent arguments for social responsibility Answer :
is that public expectations from business have changed. It is
reasoned that the institution of business exists only because it Organizational Structure
satisfies the valuable needs of the society. If business wishes to The term organisational structure defines the firm’s
remain in the long-run, it must respond to society’s needs and formal reporting relationships, procedures, controls, authority
give society what it wants. and decision-making processes.
Need for Designing an Organization M anaging Director
Designing organization is necessary for the following

reasons, General M anager
1. To identify and classify the required activities.

2. To group the activities necessary to attain objectives. Senior AGM
Senior
AGM AGM
M anager M anager
Purchase M arketing Personnel
3. To assign each group to a manager delegating authority Production Quality
necessary to supervise it, and

M anager M anager M anager M anager M anager
4. To provide coordination horizontally and vertically in M achine Direct Incoming Sales Recruitment
Shop M aterial & Quality
the organizational structure. Capital
Equipment
Steps Involved in Designing an Organizational Structure
The common steps which are followed in designing the M anager
M anager
M anager M anager
Indirect M anager
organizational structure are, Assembly
M aterial Product Service Training &
Quality Placements
Step 1: Objectives
The first and the foremost step is clearly defining the
Figure: Organisation Chart
objectives of an organization to be achieved. This would help
to ascertain the primary features of an organization. Characteristics of Organizational Chart
Step 2: Classification Following points highlight the characteristics of
Once the objectives are set, the next step is to determine organizational chart,
the ways to achieve them i.e., identifying the important activities 1. Organization chart shows the interrelationship and
and classifying them accordingly in an organized manner.
relative position of each department of the company.
Step 3: Ascertaining the Structure
2. It shows the relationship between the lines of command
The third step is to determine the structure i.e., to decide i.e., authority and responsibility.
about the supervision activity, kind of organizations, the grounds
for departmentation and the pattern of authority level and so on. 3. It serves as a training device and as a guide in planning
for expansion.
Step 4: Reviewing
4. It is useful in showing the nature of the organization and
The last step in developing an organizational structure
changes (if any) in the existing and the newcomers.
is reviewing the whole organization by assessing both the
personnel and the capital structure. The abilities of the 5. It clearly shows if any particular function is omitted.
employees are determined.
6. It shows the kind of managerial relationship which exists
All the four steps are the general steps which are in the organization i.e., line, line and staff or functional.
followed by most of the organizations. It is not necessary that
each and every organization follows the same steps. Different 7. It illustrates the superior subordinate relationship i.e.,
organizations can follow different steps depending upon their who reports to whom.
organizational structure.
Advantages of Organizational Chart
Q16. What is an organizational chart? List out its
characteristics, advantages and disadvantages. Following are some of the advantages of an organizational
chart,
OR
1. The activities of the firm can be represented with the help
What is an organizational chart and describe its
of organizational chart and it is also useful in recognizing
characteristics?
the employees who are accountable for activities.
(Refer Only Topics: Organizational Chart, Characteristics
of Organizational Chart) 2. It facilitates in knowing the inter-relationships of
positions.
Answer : [Model Paper-I, Q2(b) | April/May-17, Set-3, Q2(b)
3. The organizational relationships can be introduced to
Organizational Chart
new employees with the help of organizational chart.
Organisation chart is the graphical representation of 4. It helps in defining the tasks that are to be performed by
structural relationship among different functions and the persons
the employees in their positions.
responsible for that function. It shows how the dynamic activity
and enterprise are coordinated into a working unit. 5. The difficulties inside the organizations can be solved.
Disadvantages of Organizational Chart
Disadvantages of organizational chart are as follows,
1. It may create some problems in the relationships of the organization.
2. There is an issue of re-organizing the chart if there is any change in hierarchy of new positions in the organization.
3. It does not provide authority to existing personnel at any level of the structure.
4. It does not indicate any human relationships between superior and subordinates.
5. Only formal authority relationships are indicated and most of the important informal and informational relationships are
ignored.
Q17. What are the elements of organizational structure? Explain briefly.
Answer :
The various elements of organization structure/design are as follows,
1. Work Specialization
It refers to the division of work related activities according to their functions. Specialization deals with assigning tasks to
persons according to their functional capabilities and specialities. Effective organizations should develop specialization.
2. Departmentation
so that efficient supervision takes place in a channelized manner is called departmentalization. Each group/set so channeled is
called a department answerable to its head, who in turn, is answerable to the next higher-up in the hierarchy.
3. Chain of Command
Chain of command is also called as “scalar principle”. This principle vividly defines the line of authority, which flows
from the top (chief executive) level to the lowest (first line managers) level. It is a continuous chain of command and must try to
avoid its breakdown from any kind of problem.
4. Centralization and Decentralization
Centralization
According to Allen - “Centralization is the systematic and consistent reservation of authority at central points within the
organization”.
Decentralization
According to Allen, “Decentralization applies to the systematic delegation of authority in an organization wide context”.
5. Span of Control
According to Urwick, ‘a manager can directly supervise a limited number of people’. Therefore, the span of control should
be minimum in order to provide effective supervision. It means a superior (executive) would be able to efficiently handle a team
of few (or) less number of subordinate members.
The span of control principle explains that an individual can effectively manage only few limited number of people.
6. Formalization
The concept of formalization analyses the degree of standardization among jobs. It determines, how well established rules
or procedures guide the behaviour of employees.
Example: Fast Food Franchises maintain high level of standardization for its employees. It has laid down strict guidelines
for behaviour and processes.
Generally companies which are at initial stage are likely to employ low levels of formalization.
Q18. What are the basic important concepts related to organization?
Answer :
The following are the basic/important concepts which help in understanding the functioning of organisation,
1. Organisational Hierarchy
Organisational hierarchy refers to the layers of the management right from top management to managers or supervisors of
the lower rank. Top management includes chief executive or director who formulates plans and take decisions in the organisation.
In the organizational hierarchy, employees have different degrees of authority based on their levels. Managers have authority over
their subordinates. The higher, the level in the hierarchy, the higher will be the responsibility and authority.
2. Authority and Responsibility
Authority refers to the right and power of doing specific tasks. The top management cannot perform all the activities alone.
Therefore, there must be a proper chain of authority and responsibility formulated by the top management.
An obligation to perform a task, given by the boss to his subordinate is considered as “Responsibility”. In other words,
Responsibility simply means “Accountability”. The authority and responsibility should go hand in hand to ensure efficient and
effective achievement of organisational objectives.
3. Delegation of Authority
According to George R.Terry, Delegation means “Conferring authority from one executive or organizational unit to another
in order to accomplish particular assignment”.
According to Louis A.Allen, “Delegation is the dynamics of management, it a process a manager follows in dividing the
work assigned to him so that he performs that part which only he, because of his unique organizational placement can perform
effectively and so that he can get others to help him with what remains”.
4. Span of Control
The number of subordinates who are directly supervised or assigned to report to a single executive is known as “span of
control”. The number of subordinates under an executive must be wisely determined. Unreasonable number of employees under
an executive may lead to inefficiency because of the following reasons,
(a) Restricted Time-availability
The time available for performing the activities seems to be limited for an executive.
(b) Limited Energy
The executive is not a special person, he too has a limited energy for work.
Q19. Discuss the concept of delegation of authority in context to designing of organization structure.
Answer : April-18, Set-4, Q2(b)
According to George R. Terry, Delegation means “conferring authority from one executive or organizational unit to another
in order to accomplish particular assignment”.
Delegation of authority usually takes place between manager and his subordinates. It is a narrow concept. It is essential
for carrying out the activities of an organization.
When it comes to designing of an organizational structure, delegation of authority plays a crucial role. In an organization,
positions are designed to perform different functions and work is assigned to each person depending on his/her authority. The
structure of an organization is designed by defining who is interacting with whom formally. This is done with the help of process
of delegation of authority. The work cannot be completed within the available time if there is no sufficient authority to assign the
tasks.
At times, managers assign tasks to sub-ordinates without giving them proper authority which shows their lack of decision
making. As a result, subordinates may face many problems and they may not be able to complete their work on time.
Top level management are the originators of business and hold complete authority of business. They delegate their authority
to the manager by specifying certain limits within which the manager manages the business activities. The manager after receiving
the delegation of authority, redelegates his authority to subordinates or employees. In this manner, the organizational authority is
delegated and redelegated all over the organization.
1.9 Departmentation and Decentralization

Q20. What do you mean by the terms Departmentation and Decentralization? Give example for each.
Differentiate between Departmentation and Decentralization.
Answer :
Departmentation
so that efficient supervision takes place in a channelized manner is called departmentalization. Each group/set so channel is called
a department, answerable to its head, who in turn is answerable to the next higher-up in the hierarchy.
Example
In business corporations, terms like departments, division, sections etc are used. In government sector, branch, department,
sector, bureau, office etc are used. While in military, department is named as battalion, group, company and regiment.
Decentralization
According to Allen, “Decentralization applies to the systematic delegation of authority in an organization-wide context”.
When the authority is decentralized, it refers that the authority instead of resting on one individual lies in hands of many
people. Decentralization denotes division of physical facilities place-wise or function-wise.
Example
TESCO, the supermarket chain, is the best example of decentralized organization structure where each store has a manager
who can make certain decisions regarding that particular store. The store manager of Tesco is responsible to report all
the things to regional manager of Tesco.
Differences Between Departmentation and Decentralization
The differences between departmentation and decentralisation are as follows,
S.No. Departmentation Decentralization
1. Departmentation is a process of determining and grouping Decentralization is a process of systematic delegation of
the similar organizational activities into different divisions authority in an organization-wide context.
for achieving the organizational objectives.
2. Department denotes a division, a distinct area or branch Decentralization denotes division of physical facilities
in an organization. placewise or functionwise in an organization.
3. A department is under the authority of a manager or a When the authority is decentralized, it refers that the
figure head who in turn is answerable to the next higher authority lies in the hands of many people instead of resting
up in the hierarchy. on one individual.
4. Departmentation is done on the basis of different functions The degree of decentralization is based on the factors like
performed by a business enterprise and its location and organizational size, availability of economic resources
geographical features. and managerial capabilities, management philosophy,
competencies of the managers, number of employees etc.
5. Departmentation increases the management cost. Decentralization minimizes the management cost.
6. Departmentation provides an opportunity to department Decentralization of authority gives an opportunity to
managers to take initiative and learn new managerial skills. subordinates to exercise power.
7. In departmentation, the entire burden of taking the Decentralization reduces the burden of top executives by
decisions is on the top level managers. delegating the major part of authority to subordinates.
Q21. Discuss the methods of Departmentation with their advantages and disadvantages.
Answer :
The various methods of departmentation are,
1. Functional Departmentation
In this method, departmentation is done on the basis of the variety of functions performed by a business enterprise. Since,
the basic functions of an enterprise include production, selling, financing and so on, these activities are divided into departments
called production, sales, finance, marketing and HR. Co-ordination between the activities is achieved by rules, regulations,
procedures, goals, budgets, organizational hierarchy etc.
Advantages
Some of the advantages of functional departmentation are,
(a) It is logical and is based on principles.
(b) It is the best way of making certain that the power and prestige of the basic activities of the organization are under
the control of top managers.
(c) Training of personnel according to the requirements is simplified.
(d) It provides means of tight control at the top.
Disadvantages
Some of the disadvantages of functional departmentation are,
(a) Top level holds the responsibility only for profits.
(b) Co-ordination between functions is less.
(c) The views of the key personnel are narrowed.
(d) Overall functioning of the organization may get destroyed due to irresponsibility of departmental head.
2. Geographical Departmentation/Territorial Departmentation
Geographical departmentation is quite common among the firms which operate over wide geographical areas. In this
method, departmentation is done on the basis of location of firm and its geographical features.
Advantages
Some of the advantages of geographical departmentation are,
(a) Responsibility is vested in the lower level.
(b) Local markets and problems are given importance.
(c) Coordination and communication is improved.
(d) Good training is provided.
Disadvantages
Some of the disadvantages of geographical departmentation are,
(a) Problems of top management control are high.
(b) Incapable department head is a threat to overall organizational performance.
3. Product Departmentation
In this method, departmentation is done on the basis of variety of products which are produced by the organization. Either a
single product or group of related products are independently combined in the organizations framework which results in achieving
the specialization of products.
Example
‘xyz’ company can produce number of products like Ice-cream, Food stuff, Cheese and Paneer by using different specialization
techniques.
Advantages
The various advantages of product departmentation are,
(a) It facilitates in providing better customer services.
(b) Organization can achieve growth and diversify its products and services.
(c) It provides greater focus on the product lines.
Disadvantages Q22. Under what conditions decentralization should
Some of the disadvantages of product departmentation be adopted? State the merits and demerits of
are, Decentralization.
(a) It is not an easy task to control all the product lines. OR

Explain when decentralization need to be
(b) It requires heavy infrastructure set up cost.
adopted by the organizations.
(c) Customer may find it difficult to cope up with
(Refer Only Topic: Conditions/Situations Under Which
various salesmen.
Decentralizations Should be Adopted)
4. Process Departmentation
Answer : [Model Paper-III, Q1(b) | April/May-19, Set-3, Q2(b)]
In this method, departmentation is done on the basis
of various machines and processes which are used in the Conditions/Situations Under Which Decentralization Should
manufacturing process as each process requires special skills be Adopted
for operating it. Decentralization needs to be adopted by the organizations
Example under the following situations,
A manufacturing of cotton may need to pass through 1. Large Size of the Organization
various processes like Weaving, Spinning, Raring and Decentralization is best suitable for the large size
Threading. organizations. In large organizations, greater number of
Advantages decisions are required to be made at different levels. If in
case the organization is divided into departments or it is being
Some of the advantages of process departmentation are, decentralized, then the quality decisions can be made quickly.
(a) Each process makes use of the expert technology. 2. Rate of Change in the Organization
(b) It facilitates in achieving economic advantage. The rate of change in the organization also influences the
Disadvantages decision to adopt decentralization. If the business organization is
developing rapidly and aims at expansion, then such organization
Some of the disadvantages of process departmentation needs decentralization of authority.
are,
3. Environmental Influences
(a) Responsibility of profit basically, lies in the hands
of top management. The decision to adopt decentralization also depends upon
environmental influences. Out of the various environmental
(b) It is difficult to bring in coordination among various influences, the most significant element is the government
departments. regulations over the private business.
5. Customer Departmentation 4. Availability of Managers
In this method, departmentation is done on the basis of The adoption of decentralization relies upon the
various categories of customers. availability of mangers because in order to use/exercise the
Advantages authority, competent and capable managers are needed. The
availability of quality managers increases the possibility of
Some of the advantages of customer departmentation decentralization.
are,
Merits of Decentralization
(a) It offers specialized services to the customers.
Some of the merits of decentralization are,
(b) It facilitates in managing various marketing
channels for different customers. (a) It reduces the burden of the top management and
facilitates them to concentrate more on strategic
(c) It brings in expertise in the customer field. management issues.
Disadvantages (b) It facilitates the growth and diversification of the
Some of the disadvantages of customer departmentation organization.
are, (c) It enhances the motivational level of employees as well
(a) Experts are needed to solve the customer problems. as managers.
(b) It results in unequal development of customer (d) It drives the development of managers by providing them
groups. opportunities to shoulder more responsibility.
(c) There would be less work which would result in (e) It facilitates the organization to grow horizontally by
under employment and specialization activities decreasing the management levels thereby increasing
with respect to customer groups. span of management.
Demerits of Decentralization
Some of the demerits of decentralization are,
(a) Decentralization if not followed properly, creates chaos in the organization.
(b) As the units become autonomous in decentralization, cost tends to increase.
(c) Absence of effective managers make decentralization ineffective.
(d) It requires high degree of self-motivation and self-control by managers.
1.10 Management By Objectives (MBO) – Meaning, Process and Concepts

Q23. What do you mean by Management By Objective (MBO)? Explain its features, benefits and limitations.
Answer : Model Paper-IV, Q2(a)
Management By Objective (MBO)

The term MBO represents ‘management by objectives’ which was initiated by Peter Drucker in 1954. It was mainly based
on the principle of managing the organisation by objectives.
MBO is a comprehensive managerial framework linking several important managerial activities in a systematic manner.
It tries to coordinate the efforts of individual employees with the organisational goals.
Features of MBO
The features of MBO are as follows,
1. It is an approach and philosophy to management and not merely a technique. It can be applied in selected parts of the
organisation.
2. It helps in the introduction of new techniques of management and enhances the relevance and utility of the existing ones.
3. MBO emphasizes on objectives. It is also concerned with determining what these results and resources should be.
4. MBO is characterised by the participation of concerned managers in objective setting and performance reviews.
5. Periodic review of performance is an important feature of MBO.
6. Objectives in MBO provide guidelines for appropriate system and procedures.
Benefits of MBO
The benefits of MBO are as follows,
1. MBO helps in better management of the organisational resources and activities. Resources and activities are put in such
a way that they result better performance.
2. MBO tends to provide the Key Result Areas (KRA’s) where organisational efforts are needed.
3. MBO provides greatest opportunity for personnel satisfaction. Individuals enjoy considerable authority and derive satisfaction
from the organisation.
4. It stimulates organisational change and provides a framework and guidelines for planned change, enabling the top
management to initiate, plan, direct and control the direction and speed of change.
Limitations/Weaknesses of MBO
The limitations/weaknesses of MBO are as follows,
1. MBO is not as simple as it looks to be. It requires large amount of the scarce resources in the organisation such as cost and
time.
2. MBO is a philosophy of managing an organisation in a new way. However, manager may fail to understand and appreciate
this new approach.
3. MBO requires verifiable objectives against which performance can be measured. Setting such objectives is difficult atleast
in some areas.
4. There is a tendency to emphasize on short-term objectives usually for a year or even less.
5. MBO represents the danger of inflexibility in the organisation, particularly when the objectives need to be changed.
6. MBO creates frustration among managers. Managers may not be able to implement MBO properly, resulting into utter
chaos.
Q24. Explain the various steps involved in the process of MBO.
Answer : Model Paper-IV, Q2(b)
MBO is a system for achieving organisational objectives, enhancement of employee commitment and participation.
Following are the steps involved in the process of MBO,
Setting Organizational Purpose and Objectives
Identifying Key Result Areas (KRA's)
Recycling
Setting the Subordinates Objectives
Matching Resources with Objectives
Performance Appraisal
Figure: Process of Management By Objectives

Step-1: Setting of Organisational Purpose and Objectives
Defining the organisational purpose and objectives is the first step in MBO. Usually the objectives setting starts at the top
level of the organisation and moves downward to the lowest managerial levels. The objectives are defined in the below given
sequence,
(a) Defining the purpose of the organisation
(b) Long-range and strategic objectives
(c) Short-term organisational objectives
(d) Divisional/departmental/sectional objectives
(e) Individual managers objectives.
Step-2: Key Result Areas (KRA’s)
Key Result Areas (KRA’s) are derived from the expectations of various stakeholders and indicate the priorities for
organisational performance. They also indicate the present state of an organisations health and the top management perspective
for the future. Some of the KRA’s include profitability, market standing, innovation, profitability, worker performance, financial
and physical resources, manager performance and public responsibility.
Step-3: Setting Subordinates Objectives
The process of objective setting begins with superiors proposed recommendations for his subordinate objectives. Subordinates
states his own objectives as perceived by him. The final objectives for the subordinate are set by the mutual negotiation between
superior and subordinate. Thus, the organisational objectives are achieved through individuals.
Step-4: Matching Resources with Objectives
When objectives are set carefully, they also indicate the resource requirement. Resource availability become an important
aspect of objectives setting because it is the proper application of resources which ensures objective achievement. There should
be a match between objectives and resources. By relating these to objectives, a superior manager is better able to see the need and
economy of allocating resources. The allocation and movement of resources should be done in consultation with the subordinate
manager.
Step-5: Appraisal
Appraisal aspect of MBO tries to measure whether the subordinate is achieving his objective or not. Appraisal is undertaken
as an on-going process with a view to find out deficiency in the working and also to remove it promptly. It is not taken merely
to punish the non-performer or to reward the performer. It is taken as a matter of system to ensure that everything is going as
planned and the organisation is able to achieve its objectives.
Step-6: Recycling
Appraisal is used as an input for recycling objectives and other actions. Objectives are neither set at the top and communicated
to the bottom nor are they set at the bottom and go up. Objective setting is a joint process through interaction between superior
and subordinate. The outcome of appraisal at one level is recycled to see if the objectives have been set properly at the level
concerned and also at the next higher level.
The three aspects involved in recycling process include setting of objectives at various levels, action planning in the context
of those objectives and performance review.
Action
Figure: Recycling
Q25. What are the different concepts of Management by Objectives (MBO)?
Answer :
The different concepts of Management By Objectives (MBO) are as follows,
1. Performance appraisal
2. Short-term objectives and motivation
3. Long-range planning in the MBO process
4. Systems approach to MBO.
1. Performance Appraisal
The traditional appraisal programs were criticized by Douglas McGregor because these programs focussed on personality
traits to judge subordinates personal worth. However, a new approach is suggested by McGregor to evaluate the performance
of the subordinate. This approach is developed on the basis of the concept of Management By Objectives (MBO) as proposed
by Drucker. In this approach, subordinates get a chance to set short-term objectives for themselves and then they can discuss
these objectives with the superior. Not only that, they can also assess their performance against the set objectives. Thus, the new
approach focuses more on the performance of subordinate rather than their personality. It enables the subordinate to emphasize
on self-development and self-appraisal. This gives a sense of motivation and they show more commitment to subordinates and
to work.
2. Short-term Objectives and Motivation
There are various factors that motivate employees to perform exceptionally well. Such factors include autonomy, incentives
and participation. One of the important factors of all is "Individual goal setting", because people are less likely to perform well
when they are encouraged to put their best efforts. They rather show good performance when they are given specific objectives
to achieve.
3. Long-term Planning in MBO Process
In MBO programs, the focus is increasingly being laid on long-term strategic planning because it is the long-term planning
that sustains the organization. It is not always a good idea to focus on short-term objectives like motivation and performance
appraisal as this may lead to unacceptable managerial behaviour. The following examples show why long-run planning is important.
Example-1: A production manager of a company may try to save maintenance costs by neglecting the need to keep the machines
in good working conditions. However, after a period of time, The machines may stop working and require costly repair.
Example-2: A company may not focus on maintaining good relations with customers in an attempt to get good return on
investment in a specific year.
4. System Approach to MBO
Many changes have been taken place in management by objectives and it is used for several purposes including strategic
planning, performance appraisal and employee motivation. However, it is important to note that there exist many other sub-systems
which can be merged into the process of MBO. Such sub-systems include compensation programs and budgeting, management
development, design of organizational structures, portfolio management, career development etc.
Frequently Asked and Important Questions
Q1. Define management. Describe the nature and features of management.
Ans : (Important Question | April/May-17, Set-1, Q2(a))
Q2. Discuss about the functions of management.
REPEATED
Ans : (May/June-14, Set-2, Q1 | April/May-19, Set-1, Q2(b)) 2
TIMES
Q3. Explain Taylor’s scientific management.
REPEATED
Ans : (April-18, Set-2, Q2(a) | April/May-17, Set-4, Q2(a)) 2
TIMES
Q4. Discuss the scientific management principles.
Q5. What is an organizational chart and describe its characteristics?
Ans : (Important Question | April/May-17, Set-3, Q2(b))
Q6. Explain when decentralization need to be adopted by the organizations.
Q7. Define Management. Explain 14 principles for management.

REPEATED 3
Ans : (Jan./Feb.-15, Set-2, Q1 | April/May-17, Set-1, Q3(b) | April/May-13, Set-1, Q1)
TIMES
Unit-2 Functional Management 2.1
Unit
2
Functional Management
SI
A GROUP
Syllabus
Functional Management : Human Resource Management (HRM) Concepts of HRM, Basic Functions of HR Manager:
Manpower Planning, Recruitment, Selection, Training and Development, Wage and Salary Administration Performance
Appraisal, Grievance Handling and Welfare Administration, Job Evaluation and Merit Rating – Marketing Management:
Concepts of Marketing, Marketing Mix Elements and Marketing Strategies.
Learning Objectives
 The Meaning, Objectives and Importance of HRM.

 The Concepts of HRM i.e., HRD, Personnel Management and Industrial Relations.
 Basic Functions of HR Manager – Manpower Planning, Recruitment, Selection, Training and Development,
Wage and Salary Administration, Performance appraisal, Grievance Handling and Welfare
Administration, Job Evaluation and Merit Rating.
 Marketing Management – Concepts of Marketing, Elements of Marketing Mix and Marketing
Strategies.
Introduction
Human Resource Management (HRM) is concerned with the human beings in an organization. It is a
managerial function which facilitates the effective utilization of people in achieving organizational
and individual goals. The concepts related to HRM are Human Resource Development (HRD), Personnel
Management and Industrial Relations (IR).
HR Manager has an important role to play in an organization. The functions of HR manager include
manpower planning, recruitment, selection, training and development, wage and salary administration,
performance appraisal, grievance handling, welfare administration, job evaluation and merit rating.
Marketing management is the process of performing business activities through management. Profit
maximization and customer satisfaction are the two main objectives of 'marketing management'. Marketing
mix is a mix of marketing components which are used by the company in achieving its marketing objectives.
The elements of marketing mix are product, place, promotion and price.
2.1 Human Resource Management (HRM) – Definition, Objectives and

Importance
Q1. Define Human Resource Management (HRM). Discuss its objectives and importance.
Answer :
Definition of Human Resource Management (HRM)
According to Milkovich & Boudreau, “Human Resource Management is a series of decisions that affect the relationship
between employees and employers; it affects many constituencies and is intended to influence the effectiveness of employees and
employers”.
Human Resource Management (HRM) is concerned with the human beings in an organization. It is a managerial function
which facilitates the effective utilization of people (manpower) in achieving the organizational and individual goals. Earlier
HRM was called by different names like Personnel Management, Staff Management, Manpower Management, Labour Relations,
Industrial Relations, Labour Management, Employee-Employer Relations.
Objectives of HRM
The objectives of HRM are as follows,
1. To guide the organization in attaining its goals by providing well-trained and competent personnel.
2. To effectively utilize the available human resources according to the requirements.
3. To increase the job satisfaction and self-actualization of the personnel by encouraging them to realise their potential.
4. To develop, maintain and motivate productive and self-respecting working relationship among all the members of the
organisation.
5. To develop the individuals upto a maximum extent by providing them the necessary training and advancement.
6. To develop and maintain high morale and cordial relations within the organization.
7. To recognize and satisfy the individual needs and group goals by providing monetary and non-monetary incentives.
Importance of HRM
The importance of HRM can be understood from the following points,
1. HRM serves as a means for achieving organizational objectives.
2. HRM ensures the development of personnel. It provides them a good working atmosphere, motivates them and moulds
their attitude and behaviour according to organizational requirements.
3. It effectively utilizes the available resources to its full potential.
4. It creates hierarchy/structure in an organization.
5. It frames the policies of the organization.
6. It helps in creation of mission, vision and objectives of organization.
Q2. Define Human Resource Management. Explain the important functions of HRM.
Answer : [Model Paper-I, Q3 | April-18, Set-2, Q4(a)]
Definition of Human Resource Management (HRM)

According to National Institute of Personnel Management (NIPM), India, “The part of management which is concerned
with the people at work and with their relationship within an enterprise. It aims to bring together and develop into an effective
organization of the men and women who make up an enterprise and having regard for the well-being of the individuals and of
working groups, to enable them to make their best contribution to its success”.
Functions of HRM
The functions of Human Resource Management (HRM) are presented in the below figure,
HRM Functions HRM Functions HRM Functions
Operative Functions OperativeFunctions

Managerial Functions Managerial
Operative Functions Managerial Functions
Planning Organizing DirectingPlanning Organizing

Controlling DirectingPlanning
Controlling
Organizing Directing Controlling
Acquisition Acquisition
Development Development
Integration Acquisition Integration
Maintenance Development Maintenance
Compensation Integration Compensation
Maintenance Compensation
Motivation Motivation
Organizational Motivation
Organizational Organizational
Job Analysis Job Analysis Job Analysis Health Job Evaluation Job Evaluation Job Evaluation
Performance Performance Performance Health Health
Job Satisfaction Job Satisfaction Job Satisfaction
HRP AppraisalHRP AppraisalHRP HR Audit Appraisal Wage and HRsalary
Audit Wage and
HR salary
Audit Wage and salary
Grievance Grievance Administration Grievance Administration Administration
Training Recruitment Training Training
Recruitment Handling RecruitmentHR Accounting
Handling Incentives Handling
HR Accounting Incentives
HR Accounting Incentives
Collective Collective Collective
Selection Selection
Career Planning Career Selection
Planning Career Bonus
Planning Bonus Bonus
Bargaining Bargaining Bargaining
and
and
Placement Employee
Career Development Employeeand Employee
Placement Career Development Placement Career Development
Fringe Benefits Participation Fringe Benefits Fringe Benefits
Participation Participation
Induction Discipline Induction Discipline Discipline

Induction
Transfer Transfer Transfer
Promotion and demotion Promotion and demotion Promotion and demotion
Figure: Functions of HRM

1. Managerial Functions
The managerial functions are performed in general by each and every manager which are as follows,
(a) Planning
Planning is a predetermined course of action. It is concerned with determining organizational goals and formulating the
policies and procedures for attaining those goals. Planning is future-oriented and charts out the directions for attaining the
goals.
(b) Organizing
Organizing is the method of achieving the planned task. It is the process of allocating the jobs in the direction of achieving
the goals. Organizing includes the activities like allocation of tasks to the sub-ordinates, establishing departments, delegation
of authority, establishing channels of communication, co-ordination of work and so on.
(c) Directing
Directing is the process of activating and co-ordinating the individual and group efforts in order to achieve the goals and
objectives. Directing includes the activities such as maintaining morale, getting things done with sub-ordinates, motivating
the sub-ordinates etc., in accordance with goal achievement.
(d) Controlling
Controlling which is the process of checking the performance to confirm whether the activities are going according to the
plans made. Controlling involves the activities like setting performance standards, checking, verifying and comparing the
actual with the plans and taking corrective action if needed.
2. Operative Functions
The operative functions are the functions related to a particular department or section. Effectively performed operative
functions of HRM ensure placing right people on the right jobs at the right times. The operative functions include activities like,
(a) Acquisition
Acquisition involves acquiring right kind of people and placing them in right positions in tune with organizational
requirements. Acquisition includes these activities,
(i) Job Analysis
Job analysis is a method of collecting and analyzing the facts related to a particular job in order to identify the job
contents, job requirements, job related duties and responsibilities and the characteristics of the person intending to
do that job.
(ii) Human Resource Planning/Manpower Planning
Manpower planning is forecasting the manpower (skills, knowledge, abilities, values, commitment, motivation and
the number of employees) requirements of an organization and the future supply of manpower.
(iii) Recruitment
It is the process of searching for prospective employees and encouraging them to apply for the jobs in the organization.
(iv) Selection
It is the process of choosing the best qualified and most suitable candidate for each vacant position.
(v) Placement
It is the process of determining the job which will be given to selected candidate.
(vi) Induction
It is the process of receiving and welcoming an employee when he first joins a company and giving him the basic
information he needs to settle down quickly and start the work.
(vii) Transfer
It is the moving of an employee to the same level of job where their potentialities can be more effectively utilized.
(viii) Promotion and Demotion
Promotion is the upward movement of an employee to occupy higher position. Demotion is the downward movement
of an employee in the organization.
(b) Development
Development is the process meant to improve the knowledge, skills, aptitudes and values of employees so that they can
better contribute to their job. Development includes the following activities,
(i) Performance Appraisal
It is the method of evaluating the behaviour of employees in the workspot including both quantitative and qualitative
aspects of performing the job.
(ii) Training
It is the act of improving the knowledge, skills and abilities of an employee to do a particular job.
(iii) Career Planning and Career Development
Career planning is the process by which one selects career goals and the path to these goals. Career development is
that personal improvement one undertakes to achieve his/her personal career plan.
(c) Integration
Integration is the process of reconciling and reuniting the organizational goals with it’s members. Integration involves the
activities like,
(i) Motivation
It is the act of stimulating and inspiring the subordinates to achieve the goals of the organization.
(ii) Job Satisfaction
Job satisfaction is the result of various attitudes the employee holds towards his job related factors.
(iii) Grievance Handling
Grievance is the sign of employee’s discontent/dissatisfaction with their job and its nature.
(iv) Employee Participation
It is the involvement of employees in organizational decision-making process.
(v) Discipline
It refers to a condition/attitude prevailing among the employees, with respect to rules and regulations of organization.
(d) Maintenance
Maintenance includes the following activities,
(i) Organizational Health
It is studied through the result of employees contribution to the organization and the employee job satisfaction.
(ii) Human Resource Audit
It is the process of evaluating the policies, procedures and practices to determine the effectiveness of HRM.
(iii) Human Resource Accounting
It is the measurement of cost and value of human resources to the organization.
(e) Compensation
Compensation includes determining wages and salaries that match with contribution made by the employees to achieve
organizational goals. Compensation includes following activities,
(i) Job Evaluation
It is the process of determining the relative worth of jobs.
(ii) Wage and Salary Administration
It is the process of developing and operating a suitable wage and salary program.
(iii) Incentives
It is the additional payment to regular wages and salaries.
(iv) Fringe Benefits
It is the payment made by the management to motivate the employees and to meet their contingencies in life.
2.2 Concepts of HRM

Q3. What are concepts related to HRM? Explain.
Answer :
The various concepts of Human Resource Management (HRM) are,
2. Personnel Management
3. Industrial Relations (IR)
According to Leonard Nadler “HRD is a learning experience which is organised for a specific time, and designed to bring
about the possibility of behavioural change”.
According to Talam Venkateswara Rao (T.V.Rao) “HRD is a process by which the employees of an organisation are helped
in a continuous and planned way to develop their general capabilities as individuals and to effectively perform the present or future
roles and to develop a sound organisational culture, wherein harmonious superior-subordinate relations, team collaborations,
motivation, employee pride etc., exists.
2. Personnel Management
“Personnel Management is that phase of management, which deals with the effective control and use of manpower as
distinguished from other sources of power”.
E. Dale Yoder
“Personnel Management is that part of management’s process, which is primarily concerned with the human relationship
in an organization”.
E.F.L. Breach
3. Industrial Relations (IR)
“Industrial relations is that part of management which is concerned with the manpower of the enterprise whether operate,
skilled worker or manager”.
Bethel & Smith
“Industrial relations may be defined as the relations and interactions in the industry, particularly between labour and the
management as a result of their composite attitudes and approaches in regard to the management affairs of the industry not only
for the betterment of the management and worker but also to the industry and national economy”.
B.C. Memoria
Q4. Distinguish between,
(a) Personnel Management and HRM.
(b) HRM and IR
(c) HRM and HRD.
OR
Compare and contrast HRM and HRD.
(Refer Only Topic: HRM and HRD)
Answer : [Model Paper-II, Q3(a) | April/May-19, Set-1, Q4(a)]
(a) Personnel Management and HRM

Differences between Personnel Management and Human Resource Management (HRM) are as follows,
S.No. Personnel Management Human Resource Management (HRM)

1. Personnel management is the management of people HRM is the management of employee’s skills, knowledge,
employed. abilities, talents, aptitudes, creative abilities etc.
2. Employee in personnel management is viewed as a commodity. Employee in HRM is considered as a resource.
3. Personnel management is a daily routine administrative HRM is a developmental process of the workforce over long
function. periods.
4. Personnel management takes a narrow view. It is reactive HRM takes a broader view. It is proactive and concerned with
and responds only when need arises. present and anticipates the future needs.
5. Personnel management believes that job satisfaction will HRM approves that good performance will lead to high
lead to improved performance. morale and satisfaction of employees.
(b) HRM and IR

Differences between Human Resource Management (HRM) and Industrial Relations (IR) are as follows,
S.No. Human Resource Management (HRM) Industrial Relations (IR)

1. Human resource management involves only two parties Industrial relations involves four parties i.e., employees,
i.e., employee and employer. employer, trade unions and government.
2. In HRM, grievance and disciplinary procedures are Collective bargaining and different types/forms of industrial
used for solving the employer and employee issues. conflicts are used for solving the problems.
3. The individual employee has an easy access over its The individual employee can directly contact the top level
superior. management.
(c) HRM and HRD
The term HRM (Human Resource Management) and HRD (Human Resource Development) are used interchangeably
sometimes but there are differences between HRM and HRD. Some of the differences between HRM and HRD are as follows,
S.No. Basis HRM HRD
1. Definition According to ‘Milkovich and Boundreau’ “HRM According to ‘Leonard Nadler’ “HRD is a learning
is a series of decisions that affect the relationship experience which is organized for a specific time and
between employees and employers, it affects designed to bring about the possibility of behavioural
many constituencies and is intended to influence change”.
the effectiveness of employees and employers”.
2. Scope The scope of HRM is wider. It includes HRD. The scope of HRD is narrow when compared to
HRM. HRD is a part of HRM.
3. Functions HRM includes functions like recruitment and HRD includes functions like training and
selection, compensation, placement, HR appraisal development, performance appraisal, career
and HRD activities. planning, quality of work life and employee welfare.
4. Nature HRM is a reactive function. HRD is a proactive function.
5. Focus HRM focuses on success and growth of an HRD focuses on adding value to teams, individuals
organization. and organization.
2.3 Basic Functions of HR Manager Objectives of Manpower Planning

Q5. Describe the functions of HR manager in an The objectives of manpower planning or HR planning
organization. are as follows,
[Model Paper-III, Q3(a) | May/June-14, Set-1, Q3] 1. To maintain and improve the organisation's ability to
OR achieve its goal by developing strategies that will result
Write a brief note on changing role of human in optimum contribution of human resources.
resource manager in the contemporary business
2. To identify the areas where there are surplus personnel
environment.
or areas where there is a shortage of personnel.
Answer : Jan./Feb.-15, Set-1, Q3
3. To deduct the workforce if there are surplus personnel
The functions of HR manager are as follows,
and to add manpower if there is a shortage.
1. Training the employees for job which may be new to
them. 4. To meet the needs of the expansion programmes of the
2. Placing the right person on the right job. organisation.
3. Developing the individual to realize his potential as an 5. To meet the challenges of new and changing technology
individuals to a maximum extent. and to adopt new technologies of production.
4. Developing the capabilities of the individuals to help
Need and Importance of Manpower Planning
them perform their present job in a better way.
5. Developing and maintaining high motivation level of In recent years, the need and importance of manpower
employees. planning has increased for the following reasons.
6. Appraising the individuals performance. 1. Increasing Unemployment
7. Selecting and recruiting new employees in the
Day after day, the number of educated unemployed are
organization.
increasing and there has been a shortage of skills, knowledge
8. Strengthening superior-subordinate relationship. and capabilities to do work. This situation demands for more
9. Strengthening team spirit among different teams. effective recruitment. Therefore, need for manpower planning
10. Training and developing managers. arises.
11. Promoting inter-team collaboration. 2. Technological Changes
12. Promoting healthy relationship among the individual
employees of the organization. The rapid changes in production technology, marketing
methods and management techniques have an impact on
13. Dealing with the issues related to promotion, demotion
the contents and contexts of jobs. These changes create
and transfer of employees.
problems related to redundancies and retaining of personnel.
14. Managing wages and salaries. A systematically organized manpower planning reduces these
15. Planning labour needs. problems.
By observing the above roles of the Human Resource
3. Organisational Changes
Manager in any organization, we can say that his job is related to
the human resource needs of the organization and without efficient In recent years, the size of the firms are increasing and
and effective human resources no organization can survive. the business environment is becoming unstable. These require
2.3.1 Manpower Planning changes in organisational structure, organisational activities
and new human resource strategies. Thus, there is a need for
Q6. What is Manpower Planning? What are its manpower planning arises.
objectives? What is the need and importance
of manpower planning? 4. Demographic Changes
Answer : The profile of the manpower in terms of age, sex,
Manpower Planning/HR Planning education, social background and technical skills is changing.
These changes demand for a systematic manpower planning.
Manpower planning is a process of analysing the present
and future vacancies that may occur as a result of retirements, 5. Legal Control
discharges, transfers, promotions, sick leave, leave of absence or
other reasons and an analysis of present and future expansion in Law related to working conditions, working hours,
the various departments. Plans are then formulated for internal weaker sections, women and child labour, casual and contract
shifts or cutbacks in manpower, for the training and development labour does not permit the management to follow hire and fire
of present employees, for advertising opening or for recruiting policy. To overcome these problems, manpower planning is
and hiring new personnel with appropriate qualifications. essential.
Q7. Explain the process of human resource planning. Step-5: Develop an Human Resource (HR) Plan
Answer : In this step, a human resource plan is developed that
indicates the source of labour supply such as hired persons,
Process of formulating Human Resource Planning outside sources, inside sources where existing manpower can be
involves following steps, promoted to occupy the vacancies on higher positions through
labour markets. The development of human resource plan is
Decide Goals and Objectives dependent on the company policy.
2.3.2 Recruitment
Estimate Future Requirements Q8. Define Recruitment. What are its objectives?
Explain the sources of recruitment.
Answer :
Audit Human Resources Definitions of Recruitment
“Recruitment is a process to discover the source of
manpower to meet the requirements of the staffing schedule
and to employ effective measures for attracting manpower in
Conduct Job Analysis
adequate numbers to facilitate effective selection of an efficient
working force”.
– Dale Yoder
Develop an HR Plan
“Recruitment is the development and maintenance of
adequate manpower resources. It involves the creation of a pool
Figure: Process of HR Planning of available labour upon whom the organization can depend
when it needs additional manpower”.
Step-1: Decide Goals and Objectives
– Dale.S.Beach
Determining the objectives of a company is the basic
step. The objectives such as expansion, merger, capacity Objectives of Recruitment
enhancement, area of operations, technology of future operations Objectives of recruitment are as follows,
or processes etc., are clearly determined. 1. To provide the organization with a pool of potential and
Step-2: Estimate Future Requirements skilled human resources.
2. To forecast the human resource requirements of the
The next step is to estimate the number and type of organization using various statistical and other tools.
employees needed at a given point of time. The estimation includes
business forecasts, expansion and growth, design and structural 3. To use effective recruitment tools and techniques so
changes, management policy, competition etc. The future needs that more number of aspirants can be recruited which
can be forecasted on the basis of production and sales, budgets, helps in increasing the efficiency of selection process.
workload analysis and workforce analysis and based on objectives 4. To reduce the attrition rate by recruiting the right
of the organization. The future manpower requirements should be candidate at the right place.
estimated qualitatively and quantitatively. 5. To periodically appraise the recruitment process, to
Step-3: Audit Human Resources keep it upto date and effective as per the organizational
requirements.
In this step, we take into account the available manpower
Sources of Recruitment
and assess their skills, abilities, work performance and other
items of information about the overall worthiness of existing The various sources of recruitment are,
manpower. Based on this data, we establish the future manpower 1. Internal Sources
or additional manpower required. By auditing we will have a Internal sources of recruitment include,
clear picture of what is available today and by anticipating the
technological improvements and organizational requirements (a) Employee Referrals
effective manpower planning can be done. In this method of recruitment, employees who are
currently employed refer their family members or friends
Step-4: Conduct Job Analysis to their company. The advantages of this source is that
This is a process which includes the techniques of job the employee can acquaint the applicants with details or
description, job identification and job requirements. After having working conditions of the company. The companies may
decided how many persons would be needed, the job analysis offer a reward for a successful referral.
is prepared. In job analysis, we record details of training, skills, This is a low cost source of recruitment but it has a
qualifications, abilities, experience and responsibilities etc., downside also, where groupies may be encouraged
which are needed for a job. leading to future problems.
(b) Previous Applicants
This method is also an inexpensive source of recruitment wherein previous applicant are contacted again for different
openings.
2. External Sources
External sources of recruitment are,
(a) Advertisements
Advertisements placed in the newspaper is also another way of recruitment. These ads appear in the classified section
of the newspaper under want ads or ‘situation vacant’. These ads usually carry details of the company and the specific
requirements. Sometimes there is no reference to the company, this is a blind ad. This approach is adopted to avoid publicity.
(b) Contractors
Recruitment could be through contractors who have records for casual workers.
(c) Other Sources of Recruitment
(i) Other public undertakings
(ii) Central training institutes
(iii) Introduction by the basion officer of a corporation
(iv) Deputing personnel
(v) Employment exchanges
(vi) Temporary help services
(vii) School placement.
Q9. Explain the general procedure for recruitment of employees in an enterprise.
Answer :
The process of recruitment consists of five steps as shown in the following figure,
Recruitment
HR Number of candidates,
planning types of candidates
Strategic Where and how to call,

Development when to call
Searching Using various sources,

media selling
Screening for Knock out round,

candidates Biographical information blanks
Evaluating and Cost benefit analysis

controlling ROI method
Figure: Five Step Process of Recruitment

Step-1: Recruitment Planning
The first step of the recruitment process is planning. The HR department must collect the data about the number and type
of vacancies available. Planning involves setting of specific targets, for a specific job depending upon the number and types of
applications.
Step-2: Strategic Development Selection is a process by which qualified personnel are
The second step of the recruitment process is strategic chosen from the applications secured through different sources
development. This step provides answer to the following of recruitment.
questions,
Process of Selection
(i) Where to look for? (campus job fairs etc.)
(ii) How to look for? (Internal and external sources) The steps involved in selection process are,
(iii) When to look for? (perfect timing). Step-1: Initial Screening/Shortlisting
The company studies, whether to “make or buy” (i.e.,)
This is a shortlisting process. The applicants are expected
is it better to hire and train (make) fresh graduates at a lower
to possess the necessary qualifications and aptitude and are
pay or to select experienced and trained candidates. Technical
encouraged to make a formal application. The applications of
advancement have provided many alternatives for the selection
of potential candidates. An efficient recruitment strategy those who do not have necessary qualifications are eliminated
suggests the best time for recruitment. at this stage.
Step-3: Searching Step-2: Biodata Screening
This is the third step of recruitment process. The search
Here, the organization provides an application form to the
for a candidate begins only after the line manager communicates
applicants and asks them to fill it. If the information provided
that there is a vacancy or there would be a vacancy in the
is incomplete or irrelevant, then such applications are dropped
future. Searching involves selecting and screening of potential
candidates. It is also important to select the right medium as it at this stage.
reflects the company’s image. Step-3: Aptitude Tests
Step-4: Screening for Potential Candidates
Organizations rely on intelligence, aptitude, ability and
Screening is the fourth step in the recruitment process. interest tests to provide a major input to the selection process.
Some researcher considered screening as the first step of Its main purpose is to predict how the candidates are likely to
selection. Whereas, others argue that the selection process begins perform to a given job.
only after the candidates are short listed through recruitment.
For screening, recruiters mostly use “multiple hurdle Step-4: Group Discussion
process”. For this, they use tools like “Biographical information Candidates are shortlisted after the aptitude test. In group
blank” and “Knockout round”. In knockout round, applicants discussion, abilities like communication skills, presence of mind,
have to fill an application form consisting of 2-3 key questions reacting to other’s view points, ability to convince, leadership
if they are found to be capable of performing a task. skills and others are assessed and candidates are shortlisted for
Step-5: Evaluating and Controlling the next selection stage based on their performance in the group
discussion.
This is the last step in the recruitment process. It involves
cutting and controlling costs of recruitment and evaluating the Step-5: Personal Interview
effectiveness of the companies recruitment policy. Recruitment
The candidates who are shortlisted in group discussion
mostly involves costs like, are invited for attending a personal interview. The interview
(a) Cost of advertising in newspapers, magazines, on-line board consists of the personnel manager, one or two senior
agencies. Example: Naukri.com, Monster.com etc. managers and a psychologist to assess the candidate. Here the
(b) Salaries paid to the recruiters. personnel manager should ensure that, the interviewer assesses
the performance of the interviewee in an objective, unbiased
(c) Cost of outsourcing the job till the post is filled.
and dispassionate manner.
(d) Administrative and overhead expenses.
Step-6: Medical Examination
Evaluation is done to modify and make recruitment more
effective. Mostly companies use the cost benefit and ROI method Shortlisted candidates have to undergo a medical
for evaluation purpose. examination. This is intended to ensure that the candidate is in good
health and has enough capacity to cope with the requirements of the
2.3.3 Selection job. Only those who pass the medical examination are considered
Q10. Define Selection. Explain the process of selection. for the next stage of the selection process.
Answer : Step-7: Employment Offer
Definition of Selection
Candidates who are considered medically fit are offered
“Selection is the process in which candidates for
employment in the organization. The terms and conditions
employment are divided into two classes those who are to be of the employment are mentioned in the offer letter. Some
offered employment and those who are not”. organizations insist the candidate to sign a contract for a
Dale Yoder minimum period.
2.3.4 Training and Development Q12. Analyze the advantages of training and
development programmes.
Q11. What is Training and Development? Why is
training needed? How can managers ensure Answer : [Model Paper-IV, Q4(a) | April/May-17, Set-4, Q4(b)]
that training is working?
Training and development programmes are advantageous
Answer : to both employers and employees.
Training
Advantages/Benefits to Employer
“Training is an act of increasing the knowledge and skill
of the employee for doing a particular job”. Training is advantageous to the organization in the
following ways,
Edwin . P. Flippo
1. Improved Productivity
“Training is a process by which the aptitude, skills and
abilities of employees to perform specific jobs are increased”. Training helps the employees to improve their
Michael J. Jucius performance level. This improvement in manpower performance
helps the organization to achieve high and improved productivity.
Development
Development of training or training and development is 2. Cost and Wastage Reduction
the process through which employees knowledge and skills are Trained employees perform less functional/operational
developed for performing the given job efficiently. mistakes and make more economical use of materials and
Need or Importance of Training machinery. This reduces wastages and results in increased
productivity with high quality and reduction in cost per unit.
The need/importance of training to an organization is
discussed as follows, 3. Reduced Supervision
1. To increase productivity and performance. A well trained employee tends to be self-supportive,
2. To reduce complaints and dissatisfaction. highly motivated and requires less assistance and control. This
reduces the supervisor's burden and in turn increases the span
3. To reduce learning time. of supervision.
4. To benefit the employee and the organization.
4. Improved Organizational Climate
5. To minimize accidents and wastage.
A sound training programme improves the organizational
Ways to Know Whether Training is Working Well climate including harmonious industrial relations, improved
It is very important for the managers to know whether discipline, decentralized authority, participative management,
the training program is working or not because if the program reduced resistance to change and organizational stability.
doesn't yield better results, it will be a waste of resources and Advantages/Benefits to Employees
time. In order to ensure that training is working effectively,
managers can adopt number of ways, Training is beneficial to employees in the following ways,
1. Firstly, the various managers, a group of workers and 1. Personal Growth

HRM representatives who have just completed a training
Training improves the employees attitude, aptitude,
program are asked to give their opinion regarding how knowledge and skills and guides to grow faster in career.
well the program worked. If their opinions turned out to Training develops positive attitude among employees and builds
be positive, the program will be continued until someone a high morale.
decides to stop the program.
2. Self Confidence
2. Secondly, the trainees or participants are asked to provide
feedback on the effectiveness of training program. Training improves the self confidence of an employee,
enabling him to perform his job with enthusiasm.
3. The effectiveness of training is also evaluated based on
factors such as, 3. Higher Earnings
(i) How much the trainees have learned from the Training facilitates an employee to improve his/her
program? performance level thereby increased earning.
(ii) How effectively they're able to use their skills on 4. Safety and Reduced Accidents
the job?
Training helps an employee to use various safety
(iii) Did training program bring any results in terms of measures and methods to perform activities. This reduces the
increased customer service and reduced turnover? frequency of accidents.
Q13. Explain different methods of training in an organization.
Answer : [Model Paper-IV, Q3 | April/May-13, Set-3, Q3]
There are various methods of training the employees are presented in the figure below,
Training Methods
On-the-Job Training (OJT) Off-the-Job Training

– Job Rotation – Vestibule Training
– Committee Assignments – Programmed Instructions
– Job Instruction Training (JIT) – Role playing
– Internship Training – Lecture methods
– Coaching and Mentoring – Conference/Discussion
– Under Study – Incident Training
– Apprenticeship Training – Inbasket Training
Method Method
– Case Study Method
Figure: Training Methods

1. On-the-Job Training
This is the most commonly used method of training the employees. In this method, the employee is placed on his regular
job and taught the skills necessary to do that job under the guidance of a supervisor. On-the-job training is advantageous by
providing first hand knowledge under the actual working conditions.
The different on-the-job training methods are,
(a) Job Rotation
Job rotation is the movement of an employee from one job to the other of same nature. This method provides an opportunity
to enhance the knowledge and skills of an employee and make him competent in several jobs rather than one.
(b) Committee Assignments
In committee assignments method, a group of employees are given an actual organisational task/problem and are asked
to solve it. The group members collaborate and cooperate with each other to solve the problem. This method of training
develops the team work and intergroup collaborations.
(c) Job Instruction Training (JIT)
In this method, the trainer explains the trainee the job knowledge and skills, method of performing the job and allows him
to do the job. At the same time, the trainer analyzes the employee performance and provides him the feedback.
(d) Internship Training
In this method, the educational institutes and business firms cooperate with each other and select a group of candidates.
The selected candidates carry on with their regular studies for a period of time and at the same time, they work in a office
or factory to acquire the practical knowledge.
(e) Coaching and Mentoring
In this method, the trainee is placed under the guidance of a supervisor. The supervisor assesses the employee performance,
provides him the feedback and offers some suggestions of improvement.
(f) Under Study
Under study is a method in which an employee is trained to take in future the full responsibility of the position of his
superior. This method helps an organisation to acquire an employee of equal competence as his superior and prevents the
recruitment of a new unknown personnel.
(g) Apprenticeship Training
This method of training is used in those trades, crafts and technical fields in which proficiency is acquired after a long
period of time in direct association with work under direct supervision of experts.
2. Off-the-Job Training
In this method of training, the trainee is separated from his actual job and trained for his future job performance. Contrary
to on-the-job training where the trainee is disturbed by his actual job requirements, off-the-job training facilitates him to cater
his entire interest on the training only. This method provides an opportunity to the trainees to have a freedom of expression. The
different off-the-job training methods are,
(a) Vestibule Training
In this method, training is provided by the simulation or creation of actual working conditions in a classroom. The classroom
exactly represents the actual working conditions with same kind of machines, files, equipments etc. Vestibule training in
general is used to train clerical and semi-skilled jobs.
(b) Programmed Instructions
In this method, the theory or the subject-matter to be learned is presented in a series of carefully planned sequential units
ranging from simple to more complex levels of instruction. The subject matter is presented in the form of multiple choice
and fill in the blanks and then trainee passes through each unit by answering these questions.
(c) Role Playing
Role playing is a realistic behaviour in an imaginary situation. The participant/trainee plays the role of certain characters
like production manager, mechanical engineer etc. This method includes doing action and practice and is generally used
to improve interpersonal skills.
(d) Lecture Method
In this method, the trainer/instructor prepares a material and delivers it to a group of trainees in the form of a lecture. The
lecture prepared by the trainer should motivate the trainees and create interest in them.
(e) Conference/Discussion
In conference method, group of people meet and pose ideas, share the facts, test the assumptions and draw conclusions to
improve the job performance. Unlike lecture method which involves only one way communication, discussion involves
dyadic communication and it also provides feedback.
(f) Incident Training
The main aim of this method is to develop the trainee in areas of practical judgement, intellectual ability and social
awareness. This method involves development of an employee in a group, i.e., a group of employees who require training
are selected and are trained. For training the employees, incidents are prepared based on the actual situations that happened
in other organizations. Each trainee in the group is given the incident and asked to make short-term decisions. Later, the
group discusses on the incident and takes decisions through group interactions.
(g) Inbasket Training Method
Under this method, the trainee is given a basket or pile of papers and files related to his functional area. The trainee is then
asked to study and analyze the situation and make necessary recommendations. The recommendations provided by all the
trainees are compared and conclusions are made.
(h) Case Study Method
In case study method, a real business problem is presented to the trainees in the form of writing. The trainees are asked to
analyze the problem and suggest the alternative courses of action.
2.3.5 Wage and Salary Administration

Q14. What do you mean by "Wage and Salary Administration"? What are its objectives? What approaches
are used to determine compensation?
Answer :
Wage and Salary Administration
Wage and salary administration is also called as compensation management. It is a systematic approach of ensuring
employees that they are paid logically and fairly with an equitable sense, for the work they accomplished.
Objectives of Wage and Salary Administration
The objective of Wage and salary administration is,
1. To acquire competent and qualified employees by developing attractive pay packages.
2. To retain the employees by providing good salary/wage levels in comparison with that of similar organisations.
3. To motivate the employees by providing rewards for loyalty, good performance, discipline etc.
4. To maintain labour and administrative expenses within the availability of organisational funds.
5. To develop a pay plan based on legislative background.
6. To base the salary on perfect job evaluation and avoid misinterpretations by labour.
Approaches to Determine Compensation 4. Wage Negotiations and Agreements
The approaches used to determine compensation are, The personnel manager is accountable to administer the
wage agreements between unions and management. Deciding
1. Competency-based pay system
the pay scales for different positions, related prerequisites,
2. Variable pay systems. incentives (monetary and non-monetary) is a part of wage
1. Competency-Based Pay System administration undertaken by personnel manager.
Competencies refers to knowledge, skills and personal Factors Influencing Wage Fixation and Compensation Policy
traits which help the employees in performing effectively. The following are the different factors that affect wage
In competency-based compensation system, employees are fixation and compensation policy,
compensated on the basis of their competencies. People
1. Company’s Ability to Pay
with good competencies usually show superior performance.
Competency-based pay systems are usually framed to ‘Firm’s ability to pay’ is an important factor that greatly
compensate the top-level employees who are at the professional influences wages fixation. It is necessary to consider the financial
and managerial levels. position, paying capacity and profitability of the company.
2. Variable Pay System 2. Remuneration in Comparable Companies
Variable pay is also called as pay for performance or Wage rates in the comparable organization is also an
contingent pay. In variable pay system, an employee is paid essential factor to be considered while fixing the wages to attract
on the grounds of his/her total performance. Performance here and retain the talented employees.
is inclusive of the sum of individual performance, business 3. Cost of Living
unit performance and organizational performance. Variable Wage rates can be determined by the cost of living in the
pay system aims at giving tangible rewards to the employees area where the firm is situated.
who performs more than their ability. Variable pay system was
traditionally known as the incentive pay system. 4. Union Pressure
Generally, trade unions exert pressure on the management
Q15. What factors need to be considered by a
personnel manager for administering wage and of a company. These demands of trade unions also have a
salary? Explain briefly the factors influencing significant influence over the wages.
wage fixation and compensation policy. 5. Employee Productivity
Answer : The wage rate is also affected by the productivity of
employee. Better productivity would be reflected in the wage
Factors to be Considered for Administering Wage and Salary
rates.
It is the responsibility of personnel manager to consider 6. Labour Laws
the following factors/aspects for administering wage and salary,
Wage fixation is influenced by the current labour law in
1. Fair Compensation Package the Country/State regarding wage and salary administration.
Personnel manager should introduce a flexible and
rational compensation package that suits the interest of 2.3.6 Performance Appraisal
employees as well as management. A fair compensation package Q16. Define Performance Appraisal. What is the need
helps in attracting new applicants, retaining the existing staff, for appraising the performance? Briefly explain
satisfying the employees and rewarding the good performance. the methods of performance appraisal.
2. Wage Differentials OR
Different industries offer different wages for same What is Performance Appraisal? Why is it
positions. Wage differential is the magnitude of difference in necessary to carryout performance appraisal?
wages. Basically, wage differentials exist due to the differences
(Refer Only Topics: Definition of Performance Appraisal,
in employee characteristics like productivity level, inter-industry
Need for Performance Appraisal)
differences etc. The personnel manager should have knowledge
about the factors influencing wage differentials. Answer : [Model Paper-I, Q4 | April/May-17, Set-4, Q4(a)]
3. Balanced Compensation Package Definition of Performance Appraisal

Dale S. Beach defines "Performance Appraisal as the
The personnel manager must follow a balanced system of evaluation of the individual with regards to his/her
compensation package. A balanced compensation package is the performance on the job and potential for development".
one which is employee welfare oriented, unbiased and rewards Edwin B.Flippo says that "Performance Appraisal is
employee’s efforts. An unbalaned compensation package may a systematic, periodic and an impartial rating of employee’s
cause frequent conflicts, disturbance in the employee relations excellence in matter pertaining to his/her present job and
and there by results in break down of the organisation. potential for a better job".
Need for Performance Appraisal
Performance appraisal is needed for the following reasons,
1. To guide HR activities like recruitment, selection, placement, orientation and training of employees in the organisation.
2. To identify training needs by identifying the people who require training.
3. To identify individuals with high potential for higher positions.
4. To provide appropriate feedback, counselling, performance appraisal and to improve the performance of an employee.
5. To create a positive working environment that increases productivity.
6. To motivate employees and create competitive spirit in them to improve their performance.
7. To help reduce employee grievances.
Methods of Performance Appraisal
The various methods of performance appraisal are,
1. Critical incident method
2. Management By Objectives (MBO)
3. Behaviourally Anchored Rating Scales (BARS)
4. 360 Degree Appraisal.
1. Critical Incident Method
In this method, the rater lays emphasis on those key behaviours that make the difference in performing a job in note worthy
manner. In this method, the employee’s performance is appraised in three basic steps.
(a) Preparing a list of note worthy on-the-job behaviour of specific incidents.
(b) Group of experts assign weightage to these incidents, depending on their degree of desirability to perform a job.
(c) Finally constructing a 'CheckList' indicating incidents describing workers as ‘good’ or ‘bad’. Then, the check-list is
given to the rater to evaluate the workers.
The advantage of this method is that it focuses on behaviour and judges performance rather than personality. The main
drawback of this method is that, it is time-consuming and burdensome for evaluators to regularly write down the critical incidents.
2. Management By Objectives (MBO)
Management by objectives method was developed by Peter F. Drucker in 1954. According to him, MBO is a process
whereby the superior and subordinate managers of an organisation jointly identify common goals, define each individual’s major
areas of responsibility in terms of results expected from him and use these measures as guide for operating the unit and assessing
the contributions of each of its members. The advantage of this method is that it is result-oriented and focuses on end goals.
However, it suffers from the limitation that it is time-consuming.
3. Behaviourally Anchored Rating Scales (BARS)
Developed during 1960s, Behaviourally Anchored Rating Scales are descriptions of various degrees of behaviour with
regard to a specific performance dimension. It combines the functions of narratives, critical incidents and quantified ratings by
anchoring a quantified scale with specific behavioural examples of good or poor performance.
The following are the steps followed in developing Behaviourally Anchored Rating Scales (BARS)
(a) Generating the critical incidents
(b) Developing performance dimensions
(c) Reallocating the incidents
(d) Scaling the incidents
(e) Finally, developing the BARS instrument.
The advantages of BARS method is that it is accurate, has clear standards, better feedback and consistency in evaluation.
However, it is not easy to develop measures and conducting BARS is a time-consuming process.
4. 360 Degree Appraisal
The 360-degree appraisal method was first developed and used by General Electric Company of USA in 1992. Today,
the Indian companies like Wipro Corporation, Infosys, Reliance Industries, Thermax etc., follow this method. In this method,
an employee is appraised by his supervisors, subordinates, peers and customers with whom he interacts in the course of his
job performance. All these appraisers provide feedback on the employee by completing a survey questionnaire designed for
this purpose. All the information so gathered is then compiled through the computerized system to prepare individualized
reports. These reports are then presented to the employees who were rated. The advantage of 360-degree method is that
it provides a detailed evaluation of employee's performance and the limitation is that it takes long time for performance
appraisal.
Q17. What are the steps involved in performance Step 4 : Appraise Performance
appraisal? The employee whose appraisal is to be evaluated after an
Answer : agreed period of 6 months or a year, measures his own present
performance and compares it to what he has achieved in his
The various steps involved in performance appraisal
objectives and SMART goals. This analysis is written along the
process are,
side of the same appraisal form in which objectives have been
Set Objectives for written.
Step 1
Personnel Appraisal Step 5 : Appraise Interview
An appraise interview is the interview in which the
Step22
Step Define Job Expectations supervisor and subordinate review the appraisal and make plans
to remove deficiencies and increase strengths.
Design an Appropriate Step 6 : Appraisal Data Used by HRM
Step 3 Appraisal Program The information and data along with the recommendations
and suggestions made by superior is sent to the human resource
department which decides about various aspects of payment
Step 4 Appraise Performance
such as promotion, increments or demotion.
Q18. Who will appraise the performance of employees
Step 5 Appraise Interview and what is the basis of performance appraisal?
Answer :
People Who Appraise Employee's Performance
Appraisal Data Used by
Step 6 The employee's performance may be appraised by any
HRM
of the following,
Step 1: Set Objectives for Personnel Appraisal 1. Supervisors
In this step, the person to be appraised is asked to prepare Supervisor evaluates his subordinate’s performance
the performance standards for himself, i.e., the employee lists on numerous aspects. He is the best person to evaluate his
down the various improvements, contributions and goals that subordinates because he has clear knowledge regarding
he can achieve by himself for a period of one year. This method subordinate activities. He knows the capabilities lacking in his
results in the higher contribution to the organization by the subordinates and how they can be developed or improved. The
employee. chances of bias are more in supervisor appraisal and sometimes
supervisor may not have thorough knowledge regarding his
Step 2: Define Job Expectations subordinates behaviour.
This step includes the dialogue between the superior and 2. Peers
subordinate in which the employee is informed what is expected
Peers are the colleagues/team members of an appraise.
out of him on the job. Normally, the superior reviews the major As team members are the persons who directly interact with the
duties contained in the job description and sets the expectations employee, they can evaluate him more effectively. Evaluations
and goals to be attained by the subordinate. may be in terms of his communication abilities, interpersonal
Step 3 : Design an Appropriate Appraisal Programme skills, activities performed, innovativeness and so on.
In designing the appraisal programme, the manager/ 3. Managers by Themselves (Self Appraisal)
superior considers whether the appraisal programme should be In self appraisal, employee is appraised by himself rather
formal or informal. than his superior or other appraisers. Appraisee identifies his
own strengths and weaknesses, activities undertaken by him,
(a) Formal Appraisal
his contributions, targets achieved etc. Bias may occur in self
These type of appraisals take place at specific time period appraisal because usually appraisee focuses on his strengths and
say once or twice a year. It is formalised process of rating achievements rather than his weaknesses and failures.
the performance of the subordinate. 4. Users of Services or Customers
(b) Informal Appraisal Customers are the ones who can appraise the performance
Informal appraisal occurs whenever the superior feels of an employee on the basis of his initiativeness, quality services,
the need. It is a process of continuous feedback to politeness, reliability, coordination etc.
subordinates regarding their work performance. It is 5. Consultants
conducted at regular intervals or day-to-day basis. Most of the times, the employee's performance is
This system encourages desirable performance and appraised or evaluated by outside consultants so that the bias
discourages undesirable performance. problem doesn't arise in the appraisal process.
Basis of Performance Appraisal Step-3
The basis for measuring performance appraisal are as The organizational managers and a local and national
follows, union representatives play an important role in this step. The time
(i) The time and costs saved by the employee given for solving the grievance in this step is usually 10 days.
The grievances which have the ability to set actions influencing
(ii) Sales volume increased by the employee
the employment policies usually moves to this level as it is not
(iii) Revenue generated by the employee possible for plant supervisors or managers to settle them. In
(iv) Level of customer satisfaction as a result of employee this step, the management has the responsibility to negotiate a
performance settlement with the union.
(v) Production volume generated by the employee Step-4
(vi) Number of complaints attended by the employee The last step of grievance procedure is ‘Arbitration’.
(vii) Number of projects completed by the employee Almost all the grievances are solved in the earlier steps and only
1 percent of grievances reach this step. In this step, both the
(viii) Return on investment as a result of employee performance.
parties select the arbitrator and in front of him, the union and
2.3.7 Grievance Handling and Welfare management present their case and proofs at a hearing within a
Administration quasi-judicial format. Then, the arbitrator analyses the proof and
takes a decision. Some of the arbitrators also give their opinions
Q19. Define the terms "Grievance" and "Grievance specifying their analysis and labour contract sections which
Handling". How will you setup machinery for affected their decisions. This opinion acts as a principle or a
redressing the grievance? what are the steps general rule for handling future disputes. The decision taken by
in handling a grievance? the arbitrator is final which both the parties have to abide by it.
Answer : Steps in Grievance Handling
Grievance The below steps are followed in handling employee
Grievance refers to the dissatisfaction of employee grievance,
relating to any aspect of his/her employment within the 1. Receive the Employee's Complaint in Writing
organisation. It is a feeling, where employee thinks that
In the first step, the complaint is received from the
something is happening unfair or unjust or inequitable to him/
aggrieved employee regarding their dissatisfaction. The
her.
complaint received with detailed information is used to carryout
Grievance Handling further investigation.
The procedure to resolve grievances of employees is 2. Clearly Describe the Nature of Dissatisfaction
known as “grievance handling”.
The reason for employee's dissatisfaction is identified
Steps in Setting Up Machinery for Grievance Redressal in this step. There could be several sources of dissatisfaction
The various steps involved in setting up a machinery for including poor working conditions, mis communication among
grievance redressal, employees in the shop floor, irregular wages etc.
Step-1 3. Collect the Information
In the first step of the grievance handling, an employee This step involves collection of information regarding
informs the steward or supervisor about his grievance. The the complaint and consulting different parties to inquire about
grievance should be communicated/registered with the the same.
supervisor as soon as possible, say, within five working 4. Give Reply to the Aggrieved Employee
days of its occurrence. The steward is the labour contract The aggrieved employee is informed about the decision
who ascertains whether the grievance is valid or not. If the taken within a specific time limit.
grievance is valid, then the steward tries to work along with
5. Follow up
the employees supervisor in order to find out an optimal
solution for it. Usually, about 75% of the grievances are The final step is to check whether the decided disciplinary
solved in this first step itself. If in case, the grievance is not actions are taken to resolve the grievance.
settled in the first step, the grievance is written down and is Q20. Discuss in detail about welfare administration.
moved towards the second step. Answer :
Step-2 A personnel manager is accountable for executing, the
In the second step of grievance procedure, the grievance legal obligations under the factories Act which are concerned
is written down and a business representative or department with welfare, safety and health of workers in the industry. There
or plant manager is given some additional working days. exists certain legal enactments to administer minimum wages,
For example, five working days for solving the grievance. A payment of bonus, compensation and governance of different
formal meeting is also conducted in this step for discussing the benefits like sickness beneifit etc. In order to manage these
grievance. If the grievance is not settled in this step, also, then issues, the personnel manager is responsible to make sure that
the parties proceed towards the third step. the provisions concerning the following enactments are obeyed.
1. The Payment of Wages Act, 1936 Answer : [Model Paper-II, Q3(b) | April-18, Set-1, Q4(a)]
The payment of wages Act 1936, monitors the payment Definition of Job Evaluation
of wages to specific groups of individuals who are employed in
Job evaluation is the process of determining the
the industry. This act was introduced for assuring that the wages
relative worth of different categories of jobs by analysing their
payable to the employees who are included by the act are paid
responsibilities, and fixing their remuneration.
by the employer within the specified time period and there must
not be any deductions except those entitled by law on 1st January “Job evaluation is a systematic and orderly process of
1996, the law was lastly amended by the Payment of Wages Act determining the worth of a job in relation to other jobs”.
1982 which was later enforced on 15-October-1982.
Edwin B.Flippo
2. The Minimum Wages Act, 1948
“Job evaluation is a practice which seeks to provide a
The main aim of the Minimum Wages Act, 1948 is to degree of objectivity in measuring the comparative value of jobs
protect labour from the expansion by the payment of minimum within an organization and among similar organizations”.
wages. This act generally outlines the methods for fixing the
minimum rates of wages for specific employments which are Dale yoder
described in the schedule. The national commission on labour Objectives of Job Evaluation
has suggested the expansion of the principle of minimum wages
to non-scheduled employments. It was observed that wage The following are some of the objectives of job
determination doesn't depend completely on market forces such evaluation,
as supply of and demand for labour. 1. Developing standardized procedures for determining the
3. The Workmen’s Compensation Act, 1923 relative worth of each job.
The Workmen’s Compensation Act is considered as 2. Determining equitable wage differentials between
the oldest and the most significant part of the social security different jobs in an organisation.
legislation. The main aim of this Act is to develop provisions for 3. Removing the wage/salary inequalities.
paying the compensation to a workman. This legislation benefits
the workmen by maximising the significance of suitable safety 4. Developing a basis for fixing incentives and bonus.
devices and decreasing number of accidents. This Act is basically 5. Providing necessary information for solving the
concerned with the workers and ensures that the weaker section grievances regarding wage rates.
of the community particularly the working class is not exploited.
6. Serving as a useful reference for work organisation,
4. The Employee State Insurance Act, 1948 employee selection, placement etc.
The Employee State Insurance Act, (ESIC) 1948, is a
7. Facilitating career planning in the organisation.
part of social-welfare legislation which is approved mainly with
the aim of offering benefits to the employees during sickness, Principles of Job Evaluation
maternity and employment injury and also to make provision The principles of job evaluation are as follows,
for some others matters. The main objective of ESI act is to give
security to employees during uncertainties which effect their 1. Supervisors should involve in the ratings of jobs in their
earning capacities both temporarily and permanently. own departments.
5. The Employee Provident Fund Act, 1952 2. Excessive overlapping or duplication should be avoided.
The employees provident funds and Miscellaneous 3. The job evaluation scheme must be selected cautiously.
provisions Act, 1952 was enforced for giving social security to the It should be implemented and managed based on
industrial workers. It acts as a social measure which encourages
employment market, demand for labour, job conditions
the employees to save a part from their present earning for future.
and bargaining power of parties.
The employees provident funds and miscellaneous provisions
Act offers retirement or old-age benefits like provident fund, 4. Job evaluation results must be rational, fair and unbiased
superannuation, pension, invalidation, pension, family pension for all the individuals.
and deposit linked insurance.
5. It is important to publicize every stage of programme
2.3.8 Job Evaluation through notice boards, publications, departmental
Q21. Define Job Evaluation. What are its objectives meetings and letter to homes of employees.
and principles? 6. The supervisors should have the complete knowledge of
OR the programme such that they should be able to explain
What do you understand by job evaluation? it to people.
What are the principles of job evaluation? 7. Maintaining separate pay structures is essential for major
(Refer Only Topic: Definition of Job Evaluation, groups of employees like office workers, factory workers
Principles of Job Evaluation) and salesmen.
Q22. What are the essentials of successful job evaluation system? Explain the importance of job evaluation.
OR
Discuss the essentials of successful job evaluation system. [Model Paper-II, Q4 | April-18, Set-1, Q4(b)]
(Refer Only Topic: Essentials of Successful Job Evaluation system)

OR
Discuss the importance of job evaluation.
(Refer Only Topic: Importance of Job Evaluation)
Essentials of Successful Job Evaluation System

The essentials of successful job evaluation system are,
1. Each and every employee of the organization should be given a clear and complete information about the objectives,
methods and process of job evaluation.
2. The methods used in job evaluation should be simple and easily understandable to the employees.
3. The job evaluation programme should receive proper guidance from top level management and acceptance from trade
unions.
4. Job evaluation programme should include each and every group and grade of job. The jobs having same duties, working
conditions etc., should be grouped together.
5. Job evaluation programme must be used as an addition/supplement to collective bargaining.
6. The unfavourable impact of job evaluation on the terms and conditions of employees working in the organization should
be avoided.
7. The knowledge, assessment and expertise of HR department, line managers and external experts should be used in the job
evaluation process.
8. Job evaluation programme should concentrate on rating the jobs instead of job holders.
Importance of Job Evaluation
The following points highlight the importance of job evaluation,
1. Job evaluation helps the organization to objectively determine the relative worth of each job.
2. It helps to determine a fair and equitable pay for all jobs in the organization.
3. It helps to reduce the rate of employee turnover as the employees are paid fair and equitable wages.
4. It helps in reducing the cost of recruitment and selection of workers.
5. It replaces many accidental factors, occurring in a less systematic procedure.
6. It leads to greater uniformity in wage rates, thus simplifying wage administration.
7. Job evaluation includes job description and job analysis. The information collected in job description and job analysis may
be used for the improvement of selection, transfer and promotion procedures on the basis of comparative job requirements.
8. Job evaluation helps in identifying the workers who are engaged in jobs requiring less skill and other qualities than what
they possess, thereby pointing to the possibility of making more efficient use of the plant’s labour.
Q23. What are the different techniques of job evaluation? Explain each with merits and demerits.
OR
Explain the point rating method and factor comparison method of job evaluation.
(Refer Only Topics: Point Rating Method, Factor Comparison Method)
Answer : [Model Paper-III, Q3(b) | April-18, Set-3, Q4(a)]
The job evaluation methods/techniques are classified into two broad categories.
Methods
Job Evaluation Techniques
Non-Quantitative Methods Quantitative Methods
Ranking Grading Point Factor

Method Method Rating Comparison
Figure: Job Evaluation Techniques

1. Non-quantitative Methods
Non-quantitative methods are also called as non-analytical or summary systems. They are simple and utilise non-quantitative
techniques for listing the jobs in order of their difficulty. These include two methods namely,
(a) Ranking Method/Job Comparison Method.
(b) Grading Method/Job Classification Method.
(a) Ranking Method/Job Comparison Method
Ranking method involves comparison of each job as a whole with other jobs and arranging them in the order of their
importance from highest to lowest. The ranking criteria involves judging the duties, responsibilities and demands of the
job holder.
Merits of Ranking Method
Following are the merits/advantages of ranking method,
(i) It is the simplest and the oldest method.
(ii) It is economical to be adopted and consumes less time.
(iii) There is no wastage of material and involves less paper work.
Demerits of Ranking Method
The demerits/disadvantages of ranking method are,
(i) Ranking method just shows the importance of one job from the other but does not specify the degree of difference
between the jobs.
(ii) It involves subjective judgement and therefore it is less accurate and not fully reliable.
(iii) The rater should be familiar with all the jobs to be rated.
(b) Grading Method/Job Classification Method
This method is also called as ‘Job Classification Method’. This method involves the following procedure,
(i) Developing job grades or job classes. A job grade is a group of different jobs requiring similar skills to perform.
(ii) A written description is used to define each job grade.
(iii) Classifying each job into an appropriate grade depending on the degree to which its characteristics match the grade
definitions.
Merits of Grading Method
The grading method has the following merits,
(i) It is simple and easy to understand.
(ii) It is more systematic and accurate when compared to ranking method.
(iii) It simplifies wage administration and facilitates in developing a systematic organisational structure.
Demerits of Grading Method
The demerits/limitations of grading method are,
(i) Writing an accurate and precise job grades description is very difficult.
(ii) It is difficult to classify the jobs that involve tasks which overlap.
(iii) It is a rigid system.
2. Quantitative Methods
These methods use quantitative techniques for listing the jobs. They are very complex and are time consuming. They are
also called as analytical systems. These include two methods namely,
(a) Point rating method and
(b) Factor comparison method
(a) Point Rating Method
This is the most commonly used technique of job evaluation. In this method, the jobs are divided into component factors
and each factor is assigned some points/weights depending upon its importance in a particular job. Thus, the total points
obtained for a job gives its relative worth.
Merits of Point Rating Method
The following are the merits/advantages of point rating method,
(i) It facilitates in determining system wage differentials according to job content.
(ii) It is most comprehensive and accurate as factors are divided into sub-factors.
(iii) It reduces bias and human judgement as uniform point scores and money values are assigned.
Demerits of Point Rating Method
The demerits/limitations of point rating method are,
(i) It is complicated and therefore difficult for an average worker to understand it.
(ii) It is expensive and time consuming.
(iii) Managerial jobs cannot be measured by using this technique.
(b) Factor Comparison Method
This method follows the following procedure,
(i) Selecting and Defining the Factors
Factors like skills, responsibilities, working conditions common to all the jobs are selected and defined clearly.
(ii) Selecting the Key/Representative Jobs
The key jobs in the organisation are selected and they are used as standards for comparing other jobs.
(iii) Ranking the Key Jobs by Factors
The key jobs are carefully analyzed and are rated in terms of selected factors.
(iv) Deciding the Key Job Rates
Fair and equitable wage rates are determined.
(v) Assigning the Wage Rate
Allocating the wage rate for a job depending on identified and ranked factors.
(vi) Comparing the Other Jobs
The remaining jobs are compared with the key jobs in terms of each factor.
Merits of Factor Comparison Method
Merits of factor comparison method are,
(i) It is relatively more analytical and objective method.
(ii) The chances of overlap are less because only few factors are utilized.
(iii) More reliable and valid.
Demerits of Factor Comparison Method
The demerits of factor comparison method are,
(i) It is expensive and time consuming.
(ii) It is difficult to understand and operate.
Q24. What do you mean by job analysis? What is the (v) Working conditions
need for job analysis? Explain the relationship (vi) Supervision received
and differences between job description and job
specification. (vii) Hazards
OR 2. Job Specification
Explain the need for job analysis in an Job specification is defined as statement consisting of the
organization. minimum qualities (both physical and mental) required
[Model Paper-IV, Q4(b) | April/May-17, Set-2, Q4] for doing a job. Job specification consists of the following
human qualifications required for performing the job,
(Refer Only Topic: Need for Job Analysis)
OR (i) Education
What is job description and job specification? (ii) Experience

April/May-19, Set-4, Q4(b) (iii) Training
(Refer Only Topics: Job Description, Job Specification) (iv) Judgement
OR (v) Initiative
What is job specification? How is job description (vi) Creativity
related to job specification?
(vii) Physical abilities
(Refer Only Topics: Job Specification, Relationship
Between Job Description and Job Specification) (viii) Responsibilities
Answer : April/May-17, Set-3, Q4(b) (ix) Communication skills
Job Analysis (x) Emotional characteristics.
Job analysis may be understood as a process or method Need for Job Analysis
of collecting information related to a particular job. The need of job analysis can be understood from the
“Job analysis is the process of determining, by benefits served by job analysis. Some of the benefits of job
observation and study and reporting pertinent information analysis are as follows,
relating to the nature of a specific job. It is the determination of
1. Planning the Human Resources
the tasks which comprise the job and of the skills, knowledge,
abilities and responsibilities required of the worker of a For planning the human resources required for performing
successful performance and which differentiate one job from the job, job analysis statement acts as a foundation for deciding
all others”. the number and type of the personnel required.
U.S. Department of Labour 2. Recruiting and Selecting the Personnel
Job analysis consists of two sets of data which are as Job analysis guides the recruitment and selection of
follows, personnel by providing the information about characteristics,
qualifications, experiences required for performing the job.
Job Analysis
3. Job Analysis and Training
Job analysis aids in bridging the gap between the job
requirements and individual capabilities and providing training
Job Description Job Specification
(induction training) if required in order to close the gap, if any.
1. Job Description 4. Performance Appraisal
Job description is defined as an organised statement Job analysis facilitates performance appraisal by fixing
which represents the duties and responsibilities of a job. the standards of job performance in relation to which the actual
It is an important document which is basically descriptive performance of an employee is assessed and compared.
in nature and contains a statement of job analysis. Job 5. Wage and Salary Administration
description tells us what should be done, why it should be
done and where it should be performed. Job description Job analysis information plays a vital role in fixing the
statement consists of, salaries and wages of the employees in accordance with their
skills, knowledge, capabilities etc.
(i) Job identification
6. Maintaining Harmonious Industrial Relations
(ii) Job summary
The job description information acts as a standard in
(iii) Materials used
settling the disputes if any, arising with regard to working
(iv) Machines, tools and equipments conditions, duties and responsibilities, salaries, wages etc.
Relationship Between Job Description and Job Specification
Job description and job specification are inter-related with each other because they are the major components of ‘Job
Analysis’. The following table shows the relationship between job description and job specification,
S.No. Basis Job Description Job Specification

1. Component It is a component of job analysis. It is also a component of job analysis.
2. Information It provides description about a job. Thus, it is It provides the specification of a job. Thus, it is also
related with job information. related with job information.
3. Objective Its main objective is to assist candidate in Its main objective is to assist management in
understanding the job requirements. Thus, finding appropriate candidate for job. Thus, it is also
it is indirectly concerned about effective job concerned about effective job performance.
performance.
4. Measurement It measures the job responsibilities. It measures the responsibilities performed by a
person i.e., how he is handling.
Differences Between Job Description and Job Specification
The following are the differences between job description and job specification,
S.No. Job Description Job Specification

1. Job description is an organized statement containing Job specification is a statement consisting of the minimum level
the facts about the duties and responsibilities of a of qualifications, skills, talents, physical abilities, experience
specific job. etc., required for performing a job properly.
2. Job description focuses on job characteristics Job specification focuses on individual characteristics.
3. Job description measures the duties and Job specification measures the responsibilities performed by
responsibilities. a person.
4. Job description assists the candidate to understand Job specification assists the management in finding an
the requirements of the job which are to be fulfilled appropriate candidate for the job.
by him/her.
2.3.9 Merit Rating

Q25. Define Merit Rating. What are its objectives and methods? Explain.
OR
Define merit rating and describe its methods elaborately.
(Refer Only Topics: Definition of Merit Rating, Methods of Merit Rating)
Answer : [Model Paper-III, Q4(a) | April/May-17, Set-3, Q4(a)]
Definition of Merit Rating

“Merit rating is a systematic, periodic and so far as humanly possible, an impartial rating of an employee’s excellence in
matters pertaining to his present job and to his potentialities for a job”.
Edwin B.Flippo
“Merit rating of an employee is the process of evaluating the employee’s performance on the job in terms of the requirement
of the job”.
Scot, Clothier and Spriegal
Objectives of Merit Rating
The objectives of merit rating are,
1. To recognise and reward the employees by determining their worthiness.
2 To evaluate the employee performance regularly in order to decide their promotion, transfer or demotion.
3. To identify training needs.
4. To guide the employees who lack in performance.
5. To judge whether or not the employee is suitable for the given task.
Methods of Merit Rating
The merit rating methods that are used to determine the employee’s performance are,
1. Straight Ranking Method
In straight ranking method, the rater ranks the employee in order of their merit with the best on the top and poorest employee
at the bottom of the ranking table. This method does not take into account the various components of performance and it does not
indicate the degree of difference between the employees. It is best suited where the number of employees are less.
2. Paired Comparison Method
As the name indicates, each person is compared with other person in pairs. Each employee is paired with other employees
working on similar type of jobs, the result of these decisions are tabulated and a rank is allotted from the number of times each
person is considered to be superior.
3. Man-to-Man Comparison Method
It is commonly called “Factor comparison method”. Under this method, certain factors such as leadership, initiative dependability,
reliability etc., are selected. Thereafter a five point master scale is designed to each factor by the rater. The five point scale would be
excellent, good, satisfactory, average and poor and the weightage could be 5, 4, 3, 2 and 1, respectively. The indications are recorded
by marking the relevant number representing the degree to which the individual satisfies the standard.
4. Grading Method
In this method, certain categories of worth similar to five point scale of person-to-person comparison method is made such
as excellent, very good, average, poor, very poor etc., are established. The actual performance of each employee is compared with
the grades established and the person is allocated to the grade which best describes his performance.
5. Graphic Scale Method
In this method, there are two types of factors,
(a) Employee Characteristics: Employee characteristics refers to the qualities of the persons such as dependability,
initiative leadership, reliability etc.
(b) Employee Contributions: Employee contributions are those which denote what the person produces such as quality
and quantity of work, responsibilities assumed etc.
Each of these factors will have three to five degrees. The indications are recorded and rest is similar to person-to-person
comparison method.
6. Check List Method
This method is also referred as “questionnaire method” as it uses a checklist questionnaire which contains a series of “yes”
or “no” questions concerned with the employee and his behaviour. The employee answers these questions in “yes” or “no” on
the basis of checklist and the personnel department ranks the employees.
7. Forced Choice Description Method
In this method, employees are given a set of alternatives for a problem and they have to choose one. This method helps
in assessing the employees judgement skills, analytical and reasoning skills. It is called forced choice, because the employee is
forced to choose one from the set of answers and explain why he thinks that alternative is the right answer.
8. Selection of Critical Incidents
This method or approach is based on the human behavioural concept. The employee exhibits a particular behavioural pattern
while performing his job. This behavioural pattern makes the difference between success and failure of a job. In this method the
employee is ranked based on his reactions to a particular situation.
9. Descriptive Evaluation Method
In this method, the rater prepares a consolidated report describing the performance of employee on the job. The report
reflects the personality, behaviour, quantity and quality of work performed by the employee. The report is prepared by rater purely
based on observation.
10. Interview Method
In this method, instead of directly interacting with employees, the experts from personnel department interview the
concerned supervisor to obtain all the information about each employee and also ask them about the possible methods of improving
performance of employees. Based on the interview, the report is prepared and submitted to top management.
2.4 Marketing Management – Concepts of Marketing

Q26. Define Marketing. How is it different from selling? Briefly explain the core concepts of marketing.
OR
Distinguish between selling and marketing.
(Refer Only Topic: Differences Between Selling and Marketing)
Answer : [Model Paper-III, Q4(b) | April/May-19, Set-4, Q4(a)]
Definition of Marketing
“Marketing is the process of determining consumer demand for a product or service, motivating its sales and distributing
it into ultimate consumption at a profit”.
– EFL Brech
“It is an art of selling product and services”.
– Peter F. Drucker
Differences Between Selling and Marketing
Some of the differences between selling and marketing are,
S.No. Basis Selling Marketing

1. Point of beginning Selling process begins from the production Marketing process begins from the target market.
floor.
2. Orientation It is product-oriented. It is customer-oriented.
3. Objective It’s objective is only to sell the products. It’s objective is customer satisfaction.
4. Function Selling functions are concerned with Marketing functions are concerned with
transformation of the product into cash. transforming customer requirements into
products.
5. Techniques It uses selling and promoting techniques. It is a combined responsibility so, it adopts
integrated marketing techniques.
6. Final stage Selling process ends with the product sale. Marketing process goes on as it intends to
develop and maintain long-term relation with
customers.
Core Concepts of Marketing

The core marketing concepts are as follows,
1. Needs, Wants and Demands
A human need is a state of feeling deprived of some basic satisfaction. Basic needs include the need for food, clothing
and shelter. Wants constitute the specific forms of human needs. They are designed based on cultural and individual personality
characteristics. The only difference which between needs and wants is that human needs are limited while wants are unlimited.
Demands are wants for any product or a service that are supported by an ability and willingness to purchase it. While estimating the
demand for a product, a marketer needs to consider both the preferences as well as the willingness/ability of a buyer to purchase it.
2. Target Markets and Segmentation
These are defined as the particular type or segment of customers which the marketer wants to target. For example, a coach
who wants to undertake coaching for common entrance examinations, would look for students studying chemistry, physics and
mathematics in XII class.
3. Market Offerings
Market offerings refer to the collection of products, services, information or experiences that can be offered in a market
to satisfy a need, or a want.
4. Marketing Environment
Philip Kotler defined marketing environment as "external factors and forces that affect the company's ability to develop
and maintain successful relationship with its target customers".
5. Competition
Competition is a significant environmental factor which includes various products/services offered by rival firms and there
are chances that the customer would consider them.
6. Supply Chain
According to Mohanty & Deshmukh, "A supply chain is a network of facilities and distribution options that are engaged in
the procurement of raw materials, transformation of these materials into intermediate and finished products and finally distributing
them among the ultimate customers".
7. Customer Value and Satisfaction
Every customer selects products and services based on his/her perceptions and satisfaction about the firm’s offerings.
Basically customer satisfaction depends on the firm’s ability to effectively fulfill the expectations of customers.
Customer value is denoted as,
Customer value = Benefits that customer obtained from his purchases – Cost of products.
8. Exchanges, Transactions and Relationships
Exchange is a process of obtaining an object by offering another in return. An exchange process involves two or more
people, who possess the products/services and carry a certain value to the other. A transaction takes place when two or more
parties agree upon certain terms and conditions. A transaction includes the value exchange among two or more parties and even
the shifting of ownership from the seller to the buyer. A marketer does not restrict its business to a single transaction which occurs
between him and the customer, but he also tries to maintain a long term relationship with their customers by optimally satisfying
their needs.
9. Marketing Channels
The marketing intermediary used to transfer the goods from one place to another is called "channel of distribution" or
"marketing channel". The marketing channels include distributors, wholesalers and retailers.
Q27. What is Marketing Management? What are its objectives and functions?
Answer :
Marketing Management
Marketing management is the combination of two words i.e., marketing and management.
In the words of ‘William J. Santon’ – “Marketing is a total system of interacting business activities designed to plan, price,
promote and distribute wants satisfying products and services to present and potential consumers”.
In the words of ‘Stanley Vance’ – “Management is simply the process of decision making and control”.
If we combine the above two definitions, we get the definition of marketing management.
In the words of ‘William J. Stantom’ – “Marketing management is the marketing concept in action”.
Objectives of Marketing Management
The objectives of marketing management are discussed below,
1. Identifying customers needs and wants is an important and foremost objective of marketing management.
2. It aims at dividing the entire market into various segments. The market is segmented depending upon age, sex, location,
income and so on.
3. Growth of the organization is the third main objective of marketing management. In order to achieve organizational growth,
an organization must focus on increasing its sales volume and net profits.
4. It aims to improve the satisfaction levels of customers so as to maximize profits.
Functions of Marketing Management
The functions of marketing management are as follows,
1. Planning of Marketing Activities
Market planning is carried out to develop and define objectives and then derive strategies and design programmes that
enable the firms to achieve these preset aims/goals. In case of planning, marketer needs to define the ways, timings, location and
persons through/at which different marketing activities can be performed.
2. Organizing of Marketing Activities
Organizing is a function of classifying similar activities into the same group. The basic element of organizing in marketing
management is to carry out the function of each personnel effectively.
3. Staffing for Marketing Activities
Staffing function deals with the appointment of different personnel for marketing department. Nowadays, a separate
personnel department has been introduced in organizations with an intention of recruiting, selecting and placing qualified personnel
for filling its vacant posts.
4. Directing the Marketing Staff
Marketing is essentially an art/a process of getting things done by others. The marketing manager is not only responsible for
planning and organizing the activities but also for guiding and supervising his subordinates. He should motivate the subordinates
through his leadership abilities so that subordinates function efficiently for the attainment of marketing goals.
5. Controlling the Marketing Activities
Controlling is an important function of marketing management. The extent of its effectiveness determines the success of
any programme or any policy of business unit. Even the best efforts cannot produce any result, if it is not controlled properly.
2.4.1 Marketing Mix Elements

Q28. What is Marketing Mix? Describe the various elements of marketing mix.
Answer : April/May-13, Set-4, Q3
Marketing Mix
Marketing mix is a mix of marketing components which are used by the company in achieving its marketing objectives.
These components can be considered as “marketing tools” because they are used as a weapons for attaining success in marketing
activities.
Elements of Marketing Mix
The four P’s of marketing mix focusing on target market customers is depicted through the following figure,
n
P ro
io
ot
om
duc
Pr
Target
t
market
customers
Pr
ce
ice
a
Pl
Figure: Elements of Marketing Mix

1. Product
The first “P” of marketing mix is product. A product is produced by the company to fulfill the needs and requirements of
the target market audience. Product might include a tangible good or intangible service or a mixture of both.
The various sub-components of the component ‘product’ are – product attributes, product quality, warranty, packaging,
branding, product benefits, tangible goods, intangible services, installation etc.
2. Place
A product can be made available to the target market customers through distribution channels. The various decisions to be
taken pertaining to place are – type of distribution channels to be setup, types of intermediaries, place of storage etc. The objective
is to make sure that the right products and services are accessible in right quantities, at the right time and in the right place.
The distribution channel may be very short, where manufacturer sell its products to the ultimate consumers directly. On
the other hand, distribution channel may include wholesalers and retailers who act as intermediaries in the channel of distribution.
3. Promotion
The third ‘P’ – promotion is related to communicating with the target customers and other participants of the distribution
channel regarding the product offered by the company. Promotion is nothing but promoting the product in the market. The four
main sub-components of promotion are – Advertising, public relations, sales promotion and personal selling. Through all these
sub-elements, the target customers are made aware of the products and services available to them in the market. Promotion
activities in some situations aim at retaining existing customers and in some other situations aim at attracting new customers.
4. Price
Price is the amount paid by the customer as an exchange to product/service purchased by them. While deciding the price
of a product, the aspects like – type of competition prevailing in the market place and cost involved in marketing mix have to be
taken into consideration. The price of the product has to be decided very carefully because all marketing activities of the company
will fail in their attempts, when customers do not accept the product price.
Thus, the four P’s of marketing play an equally significant role in the marketing mix of the company. No one element is
considered more significant than others.
2.4.2 Marketing Strategies

Q29. Define Marketing Strategy. Explain in detail various strategies of marketing.
OR
Explain various strategies of marketing with suitable examples.
(Refer Only Topic: Strategies of Marketing)
Answer : April-18, Set-4, Q4(b)
Marketing Strategy
“Marketing strategy is a set of objectives, policies and rules that guide overtime firm’s marketing efforts”.
– Philip Kotler
Marketing strategy refers to a plan which helps the company in retaining its competitive position in the market place. The
product, price, place and promotion strategies are combined together to develop a company-wide marketing strategy.
Strategies of Marketing
The various core strategies of marketing are,

1. Segmentation
Segmentation is one of the basic marketing strategies. Market segmentation helps the firm to allocate its resources to only
a particular segment of the market, thereby focusing on the satisfaction of the needs of only those customers belonging to such
segment.
Example
For instance, airframe producers like Boeing and Mc Donnell- Douglas have few buyers only. Thus, they consider them
as distinct markets.
2. Value Addition
In customer-based marketing strategy, value is created and delivered to the customers. Successful companies are not only
required to add value but also to focus on their renovation by forming effective tie ups with suppliers, channel members and
customers and also by improving their knowledge and awareness. The objective may be to create value in new forms and by new
actors because of innovations in technology and a reduction in trade barriers.
Example
The best example for value addition is ‘1KEA’ which is the world's largest retailer of home furnishings, french concessionaires,
danish pharmacies and Automated Teller Machines (ATM’s).
3. Mass Customization
Mass customization is one of the marketing strategies wherein the firm’s offerings are tailor-made i.e., based on the
requirements of an individual customer. Today with the advancement in technology, firms are able to use computers to design
the product as per the needs and requirements of the customer. In a mass customization strategy, computer-based systems are
integrated, with new production systems such as JIT (Just-In-Time) and Flexible Manufacturing. Such integration is used to make
attractive and tailor-made offers to the customers at economical prices.
Example
For example, Motorola is providing more than 29 million various combinations of pager features and each pager is designed
by considering the specific requirements of customers.
4. Product Market Fit
Another important marketing strategy is fitting product ranges into appropriate markets. Product market fit is possible by
assessing the product’s usage in both existing and new markets. The following figure depicts the matrix of strengthening product
market fit,
Figure: Matrix of Strengthening of Product Market

The matrix requires a marketer to compare their product attributes with the usage behaviour of customers. According to
Sheth, the in-depth analysis of customer’s (needs and requirements) and their usage behaviour assists the firm in developing the
new marketing strategies which inturn help them in gaining huge amount of market share and also in achieving the competitive
position in the markets.
Example
(a) Existing Users-Existing Users
In case of making consumption mandatory, the Indian government has instructed all the officials to use only state air carriers
and to stay in India Tourism Development Corporation (ITDC) only or various state owned hotels. By doing this, Indian
Airlines, Air India and government owned hotels can penetrate the executive markets.
(b) Existing User-New Users
In case of Internationalization, numerous engineering organizations, specially light engineering organizations are
manufacturing products such as fans, sewing machines, hand tools etc.
(c) New User- Existing Users
In case of modification in packaging, sachet packing in the shampoo market is introduced by Hindustan Lever.
(d) New User-New Markets
In new user-new markets strategy, Sony Corporation has introduced walkman by realizing that there is a need to introduce
a personal portable music system.
5. Customer Service
In the process of value creation, the deviation between tangibles and intangibles gets reduced and the emphasis of marketer
shifts from profit generation to the delivery of quality service to customers. Usually, customers have certain expectations from
the firm’s offerings which makes them to compare firm’s offerings against their expectations.
Example
For example, Now-a-days, Indian Airlines is providing great customer service.
Important Questions
Q1. Define Human Resource Management. Explain the important functions of HRM.
Ans : (Important Question | April-18, Set-2, Q4(a))
Q2. Describe the functions of HR manager in an organization.
Ans : (Important Question | May/June-14, Set-1, Q3)
Q3. Analyze the advantages of training and development programmes.
Q4. Explain different methods of training in an organization.
Ans : (Important Question | April/May-13, Set-3, Q3)
Q5. What is Performance Appraisal? Why is it necessary to carryout performance appraisal?
Q6. Explain the point rating method and factor comparison method of job evaluation.
Q7. What is job description and job specification?
Q8. Distinguish between selling and marketing.
Q9. What is Marketing Mix? Describe the various elements of marketing mix.
Ans : (Important Question | April/May-13, Set-4, Q3)
Q10. Explain various strategies of marketing with suitable examples.
Ans : (Important Question | April-18, Set-4, Q4(b))
Unit-3 Strategic Management 3.1
Unit
3
Strategic Management
SI
A GROUP
Syllabus
Strategic Management : Strategic Management and Contemporary Strategic Issues: Mission, Goals, Objectives,
Policy, Strategy, Programmes, Elements of Corporate Planning Process, Environmental Scanning, Value Chain Analysis,
SWOT Analysis, Steps in Strategy Formulation and Implementation, Generic Strategy Alternatives. Bench Marking
and Balanced Score Card as Contemporary Business Strategies.
Learning Objectives
 The Concept, Process and Importance of Strategic Management.
 The Concepts of Corporate Planning i.e., Mission, Goals, Objectives, Policy, Strategy and Programmes.
 The Concept and Elements of Corporate Planning Process.
 The Concept, Importance and Process of Environmental Scanning.
 Value Chain Analysis and SWOT Analysis.
 Steps in Strategy Formulation and Implementation.
 Generic Strategy Alternatives and Strategic Alliance.
 Benchmarking and Balance Score Card as Contemporary Business Strategies.
Introduction
Strategic management is defined as a set of decisions and actions resulting in formulation and implementation
of strategies designed to achieve the objectives of an organization. Strategic management is very important
in an organization as it brings a drastic change in the performance of organization, helps managers in dealing
with dynamic situations and enables all the members of organization to work together to achieve organizational
goals. Strategy formulation and implementation is the heart of the strategic management process.
Corporate planning is defined as a process of planning carried out by top management to attain the set
of goals of organization. The basic concepts of corporate planning are mission, goals, objectives, policy,
strategy and programmes. Environmental scanning and strategy formulation are the two important phases
of corporate planning.
A strategy is nothing but a course of action taken by the company to achieve its objectives. There are
many strategies available to a firm if it wants to increase sales, motivate the employees, deal with the
rivals, increase production etc. Generic strategic alternatives include expansion strategy, stability strategy,
retrenchment strategy and combination strategy.
The two contemporary business strategies discussed in the unit are Benchmarking and Balance score card,
Benchmarking is a systematic and structured approached in which a company compares its operations
and internal processes against those in best performing companies outside the industry. Balance scorecard
is defined as 'A strategic feedback system using which program managers can make faster, easier and
smarter decisions'.
3.1 Strategic Management and Contemporary Strategic Issues

Q1. Define Strategic Management. What is its objective? Why is strategic management important? Write a
brief note on contemporary issue in strategic management.
OR
What is Strategic Management?
(Refer Only Topic: Definitions of Strategic Management)
Answer : [Model Paper-I, Q5(a) | April/May-19, Set-1, Q6(a)]
Definitions of Strategic Management

‘Samuel.C. Certo and J. Paul Peter’ defined strategic management “As a continuous, interactive, cross-functional process
aimed at keeping an organisation as a whole appropriately matched to its environment”.
‘Schellen Berger and Boseman’ defined strategic management “As a continuous process of effectively relating the
organisations’s objectives and resources to the opportunities in the environment”.
Objective of Strategic Management
The primary objective of strategic management is to develop and execute effective strategies, which assist in establishing
a good fit among the organisation and its environment and the attainment of the strategic goals.
Importance of Strategic Management
The following points explain the importance of strategic management,
1. Gives Guidelines
Strategic management provides guidelines to employees regarding what organisation expects them to do. These guidelines
make employees clear about what their jobs are demanding and what performance they are supposed to give. Strategic
management offers incentives to employees and assists the organisation in the attainment of objectives.
2. Increases of Good Performance
Most of there research studies state that there exists a relationship between good performance and formal planning. The
companies which do strategic planning will have more chances to succeed than the companies that do not do strategic
planning.
3. Facilitates Communication
Strategic management facilitates free flow of information from bottom level managers to middle level managers to top
level managers.
4. Allocation of Resources
Strategic management assists in selecting achievable and realistic projects and inturn enhances the allocation of resources
to realistic projects.
5. Allows Forecasting of Change
Change is unavoidable and it makes planning a complicated task. Strategic management motivates top level managers to
forecast the changes in the environment and helps them grab the opportunities coming out of the changes and overcome
threats by forecasting future change.
6. Assist Managers in Getting a Holistic Approach
Strategic management assists managers in getting full awareness regarding the company and in acquiring a holistic approach
with respect to business problems and proportions.
7. Systematic Decision Making
Strategic management gives information to managers regarding various business transactions which assist managers in
making business decisions in a systematic manner.
Contemporary Issues in Strategic Management
In strategic Management, there exist several contemporary issues that are practiced by organizations. One such contemporary
issue in strategic management is "corporate governance". Corporate governance refers to the set of mechanisms which are used in
the relationship between shareholders and also to ascertain and monitor the strategic decisions and performance of the organization.
Q2. Define strategic management and describe the Contents in Mission Statement
process of strategic management. A good mission statement contains the following
Answer : [Model Paper-III, Q6(a) | April/May-13, Set-1, Q5]
information,
1. Basic product or service to be offered.
Definitions of Strategic Management
2. Customers groups or primary markets to be served.
‘F. R. David’ defined strategic management “as a process
3. Advantages and benefits of products or services.
of formulating, implementing and evaluating cross-functional
decisions that enable an organisation to achieve its objectives”. 4. Technology in production and delivery.
5. Basic concern for survival of organization through
‘Pearce and Robinson’ defined strategic management profitability and growth.
‘As a set of decisions and actions resulting in formulation and
Mission statement also includes information regarding
implementation of strategies designed to achieve the objectives
the values and beliefs of the organization including,
of an organisation”.
(a) Organization’s managerial philosophy.
Process of Strategic Management
(b) Self concept that its adopted by stockholders and
The steps in the strategic management process includes, employees for the business.
Step 1: Identifying/Defining Business Mission, Purpose and (c) Organization‘s public image.
Objectives Characteristics of Mission Statement
Identifying or defining an organisation’s existing mission, A mission statement should possess the following seven
purpose and objectives is the logical starting point as they lay characteristics,
foundation for strategic management. 1. It should be Feasible
These elements relate the organisation with the society A mission statement should always aim high but it
and states what organization has to achieve for itself and for the should not be an impossible statement. It should be realistic
society. and achievable, its followers must find it to be credible. But
feasibility depends on the resources available to work towards
Step 2: Environmental Analysis a mission.
Environmental factors both internal environment and 2. It should be Precise
external environment are analyzed to,
A mission statement should not be so narrow as to restrict
(i) Identify changes in the environment. the organization’s activities nor should it be too broad to make
itself meaningless.
(ii) Identify present and future threats and opportunities and
3. It should be Clear
(iii) Assess critically organizational strengths and weaknesses.
A mission statement should be clear enough to lead
Organisational environment encompasses all factors an action. It should not be a high-sounding set of platitudes
both inside and outside the organisation that can influence the meant for publicity purposes. Many organizations do adopt
organisation positively and negatively. Environmental factors such statements but probably they do so for emphasizing their
may help in building a sustainable competitive advantage. identity and character. To be useful, a mission statement should
Managers must understand the purpose of environmental be clear enough to lead the action.
analysis and recognize the multiple organisational environments 4. It should be Motivating
in which they operate.
A mission statement should be motivating for members
of the organisation and for society and they should feel it worth
3.2 Mission, Goals, Objectives, Policy, while working for such an organization or being its customers. A
Strategy and Programmes bank which lays great emphasis on customer service is likely to
Q3. Define Mission. What does a mission statement motivate its employees to serve its customers well and to attract
contain? Discuss the characteristics of mission clients. Customer service, therefore is an important purpose for
statement. a banking institution.
5. It should be Distinctive
Answer :
A mission statement which is similar to other organizations
Definition of Mission is likely to have little impact. If all scooter manufacturers defined
Thomson (1997) defines mission as, “the essential their mission in a similar fashion, there would not be much
purpose of the organization, concerning particulars” why it is in difference among them. But when one defines it as ‘value for
existence, the nature of the businesses it is in and the customers money, for years, this will create an important distinction in the
it seeks to serve and satisfy. public mind.
6. It should Indicate Major Components of Strategy Significance of Goals
A mission statement along with the organizational Goals are considered significant due to the following
purpose should indicate the major components of the strategy reasons,
to be adopted.
1. Goals help to Define the Organisation
7. It should Indicate How Objectives are to be
An important job of goals is that they help to define the
Accomplished
existence of the firm in the environment.
Besides indicating the broad strategies to be adopted,
For example, a Non-government organization (NGO)
a mission statement should also provide clues regarding the
specified its aim as “Empowering women” and “to educate the
manner in which the objectives are to be accomplished.
tribal women regarding the self-employment opportunities for
Q4. Define Goal. What are the characteristics of the coming 5 years” as its goal.
well-written goals? What type of goals do
2. Goals help in Coordinating Decisions
organizations have? State the significance of
goals. The top level management must clearly specify
organizational goals so that the employees can act accordingly.
Answer :
Also, the managers can arrange the resources and effectively
Definition of Goal utilize the manpower with the help of goals.
“Goals are the targets attributed by features which an 3. Goals Facilitate Performance Appraisal
organization wants to achieve”. Goals, are not time framed and
specifically quantified. A significant contribution of goals is that they facilitate in
the performance appraisal of the employees and the organization
Characteristics of Well-Written Goals as a whole. However, goals need to be clear and measurable in
The characteristics of well-written goals are given as nature to contribute towards performance appraisal.
follows, Q5. What are the steps involved in setting goals?
1. Goals should be written down in terms of results and not What approaches are available to set goals?
the actions.
Answer :
2. Goals should be challenging but should be attainable at
Step Involved in Setting Goals
the same time.
The steps involved in goal setting are as follows,
3. Goals should be conveyed to all the members of
organization. 1. Review the Organizational Mission and Key Jobs of
4. Goals should be quantifiable and measurable. Employees
5. A clear time frame should be set for achieving goals. The mission statement of an organization acts as a
guide to the members of the organization. It is essential for the
Types of Goals managers to review the mission prior to writing of goals as goals
The goals of a company are classified as, should reflect the mission. Besides this, organization should
1. Strategic Goals define what it expects from its employees.
2. Financial Goals 2. Examine the Available Resources
3. Stated Goals The goals should be set in such a way that they should be
achievable. Organization should make sure that it has sufficient
4. Real Goals resources to achieve the goals. If there are insufficient resources,
1. Strategic Goals then it becomes very difficult and even impossible to achieve
Strategic goals are the goals that are set for all areas of goals. Therefore, the goals should be realistic.
organization except for financial performance. 3. Determine the Goals Individually or with Input from
2. Financial Goals Others
Financial goals are the goals that are set specifically for The set goals should consider the organizational mission
financial performance of organization. and goals in other areas of organization. The goal must reflect
the required outcomes and it should be specific, measurable and
3. Stated Goals has a specific time frame for accomplishment.
Stated goals are nothing but the official statements that 4. Write the Goals Properly and Communicate them to
state what company wants to say and what goals it wants its the Respective People
stakeholders to believe.
The organization should make sure that goals are well
4. Real Goals
written and it should be communicated to the organizational
Unlike stated goals, these goals are the actual goals that members. The goals when written, shows the importance of
a company pursues. working towards something.
5. Create Feedback Mechanisms to Evaluate Progress Nature of Objectives
of the Goal The following points explain the nature of objectives,
If it is not possible to meet the goals, then one can change 1. Achievement of objectives requires time.
them as per the requirements.
2. Each objective carries some weight.
6. Link Reward to the Attainment of Goal
3. There might be restrictions on the achievement of few
It is quite obvious that employees expect something objectives.
in return after the accomplishment of goals. Therefore, it is 4. Official objectives are different from operative objectives.
important to link the rewards to goal achievement. Official objectives are the results which organisation try
Once the goals are set, written down and communicated, to achieve on official occasions like public statements to
the managers can develop plans for pursuing the goals. general public. Operative objectives are the results which
organization aims at achieving.
Approaches Available for Setting Goals
5. As there are multiple objectives in the shortrun, usually
Goals are usually set through the two major approaches/ few objectives are given more priority or assigned more
processes, weight when compared to other objectives.
1. Traditional goal setting process. Significance/Importance of Objectives
2. Alternative to traditional goal setting process i.e., The following points highlight the significance/
Management By Objectives (MBO). importance of objectives,
1. Coordinate Decisions and Decision Makers
1. Traditional Goal Setting Process
The objectives set in an organisation put restriction on
In traditional goal setting process, goals are set by the the employees activities and make them work towards
top management. After setting the goals, the top management the achievement of objectives. Objectives coordinate
formulates them for middle management. Subsequently, decision-making process through various employees.
the middle management ensures an essential ground for the
development of secondary level. This way, the goals are passed 2. Serve as Standards for Measuring Organisational
down to each succeeding level and all the employees use it as Performance
a guide to achieve the assigned goals. Apart from showing direction to the organisation,
2. Management by Objective as an Alternative to objectives state the final goals and targets which
Traditional Goal Setting organisation is required to achieve. These targets and
goals serve as standards for measuring organisational
Management by objectives method was developed performance.
by Peter F. Drucker in 1954. According to him, MBO is a
3. Demonstrate the Changes in the Environment
process whereby the superior and subordinate managers of
an organization jointly identify common goals, define each Objectives are changed as per the changes taking
individual’s major areas of responsibility in terms of results place in the internal and external environment of the
expected from him and use these measures as guides for organisation. Thus, objectives demonstrate the changes
operating the unit and assessing the contributions of each of in the environment.
its members. An MBO programme mainly involves four steps. 4. Define the Organisation to the Stakeholders in the
Goal setting, Performance standard, Comparison and Periodic Environment
review. The MBO method suffers from the limitation that it is
time-consuming. Customers, creditors, government and society come
under the stakeholders prevailing in the environment.
Q6. What is an Objective? Explain nature and Objectives define the organisation to these stakeholders.
significance of objectives. What are the
5. Assist in Setting Strategies
differences between goals and objectives?
Organisation’s mission statement is converted into
Answer : objectives and these objectives are taken as basis for
Meaning of Objective setting strategies.
Objective refers to an outcome which an organization 6. Tangible Goals

aims at achieving in the long-run. Objective is a final outcome, When compared with mission statements, objectives
end point or is something which a person aim at and make efforts are more tangible. Mission statements are set generally
to achieve. In other words, objective is an expected outcome/ because they are required to be met in the long-run.
result, for which organizational efforts are made. Some of the Mission statements are less tangible. On the other hand,
examples of an organizational objectives are, satisfaction of as mission statement is converted into objectives, they
employees, quality production etc. are more tangible.
Differences Between Goals and Objectives
The differences between goals and objectives are as follows,
S.No. Goals Objectives

1. Goals are higher in hierarchy. Objectives are down the hierarchy. They serve the goals.
2. Goals are of short-term nature. Objectives are of long-term nature.
3. Goals are abstract. Objectives are concrete.
4. Goals are intangible. Objectives are tangible.
5. Goals are broad. Objectives are narrow.
6. Goals cannot be validated. Validation of objectives can be done.
Q7. Define Policy. State its features. Explain the differences between objectives and policies.
Answer :
Definition of Policy
A policy is a set of rules, guidelines and procedures for smooth functioning of the business. Policies provide the framework
or the guidelines through which objectives can be achieved.
Features of Policy
The following points highlight the features of organizational policy,
1. Expresses Organisational Culture
Policy declaration is a term signifies the organisational culture and dedication. Policy statement motivates the individual
employees to possess the capability to deal with dynamic situations in an organization.
2. Guides Managerial Performance
Policy statement helps the managers in their daily work. Whenever the manager faces any difficulty or confusion in the
process of organizational work, he prefers to have a look on the prescribed policy statements and acts accordingly. Thus
policies act as a guide for the managers.
3. Fosters Uniformity of Action
Policy statement is prepared to maintain the consistency in the managerial performances. Further, it encourages uniformity
of action among the organizational work force.
4. Creates and Sustains Good Conduct and Character
Policy Statements are incorporated in order to create and support good behavior and character among the employees.
Differences Between Objectives and Policies
The differences between objectives and policies are as follows,
Point of
S.No. Objectives Policies
Difference
1. Meaning Objectives are the end points that require Policies are nothing but the details that are designed for
the activities to be undertaken for its the proper guidance of employees in decision making.
achievement.
2. Nature Objectives show what is to be done. Policies indicate how an activity is to be done.
3. Need An organisation cannot be setup without the Unlike objectives, policies are not very necessary.
formulation of objectives. Thus objectives
are necessary.
4. Level of Usually, higher level managers determine Employees working at different levels can determine
Determination the objectives. the policies.
Q8. Write about, Answer : April/May-17, Set-3, Q6(a)
(a) Strategy Strategy at Different Levels of a Business

(b) Goals The strategy used at different levels of a business are,
(c) Programmes.
1. Corporate level strategy
OR
2. Business level strategy
Explain Goals and Strategy of an organization
of your choice. 3. Functional level strategy.
1. Corporate Level Strategy
(Refer Only Topics: Goals, Strategy)
Answer : [Model Paper-IV, Q5(a) | April/May-19, Set-2, Q6(a)]
Corporate level strategy may be defined as an organization’s
overall direction with respect to its various business units. It
(a) Strategy explains in detail about the type of businesses, a firm intends to
A strategy is an integrated plan which helps in connecting operate. Thus it provides answers to questions like,
all the components of an organisation together. A strategy is a
(i) What business does the firm operate?
comprehensive plan wherein all the components of a plan are
consistent with each other and joins together effectively. (ii) What other areas of business the firm intends to enter?
Thus, a strategy is a unified, comprehensive and 2. Business Level Strategy
integrated plan which associates the firms strategic advantages The term business level strategy refers to the managerial
with the environmental challenges. decisions and actions pertaining to a single business unit. In other
Example words, it is the managements game plan for a single business
Some of the strategies of Microsoft Inc are, unit. The main aim of this strategy is to make the business
unit competitive in the market. This strategy provides answer
(i) To understand the exact needs of people.
to question like, How can the business unit be made more
(ii) To develop high-grade software. competitive?
(b) Goals Organizations generally follow one of the following
“Goals are the targets attributed by features which an competitive strategies for making the business unit more
organization wants to achieve”. Goals, are not time framed and competitive.
specifically quantified.
(a) Low Cost Strategy
Example
Under this strategy, the firm tries to increase its market
Some of the goals of Microsoft Inc are, share by providing goods/services at the lowest price in
(i) To understand the state of technology. the market.
(ii) To participate actively in developing rich variety (b) Differentiation Strategy
of digital devices.
Under the differentiation strategy, the firm provides
(iii) To emerge as the supplier of great software. products/services with unique features. Thus
(c) Programmes differentiating its products from that of the competitors.
A program is a specific plan devised to meet a particular The customer too would be willing to pay a premium
situation. It is a combination of policies, procedures, rules, price for such unique high quality products.
budgets, task assignments etc., for the specific purpose of (c) Focus Strategy
carrying out a particular course of action.
Under this strategy, the firm focuses on a specific group
Programmes are supported by necessary capital and of customers. Thus creating a nitche market for itself.
operating budgets. Many sub-programmes may be formulated
based on the master programme. 3. Functional Level Strategy
Q9. What strategy is used at different levels of a This strategy pertains to the functional areas of a business
business? Discuss the role of strategist in the unit such as research and development, production, marketing,
modern era. finance etc. The main aim of this strategy is to support the
organization’s business and corporate level strategy.
OR
Thus, an international firm may make use of the above
Explain the strategy at different levels of a
mentioned approaches for evaluating its corporate strategies.
business. [Model Paper-IV, Q6(a) | April/May-17, Set-4, Q6(a)]
Role of Strategist in the Modern Era
(Refer Only Topic: Strategy at Different Levels of a Business)
OR Strategists are the individuals or group of individuals
who take part in the different stages of strategic management
Enumerate the role of strategist in the modern era.
process such as evaluation of environment, strategy formulation,
(Refer Only Topic: Role of Strategist in the Modern Era) strategy execution and evaluation of strategies.
Strategists include board of directors, Chief Executive 3.3 Elements of Corporate
Officer (CEO), managers with different designations, consultants
etc. The key strategists and their role in strategic management
Planning Process
are as follows, Q10. Define Corporate Planning and describe the
process of corporate planning.
1. Board of Directors
[Model Paper-I, Q6 | April/May-13, Set-2, Q5]
Board of directors constitutes the top most level of OR
strategists. They are responsible for formulating the corporate
Explain the steps in corporate planning
level strategy. They guide the chief executive officer and
senior managers in framing organizational objectives, process. April/May-17, Set-1, Q6(a)
policy designing, reviewing and analyzing organizational (Refer Only Topic: Elements/Steps Involved in Corporate
performance. Planning Process)
2. Chief Executive Officer (CEO) OR
The chief executive officer is regarded as the working Discuss briefly corporate planning process.
head of an organization. CEO has the responsibility to formulate April/May-19, Set-3, Q6(b)
corporate level strategy, organize various business areas, offer
the needed information to board of directors, direct the head of (Refer Only Topic: Elements/Steps Involved in Corporate
Strategic Business Units (SBU’s) etc. Planning Process)
3. Strategic Business Unit Managers OR

Explain the elements involved in corporate
The strategic business unit managers of SBU’s are the
planning process. April-18, Set-3, Q6(b)
heads of strategic business units. They design the strategies at
the strategic business unit level and also direct the functional (Refer Only Topic: Elements/Steps Involved in Corporate
managers (departmental heads) in designing a strategy at the Planning Process)
functional level.
OR
4. Functional Managers (Senior Managers)
Discuss the elements of corporate planning.
Functional managers are the heads of different
functional departments in each business area. They design the (Refer Only Topic: Elements/Steps Involved in Corporate
functional level strategies whose main objective is to attain the Planning Process)
departmental goals. They provide guidance to the middle and Answer : May/June-14, Set-1, Q5
lower level managers for performing different activities and also Definition of Corporate Planning
organize various activities within their department.
Corporate planning can be defined as the process of
5. Middle Level Managers formulating the corporate mission, scanning the business
The middle level managers design operational environment, evolving strategies, creating necessary
level strategy and furnish the required information to their infrastructure and assigning resources to achieve the given
departmental heads or functional managers. mission. Corporate planning has a company-wide and
comprehensive perspective. Strategic planning is done for the
6. Executive Assistants entire organization, can also be called as corporate planning.
They are the supporting staff who provide support and Elements/Steps Involved in Corporate Planning Process
assistance to the managers who are operating at various levels.
The elements/steps of corporate planning process are,
They furnish the required data about the different internal and
external environmental elements. 1. Identification of opportunity
As these executive assistants are responsible for 2. Establishment of objectives
executing a strategy, they communicate or share the real and 3. Determining internal and external factors
practical problems in strategy. They also give important advises
for designing a strategy effectively. 4. Identification of alternatives
7. Consultants 5. Evaluation of alternatives
Consultants are the experienced professionals who are 6. Selection of best alternative
working independently outside the organization. They give 7. Formulation of supporting plans
very useful advises to the firm. The consultants are hired by the
business firms and are utilized while formulating the strategies 8. Establishing sequence of activities
at different levels. 9. Follow up.
1. Identification of Opportunity
One should be sure of what opportunities are available for planning a product or service. For planning the future requirements,
the identification of opportunity is an essential factor which gives way to purpose or mission of the organization.
2. Establishment of Objectives
Objectives specify the results expected and indicate the end points of what is to be done, where the primary emphasis
is to be placed, what is to be accomplished by the various types of plans. Based on the corporate objectives, the division and
departments prepare their individual objectives.
3. Determining Internal and External Factors
The next step in planning is to determine internal and external factors which may influence the performance of the company
in future.
Internal factors are organizational policies, resource availability and the ability of the organization to withstand the financial
and environmental pressures.
External factors such as political environment, social environment, technological environment, government policies, market
conditions and most important is the competitors plans and actions.
4. Identification of Alternatives
Various alternatives suggest that a particular objective can be achieved through various actions. The most common problem
with alternatives is not only finding the alternatives, but to reduce the number of alternatives, so that the best alternatives are taken
for detailed analysis.
5. Evaluation of Alternatives
There can always be a number of alternatives to attain a goal. These alternatives are considered as feasible initially and
are taken up for evaluation. At this stage, an attempt is made to evaluate how each alternative contributes to the organizational
objectives. For example, one alternative may be more profitable, but requires heavy investment with a long period of maturity,
another may be less profitable but also involves less risk.
6. Selection of Best Alternatives
After evaluation of various alternatives, the alternative which is best suitable should be selected keeping in view the
organizational objectives.
7. Formulation of Supporting Plans
After formulating the basic plan, various plans are derived so as to support the main plan. In an organization, there can be
various derivative plans like planning for buying equipments, buying raw materials, recruiting and training personnel, developing
new product etc.
8. Establishing Sequence of Activities
After formulating the basics and derivative plans, the sequence of activities is determined so that plans are put into action.
9. Follow Up
After doing all the hard work about the steps described above, it will be a waste of time and effort if there is no follow up.
So follow up action checks whether or not the plans prepared are being carried out in accordance with plans.
Q11. Distinguish between Strategic planning, Tactical planning and Operational planning. What strategies
can be used to improve sales?
OR
What type of strategies to be used to improve sales? [Model Paper-I, Q5(b) | April/May-17, Set-3, Q6(b)]
(Refer Only Topic: Strategies to Improve Sales)

OR
Distinguish between strategic planning, tactical planning and operational planning.
(Refer Only Topic: Differences Between Strategic Planning, Tactical Planning and Operational Planning)
Answer : April-18, Set-1, Q6(a)
Differences Between Strategic Planning, Tactical Planning and Operational Planning

The differences between strategic planning, tactical planning and operational planning are as follows,
S.No. Criteria Strategic Planning Tactical Planning Operational Planning

1. Objective Strategic planning aims at Tactical planning aims to fill the It aims at performing routine or
defining and achieving long- gaps in strategic planning with day-to-day activities effectively.
term goals. detailed of steps to be taken.
2. Duration It is a long-term planning. It It is a short-term planning. The It is short-term planning. It is
lasts for more than 1 year. duration is less than one year. usually for one year or less than
one year.
3. Scope It has a broader scope. It Compared to strategic planning, It has a limited scope. It covers
covers all the important tactical planning has a less specific aspects and functions to
aspects of the organisation broader scope. support strategic planning.
which have long-term
implications.
4. Level of Strategic plans are developed Tactical planning is performed Operational plans are developed
Management by upper-level managers. by middle level managers. by middle and lower level
managers.
5. Information Strategic planning require Tactical planning require less Information required for
large amounts of information. information. operational planning is almost
exclusive internal and a little
undimensional.
6. Uncertainty and It involves high state of It involves less uncertainty and It involves relative certainty and
Risk taking uncertainty and risk-taking. risk-taking. little risk-taking.
7. Focus It focuses on planning and It focuses on coordination. It focuses primarily on control.
forecasting.
Strategies to Improve Sales

Following are the various strategies used to improve the sales performance of strategic business unit,
1. Strategy of Intensive Growth
The process of identifying the opportunities of growth in the current business is called ‘intensive growth’. For doing so,
the management has to completely analyse the market and identify the available opportunities. It can gain the market by following
three strategies such as,
(a) Market penetration strategy
(b) Market development strategy
(c) Product development strategy.
2. Strategy of Integrative Growth
The process of identifying opportunities for developing or acquiring similar kind of businesses is called "Integrative
Growth". A growth can be attained by the integration of various business processes through three types of integrations.
(a) Backward integration
(b) Forward integration
(c) Horizontal integration.
3. Strategy of Diversification Growth
This is another strategy that is available for improving the sales performance of a strategic business unit. The strategies
under this are,
(a) Concentric diversification strategy
(b) Horizontal diversification strategy
(c) Conglomerate diversification strategy.
3.4 Environmental Scanning Factors to be Diagnosed in External Environment

External environment of a business enterprise has three
Q12. What is Environmental Scanning? State its
factors to be diagnosed.
importance. What are the factors to be diagnosed
in external and internal environment? 1. Diagnosing General Environment
OR Diagnose of general environment includes the factors

like,
What is Environmental Scanning? How is this
(a) Socioeconomic factors (comprising of the forces
important in present day context? affecting the economy, society and business climate and
[Model Paper-III, Q6(b) | May/June-14, Set-3, Q5]
culture).
(Refer Only Topics: Meaning of Environmental Scanning, (b) Technological factors (comprising of flow of raw
Importance of Environmental Scanning) materials, technological changes).
OR (c) Governmental factors (comprising of taxation gap
Explain the importance of Environmental between demand and supply etc.).
Scanning. April/May-19, Set-1, Q6(b) 2. Diagnosing Industrial Environment
(Refer Only Topic: Importance of environmental Scanning) The forces to be diagnosed in industrial environment are,
OR (a) Customers are to be identified and their needs are
analyzed. Organisation should be ready to meet the
Describe the importance of Environmental needs of the customers in order to overcome the threat
Scanning. of competition.
(Refer Only Topic: Importance of environmental Scanning) (b) Suppliers play a vital role in external environment. The
cost and supply conditions (raw materials, technology,
Answer : April-18, Set-3, Q6(a) money, labour) are to be diagnosed.
Meaning of Environmental Scanning (c) Competition is a great threat to the organisation. The exit
Environmental scanning is a process of examining and entry of competitors, the intensity of competition is
the political, economic, technological and socio-cultural to be diagnosed.
environment and identifying and controlling the factors that 3. Diagnosing International Environment
influence the organizational growth. Diagnosis of international environment includes a clear
Importance of Environmental Scanning study pertaining to the factors like Political factors, Social
factors, Economical factors, Financial issues etc.
The following points highlight the importance of
environmental scanning, Factors to be Diagnosed in Internal Environment
1. It helps the firms to evaluate the corporate strategy The following factors are to be considered in internal
with respect to the opportunities emerging in the environmental diagnosis,
environment. 1. Human Resources
2. It monitors the changes that take place in the environment Availability of personnel, their skills, capabilities,
and helps in forecasting the future position. knowledge, motivational levels, group dynamics are to
be well diagnosed and are to be effectively utilised.
3. It identifies the opportunities and threats in the
environment and highlights the opportunities that are 2. Financial Resources
specifically relevant to the organization. Extent of investment, assets level, shareholders capacities
4. It enables the organization to be in synchronization etc. should be diagnosed.
with the changing environment as it is highly dynamic 3. Infrastructural Facilities
in nature. This includes diagnosing availability of equipments, their
5. It helps the firms to identify the critical factors which capacity, raw materials, their inflow, finished products,
may have a drastic impact on their existing goals and their outflow etc.
strategies. 4. Technological Capabilities
6. Through environmental scanning, key factors The extent of technology prevailing in the organization,
presenting the opportunities for the optimal attainment its usage and technology required are analyzed.
of goals can be identified and incorporated into the 5. Other Factors
strategic planning framework.
Other factors include Leadership style, Superior-subordinate
7. It helps the firm in identifying the areas and timings relations, Communication, Coordination, Motivational
for the proper exploitation of resources. level, Group dynamics etc.
Q13. Explain the process of environmental scanning. 4. Environmental Diagnosis
Answer : Model Paper-II, Q5 Environmental diagnosis is the process which consists

of managerial decisions made by analysing the significance
The process of environmental scanning can be
of the data pertaining to opportunities and threats indicated in
understood from the following figure,
environment analysis.
It is essential that corporate bodies should identify the
opportunities and threats present in the environment, their ability
to adopt to the external environmental factors, their ability to
properly design and adjust to the internal environmental factors
in order to take advantage of the opportunities and to fight the
threats of the environment.
For this purpose, organizations carryout environmental
analysis and the data obtained by environmental analysis is
diagnosed which is called as "environmental diagnosis".
5. Environmental Opportunity
“Environmental opportunity is defined as an attraction
arena for company’s action in which a particular company would
enjoy a competitive advantage”.
6. Environmental Threat
Environmental threat is defined by Philip Kotler as "a
challenge posed by an unfavourable trend or development in
Figure: Process of Environmental Scanning the environment that would lead in the absence of purposeful
Business decisions are influenced by two sets of factors action, to the erosion of the companies position”.
namely internal factors referred to as internal environment and 7. Strengths
external factors referred to as external environment.
Strengths are the internal capabilities of the business
1. Internal Environment organization in comparison with that of its competitors. The
The internal environment is generally regarded as the strengths may be the company’s image, brand image, business
combination of factors which could be controlled as these synergies and functional areas of marketing, finance, production,
are within the controllable limits of the organization. The R&D (Research and Development) and human resources.
internal factors such as personnel employed, physical facilities, 8. Weaknesses
organizational decisions on marketing mix can be altered to suit
the environment. Weaknesses include those factors which tend to reduce
the capabilities or competencies of the organization when
2. External Environment compared to its competitors. It could be poor product quality,
The external environment is generally regarded as obsolete technology, high cost of production, poor marketing,
the combination of factors which are beyond the control of financially weak and ineffective management.
management and can be called as uncontrollable factors. The
factors such as the economic factors, socioeconomic factors, 3.5 Value Chain Analysis
sociocultural factors, government and legal factors, geophysical
and demographic factors comes under this environment. Q14. What do you understand by value chain
analysis? Explain its components.
Environmental scanning identifies various opportunities,
threats, strengths and weaknesses. In short, it conducts SWOT analysis. Answer :
3. Environmental Analysis Meaning of Value Chain Analysis
Environmental analysis is defined as “the process by Value chain analysis involves a set of interrelated activities
which strategists (people who formulate strategies) monitor performed in a sequence for producing and marketing a product or
the environmental sectors for determining the opportunities and a service.
threats to their firms”. The utility of value chain analysis for the purpose of
The techniques adopted for environmental analysis operational and marketing evaluation lies in its ability to segregate
are information gathering and evaluation. For an effective the total tasks of a firm into identifiable activities which can then
information gathering, there should be a source of information. be evaluated for effectiveness.
Components of Value Chain Analysis (a) Promptness of attention to customer complaints.
The various components of value chain analysis are (b) Appropriateness of warranty and guarantee policies.
presented in the below figure, (c) Quality of customer education and training.
(d) Ability to provide replacement parts and repair services.
Evaluating a Firm’s Value Chain : Support Activities
The support activities in evaluating firm's value chain
are,
1. Firm Infrastructure: This includes,
(a) Coordination and integration of all activities associated
with the value chain among organizational subunits.
(b) Ability to obtain relatively low cost funds for capital
expenditures and working capital.
Figure: The Value Chain Analysis (c) Timely and accurate information for management on
Evaluating a Firm’s Value Chain: Primary Activities general and competitive environments.
(d) Relationships with public policy makers and interest
The primary activities in evaluating a firm's value chain
groups.
are,
(e) Public image and corporate citizenship.
1. Inbound Logistics: It involves,
2. Human Resource Management: It includes,
(a) Soundness of material and inventory control systems.
(a) Effectiveness of procedures for recruiting, training and
(b) Efficiency of raw material warehousing activities. promoting all levels of employees.
2. Operations: It involves, (b) Appropriateness of reward system for motivating

challenging employees.
(a) Productivity of equipment compared to that of key
(c) A work environment that minimizes absenteeism and
competitors. keeps turnover at the desirable levels.
(b) Appropriate automation of production process. (d) Relation with trade unions.
(c) Effectiveness of production control systems to improve (e) Levels of employee motivation and jobs satisfaction.
quality and reduce costs. 3. Technology Department: It involves,
(d) Efficiency of plant layout and work flow design. (a) Success of R&D activities (in leading to product and
process innovations).
3. Outbound Logistics: It involves,
(b) Quality of working relationship between R&D personnel
(a) Timeliness and efficiency of delivery of finished goods and other departments.
and services.
(c) Timeliness of technology development activities in
(b) Efficiency of finished goods and warehousing activities. meeting critical deadlines.
4. Marketing and Sales: This includes, (d) Quality of laboratories and other facilities.
(a) Effectiveness of market research to identify customer (e) Ability of work environment to encourage creativity and
segments and needs. innovation.
(b) Innovation in sales promotion and advertising. 4. Procurement: It involves,

(a) Development of alternative sources for inputs to
(c) Evaluation of alternate distribution channels.
minimize dependence on a single supplier.
(d) Motivation and competence of sales force.
(b) Procurement of raw materials on a timely basis, at lowest
(e) Development of an image of quality and a favourable possible cost and at acceptable levels of quality.
reputation. (c) Procedures for procurement of plant, machinery and
5. Customer Service buildings.
Means to solicit customer inputs for product (d) Development of criteria for lease vs. purchase decisions.
improvements. It involves, (e) Long term relationships with reliable suppliers.
3.6 SWOT Analysis Weaknesses

Q15. What is SWOT analysis? Explain the process of Weaknesses include those factors which tend to reduce
SWOT analysis. April-18, Set-1, Q6(b) the capabilities or competencies of the organization when
compared to its competitors. It could be poor product
OR
quality, obsolete technology, high cost of production, poor
Explain briefly SWOT analysis.
marketing, financially weak and ineffective management.
[Model Paper-III, Q5 | April/May-19, Set-4, Q6(b)]
Opportunities
OR
Opportunities are those favourable conditions in a firm’s
Discuss the internal environment to determine
the strengths and weakness. environment which help the firm strengthen its position.
(Refer Only Topic: Internal Analysis) Threats
Threats are the major unfavorable conditions in a firm’s
environment which may pose a risk or damage the firms
SWOT Analysis
position in comparison to its rivals.
SWOT analysis is the analysis of strengths, weaknesses,
Step-2: Internal Analysis
opportunities and threats of an organization. In other words,
swot analysis aims to relate the strengths and weaknesses of The second step is to perform internal analysis i.e.,
the organization based on internal audit and assessment of the analyzing the strengths and weaknesses within the business.
organization’s capabilities against the opportunities and threats For this purpose, one can use blackboard, white board or large
resulting from the analysis of the external environment. sheet of paper and later this information can be transferred to
SWOT analysis provides a simple framework by using the computer to develop and print the analysis.
four general classifications. (a) Internal Strengths
S – Strengths One should analyze the company’s internal strengths and
W – Weaknesses write it down. To develop the list of company’s internal
O – Opportunities strengths, it is important to raise questions like,
T – Threats. (i) Is the organization creative?
Process of SWOT Analysis (ii) What are its competitive advantages?
The important steps involved in SWOT analysis are as (iii) How is the organization’s performance?
follows, (b) Internal Weaknesses
Define SWOT One should analyse the company’s internal weaknesses
and write it down. To develop the list of company’s
Internal Analysis internal weaknesses, questions must be developed such
as,
External Analysis (i) What are the internal problems of the organization?
(ii) Are the employees poorly trained or motivated?
Data Analysis (iii) Is the product line too narrow?
Step-3: External Analysis
SWOT Action Plan External analysis is the third step in SWOT analysis. In
this step, it is important to analyse the external opportunities and
Figure: Process of SWOT Analysis threats that the business is facing. For this purpose, once again
Step-1: Define SWOT one can use blackboard, white board or large sheet of paper
In SWOT analysis, the first step is to understand what and later this information can be transferred to the computer to
strengths, weaknesses, opportunities and threats and how they develop and print the analysis.
are linked to a specific business. (a) External Opportunities
Strengths One should take a moment to analyze the external
Strengths are the internal capabilities of the business opportunities that are available and that can benefit the
organization in comparison with that of its competitors. business. The external opportunities could be,
The strengths may be the company’s image, brand image, (i) Changes in technology that can help you to increase
business synergies and functional areas of marketing, productivity.
finance, production, R&D (Research and Development) (ii) Changes in consumer buying habits that would
and human resources. favour the business.
(b) External Threats 5. It leads to the formulation of goal oriented activities in
the firm.
Analysis of external threats involves considering the
external threats that the business is facing currently or it 6. It as a focal point (start-up point) for analysing the firm’s
could face in the future. The external threats could be, strategies.
(i) Is there is any new competitor in the market? 7. It enables the manager to identify the improvement and
developmental areas in the organisations.
(ii) Is the company in the maturing or declining phase?
Limitations of SWOT Analysis
Step-4: Data Analysis
The following are some of the limitations/pitfalls of
In this step, it is essential to carefully analyze and
SWOT analysis,
prioritize the data for each section. For this, one has to list out the
strengths from the greatest to smallest. This should be repeated 1. It may not be simple while implementing it in a real-life
for both internal and external categories. As a result, one can situations.
observe that some patterns start to form like competitor strength 2. It is just acts as a list of strengths, weaknesses,
build upon one of your internal weakness and so on. opportunities and threats. It does not suggest measures to
utilize or to eliminate the listed items, especially threats.
Step-5: SWOT Action Plan
3. It only represents the analyst’s views, which may be
After all the data is analyzed and prioritized, one would
misinterpreted for being self-biased or poorly analyzed.
be in a position to create an action plan that covers the following,
4. It involves high rate of ambiguity due to the false
(a) Maximize Strength
interpretations of threats with weaknesses or opportunities
If the company knows its internal strengths, then it can with threats.
maximize its positive impact on the business. 5. It restricts the organizations from developing the new
(b) Minimize Weaknesses strengths, instead it encourages them to match existing
strengths with the emerging opportunities.
Once the company has identified its internal weaknesses,
it should strive to resolve them and plan ways to minimize
their impact on business.
3.7 Steps in Strategy Formulation
and Implementation
(c) Capitalize on Opportunities
Q17. Describe the stages in strategy formulation and
If the company identifies some external opportunities, implementation.
it should use it properly to plan for future. The [Model Paper-II, Q6 | April/May-17, Set-2, Q6(a)]
company should immediately take steps to capitalize
OR
on opportunities that can make a positive impact on the
business. Explain the steps involved in strategy formulation
and implementation. May/June-14, Set-4, Q5
(d) Eliminate Threats
OR
After identifying the external threats and how they can
affect the profitability and business, the company take Discuss the various steps involved in strategy
formulation and implementation.
an immediate action that can minimize or eliminate the April/May-19, Set-2, Q6(a)
threats.
OR
Q16. Discuss the advantages and limitations of SWOT
Describe the steps involved in strategy
analysis.
formulation and implementation.
Answer :
Advantages of SWOT Analysis
Strategy Formulation
The advantages of SWOT analysis are as follows,
Strategic formulation is the first step in ‘Strategic Planning’.
1. SWOT analysis is a simple technique that help a company
identify its strengths, weaknesses, opportunities and Stages/Steps Involved in Strategy Formulation
threats. The strategy formulation process involves the following
2. It is a cost effective procedure, incurring low cost of seven steps,
analysis. Step-1: Define the Organizations Mission
3. It is adaptable and flexible to various market situations. Defining the mission includes defining the aspects like
4. It is a self explanatory procedure that clarifies various basic product, market segments, technology and goals
issues. philosophies of the organization.
Step-2: Scanning the Environment Q18. What factors need to be considered while
The second step is to conduct a clear study of the formulating the strategy? What type of problems
environment and identify the potential market and may arise while implementing the strategy?
operating environment. Suggest some overcoming measures.
Step-3: Industrial Analysis OR
In this step, the industrial factors like competition, threats Discuss the external and internal environmental
from newly entered firms, suppliers, buyers, substitute factors to be considered while formulating the
products etc., are analyzed. strategy. [Model Paper-IV, Q6(b) | April-18, Set-2, Q6(a)]
Step-4: Evaluating Global Environment (Refer Only Topic: Factors to be Considered While
Formulating the Strategy)
The next step is to evaluate international environment
for understanding the factors such as, multinational OR
competition and multinational strategic planning etc. Identify the problems encountered in the
Step-5: Forecasting the Environment implementation of strategy. Suggest the ways
to overcome those problems.
In this step, Environment is forecasted to,
(Refer Only Topic: Problems in Implementing Strategy,
(a) Select the critical variables of the environment. Overcoming Measures)
(b) Select the sources of information.
(c) Evaluate forecasting techniques.
Factors to be Considered While Formulating the Strategy
Step-6: Internal Analysis of the Organization
For answer refer Unit-III, Q12, Topics: Factors to be
Now, internal analysis is carried out to develop the Diagnosed in External Environment, Factors to be Diagnosed
company profile and identify strategic factors of internal in Internal Environment.
environment.
Problems in Implementing Strategy
Step-7: Framing of Long-term Objectives (Strategies)
Implementing a good strategy is more difficult than
The final stage of strategy formulation includes framing formulating an excellent strategy. The success of a strategy
the strategies for productivity, profitability, competition, mainly depends upon its implementation. Most of the strategies
personnel relations and their development etc. often fail because of its improper implementation. The problems
Strategy Implementation encountered in the implementation of the strategies are,
According to ‘Steiner and Miner’, “the implementation 1. Lack of management skills.
of policies and strategies is concerned with the design and
2. Ineffective leadership
management of systems to achieve the best integration of people,
structures, processes and resources in reaching organizational 3. Unclear tasks.
purposes”.
4. Poor understanding of roles and responsibilities
Stages/Steps Involved in Strategy Implementation
5. Lack of employee commitment etc.
Strategy implementation includes the following three
According to Hrebiniak, the reasons obstructing the
steps,
strategy implementation are,
Step-1: The first step is to operate the strategy throughout the
organization. This can be accomplished by, (a) In general, managers think that they are the strategy
formulators but not the strategy executors.
(a) Coordinating long-term objectives with current
targets. (b) Top managers in the organizations are reluctant to involve
themselves in the task of implementation.
(b) Directing the functional areas about the work to be
done to implement the strategies. (c) Eventhough the tasks of formulation and implementation
are dependent on each other, they are performed by two
Step-2: This step involves, institutionalizing the strategy. It different groups of managers.
includes,
(d) The inability of managers to manage the change.
(a) Identifying structural alternatives like simple,
functional, matrix, divisional etc. (e) The strategy may be poor or unclear.
(b) Deciding the leadership styles. (f) Improper guidelines for the successful implementation
of the strategy.
Step-3: The last step is to control the strategy/strategic control.
Strategic controls aim at driving the company towards (g) Lack of free flow of communication among the various
its long-term strategic decisions. levels of the management.
Overcoming Measures 1. Expansion Strategy
Some of the suggestions to overcome the problem in The companies that are highly competitive and volatile
implementation of the strategy are, in nature adopt expansion strategy, especially when they are
1. Adopting a Clear Model of Strategy Implementation in the introduction stage of product life cycle. Organizations
Successful implementation of a strategy mainly depends usually seek growth in sales, profits, market share or some
upon the abilities and initiatives of the managers. Managers other measure as a primary objective. Growth strategies may be
should be clear with their abilities. The guidelines provided pursued by means of vertical integration, horizontal integration,
to the managers should be unambiguous. They need to have diversification, mergers and joint ventures.
a model with the various elements concerning the important 2. Stability Strategy
aspects of implementation process. They should have enough
knowledge and understanding about the functionalities and The organisation that adopts a stability strategy focuses
interdependencies between various elements of the strategy. on its existing line or lines of business and attempts to maintain
2. Effectively Managing the Change in Difficult them. This is a useful strategy in several situations. An
Situations organisation that is large and dominates its market may choose
a stability strategy in an effort to avoid government controls or
Change is inevitable when strategic implementations
penalties for monopolizing the industry. Organisation may find
are performed in the organization. The changes may be of
that further growth is too costly and could have detrimental
behavioural or cultural depending on the style of leadership.
Managers need to overcome the complex organisational effects on profitability.
situations or issues satisfactorily and bring change in the 3. Retrenchment Strategy
organization when strategies are to be implemented successfully.
When an organisation’s survival is threatened and it is
3.8 Generic Strategy Alternatives not competing effectively, retrenchment strategies are often
needed. Organizations adopt this strategy when they are in the
Q19. Write about,
final stage of product life cycle. The three types of retrenchment
(a) Generic Strategy Alternatives. strategies are turnaround, divestment and liquidation.
(b) Strategic Alliance. 4. Combination Strategy
OR
Large diversified organizations commonly use a number
Explain Generic Strategy Alternatives. of these strategies in combination. For example, an organisation
[Model Paper-IV, Q5(b) | April/May-19, Set-2, Q6(b)] may simultaneously seek growth through the acquisition of new
(Refer Only Topic: Generic Strategy Alternatives) business, employ a stability strategy for some of its existing
businesses and divest itself of other businesses.
OR
Explain various generic strategy alternatives in (b) Strategic Alliance
detail. April/May-13, Set-3, Q5 Strategic alliance is one of the effective alternative
(Refer Only Topic: Generic Strategy Alternatives) adopted by organizations. They form an alliance with strategic
group members to carryout their work effectively. The various
OR
forms of strategic alliance are,
Write about generic strategy alternatives
available for organization. 1. Product or Service Alliance
(Refer Only Topic: Generic Strategy Alternatives) 2. Logistic Alliance

3. Pricing Collaborations
(a) Generic Strategy Alternatives 4. Promotional Alliance.
Basically, there are four primary strategy alternatives 1. Product or Service Alliance
available to management. They are, In this type of alliance, two or more companies form an
Generic Strategy Alternatives alliance to carryout their product or service related operations.
2. Logistic Alliance
Logistic alliance is the process under which logistic
Expansion Stability Retrenchment Combination companies make tie-up with production companies in order to
Strategy Strategy Strategy Strategy deliver their products to ultimate customers. The main objective
of logistic alliance is to develop and extend logistics support.
Figure: Generic Strategy Alternatives Some of the examples are,
(a) Safe express is a logistical company which tied-up with puma to deliver its products.
(b) TDK logistics limited tied-up with Pizza Hut to deliver Pizza to its customers.
3. Pricing Collaborations
Companies make alliance with each other for special price collaborations. For instance, Hardware and Software companies
in IT sector make price collaborations and offer price discounts to each other. In this type of alliance or collaboration, companies
seek a strategic partner who possesses contemporary strengths and can offset the current weakness of the company.
4. Promotional Alliance
This type of alliance is formed between companies when they want to promote their products/services together. In this type
of alliance, a company agrees to promote the product of another company for a specific period of time. For example, the cricket
board displays the products of coke for an year during the cricket matches.
3.9 Benchmarking and Balanced ScoreCard as Contemporary Business

Strategies
Q20. Define Benchmarking. State its types. What are the steps involved in benchmarking?
OR
Discuss briefly the concept of Benchmarking.
Definition of Benchmarking
Benchmarking is a systematic and a structured approach in which a company compares its operations and internal processes
against those in best performing companies outside the industry. Robert Mac Neil (1994) suggests benchmarking to be ‘a method
for continuous improvement that involves an ongoing and systematic evaluation and incorporation of external products, services
and processes recognized as representing best practice’.
Types of Benchmarking
The various types of Benchmarking are,
1. Product Benchmarking
Product benchmarking has been part of the practice of competitive evaluation for many years. Automobile manufacturers
have practiced benchmarking by dismantling competitors’ products to identify not only performance differences but to understand
design and production methods. ‘By using the product as directed, a designer may be able to deduce how a competitor thinks
about design trade-offs, or learn a new way to satisfy a customer’s need from a non competitive product (Miller 1992).
2. Functional or Process Benchmarking
Functional or process benchmarking differs from product benchmarking in two ways. First is the emphasis on comparison
of a functional process such as order entry, assembly, set-up activities, and so on. The other is the nature of the process: it requires
permission of the company being benchmarked, if it is to be effective. It is also necessary for the organization to accept that some
company, somewhere ‘can do it better’.
3. Best Practices Benchmarking
Best practices benchmarking extends functional benchmarking by directing management to focus on management practices
as well as the elements of the functional processes that managers supervise. The purpose is to understand the philosophy and
practices that enable good processes to perform exceptionally.
4. Strategic Benchmarking
Strategic benchmarking begins with the proposition that unless the strategic direction of the targeted benchmark company
is understood, it is unlikely that the exercise will prove to be successful. It is obvious too, that the company must itself have a
clear view of its own strategic intent.
Steps Involved in Benchmarking
The benchmarking is a continuous process where in data is collected, goals are set and analysis is conducted with the help
of the following seven steps.
Step-1 Clarifying benchmarking objectives

Deciding team members and defining
What to the process.
Benchmark? Setting boundaries and agreeing on
the process
Flow chart the process
Step-2 Examining the flow chart

What to Developing process measures.
measure? Verifying the measures
Step-3
Conducting general research
Who to Selecting the level to
Benchmark? benchmark
Step-4 Using questionnaires

Data Carrying out a benchmarking
collection site visit
Step-5
Quantitative data
analysis
Analyze data
and determine Qualitative analysis
the gap
Step-6
Setting performance goals.
Goal setting
and developing Developing action plan
action plan
Step-7 Identify changes

Monitoring Make benchmarking a routine
the process
process
Figure: Steps in Benchmarking Process

1. Step 1: Determining What to Benchmark
Determining what to benchmark further involves the following sub-steps.
(a) Classifying the Benchmarking Objectives
(b) Deciding the Team Members
(c) Defining the Process
(d) Considering the Scope
(e) Setting the Limits/Boundaries
(f) Mutual Understanding of the Process
(g) Flow Chart
2. Step 2: Analyzing What to Measure
Soon after the determination of what to benchmark, the organizations should search for the same processes in the other
best-in-class companies for the comparison of their own processes with the best-in-class company. The following three
sub steps help in analyzing what to measure,
(a) Examining the Flow Chart
(b) Creating Measures of Process
3. Step 3: Identifying who to Benchmark
For identifying who to benchmark, the organizations should carry out general research and select the levels to benchmark.
4. Step 4: Data Collection
After determining the levels and organizations to be benchmarked, the organizations collect the data and information
about the performance of their benchmarking targets and the management of these processes for attaining those levels.
The sources of collecting information and data include internal sources, public information and other organizations.
5. Step 5: Analyzing Data and Determining the Gap
In this step, the data is analyzed for determining the gaps or differences between the organization and the best-in-class
company. The quantitative analysis and qualitative analysis helps in examining the data and determining the gaps between
the two organizations.
6. Step 6: Goal Setting and Developing Action Plan
In this step, performance goals are set and action plan is developed.
7. Step 7: Monitoring/Controlling the Process
Once the action plan is ready and all the employees have started accepting the new changes, then the firms should monitor
the process for the effective implementation of benchmarking process. For monitoring the process the firm should,
(a) Identify/detect the changes and
(b) Make benchmarking a regular organizational process.
Q21. What are the advantages and disadvantages of benchmarking?
Answer :
Advantages of Benchmarking
The advantages of benchmarking are as follows,
1. The basic benefit of benchmarking is that it helps in understanding company’s own methods and processes, the present
status of the organization and also realizing what are its strengths and weaknesses.
2. It saves the time and money of the company as they do not discover or invent new techniques of improving but they try
to adhere to the best practices which played an important role in the success of top companies.
3. It empowers the company to compare itself with the best company in all the areas of function of the business and also
makes it possible to measure their own performances.
4. Benchmarking is concerned more about the process that produces the product and measures the performance of employees
and departments in the firm.
6. It is not industry specific, company can extend their search for better companies beyond their industries.
7. Benchmarking enables the firms to set realistic goals and bring difference in their performance by comparing itself with
successful and best companies.
8. Two companies can combine their activities and improve their service by benchmarking one best company.
Disadvantages of Benchmarking
The disadvantages of benchmarking are,
1. Benchmarking cannot be a wonder that can quickly replace the current process and management practices that improve
the advantage of competition of the company over others.
2. The major limitation of benchmarking is that, as the technology is changing day by day, the title of best company may
shift from the company to company. So, there is a need to go for new and innovative ideas which are not similar to other
firms.
3. Benchmarking process can be successful only if components like information system, process control and HRM programs
are present in an organization.
Q22. Define Balanced Scorecard. State its merits, demerits and applications.
Answer :
Definition of Balanced Scorecard (BSC)
Balanced scorecard is a strategic feedback system using which program managers can make faster, easier and smarter
decisions. Balanced scorecard is defined as a conceptual framework which is used for converting the strategic objectives of an
organization into a group/collection of performance indicators which are divided into four areas i.e., financial, customer, internal
business processes and learning and growth.
Merits of Balanced Scorecard
Following are the merits of balanced scorecard,
1. The balanced scorecard facilitates a strong foundation for changing the performance measurement approach into a
management system.
2. Senior management can change the strategies of the company into long-term objectives with the help of a balanced
scorecard.
3. Balanced scorecard helps in transforming the measures at higher level to effective and supporting measures and analyses
the main causes of variations.
4. It produces a structure which helps in executing an organized performance management system and culture.
5. The balanced scorecard includes all the aspects of the business and even the strategic and tactical purposes are considered.
Demerits of Balanced Scorecard
Following are the demerits of balanced scorecard,
1. It is very essential to manage the balanced scorecard effectively as it encourages a league table culture of number games.
2. Many a times, well planned measures are not explained clearly and may be considered as an organizational scheme for
an organizational person who is exercising total control over the employees lives.
3. Balanced scorecard may face a significant challenge when there are several measures resulting in bureaucracy and when
there are very few measures which are insufficient.
Applications of Balanced Scorecard
The following are the various applications of balanced scorecard,
1. It acts as a useful management tool for senior executives who emphasize on strategies and long-term objectives.
2. Balanced scorecard is also used to ascertain the performance at the tactical operational level.
3. The use of the balanced scorecard has changed the evaluating performance techniques of company with the help of financial
indices.
4. The design characteristics and the usage needs of the balanced scorecard are being used in the collaborative culture of the
integrated supply chain.
Frequently Asked Questions
Q1. Define Corporate Planning and describe the process of corporate planning.
REPEATED
Ans : (April/May-13, Set-2, Q5 | May/June-14, Set-1, Q5 | April/May-17, Set-1, Q6(a) |
5
April/May-19, Set-3, Q6(b) | April-18, Set-3, Q6(b)) TIMES
For answer refer Unit-III, Q10.
REPEATED
3
Q2. What is SWOT analysis? Explain the process of SWOT analysis.
Ans : (April-18, Set-1, Q6(b) | April/May-19, Set-4, Q6(b) | April/May-17, Set-2, Q6(b)) TIMES
Q3. Describe the stages in strategy formulation and implementation.
REPEATED
Ans : (April/May-17, Set-2, Q6(a) | May/June-14, Set-4, Q5 | April/May-19, Set-2, Q6(a) | April-18, Set-4, Q6(a))
4
TIMES
Q4. Explain Generic Strategy Alternatives.
REPEATED
Ans : (April/May-19, Set-2, Q6(b) | April/May-13, Set-3, Q5 | Jan./Feb.-15, Set-2, Q5)
3
TIMES
REPEATED
Q5. What is Environmental Scanning? How is this important in present day context?
Ans : (May/June-14, Set-3, Q5 | April/May-19, Set-1, Q6(b) | April-18, Set-3, Q6(a))

3
TIMES
Unit-4 Individual Behavior 4.1
Unit
4
Individual Behavior
SI
A GROUP
Syllabus
Individual Behavior : Perception-Perceptual Process – Impression Management – Personality Development –
Socialization – Attitude – Process – Formation – Positive Attitude – Change – Learning – Learning Organizations –
Reinforcement Motivation – Process – Motives – Theories of Motivation – Maslow's Theory of Human Needs, Douglas
McGregor's Theory X and Theory Y, Herzberg's Two-Factor Theory of Motivation.
Learning Objectives

 Concept, Features and Process of Perception.
 Concept and Tactics/Strategies of Impression Management.
 Concept and Stages of Personality Development.
 Socialization Process.
 Concept, Types and Formation of Attitude.
 Concept, Areas and Forces Influencing Change.
 Concept, Characteristics and Theories of Learning.
 Concept and Characteristics of Learning Organization.
 Reinforcement Learning Theory.
 Definition, Process and Theories of Motivation.
Introduction
In an organization, it is very important to understand the behavior of an individual. The individual behavior
includes the aspects such as perception, personality, impression, socialization, attitude etc. In this chapter,
a detailed explanation of all these topics is covered.
In every organization, change is unavoidable and is certain in nature. It not only affects the organization
but also the individuals. However, many employees in the organization resist change for various reasons.
Suitable methods should be adopted to deal with resistance to change.
In today's competitive environment, learning is essential. Learning is a continuous process through which an
individual understands behavior, imitates it and acquires expertise to demonstrate the observed behavior
over a period of time. Learning can take place either through reinforcement or punishment.
Motivation is an internal feeling that induces an individual to perform specific action. The various types
of motives are primary motives, secondary motives, intrinsic motives and extrinsic motives. The theories of
motivation are Maslow's need theory, two factor theory and McGregor's Theory X and Theory Y.
4.2 Management and Organizational Behaviour [JNTU-Kakinada]
4.1 Perception – Definition and Perceptual Process

Q1. Define Perception. What are its features? What factors influence perception?
Answer : Model Paper-I, Q7(a)
Definitions of Perception
According to Stephen P.Robbins, “Perception can be defined as a process by which individuals organise and interpret their
sensory impressions in order to give meaning to their environments”.
According to Udai Pareek, “Perception can be defined as the process of receiving, selecting, organizing, interpreting,
checking and reacting to sensory stimuli or data”.
Features of Perception
Following are the features/nature of perception,
1. It is a Selective Process
Perception is a selective process through which a person selects the data from the environment organizes and obtains
meaning from it.
2. It Requires Sensation
The physical process of obtaining data from environment is known as sensation. The concept of sensation plays very
important role in process of perception.
3. It is a Psychological Process
Perception is the basic cognitive or psychological process where actions, emotions, thoughts or feelings are triggered
leading to the formation of perception.
4. It is based on Environmental Factors
The manner in which a person perceives the environment affects behaviour and inturn leads to the formation of positive
or negative perception.
5. It is a Subjective Process
Perception is a subjective process and different people may perceive the events differently based on what particular aspects
of the situation they choose to absorb.
Factors Influencing Perception
The factors influencing perception are as follows,
1. Characteristics of Perceiver
Perceiver is a person who has taken up the job of perceiving. In other words, perceiver is a person who is making efforts
to draw interpretations from whatever he/she has observed.
The characteristics of a perceiver which effects the perception include, knowledge, past experience, attitudes and personality,
motivational states, ethics and values and perceiver moods.
2. Characteristics of Perceived or Target
The perceiver perceives about the target. The target may be an object, event, people or anything. Like characteristics of
perceiver, characteristics of target such as age, sex, weight, height, facial expression and manner of communication also influences
the perception of the target. A perceiver’s perception changes depending upon the target. The characteristics of target which
influence perception are social status, ambiguity and impression management by the target.
3. Characteristics of Situation
Situation refers to a circumstance in which the process of perception takes place. Characteristics of a situation also influence
the perception of a target. The situation where the target is observed holds a profound influence on the perception of the target.
The two characteristics of a situation which influence the perception of the target are extra information in the situation, salience
in the situation.
Q2. How do managers judge employees? Explain it with the help of attribution theory. Can attributes be
distorted?
Answer :
Generally, the research on perception is conducted on inanimate objects such as computers, robots or buildings. Our
perceptions regarding people is different from the perceptions we have towards inanimate objects. Our perception and judgement
regarding an individual's actions get affected by the assumptions we make based on the internal state of a person. Therefore, such
assumptions made the researchers to propose attribution theory.
Attribution Theory
The attribution theory was proposed by ‘Hider’ who suggested that an individual’s behavior is determined by a combination
of internal forces and external forces, perceived by the individual. The attribution theory states that every individual’s judgement
of behavior is impacted by their past knowledge in comparison to other people, known to the individual. Thus, arriving at a
judgement(conclusion). This theory heavily relies on inputs from internal forces and external forces.
Key Elements of Attribution Theory
The various elements of attribution theory are presented in the figure below,
Lo
Distinctiveness w
gh
Hi
External Internal
Force High Low Force
Consensus
(environment) (personal)
455 last gh
Lo
Hi
w
Consistency
Figure: Elements of Attribution Theory

1. Internal forces include the personal factors of an individual such as ability, skill, intelligence, amount of effort and so on. These
can be controlled by the individual.
2. External forces include the environmental factors in which an individual works such as the organizational culture, policies
and procedures, attitude of the supervisor etc.
3. ‘Kelley’ has suggested that while attributing any outcome, we may choose the external forces or internal forces to be
responsible for the outcome. He further explains that this choice between internal or external force is based on three criteria
i.e., distinctiveness, consensus and consistency.
4. Distinctiveness refers to how different was the behavior of an individual, when compared to his/her behaviour in other
situations/tasks.
5. Consensus refers to the behavior of an individual as compared to the behaviour of other people under similar situation.
6. Consistency refers to the continuity of a behavior over a long period of time, (i.e.,) something that is not just in one situation.
Distortion of Attributes
According to attribution theory, the attributions are distorted due to the errors or biases. For example, while judging
other’s behaviour, people overestimate the effect of internal or personal factors and underestimate the effect of external factors.
This fundamental attribution error can describe the reasons why a manager attributes the poor performance of his sales agent
instead of focussing on innovative product line introduced by the competitor. Similarly, individuals try to attribute their success
to internal factors like ability or efforts and they blame the external factor i.e., luck for their failure. From this self-serving bias,
it can be said that the feedback given to the employees in performance reviews may be misinterpreted by them either in positive
or negative manner.
Q3. What are the common shortcuts used by 3. Being Optimistic
managers to judge others? What strategies
Perceptual distortions, to a great extent can be corrected
do you suggest to overcome perceptual
by having positive attitude or being optimistic in nature, as
distortions? How can understanding perception
attitudes greatly influence perception.
help managers be more effective?
Answer : 4. Being Empathic
Shortcuts Used by Managers to Judge Others Empathy refers to putting your legs in other’s shoes. One
The following are the various shortcuts used by managers would be able to understand other’s problem by thinking from
to judge others, other’s point of view and would get a clear perception about the
1. Personality/Self Fulfilling Prophecy problem.
Personality of the perceiver greatly influences the
5. Encouraging Open Communication
perception of other persons. Personality influences perception
because of two reasons. First, the perceiver tries to project his Lack of communication results in misunderstandings
personality attributes in others, known as projection. Second, the and misperceptions. Hence, it is essential for the managers to
perceiver tries to fit his attitudes, beliefs, expectations to reality, encourage open communication so that right message reaches
known as self-fulfilling prophecies. Secure people perceive the right person at the right place and at the right time. Open
others as warm individuals and self-accepting people perceive communication helps the managers in understanding the
others as liking and accepting them. organizational situations in a much better manner.
2. Mental Set
Relevance of Understanding Perception
Mental set is the tendency one has to react in a certain
way to a given situation. In organisational setting, people have Understanding an employee's perception towards job,
tendency to perceive about others on the basis of this mental performance appraisals and pay helps a manager in taking
set which causes misperception. The perceiver has an inherent the right steps at the right time. Most of the times, employees
tendency to respond either favourably or unfavourably. perceive certain situations in a certain way and what they
3. First Impression perceive is how they behave. Suppose that an organization
offers highest level of wages in the industry and has a fair and
People evaluate others on the basis of first impression.
unbiased appraisal process. However, if the employees perceive
If it is based on adequate and significant information, it may be
the wages to be low, they will react as if, what they think exists
correct. But if it is not based on adequate information, then it
in reality.
may not be a true reflection of the people being perceived.
4. Halo Effect Thus, the managers are encouraged to pay close attention
The term halo effect is a process in which a general to how employees are perceiving the organization and its
impression which is favourable or unfavourable is used by judges practices. Because, it will be a great loss to the company, if a
to evaluate several specific traits. The halo in such a case serves valuable employee quits the organization just because of an
as a screen. In halo effect, the rater is influenced by ratee’s one inaccurate perception.
or two outstandingly good or bad performances.
Q4. Discuss Process of Perception. What are the
5. Stereotyping differences between sensation and perception?
Stereotyping occurs when the perceiver judges or
perceives a person on the basis of characteristics of the group to Answer : Model Paper-III, Q7
which he/she belongs. A person is perceived on the basis of his Process of Perception
group characteristics as against his individual characteristics.
Strategies to Overcome Perceptual Distortions Perception is the process of collecting various
subprocesses. It is a process wherein, inputs are processed
Some of the strategies to overcome perceptual distortions
with the help of perceptual mechanism to produce output. The
are,
following figure explains the perceptual process,
1. Judge Oneself Correctly
People often misperceive others due to their inability to
judge themselves accurately because when a person understands
himself/herself more correctly then he/she would be able to
perceive others more easily, quickly and accurately.
2. Improving Self-concept
Self-concept is a function which explains how people v v
v v
achieve their goals which they have attempted to achieve. When
self-concept is developed, people acquire optimistic view about v v
v
their self personalities which enable them to start respecting
others and to perceive them more correctly than they used to
do it before. Figure: Process of Perception
1. Perceptual Inputs/Stimuli
Generation of stimuli is essential for the occurrence and initiation of the process of perception. Perceptual inputs may be
events, objects or people. The characteristics of stimuli/inputs are significant as they influence the degree to which the perceiver
gets attracted towards the factors that are directly affecting the selection of stimuli as well as those which have an indirect impact
on it, such as characteristics of a perceiver and characteristics of a situation. The perception process begins when perceiver takes
actions in response of a stimulus.
2. Perceptual Mechanism
It is clear that perceptual mechanism consists of three components. They are,
(a) Selection of Stimuli
After getting stimuli/inputs from the environment, the next step is to select them. As environment consists of ‘n’ number of
stimuli, perceiver must select only those stimuli that are required for the further process of perception. The various factors
influencing selection of stimuli can be categorized into internal and external factors. Internal factors include perceiver’s
beliefs, expectations, self concept, inner needs, response salience, response disposition and perceptual defence.
External factors are environmental factors that are concerned with the characteristics of stimuli/inputs such as size, repetition,
intensity, contrast, motion, novelty and familiarity, which influence the perceiver’s selection of a stimuli/input.
(b) Organization of Stimuli
The Gestalt School of Psychology led by Max Wertheimer claimed that the process of perception is innately organised and
patterned. They described the process as one which has built-in field effects. The most significant principles produced by
Gestalt school include the following,
(i) Figure and ground
(ii) Grouping.
(i) Figure and Ground
The figure-ground principle states that figures are seen against a background. The figure does not have to be an
object, it could be merely a geometrical pattern. Many textiles are perceived as figure-ground relationships. These
relationships are often reversible as in the popular example shown in figure.
What do you see? Do you see a white chalice (or small stand shape) in the centre of the frame? Or do you see the
dark profiles of twins facing each other on the edge of the frame? Now look again. Can you see the other shape?
(ii) Grouping
The grouping principle refers to the tendency to organise shapes and patterns instantly into meaningful groupings
or patterns on the basis of their proximity or similarity. Parts that are close in time or space tend to be perceived
together.
(c) Interpretation of Stimuli
After organizing the stimuli/inputs, perceiver is required to interpret such organized stimuli in order to draw meaning to
whatever is happening in the situation. People draw interpretations to stimuli depending upon their perceptions about their
observed things and situations. Sometimes, individuals judge their observed things simply as good or bad, beautiful or ugly
etc. Interpretation of stimuli gets influenced by characteristics of a perceiver, characteristics of situation and characteristics
of a stimuli.
3. Perceptual Outputs
Depending upon the perceptual mechanism, perceptual outputs are obtained. The perceptual outputs that have been resulted
from perceptual mechanism may be in the form of opinions, beliefs, attitudes and so on regarding the stimuli of perception. The
perceptual outputs and other factors influencing human behaviour may lead to open behaviour.
Differences Between Sensation and Perception
The differences between sensation and perception are as follows,
S.No. Sensation Perception

1. Sensation refers to a process of receiving information Perception refers to the process in which the acquired
through senses such as vision, touch, taste, hearing information from five senses is interpreted.
and smell.
2. The outcome of sensation is perception. The outcome of perception is the interpretation of acquired
information and giving a meaning to it.
3. In sensation, stimuli acts as a source obtained from In perception, the source is the information which is sent to
sensory organs. the brain via sensation.
4. Sensation has an important role to play in people's Perception has an important role to play in organizational
private lives. life.
5. Sensation is considered as a general biological process Perception is more about psychology and involves person's
that doesn't involve psychological elements. ideologies and past experiences.
4.2 Impression Management

Q5. Define Impression Management. What are positive and negative impressions?
Answer : Model Paper-IV, Q7
Definition of Impression Management

According to Rao and his colleagues, impression management is defined as "the process by which people attempt to control
and manipulate the reactions of others to create images of themselves or their ideas".
In simple words, impression management refers to a process of controlling the way in which an individual is perceived
by others.
Positive Impressions
Positive impressions are an individual's attempts to make favourable impression on others by maintaining a positive attitude
at all times, dressing well, and avoiding all the activities that hurt others. There are three main motives for creating positive
impressions,
(a) Job
The employee tries to maintain and manipulate information regarding his performance on the job.
(b) Supervisor
The employee tries to do favours for the supervisor and praises him to make a positive impression.
(c) Self
Employees who are self focussed try to maintain themselves in such a way that others see them as good and polite person.
Negative Impressions
Negative impressions are the attempts on the part of employees to make bad impression on others. The various motives
behind creating negative impressions are,
(a) Exit
When employees want to avail unemployment compensation or to get suspended from the organization, they make bad
impression.
(b) Rewards
Sometimes, the motive behind negative impressions is to get promoted, or pay raise or desired transfer.
(c) Power
When an employee wants to take revenge or to make other appear bad or to control others, then in such a case they tend
to create negative impression.
Q6. What are the different impression management tactics used by individuals? What are the ways to
improve impression management?
Answer : Model Paper-II, Q7(a)
Impression Management Tactics

According to Mark Bolino and colleagues, individuals/employees use different impression management tactics/strategies.
If these tactics are not used carefully, the impression would be opposite.
S.No. Tactics/Strategies Uses Effects of Tactics not Used Carefully

1. Supplication: The individual pretends This tactic is used to appear needy. If this tactic is not used carefully, the
to be dumb. individual may be seen as Incompetent.
2. Self-Promotion: The individual takes Self promotion tactic is used to If this tactic is not used carefully, the
credit of everything and boasts about appear competent. individual may be seen as Braggart or
himself. self-publicist.
3. Intimidation: The individual makes It is used to threaten others. If this tactic is not used carefully, the
threats. individual may be seen as Oppression
or Dominion.
4. Ingratiation: The individual gives Ingratiation tactic is to appear polite, If this tactic is not used carefully, the
compliments, do favours and agrees likeable and friendly to people. individual may be seen as Flatterer or
with the opinions of other people. puppet.
5. Exemplification: The individual tries This tactic is used to appear If this tactic is not used carefully, the
to appear busy and stays late at work. dedicated. individual may be seen as Self righteous.
Ways to Improve Impression Management

The members of an organization can improve their impression management by focussing on the below give guidelines,
1. While trying to improve impression, the individual employee should lookout for the high-positive impression. For example,
recruiters should always check whether the individual being recruited is bragging about himself/herself or their claims for
competence are genuine.
2. Personal, situational and organizational factors which may distort the impression of people, should be reduced. When
organizations do not have sufficient promotional opportunities for employee, the chances of ingratiation increase.
3. It is not a good idea for an individual employee to be impressed by overly influences, one should rather look for underlying
motives. This approach is useful in making fair and unbiased assessment of others.
4. One can improve impression management by not trying to be something they are not. One should always perform well
and put their best efforts, but they should not compromise their integrity or identity.
4.3 Personality Development

Q7. Define Personality. Discuss the stages of personality development.
Answer : Model Paper-II, Q8
Definition of Personality
According to Gary Johns, “Personality refers to a relatively stable set of psychological characteristics that influence the
way we interact with our environment”.
Personality is a basic characteristic feature of an individual which helps in influencing others through the external appearance.
However, only physical appearance does not constitute personality. It must also comprise of the social stimulus value, inner
awareness and the specific pattern of measurable traits.
Stages of Personality Development
The various stages of personality development suggested by different psychoanalysts are discussed as follows,
Freud's Stages of Personality Development
Sigmund Freud’s emphasized that an individual’s personality is formed as he or she passes through number of stages of
infant and childhood development. The stages of personality development are as follows,
2. Autonomy Vs Doubt
Oral Stage
A child starts to develop new motor and mental abilities
in his initial 2-3 years. In these years, the various activities of
a child include walking, pulling, pushing, clipping etc. If the
Anal Stage parents allow the child to do things on his own, then the child
will develop a sense of competence. This is called as sense of
autonomy.
Phallic Stage On the other hand, if parents become over protective,
help the child at every step and offers him protective eriticism,
the chances are that the child will develop a sense of doubt and
Latency Stage shame. Whatever the attitude is developed by the child be it
autonomy or doubt, it will continue throughout his life.
3. Initiative Vs Guilt
Genital Stage When the age of a child is around 3 or 4, he tends to
achieve mastery in controlling his body. He no more imitates
Figure: Sigmund Freud’s Personality Development other people, but initiates things on his own. Thus, he continues
1. Oral Stage to persist these attitudes, initiatives and guilt throughout his life.
This is the first stage which occurs between infant/ 4. Industry Vs Inferiority
baby’s birthdate and the age of 1 year. The infant first A child learns to play and learn by rules and also learns
experiences social contact with the outside world through to reason during the age of 6 and 11. During this period, the
physical contact with others. For example eating, drinking, main concern of the child is to know how things work and how
playing, pampering and so on. they are made. At this stage, the teacher has an important role
2. Anal Stage to play in the development of the child.
This is the second stage which occurs between the age of However, one cannot get all the answers relating to
1 and 3 Years. The parent teaches the child, the characteristics personality just by looking into a person's childhood.
such as punctuality, cleanliness and orderliness.
4.3.1 Socialization
3. Phallic Stage
Q8. Write in detail about socialization.
This is the third stage which occurs between 3 and 4
Answer : Model Paper-IV, Q8(a)
years of age. At this stage, the child will be able to identify the
difference of gender and experiences self-oriented physical Socialization
differences. He is highly receptive to ideas and personality Socialization is defined as a process through which the
development during this age. personality of an individual is influenced by society, persons
4. Latency Stage and groups during interaction. It is a continuous process which
occurs to an individual throughout his/her life and is not confined
This is the fourth stage that occurs between 4 and 6 years to a specific age or early childhood. The process of socialization
of age. Freud believed that the sexual instincts of the child lie initially starts when a person/individual makes a first contact
dormant from this age until the beginning of adolscence and no with his/her mother during infancy. After that, the process
important personality changes occur during this time. continuous as he/she interacts with his/her family members,
5. Genital Stage close relatives, family friends and other people who impact his/
This is the final stage which occurs during adolscence to her personality.
adulthood. In this stage, children develop interest and awareness Role of Socialization in Organizational Context
towards the opposite gender increases. Socialization not only impacts an individual's personal
Erikson's Eight Stages of Personality Development life but also his behavior in the organization. Just like the
family and friends, organization also contributes to a person's
The eight stages of personality development as suggested
socialization process and how a person is influenced by
by Erikson are discussed in below paragraphs,
organization, determines his/her behavior in the organization.
1. Trust Vs Mistrust Thus, it is essential for managers to see what forces in the
When a new born baby comes in contact with a organization are affecting an individual's behavior and control
social environment, he tends to depend on the people of that it accordingly.
environment for his survival. The baby starts to develop trust in According to Schein, in an organization, a person's
himself depending on how he is being treated and loved by the socialization process is limited to learning organizational norms,
people around him. If the people around him fulfills his needs, values and behavioral patterns. An employee's behavior in the
remove his discomforts, play with him, cuddles him, then the organization is influenced by socialization in the following
baby will develop a particular image of the world and the people. manner,
1. Employees learn that they are supposed to wear formal Types of Work Related Attitudes
dress in the office. Attitudes can be classified into following three types,
2. They learn that they should avoid speaking anything in 1. Positive Attitude
public which affects the organizational image. Individuals who possess positive attitude tend to analyze
3. They get an idea of who should be consulted or things favourably. Such people ignore the negativity in any
approached to solve a problem. situation.
Socialization process is specifically important when a Features of Positive Attitude

company hires a foreign national. He/she should be socialized Following are the key features of people who possess
so that they become aware of local culture. positive attitude,
Socialization Process for New Comers in the Organization (a) People with positive attitude are always happy and
cheerful.
To socialize new employees in the organization,
(b) They interact and move forward with confidence and
managers use many techniques. The main aim behind designing
optimism.
such techniques is to reduce role conflict and to increase the
employee's job satisfaction and commitment. For socialization (c) They take responsibility for their actions.
purpose, the organization may conduct training programmes and (d) They are flexible in their approach.
reward systems and may use role models and mentors to bring
(e) They are always ready to accept new challenges and
desirable change in employees behavior.
adapt themselves according to new situations.
Socializing a new employee involves the following steps/ (f) They are diligent and maintain a low profile.
techniques,
2. Negative Attitude
1. A challenging and exciting job is offered to the individual People who possess negative attitude tend to see
employee. negativity in every other person, situation and in themselves.
2. An appropriate training is provided. They always complain rather than adapting and adjusting
themselves according to the situation.
3. Objective feedback is provided to employee in a timely
Features of Negative Attitude
manner.
Following are the key features of people who possess
4. Are experienced supervisor is appointed to carryout the negative attitude,
socialization process for the new employee.
(a) People with negative attitude always complain about
5. An informal orientation programme is designed. problems. They tend to focus upon bad people and bad
situations rather than good possibilities.
6. The employee is assigned to the highly satisfied
employees and work groups that have high morale. (b) They prefer to complain continuously rather than adapt
and change themselves.
Socialization is particularly important when an exciting
(c) They always blame others for their short comings.
employee of organization is promoted to a new position. Through
socialization, the employee will quickly able to adapt to change. (d) They display traits of doubtfulness, under-confidence,
jealousy etc.
4.4 Attitude – Concept, Process, (e) They have a pessimistic outlook towards life.
Formation and Positive Attitude (f) They get angry quickly and hate others.
Q9. Define Attitude. What are the types of work 3. Neutral Attitude
related attitudes? How can understanding of Individual who posses neutral attitude tend to be very
attitudes help managers be more effective? balanced in their approach. They generally remain indifferent
to any problem and wait for others to solve the problems. Such
Answer : people are self-satisfied and they display the trait of being
Definitions of Attitude unemotional.
Features of Neutral Attitude
According to Stephien P. Robbins, “Attitudes are
evaluative statements – either favourable or unfavourable Following are the key features of people who possess
concerning objects, people or events. They reflect how one feels neutral attitude,
about something”. (a) People with neutral attitude are always carefree and
According to Reitz, “Attitude is persistent tendency to cheerful.
feel and behave in a favourable or unfavourable way towards (b) They remain indifferent to any problem in the
some object, person or ideas”. organization.
(c) They do not solve any problem and rather wait for others (c) Job Satisfaction and Absenteeism
to solve the problem.
Researcher have confirmed that there is weak negative
(d) They are unemotional and self-satisfied. relation between satisfaction and absenteeism. It is very
(e) They are always balanced in their approach while dealing important to keep in mind that high level job satisfaction
with any individual. does not lead to low absenteeism, but low job satisfaction
greatly increases absenteeism.
Relevance of Understanding Attitudes
2. Organizational Commitment
Understanding of employee attitudes help a manager in
the following ways, Organizational commitment means the affection and
1. The managers can reduce the number of absences and loyalty which the employees have towards their organization.
resignations in the organization by generating positive Factors Influencing Organizational Commitment
attitude among employees.
There are three factors that influence organizational
2. They can design proper reward system for the employees commitment. They are,
if they are hesitant to participate in the activities that do
not match with their personality. (a) Personal Factors
3. They can create a more caring environment and design Factors like age, career adaptability, organizational
appropriate HR policies that would lead to employee's tenure, internal and external control aspect, positive or
satisfaction with the job and increased productivity. negative affectivity are all considered as personal factors.
Q10. What are the major attitudes to organizational (b) Organizational Factors
behavior? Explain.
Factors like job design, support, values, supervisor's
Answer : leadership style and procedural justice are considered
There are two major attitudes to organizational behavior. as organizational factors.
They are, (c) Non-Organizational Factors
1. Job Satisfaction Factors like alternatives available to the employee after
Job satisfaction refers to the positive outcomes of joining the organization come under non-organizational
job experience of an employee. If in case the expectations factors.
of an employee are not met in the job, then that employee
Outcomes of Organizational Commitment
would be dissatisfied with the job and this is called as “job
dissatisfaction”. The outcomes of organizational commitment are,
Factors Influencing Job Satisfaction (a) Low absenteeism
The factors influencing job satisfaction are, (b) High performance
(a) Pay (c) Low turnover.
(b) Work group
Q11. Discuss the process of formation of attitude.
(c) Promotions
Answer : Model Paper-III, Q8
(d) Supervision
The individuals acquire attitude from the environment
(e) Working conditions in which they interact or communicate. It is very essential to
(f) Work take into account all the factors from which individuals learn
Outcomes of Job Satisfaction or acquire knowledge for attitude formation. These factors are
as follows,
Some of the important outcomes of job satisfaction are
as follows, 1. Group factors
(a) Job Satisfaction and Performance 2. Personality factors
Researchers have found that there exists a strong relation 3. Direct experience
between employee job satisfaction and performance. The
greater is satisfaction, the better will be the performance. 4. Other factors.
(b) Job Satisfaction and Turnover 1. Group Factors

According to researchers, it has been observed that there The impact of groups on the attitudes of individuals is
exists an inverse relation between job satisfaction and inversely proportional to the closeness of the groups with the
turnover i.e., in case of High job satisfaction, the turnover individual. From this perspective, groups are classified into three
would be low and job dissatisfaction would increase the different types which influence the attitude of the individuals
turnover. distinctively. These groups include,
(a) Family 4.5 Change
(b) Reference groups Q12. What is change? List out the three categories
(c) Social factors. of change. What are the forces influencing
change?
(a) Family
Answer :
The word family signifies the close family members along Change
with the extended family. Family acts a significant source
of influence on the attitude formation. The individuals Change is described as a process which basically
learn the basic important values and central beliefs from effects the pattern of work/relationship within an organization.
their families. When an individual communicates with Change is defined as a process that helps in moving the present
family members, he affects the personality characteristics situation to the desired situation which individuals, groups and
and attitudes of others and is also influenced by others. organizations take up for responding to the dynamic internal
and external factors.
(b) Reference groups
Categories/Areas of Change
The attitude (or) behaviour of an individual is also Change is broadly classified into four categories/areas,
affected by the reference groups. Under the process of
socialization, individual acquires knowledge about the 1. Structural change
value system, norms, the desired behaviour patterns of 2. Technology change
the society and so on.
3. People focused change.
(c) Social factors
1. Structural Change
The social classes also affect the attitudes of the The main purpose of structural change is to enhance
individuals. Social classes basically carry out the organizational effectiveness by making changes in present
significant task of transferring the cultural behavioural organizational structure. Structural change involves the change
pattern to certain groups and families. They determine in authority relationships, job design, span of control and
the expectations of society from the individual. So the coordinating mechanisms.
individuals within a specific social class will be affected
by the value pattern and attitude formation of members In the process of structural change, manager’s strategy
in the similar social class. mainly focuses on reorganization. It is considered as most
effective strategy used in problematic situations.
2. Personality factors
2. Technology Change
Personality factors play a crucial role in attitude A technology change mainly focuses on performance of
formation. These factors are defined by the group and social organization and analyzes the organization’s production process.
factors. Several research studies were conducted on personality Generally, competitive forces persuade managers to develop
factors and it was found that positive relationship exists between new equipments, tools or operating techniques. The technology
the personality variables of individuals and specific attitudes. oriented changes include,
It is very important to analyze different groups, social factors
and heredity factors in attitude formation as the personality of (i) Change in the problem-solving and decision-making
the individuals is significantly influenced by these factors. process.
(ii) Change or improvement in work processes, work
3. Direct experience
methods and equipments.
The attitude of an individual consumer towards specific (iii) Establishment of advanced management information
person or object is developed by the direct experience. Direct system.
experience acts as in important source for the formation of one's
attitude. Attitude formed through direct experience is very strong 3. People Focussed Change
and durable. It is difficult to change such attitudes as they are This type of change mainly focuses on enhancing
present in our cognitive processes. organizational effectiveness by modifying competencies
4. Other Factors and other values of organizational members. This change is
introduced by manager when performance differences take place
The various other factors include, because of employee related issues. To create positive changes in
the behavior and attitudes of employees, certain initiatives such
(a) Culture as, competitive wages, performance-based bonus, promotional
(b) Religious organizations avenues, training programmes etc., are introduced. In general,
OD (Organizational Development) interventions are initiated to
(c) Role models etc. modify people and enhance their working relationships.
Forces Influencing Change
The two major forces that influences organizations are as follows,
1. External forces of change
2. Internal forces of change.
1. External Forces of Change
The external forces of change are,
(a) Economic Forces
The main reason of change is uncertainty regarding the future trends in the economy. The changes in the interest rate,
declining productivity, inflation or deflation, low capital investments and the fluctuating prices of oil (petrol) recessions
are the major reasons that affect economies which in turn affects organization.
(b) Technological Forces
The current world is represented by the rapid technological changes. The technological development specifically in
communication and computer technology has completely changed the workplace and has provided assistance in developing
a new range of products or services.
(c) Government Forces
The interventions framed by government in the form of regulations results in change. Some of the government forces
include deregulation, foreign exchange, anti-trust laws, anti-dumping duties, suspension agreements, protectionism.
2. Internal Forces of Change
The internal forces of change are,
(a) Inadequacy of Administrative Process
A set of procedures, rules and regulations govern the operations of organization. The changing trends and the previous
goals and objectives of organization may differ from the reality of existing rules, procedures and regulations, and such
autonomous procedures result in organizational ineffectiveness. The awareness about their inefficiency persuade them for
change.
(b) Individual/Group Speculations
Organization considered as an entity is an integration of people, each individual concerned about satisfying his/her needs
and goals which keep on changing. The positive factors like individual ambitions, needs to achieve, capabilities, career
growth and other negative aspects like individual fear, insecurities and frustrations persuade change in an organization’s
operations and performances.
(c) Profitability Issues
The profitability issues like loss of revenues, market share and low production act as a significant change force that makes
an organization to restructure and reengineer.
(d) Resource Constraints
Money, material machinery, personnel, information and technology are considered as resources. The major change force
for any organization can be depletion or non-availability of any of these resources.
Q13. Why do people resist change? What are some of the techniques for reducing resistance to organizational
change?
Answer : Model Paper-IV, Q8(b)
Reasons for Resisting Change

The following are some of the common reasons, why people resist change in the organization.
1. Fear of Losing Status and Power
Fear of losing their job and position is one of the most important reason for resisting and opposing change in the organization.
If change is initiated in the organization by proceeding towards a new strategy, then it will lead to changes in the power structure
and position of the individuals in the organization. Employees do not want to lose their power and position, so they resist change.
2. Uncertainty
Employees are uncertain about the future. So, they fear that they will not be able to meet the demands of a new task or
procedure. So, because of uncertain future, many employees resist change in the organization.
3. Belief that Change is not Needed
Individuals mostly resist change if they feel that the current ways of doing things have been successful in the past and
there is no need for a change in the future.
4. Economic Threats
Change may benefit the organization, but individuals resist change as it causes loss of income, benefits and security.
Downsizing and lay-offs create personal threats to the employees and increases their resistance towards new strategies.
5. Fear of Being Manipulated
Many individuals do not want to be controlled by others so they resist change. Forcing to change will create a feeling of
aggressiveness and amenity among the employees.
Techniques to Reduce Resistance to Organizational Change
The various techniques for reducing resistance to change are,
S.No. Technique Applicability Advantage Disadvantage
1. Participation This technique is used when the This helps in increasing It takes much time.
employees who are resisting employee participation and
change, have the capability to acceptance.
contribute.
2. Education and When the employees resist Misunderstandings can be This technique may be of
Communication change due to lack of required cleared up. no use if the employees lack
information, education and mutual understanding, turst and
communication is necessary. credibility.
3. Manipulation This technique is applied when It is the easiest and cheapest There are chances that the group
and Cooptation the support of a powerful group way to gain support. may backfire and insult the
is required. change agent.
4. Negotiation When a powerful group resist It helps in making the group It involves high costs and
the change, negotiation is opted. commit to certain conditions. others will also get a chance to
pressurize.
5. Facilitation and This technique is applied when Needed adjustments can be It may involve high costs and
Support the employees resisting change made through facilitation and success is not guaranteed.
have fear and anxiety related to support.
change.
4.6 Learning
Q14. What is Learning? What are its characteristics? How can an understanding of learning help managers
be more effective?
Answer :
Learning
In simple terms, learning may be understood as a continuous process through which an individual understands a behaviour,
imitates it and acquires expertise to demonstrate the observed behaviour, over a period of time.
According to David Loudon and Albert Pella, “Learning can be viewed as a relatively permanent change in behaviour
occurring as a result of experience”.
Characteristics of Learning
The following are the characteristics of learning,
1. Learning Continues Life-Long
Learning is a continuous process. Each and every person learns some or the other thing till their death. An individual learns
fast in their early stages of life but the learning speed comes down in the later stages of life.
2. It Acts as Basis for Individual’s Behavioural Pattern
An individual’s behaviour is based on learning, it assists him in developing specific behavioural patterns. These behavioural
patterns influence the activities undertaken by an individual and form a part of individual’s personality. An individual’s new
experiences strengthen earlier learning and leads to new learning.
3. It is Natural
Learning is a natural phenomenon. It is common to everyone irrespective of place where they live and under what
conditions they are in. Every individual has a willingness to learn, though the nature and extent of efforts they put in vary
from one another. Therefore, learning is considered as a basic right of every human being.
4. An Urge to Change Trigger Learning
An individual’s desire/urge to change his/her behaviour, actions or any aspect of life, encourages him/her to learn. A strong
desire to change encourages an individual to create and utilize the opportunities to the optimum extent for gaining necessary
knowledge and skills.
5. Learning Happens Through Structured and Unstructured Activities
Learning happens through structured and unstructured activities. In case of educational institutions, learning activities are
structured where as in case of socialization process, activities are unstructured. In socialization process, people learn from events
happening daily and from casual meetings with people. One point to be noted is that observation or study also results in learning
rather than just active participation.
Relevance of Understanding Learning
Managers can become more effective in their work by understanding the learning process. If the managers want employees
to learn on the job on a regular basis, they should design the rewards and conduct activities in such a manner that employees learn
something out of it and reflect what they have learned through their behavior.
Learning helps the managers understand that the employees see them as role models. If they are irregular to work, come
late to the office or spend 2 hours for lunch, then all this will affect employee behavior as well.
Q15. What are the different theories used for studying organizational behavior and behavioral performance
management?
Answer : Model Paper-I, Q7(b)
The various learning theories that are very important to understand organizational behavior and behavioral performance
management are presented in the figure below,
Learning Theories
Behavioristic Theories Cognitive Theories
Classical Operant Social Social

Conditioning Conditioning Learning Cognition
Figure: Learning Theories

I. Behavioristic Theories
The two main behavioristic theories are,
1. Classical Conditioning
Classical conditioning may be defined as the process of making a previously neutral stimulus, to become capable of
eliciting a desired response. Such capability can be acquired by repeatedly associating the neutral stimulus to the naturally
produced response. In general terms, conditioned means automatic response to any external stimuli (situation). For example, a
person may feel hungry on seeing a delicious cake. In this situation, getting hunger is the condition/response and the cake is the
external stimulus.
The Russian psychologist Ivon Pavdov was the first person to prove the relationship between stimulus and response. He
thus described conditioning. He proved that conditioned learning occurs when a stimulus is paired up with another stimulus,
that elicities a known response. Later on, the unrelated stimulus itself is capable of eliciting the same response. This is known as
conditioned learning.
Ivon demonstrated his theory in an experiment on dogs. He rang a bell and immediately provided food and the dogs salivated
each time. This was repeated a number of times later on mere ringing of the bell made the dogs to salivate. Present day marketers use
this association of two objects to advertise their products.
2. Operant Conditioning
According to this theory, an individual learns organizational behaviour based upon the consequences of the external
environment. The term ‘operant’ comes from the word ‘operate’ in the environment. If an individual behaves in a particular
manner and others (operating environment) like it, he would repeat the specific behaviour in future too.
Examples In other words, a learning organization is one in which
people at all levels, individually and collectively increase their
(i) An individual learns that by inserting a coin in the
capacity to produce results they really care about. It may also
coffee (behaviour) machine, he can get a cup of coffee
be defined as an organization that proactively creates, acquires
(consequence).
and transfers knowledge and changes itself on the basis of new
(ii) Working in office (behaviour) would get money knowledge and insights.
(consequence).
Creating a Learning Organization
II. Cognitive Theories
A learning organization can be created by adopting the
The two well-known cognitive theories are, following important characteristics,
1. Social Learning
This theory states that an individual learns through
“observation”. Thus, after keen observation, an individual would
Leadership
repeat the action he has keenly observed. This theory involves
the following steps, v Collaboration
v Shared Vision
(a) The learner needs to pay attention.
(b) The second step is to clearly retain the observed
behaviour.
Organizational Design Information Sharing
(c) The final step is to imitate and repeat the observed
behaviour. v Teams Learning v Accurate
v Boundryless Organization v Timely
Example
Environment v Open
(i) Small babies keenly observe their parents talking. v Empowerment
(ii) They retain the words, sounds, and facial gestures.
(iii) They would keep repeating the sound and words until they
Culture
are perfect in speaking the newly learned words.
v Sense of Community
2. Social Cognition
v Strong Mutual
Social cognition theory focuses on self-regulatory Relationship
mechanisms for learning and modifying behavior. Accoding v Trust and Caring
to this theory, people use five capabilities to start, control and
retain their behavior. They are,
(i) Symbolizing Figure: Characteristics of a Learning Organization
(ii) Planning 1. Leadership
(iii) Indirect learning An organization becomes a learning organization
only when its leaders create a vision for the organization and
(iv) Self-regulation and encourage everyone to work in collaboration to achieve that
(v) Self-reflection vision.
With the help of social cognitive derivatives modeling 2. Organizational Design
and self efficacy, one can get a thorough understanding of social The various elements that need to be considered in the
learning which is further helpful in understanding of learning design of a learning organization include,
and behavioral performance management. (a) Boundryless Environment
4.6.1 Learning Organizations For the learning to take place, the organization should
break the boundaries and allow the employees to work
Q16. What is meant by learning organization? How freely and learn from each other.
do you create learning organization?
(b) Teams
Answer : Model Paper-II, Q7(b)
Learning organization enables the employees to work in
Learning Organization the form of teams and make decisions and resolve issues
within the team.
According to Peter Senge, "a learning organization is a
continuous testing of experience, and the transformation of those (c) Empowerment
experiences into knowledge, accessible to the entire organization Employees are empowered to direct and control
and relevant to its core purpose". themselves without consulting the "bosses".
3. Culture
In learning organization, employees are encouraged to agree on a shared vision, maintain strong mutual relationships which
are built on care and trust. They are allowed to work in the form of community without having a fear of punishment or criticism.
4. Information Sharing
Learning is not possible without information. A learning organization teaches its employees to learn and also to share this
information among other members as well in an accurate and timely manner.
Q17. Write about,
(a) Organizational behavior in the learning organization.
(b) Learning organization in action.
(c) Differences between traditional organization and learning organization.
Answer :
(a) Organizational Behavior in the Learning Organization
Learning takes place differently in different organizations. While some organizations opt for adaptive learning in which
employees react to changes occurring in the environment to solve short-term problems of organization, other organizations prefer
generative learning which is beyond just responding to change. In generative learning, focus is laid on continuous experimentation
and feedback, employee learns to solve the problems and get an idea of how their decisions affect the organization and why they
should change their behavior as per the requirement.
Learning organizations also focus on cultural values like,
(i) Everyone should be provided with valuable information as the useful ideas can come from any member.
(ii) People who are close to the problem should be encouraged as they have a better idea of how to solve it.
(iii) Employees who give new ideas should be encouraged and rewarded.
(iv) People should be encouraged to learn from failures and view their mistakes as learning opportunities.
(b) Learning Organization in Action
Learning organizations can become more action-oriented by putting their learning into actual practice of management.
This can be done in the following ways,
(i) Breaking out of Bureaucracies
Managers should be encouraged to accept the new ideas and to look at things differently, so that they don't do the things
they have done in the past.
(ii) Systematic Thinking
Learning organizations enable their employees to see connections existing between information, events and problems
instead of viewing them as separate parts. Employees in learning organizations are taught to identify the source of conflict
and to resolve it quickly and skillfully.
(iii) Creativity
Learning organizations encourage their employees to become more creative, especially in the areas of decision-making,
problem-solving, risk-taking and personal flexibility. As a result, employees are breaking their old habits and changing
their behavior to think "outside the box".
(c) Differences Between Traditional Organization and Learning Organization
The differences between traditional organization and learning organization are as follows,
S.No. Function Traditional Organization Learning Organization
1. Resolution of Power and hierarchical influence are used to
Collaborative learning and the view points of
Conflict resolve the conflicts. employees are used to resolve the conflict.
2. Leadership The leader sets vision, provides rewards and
The leader sets a shared vision, motivates the people,
punishments and controls the employees. encourages the commitment and effective decision
making.
3. Nature of Every person is responsible for his/her own Employees not only focus on their jobs but also the
Organizational job and organization expects everyone to way in which other's work interrelates with their work.
Thinking develop competence.
4. Determination Top management provides vision. Employees from different levels contribute to the
of Overall development of a shared vision and top management
Direction makes sure that everyone is working on vision.
4.6.2 Reinforcement Critiques of Reinforcement Theory

Q18. What are the principles of learning? Define law Reinforcement theory provide important points which
of effect. Explain reinforcement theory in detail. help in understanding human being. However, it is also criticized
Answer : Model Paper-I, Q8(a) on the following grounds,
Principles of Learning (i) The theory failed to give explanation regarding the
processes which are involved in storing and using the
The two principles of learning for behavioral performance
experience of past reinforcement.
management are,
1. Reinforcement (ii) Many people feel that the idea of behavioral modification
is not appropriate which indicates that a person's behavior
Reinforcement refers to something that not only increases can be controlled based on his/her present environment
an individuals strength, but also encourages him/her to repeating and past experience. This idea appears to challenge the
the same behavior. belief that every human being has a free right to decide
2. Punishment how to act.
Punishment refers to anything which not only decreases
the individual's strength, but also discourages him from repeating 4.7 Motivation – Definition, Process
the same behavior. and Motives
It is important to note that reinforcement is considered Q19. Define Motivation. Explain the basic motivation
more important when compared to punishment. process.
Law of Effect
Answer :
In the words of Thorndike, law of effect is stated as
follows, "Of several responses made to the same situation, Definitions of Motivation
those which are accompanied or closely followed by satisfaction
According to Dubin, "Motivation is the complex force
(reinforcement), will be more likely to recur, those which are
that keeps a person at work in an organization. Motivation is
accompanied or closely followed by discomfort (punishment),
something that moves the person to action and continues him
will be less likely to occur".
in the course of action already initiated".
Reinforcement Theory
According to Flippo, "Motivation is the process of
The reinforcement theory based on E.L. Thorndike's attempting to influence others to do your will through the
law of effect, states that behavior resulting in satisfying possibility of reward".
consequences are repeated and behaviors resulting in
dissatisfying consequences are avoided. This theory basically Basic Motivation Process
deals with modifying on the job behavior of employees. In
The basic motivation process consists of interdependent
case of no consequence, the extinction principle or law is
and interacting elements as depicted in the figure below,
considered. The principle of extention states that if there is no
positive or negative consequence of a behavior, then the behavior Needs
extinguishes or comes to an end over a period of time.
(a) Positive Reinforcement
Drives
Positive reinforcement arises when an individual’s
behaviour gives him/her favorable consequences. Positive
reinforcement encourages an individual to carry out the same Incentives
behaviour repeatedly. For example, if an employee is regular and
punctual to the office and employer rewards him/her with money Figure: Basic Motivation Process
for being punctual and regular, then such reward becomes a
positive reinforcement for that employee. Positive reinforcement 1. Needs
may be tangible or intangible or both.
The "need" for anything arises when a person or an
(b) Negative Reinforcement individual feels a psychological and physiological imbalance.
Negative reinforcement arises when an individual’s For example, when the body is deprived of water and food, the
behaviour results in prevention of some sort of discomfort, need is created.
dissatisfaction or irritation. For example, if a supervisor walks Similarly, the need arise when an individual doesn't
through the work area, the worker tends to busy himself with have anyone around who serve as his companions or friends.
the work, so that he can avoid the criticism from supervisor. Psychological needs may not always due to a deficiency, for
Thus, such avoidance or prevention becomes a negative example, an individual having strong need to progress in life
reinforcement for the employee. may have a history of consistent success.
2. Drives 4. Extrinsic Motives
Drives or motives are basically developed to relieve the Extrinsic motives are visible and tangible in nature.
needs. A physiological drive refers to a deficiency in direction. These motives are shared/given by other people. The extrinsic
Both physiological and psychological motives induce an motives in an organization can be compensation, promotion
individual to take an action and create a thrust to achieve an and benefits. Extrinsic motives may also include an attempt to
incentive. The above, given examples of food and water needs escape punishment like termination or transfer.
can be translated to hunger and thirst drives.
3. Incentives 4.7.1 Theories of Motivation: Maslow's
Incentive refers to anything that not only relieves a need
Theory of Human Needs, Douglas
but also reduces the motives or drives of an individual. When McGregor's Theory X and Theory
a person attains incentive, he/she becomes psychologically or Y, Herzberg's Two-Factor Theory
physiologically balanced and his/her drive will reduce. For of Motivation
example, when a person eats food, drinks water and gets friends,
he/she will restore the balance and the drives will reduce. Thus, Q21. List out the different theories of motivation?
the incentives in this example are food, water and friends. Explain Maslow's theory of human needs.
Q20. What are the various types of motives? Explain. OR

Answer : Explain Maslow's need hierarchy theory.
The various types of motives are discussed as follows, (Refer Only Topic: Maslow's Theory of Human Needs)
1. Primary Motives Answer : (Model Paper-I, Q8(b) | April-18, Set-1, Q2(b))
A motive is said to be primary if it is physiological and
Theories of Motivation
unlearned. The common primary motives are sleep, hunger,
thirst, sex, maternal concern and pain avoidance. Primary The various theories of motivation are as follows,
motives not only affect the individual's personal life but also
1. Maslow’s theory of human needs
their performance in the organization.
2. Secondary Motives 2. Herzberg's Two-factor theory of motivation
Secondary motives are the ones that are learned. 3. McGregors theory X and theory Y.
The human motives that fall under this category include
achievement, affiliation, power, security and status. Maslow's Theory of Human Needs
(a) Achievement Motive Maslow said that the behavior of an individual at a
Achievement motive makes a person ask quick feedback particular moment is usually determined by his strongest need.
regarding his/her job performance. He identified five levels in his need hierarchy into which human
needs are arranged. If the basic needs are not met, efforts to
(b) Affiliation Motive
satisfy the higher needs should be postponed.
Affiliation motive is concerned with social motives and
group dynamics. Affiliation motive makes an individual
to search for care, love and affection from superiors and
Self
organisation. actualization
(c) Power Motive needs
Power motive refers to the need to change others and Esteem needs
make a person dominate others.
Social Social
Needs/Love
needsNeeds
(d) Security Motive
Security motive is an intense kind of motive and to a Safety needs
great extent, this motive relies upon fear and avoidance.
Physiological needs
(e) Status Motive
Status motives state the individuals ambition to achieve Figure: Maslow's Need Hierarchy
a good status in the society.
1. Physiological Needs
3. Intrinsic Motives
Intrinsic motives are the ones that are created internally, Physiological needs have the highest strength until they
i.e., a person correlates these motives to the job. Intrinsic motives are reasonably satisfied. Until these needs are satisfied to the
include feelings of achievement, responsibility, accomplishment, degree needed for the efficient operation of the body, the majority
learning from experience, competitiveness etc. Doing effective of a person’s activities will probably be at this level and the other
work is also linked to intrinsic motives. levels will provide him with little motivation.
2. Safety Needs Theory X
When the physiological needs are reasonably satisfied, This is the traditional theory of human behavior. The
other levels of needs become important. Safety needs correspond assumptions about the human behavior are stated as negative
to being free of physical danger or self preservation. These needs in this approach. Based on these assumptions organizations and
may take considerable importance in the context of department
managers who believe in Theory X kind of human nature attempt
relationship of employees to employees. Employees attitude
to structure, control and closely supervise their employees.
towards security is an important consideration in choosing a
job, security aspects may include pension plan, insurance plan These managers feel that internal control is a must as the
etc. employees are irresponsible.
3. Social/Love Needs Assumptions

When the above two needs are satisfied, social needs The assumptions of theory X are,
become important in this hierarchy. Since man is a social being,
1. The personnel are inherently lazy.
he has a need to belong and to be accepted by various groups.
People will strive for meaningful relations with others. If this 2. They lack ambition.
opportunity is reduced, men often take vigorous action against
the obstacle. Workers form informal groups for support of 3. They require constant guidance and support.
unfulfilled social needs such as affiliation. 4. They are inherently self-centered.
4. Esteem Needs
5. Their inherent nature is to resist change.
These needs are concerned with self-respect, self-
confidence, feeling of personal worth, feeling of being unique 6. They avoid responsibility, when an opportunity was
and recognition. Satisfaction of these needs produce feelings of given.
self-confidence, prestige, power and control. Theory Y
5. Self-actualization Needs
The assumptions in Theory Y are totally opposite to what
This is the need to maximise one’s potential, whatever it we have seen in Theory X. This theory emphasizes the need for
may be. It is related with the development of intrinsic capabilities a cooperative effort from management and employees. This
which lead people to seek situations that can utilise their theory highlights the requirement of today i.e., to get maximum
potential. This includes competence which implies control over output with minimum amount of input.
environment factors, both physical and social and achievement.
Assumptions
Critical Analysis of Maslow’s Theory
The assumptions of theory Y are,
Maslow's theory is criticized on the following grounds,
1. A man’s needs order may not follow Maslow’s need 1. The physical and mental effort in work is natural.
hierarchy. 2. The average human being does not inherently dislike
2. Some people may be deprived of their lower order needs work. They feel work as a source of satisfaction.
but may try for self-actualising needs. 3. They exercise self-control and direction to meet the
3. For some people, self-esteem needs are more important organizational goals.
than social needs.
4. They take up responsibility.
4. For some people, many of the needs may not form part
of their own need hierarchy. 5. They exhibit a high degree of imagination, ingenuity and
creativity in solving organizational problems.
5. It is difficult to apply this theory in practice.
6. They face all types of challenges and are highly
Q22. Explain Douglas McGregor's Theory X and committed to the organisation.
Theory Y.
In a society/community, there are people of different
Answer :
traits. Some are of positive/optimistic attitude. They hope that
Douglas McGregor defined organizations as psychological positive things will happen. While some others are of negative/
entities which can be characterized by their assumptions about pessimistic attitude. They never hope for success. Generally
what motivates people. On the basis of this, Douglas McGregor people of negative attitude are taken as persons of Theory
proposed two different opinions and assumptions about human X character, whereas people of positive attitude are taken as
behaviour. These two opinions are opposite to one another persons of Theory Y character.
and are named as theory X and theory Y. Theory X talks about
negative behaviour of people and theory Y talks about positive The general traits of Theory X person and Theory Y are
behaviour of people. presented in the below table,
S.No. Traits of Theory X Person Traits of Theory Y Person

1. Laziness Active and optimistic
2. Less motivated Takes initiative
3. Lack of initiation Highly motivated
4. Dependent Takes risks
5. Avoid taking risks Goal-oriented and innovative
6. Never performs an activity or an action on his own. Independent and empathic
7. Relies on superiors or subordinates. Good human relations
Q23. How do theory X and theory Y differ from one another? List out the differences.
Answer :
The differences between theory X and theory Y are listed down below,
S.No. Basis Theory X Theory Y
1. Meaning Theory X is a traditional theory based upon Theory Y is a positive human behavioral
negative human behavior. approach which focuses on cooperation from
both management and employees.
2. Planning Superior sets objectives for subordinates. Superior and subordinates set objectives jointly.
Subordinate has a little participation in objective Great deal of participation in objective setting and
setting and plan formulation. plan formulation. Many alternatives are explored.
High commitment to objectives and plans.
3. Appraising and It involes low trust in appraisal, control is It involes high trust in appraisal. It is based on
controlling extreme and rigid. self- control.
4. H u m a n b e i n g s Individuals don’t like to work and always try Individuals are self-director and self controller
interest towards to avoid it. who are very much committed to their work.
work
5. Level of ambition Theory X states that people don’t have goals and People are assumed to be very ambitious in
objectives. They are not ambitious. theory Y.
6. Motivating factors Theory X says that people get motivated with Theory Y says that people get motivated with the
the satisfaction of lower needs. satisfaction of higher level needs (lower level
needs are important too).
7. Type of authority Theory X focuses on centralization of authority. Theory Y focuses on decentralization of
authority.
8. Creativity As per theory X, most of the people lack As per theory Y, people possess creative skills
creativity and possess less skills. and are much more creative.
9. Focus Negative behaviour of people is focussed in Positive behaviour of people is focussed in
theory X. theory Y.
10. Type of leadership Individuals follow autocratic leadership. Individuals follow democratic and supportive
leadership.
Q24. Discuss Herzberg two factor theory and Douglas Mc-Gregor's theory X and theory Y.
Herzberg's Two Factor Theory
Herzberg’s theory advocates that human beings have two categories of needs essentially independent of each other
effecting behaviour in different ways. His findings are that some working conditions are a must and without which the employee
gets dissatisfied and another set of working conditions are those which primarily build strong motivation and job satisfaction, but
their absence rarely proves dissatisfaction. The first set of conditions are referred to as hygiene factor and second set of conditions
as motivational factors.
1. Hygiene Factors
The hygiene factors are preventive and environmental in nature. They are not intrinsic parts of job, but are related to
conditions under which a job is performed. According to Herzberg, the hygiene factors include company policy and administration,
interpersonal relationship with supervisors, peers and subordinates, technical supervision, salary, job security, personal life, working
conditions and status.
2. Motivational Factors
The motivational factors are capable of having a positive effect on job satisfaction. These factors include achievement,
recognition, advancement, work itself, possibility of growth and all other factors related to work. An increase in these factors will
satisfy the employees, once the employees are satisfied, then they can be encouraged and motivated to achieve higher outputs.
Critical Analysis of Herzberg's Theory
Herzberg's theory is criticized for the following reasons,
1. Herzberg’s procedure is limited by its methodology.
2. No overall measure of satisfaction was utilized i.e., a person may dislike part of his or her job, yet still think the job is
acceptable.
3. The theory is inconsistent with previous research, the motivation-hygiene theory ignores situational variables.
4. The reliability of Herzberg’s methodology is questioned, since raters have to make inter-relationship. They may contaminate
the findings by interpreting responses differently.
5. Various factors relating to job, whether intrinsic or extrinsic, may not be classified into maintenance and motivating factors.
Douglas McGregor's Theory X and Theory Y
Q25. Explain the similarities and differences between Maslow's Theory and Herzberg's theory of motivation.
Answer :
Similarities Between Maslow's Theory and Herzberg's Theory of Motivation
Some of the similarities between these two theories are,
1. Both the theories gained popularity among academics as well as managers.
2. Both the theories strongly assume specific needs, energies and behaviours. The totality of humans needs also matches
in both theories. Higher order needs in Maslow’s theory are called motivators and lower order needs like physiological,
safety and social needs are called hygienes in Herzberg’s theory.
3. Both are committed to humanistic values and aim at fostering psychological growth and development.
Differences Between Maslow's Theory and Herzberg's Theory of Motivation
Following are the differences between Maslow’s need hierarchy theory of motivation and Herzberg’s two factor theory of
motivation,
S.No. Basis Maslow’s Need Hierarchy Theory Herzberg’s Two Factor Theory
1. Meaning Maslow proposed a motivation theory based Herzberg proposed a motivation theory which
on human needs which are arranged in explains that human beings have two categories of
hierarchial form. needs, essentially independent of each other and
effecting behaviour in different ways.
2. Nature It is a descriptive theory. It is a prescriptive theory.
3. Need Order It suggests hierarchy in needs. it suggests no hierarchy in needs.
4. Basis It is based upon needs and their satisfaction. It is based upon rewards and recognition.
5. Satisfaction It explains that unsatisfied needs encourage It explains that needs influence motivation in
Performance employees to enhance performance. workplaces.
Relationship
6. Need Effects It states that all needs act as motivators at It states that only few needs act as motivators.
different times.
7. View It offers a macro view of dealing with all It offers a micro view of work related motivation.
aspects of existence.
8. Motivators It considers unsatisfied needs as motivators. It considers higher order needs as motivators.
9. Financial It explains that financial reward influences It explains that financial reward does not influence
Reward behaviour. behaviour.
10. Applicability It is applicable to all workers at a workplace. It is relevant to professionals and higher level
workers.
Important Questions
Q1. What are the common shortcuts used by managers to judge others? What strategies do you suggest to
overcome perceptual distortions? How can understanding perception help managers be more effective?
Ans : Important Question
Q2. Discuss Process of Perception. What are the differences between sensation and perception?
Q3. Define Personality. Discuss the stages of personality development.
Q4. Write in detail about socialization.
Q5. Define Attitude. What are the types of work related attitudes? How can understanding of attitudes help
managers be more effective?
Q6. What is meant by learning organization? How do you create learning organization?
Q7. What are the principles of learning? Define law of effect. Explain reinforcement theory in detail.
Q8. Define Motivation. Explain the basic motivation process.
Q9. Explain Maslow's need hierarchy theory.
Ans : (Important Question | April-18, Set-1, Q2(b))
Q10. Discuss Herzberg's two factor theory and Douglas Mc-Gregor's theory X and theory Y.
Unit-5 Group Dynamics 5.1
Unit
5
Group Dynamics
SI
A GROUP
Syllabus
Group Dynamics : Types of Groups, Stages of Group Development, Group Behaviour and Group Performance Factors,
Organizational Conflicts: Reasons for Conflicts, Consequences of Conflicts in Organization, Types of Conflicts, Strategies
for Managing Conflicts, Organizational Climate and Culture, Stress, Causes and Effects, Coping Strategies of Stress.
Learning Objectives

 Meaning, Characteristics and Types of Groups.
 Stages of Group Development.
 Concepts of Group Behavior and Group Performance Factors.
 Concept, Causes, Consequences and Types of Organizational Conflict.
 Strategies for Managing Conflicts.
 Organizational Climate and Organizational Culture.
 Meaning, Causes and Effects of Stress.
 Coping Strategies of Stress.
Introduction
According to Clovis R. Shepherd, a group is defined as an aggregate of a small number of persons who work
for common goals, develop a shared attitude and are aware that they are part of a group and perceive
themselves as such. In an organization, there are different types of groups such as primary and secondary
groups, membership and reference group, in-groups and out-groups, formal and informal groups etc.
Group Behaviour refers to the people having same goal and acting in a similar manner, which could be
different from their normal behavior as individuals. In order to understand group behavior one needs to
be familiar with concepts such as roles, norms, cohesiveness, status and size of the group.
Conflict is a feeling of disagreement among group members. There can be many reasons and consequences
of conflict. Thus, suitable strategies should be adopted to deal with organizational conflicts.
Stress is a state of tension experienced by individuals who are facing extra-ordinary demands, constraints
or opportunities. It is very important to develop strategies for coping/managing stress at both individual
and organizational level.
5.2 Management of Organizational Behaviour [JNTU-Kakinada]
5.1 Group – Definition, Characteristics and Types of Groups

Q1. What do you mean by the term "Group" and "Group Dynamics"? Why do people join groups? What are
the characteristics of a group?
Answer : Model Paper-I, Q9(a)
Group
According to Marvin E.Shaw, “Group is, two or more persons who are interacting with one another in such a manner that
each person influences and is influenced by each other”.
According to Clovis R.Shepherd, "Group is an aggregate of a small number of persons who work for common goals,
develop a shared attitude and are aware that they are part of a group and perceive themselves as such".
Group Dynamics
Group dynamics refer to the interaction of forces between group members in a social situation. It describes how a group
should be organized and operated. It is a social process by which people interact face to face in small groups. Group dynamics
encompasses the dynamics of interaction patterns within the group, the subtle and the non-subtle pressure exerted by group
members, the manner in which decisions are made in the group, how work gets done and how members needs are satisfied.
Reasons Why People Join Groups
People join group for the following reasons,
1. Power
Anything which cannot be achieved individually is achieved through a group action.
2. Status
People feel a sense of prestige by associating themselves with a specific group.
3. Security
Some people cannot stand alone. So, they join group to reduce their insecurity and to gain strength.
4. Affiliation
Individuals satisfy their social needs by interacting with a social group.
5. Self-Esteem
Associating oneself with a highly valued group gives a feeling of self-worth to individuals.
Characteristics of Groups
The characteristics of groups are,
1. Two or More People
It contains at least two persons. The size of the group will be determined by rules and regulations of the organisation.
2. Collective Identity
Each member of the group is aware about their membership and believes that he is a member and is a participant of the
group.
3. Interaction
Interaction means that each member shares his ideas with others through communication and this communication can
take place, face to face, in writing, over the telephone, across a computer network or in any other manner which allows
communication among group members. Each member interacts at least occasionally with one or more members of the
group.
4. Shared Goal Interest
Members of the group subscribe to the attainment of some common objectives. If a group has a variety of objectives or
interests, each member of the group shares at least one of the groups concerns. The shared goal interest binds the group
members together.
Q2. Explain the various types of groups.
Answer : Model Paper-II, Q9
The various types of groups are,

1. Primary and Secondary Groups
A primary group is an intimate face-to-face association and cooperation. The membership of primary group is small. Such
groups may be family, friendship or neighborhood groups. Secondary groups are more formal, general and remote. The members
of secondary group may not have any interest in the problems and pleasures of others. They may not have continuous interaction
and intimacy, face-to-face interaction, cooperation, association as that of primary groups.
2. Membership and Reference Group
A membership group is one to which an individual really belongs. A reference group is one with which the individual
is identified or the group to which he would like to belong. An individual may be a member of several groups at a time but he
may not participate actively in all such groups but he would like to participate in the group whose norms are more attractive and
gratifying. The attractiveness of the reference group makes the norms of that group more attractive to the individual and its norms
will become more influential in determining behavior. The reference groups have more relevance to organisational behaviors.
3. Command and Task Groups
A command group is composed of the subordinates who report directly to a common superior. It is determined by organisation
chart. A task group is usually formed to solve a problem or perform an activity that involves a number of organisational units.
Thus, membership of the task group may extend beyond the hierarchical command of a superior.
4. In-groups and Out-groups
The in-group represents a clustering of individuals holding prevailing values in a society, or at least, having a dominant
place in social functioning. It can be a majority numerically, or it may represent the power structure with its pattern of behavior
considered desirable. The out-group is the conglomerate looked up as subordinate or marginal in the society. It is usually referred
to as minority group even though in certain instances, it may represent numerical majority.
5. Formal and Informal Group
Formal groups are created and maintained to fulfill specific needs or tasks which are related to the organisational mission.
These are consciously and deliberately created. These may be in the form of temporary group as committee, task-force etc.,
or permanent groups. Informal groups are created in the organisation because of operation of social and psychological forces
operating at the workplace. Members create such groups for their own satisfaction and their working is not regulated by the general
frameworks of organisational rules and regulations.
6. Coalitions
Coalition is a group of people who join together for a common cause. In an organization, coalitions are the powerful,
unique and effective entities that work together to get some job done. For example, in some large organizations it was found that
employees formed coalitions to make the management more effective and to resolve petty conflicts.
5.2 Stages of Group Development

Q3. What are the stages of group development?
Answer : Model Paper-III, Q9(a)
The five stages of group development are presented in the figure below,
Figure: Stages of Group Development

Stage-1: Forming
Forming is the first stage in which group members don't have proper idea of group's purpose, structure and leadership.
Members try to understand what type of behavior is acceptable in the group.
Stage-2: Storming
As the name indicates, this stage of group development involves conflicts and confrontation. At this stage, the members
are emotionally charged and they tend to show disagreements about roles and responsibilities. A conflict among members may
arise over the issue of "who will control the team".
Once this stage is completed, everyone will become clear Role Expectations
about leadership in the team. Role expectations refers to the expectations of others
Stage-3: Norming relating to the role played by an individual in a given
In norming stage, members start to settle in the team and situation.
build cooperation and collaboration. They now develop close
relationship with each other and work in unity. Role Conflict
This stage is complete, when the structure of the Role conflict takes place when an individual is stressed
team becomes solidified and members accept the behaviour with different role expectations.
expectations that the company has from the group. 2. Norms and Conformity
Stage-4: Performing Norms are acceptable standards of behaviour which
In performing stage, members become fully functioning are shared by group members in all groups. Norms prescribe
and denote themselves completely to achievement of tasks. In absenteesim rates, amount of socializing permissible on the job,
this stage, the focus is laid on diverting the members attention output levels, dress code etc. One of the most important group
from knowing each other to performing the required tasks. norm is a performance norm. These norms are very effective and
Performing is the last stage of group development for powerful in modifying the performance of individuals depending
the teams that are permanent in nature. However, the next stage on ability and level of motivation.
i.e., "adjourning" is followed for the development of temporary According to the results of a classic study by Solomon
teams.
Asch, the group norms forces an individual towards conformity.
Stage-5: Adjourning An individual does not like being different and wants to be
In this stage, the team gets ready to depart. Here, the accepted by the group.
performance is no longer considered important. Rather, the
In order to have acceptance by the group, the individual
focus is given to "wrapping up of tasks or activities".
is subject to support the norms of the group. These groups can
If the set objective of the group is achieved, the group
force individuals to modify their attitudes and behaviours to
will disperse or else a new composition is formed and the same
stages will continue. accept the standards of the group. This is called conformity.
3. Status
5.3 Group Behaviour and Group Status refers to socially defined position or rank provided
Performance Factors to groups or group members by others which is spread over every
Q4. What is group behaviour? What are the society. In order to differentiate the members of group, even
foundations or basic concepts of group small group will establish roles, rights and rituals. An essential
behaviour? Discuss. factor of determining human behaviour is status.
Answer : Model Paper-IV, Q9 The factors determining status are,
Group Behaviour (a) The power exercised by a person on other individuals.
People having same goal and acting in a similar manner (b) The ability of a person to contribute in achieving goals
which could be different from their normal behavior as of a group.
individuals is referred to as "group behavior". It is the behavior (c) The personal characteristics of an individual.
of people when they act collectively. Status and Norms
Foundations or Basic Concepts of Group Behaviour It is observed that status has an impact on power of norms
To understand group behaviour, one needs to study the and forces to agree. For example, members with high
following concepts, status can freely deviate from norms unlike other group
1. Roles members.
All group members must play a specific role, i.e., a set Status and Group Interaction
of expected behaviour patterns associated with an individual The interaction taking place among group members is
occupying a position in a social unit. But, in reality a number effected by status. For example, compared to lower status
of different roles are to be played by individuals both on and members, high status members are more active, they
off job. Based on the role played by an individual, his/her interrupt others, criticize more, give more commands etc.
behaviour varies. Each group has its own requirements for role 4. Size and Social Loafing
of individuals. The overall group behaviour is affected by size of the
Group roles can be classified into four i.e., role identity, group. As it is proved that in some situations, smaller groups are
role perception, role expectations and role conflict. more efficient than larger groups in terms of task completion,
Role Identity performance etc. But in case of problem solving, large groups
are more effective.
Role identity is created through some attitudes and actual
behaviours which are constant for a role. Social loafing can be defined as, an individual's tendency
to put less efforts while working in a group than working
Role Perception individually. As the group size increases, the contribution of an
Role perception refers to understanding how an individual individual decreases. The factor responsible for this behaviour
must behave in a given situation. is the distribution of responsibility.
5. Cohesiveness
Cohesiveness is the degree of attachment of the members to their groups. Different groups have different degrees of
cohesiveness which indicates how much the group members are attracted to each other and are encouraged to stay in the group
as a member. Cohesiveness is important as it is related to group productivity. The relationship existing between cohesiveness and
productivity are based on performance related norms which are introduced by the group. When performance related norms are
high, then a cohesive group seems to be more productive, in some situation where cohesiveness is high but performance norms are
low, then it leads to low productivity. When there is low cohesiveness and high performance norms, then productivity increases.
In case, both cohesiveness and performance related norms are low, then the productivity will fall between low to moderate range.
Q5. Discuss the various factors affecting group performance.
Answer : Model Paper-I, Q9(b)
There are many factors which affect the group performance but among these there are four most important group performance
factors,
1. Composition
Group composition is one of the important factor which affects group performance. A group consists of two types of
members either homogenous or heterogeneous. When members of a group are similar in attributes that are important for work,
it is referred as homogenous group. When attributes of group members differ then they are referred as heterogeneous group.
According to Bass and Ryterband, there is a relationship between group composition and its productivity.
Homogenous groups are more productive when task is simple and sequential and when cooperation and speed are required
to complete the task. Heterogeneous groups are more productive when task is complicated and collective and when creativity is
required without any time constraint to complete the task.
2. Size
Group size is another important factor which influence the group performance. When size of group is large, it facilitates
in acquiring more knowledge and skills. In case of idea generation groups, more ideas can be generated from more members
but to some extent. If group size increases continuously then there will be formalized interaction among members and overall
communication decreases. As frequent interaction is not possible in large groups so members create sub groups which may have
positive or negative impact on group performance.
3. Norms
Norms of a group are those standards based on which effectiveness of behavior is judged in a group. During second stage,
a group identifies the norms and continues till the fourth stage. Norms helps in preventing chaos and predicting the behaviour
of people. Norms also facilitates people to behave properly and if people are not conformed to norm then they may get physical
threat, boycott or removed from group.
Norms are developed by combining various factors like traditions of group, nature of tasks, features exhibiting personality
of members and situation.
There are four main functions performed by norms. They are,
(a) Group members can prevent embarrassing situations through norms.
(b) Group can continue to achieve goal by removing deviant behaviour members with the help of norms.
(c) Group can have a unique identity through the value made by the norms.
(d) Norms facilitate group members to identify the behavior of other people of group based on group norms.
4. Cohesiveness
Group cohesiveness is also an important factor which affects the performance of group. It indicates commitment of group
members to stay together. Factors developing cohesiveness are attraction towards group, motivation to stay in group and resistance
to leave the group. If cohesiveness in a group is high then it results in job satisfaction, synergy, goal accomplishment and improved
interactions. A group may face many problems and difficulties in achieving goals if group cohesiveness is low in the group.
Composition
Cohesiveness Group Performance Norm
Size
Figure: Factors Affecting Group Performance

5.4 Organizational Conflicts – Concept, REasons for conflicts,

Consequences of Conflicts in Organization and Types of Conflicts
Q6. What is organizational conflict? Discuss the causes or reasons of organizational conflicts.
Answer : Model Paper-III, Q9(b)
Organizational Conflicts
Organizational conflict is defined as "a situation in which one or all individuals take an irrational and incompatible stand
to decision making, resulting in the breakdown".
According to James D. Thompson, "Organizational Conflict is that behaviour by the organizational members which is
expanded in opposition to other members".
According to Robbin, "Conflict is a process in which an effort is purposefully made by one person or unit to block another
that results in frustrating the attainment of other's goals or the furthering of his or her interests".
Causes or Reasons of Organizational Conflicts
The following are the causes/reasons of organizational conflict,
1. Difference in Goals
One of the reasons for a conflict to occur is the difference in the goals of two individuals, both of them may be in conflict
due to such difference. For example, One person's goal is to maximize the sales of a product, whereas the other person may have
a different goal of improving the quality of the product. This leads to conflict among them.
2. Situational Conflict
Situational conflict occurs depending on the thinking or mind set of individuals involved in a conflict. The difference in
opinion of people in the situation can cause a conflict.
3. Interest of Members
Some individuals indulge in a conflict for the purpose of gaining short-term benefits which may serve only for a shorter
period and disappears in long run. Such individuals have a very narrow thinking of concentrating only on acquiring benefit which
may be against the interest of others.
4. Limited Resources
When the resources are limited in number and the want for such resources is high, it may lead to a conflict between the
members of the same group.
5. Power of Position
When the person at a higher level say ‘A’ manager or chairperson who holds power does not like to share their power with
others because they may be insecure about their position. This leads to lack of trust among other members which ultimately leads
to conflict.
6. Stereotype Conflict
In this type of conflict, members of the same group may differ in the attitude or behaviour. Some members cannot accept
ideologies or stereotypes, which causes a conflict between the group members.
7. Norms and Standards
A group may follow some norms, rules, regulations or standards in achieving and fulfilling their objectives which requires
uniformity in group. However, due to difference in acceptance of norms and very high standards, a conflict may arise among
group members.
8. Authority and Dependency
Some people are good at performing the task assigned to them by the other authoritarian person who can be a superior
or senior manager, whereas some people like to have the high position to gain power. People at the higher position often make
others dependent on them which can also lead to conflict.
Q7. Discuss the consequences of organizational conflicts.
Answer : Model Paper-I, Q10
The various consequences of organizational conflict can be categorized into two,

1. Positive consequences and
2. Negative consequences.
1. Positive Consequences
The positive consequences of organizational conflict are as follows,
(a) A conflicting environment in an organization gives an opportunity to the individuals for analyzing the situation in an
unbiased and objective manner. An individual’s knowledge with respect to a particular situation would be assessed and
evaluated on the basis of their performance, discipline, behavior and also on procedures, policies, methods and rules to be
followed by him/ her. This type of knowledge assists the individual in developing their skills further.
(b) When the conflicts which arise in the organisation are resolved, it will result in satisfaction of the needs of the managers
and also acts as a source of great motivation and satisfaction for the managers.
(c) The resolution process of organisational conflicts can also result in development of the individuals. People usually accept
the rules and respect the values of an organisation. Resolution of organisational conflicts brings the employees together
and enables them to work in coordination with one another and attain the common objectives.
(d) Conflicting situations in an organisation usually lead to great number of challenges for the managers. In order to face such
challenges, the managers follow creative techniques and dynamic leadership styles. Attentiveness and vigilance forms the
main part of their managerial styles.
(e) In order to resolve conflicts, managers constantly identify new objectives, procedures, policies and values which are greatly
accepted by the members. Therefore, change may be regarded as one of the positive consequences of conflict.
(f) The process of resolving organisational conflict acts as one of the main tool of organisational development. This is because
during the process of resolving an organisational conflict, the causes of conflict are traced, identified and evaluated quickly
in order to enhance the internal environment of the organisation.
2. Negative or Destructive Consequences
The negative or destructive consequences of organizational conflict are,
(a) The hostile nature of groups, lack of trust among employees, negative feelings are some of the negative consequences of
conflict. If timely and appropriate corrective measures are not taken to overcome these consequences, then it will badly
effect the functioning of the organisation.
(b) Conflicts which take place in the organisation at frequent intervals usually lead to confusion, inconsistency and imbalance
in the employees. Lack of harmony in organisational objectives and lack of integration among the different subsystems of
the organisation are the main negative outcomes of conflicts.
(c) Interpersonal and inter group conflicts would usually result in hostile feeling among group members, which would further
result in unpleasant and unwanted behaviour from the group members.
(d) Conflicts in an organisation may result in the failure of achieving the planned goals i.e., goal displacement. Usually, conflict
resolution becomes quite essential for employees as they invest their efforts and resources in resolving the conflicts instead
of achieving organisational goals. Therefore, it results in displacement of organisational goals.
Q8. Explain different types of conflicts.
Answer : Model Paper-II, Q10(a)
The different types of conflicts are,

1. Inter-group organizational conflict
2. Intra-group conflict
3. Inter-individual or inter-personal conflict
4. Intra-individual or intra-personal conflict.
1. Inter-group Organizational Conflict
Conflicts between groups, departments or section may result in inter-group conflicts, that can also be called as organizational
conflicts.
The reasons for inter-group conflicts can be,
(a) Task interdependence among various departments for assistance etc.
(b) Ambiguity of the task among the groups.
(c) Goal incompatibility for different organizational units.
(d) Competition among the groups for the limited resources that are available.
(e) Competitive reward systems based on the performance levels.
2. Intra-group Conflict (c) Role Conflict
The disputes among some or all the group members that It becomes difficult for an individual to play numerous
affect the group’s performance result in intra-group conflicts. roles simultaneously as time and resources would be
Severe intra-group conflicts can be noticed in family run limited.
businesses. (d) Cognitive Dissonance
3. Inter-personal Conflict When individuals recognize inconsistencies in their
The conflict that arises between two individuals in own thoughts or behaviours that can be stressful and
an organization is known as interpersonal or inter-individual uncomfortable, it may lead to intra-personal conflict.
conflict. Inter-personal conflict arises because of the following Until cognitive dissonance is removed, it remains as a
reasons, source of conflict.
(a) Personal differences among individuals in terms of culture, (e) Neurotic Tendencies
upbringing, family backgrounds, socialization process etc. Inner conflicts arise due to the irrational personality
mechanisms that are used by an individual. These inner
(b) Environmental stress caused due to downsizing, limited
conflicts lead to conflicts with other people.
resources, high level of uncertainty, competitive pressure,
etc. 5.4.1 Strategies for Managing Conflicts
(c) Availability of wrong or deficient information can create Q9. What strategies can be used for managing
a conflict between two individuals. conflicts?
4. Intra-individual Conflict Answer : Model Paper-III, Q10(a)
The conflicts that take place within an individual results A conflict is a mutually opposing situation existing
in an intra-personal or intra-individual conflict. Intra-personal between two or more parties due to the perceived difference of
conflicts occur due to the following reasons, values. Conflicts have negative impact on the overall efficiency
of the organization. The strategies used for managing conflicts
(a) Frustration are,
An individual gets frustrated when he or she is unable 1. Physical Separation
to reach the specified goal. The likelihood of enemity and aggression can be reduced
(b) Goal Conflict by physically separating the conflicting parties. This strategy
works if the parties are not required to interact with each
Goal conflict arises when attainment of one goal prevents
other while accomplishing the organizational targets. Even
the other goal from getting accomplished. Goal conflicts
though they are separated, they tend to indulge in sabotage
can be distinguished into four major forms like,
and occasional acts of aggression. This will be continued if the
(i) Approach-Approach Conflict source of the conflict exists in the situation.
A situation in which an individual has to select 2. Ignoring the Conflict
between the two or more positive and mutually If the conflict is not serious, managers ignore it by
exclusive goals, then it is said to be “approach- considering that the conflicts may bring bad reputation to the
approach conflict”. firms. Due to the incapability of determining the sources of
This type of conflict can be resolved by satisfying conflict on time, the situation may become worse.
one goal first and then the next one. This can also 3. Withdrawal from the Conflict
be resolved by giving up one of the goals.
A smooth way of conflict resolution is to withdraw
(ii) Approach-Avoidance Conflict oneself from the source of the conflict or from maintaining the
This type of conflict arises when an individual is relationship with the opposing group.
attracted to a goal and avoids it at the same time. 4. Dominance
There are both positive and negative characteristics The easiest strategy to end a conflict is to eliminate
of individuals associated with a single goal. and conquer the other group, forcing them to agree with the
(iii) Avoidance-Avoidance Conflict viewpoints of the enforcers for conquerors. Quite often managers
use their authority to fire a trouble making employee, thus
This type of conflict arises when an individual
ending the conflict. Stagner (Researcher) found that the Chief
is forced to make a choice among two mutually
Executives (C.E.O) authority is found to be most effective for
exclusive goals, each one of which possesses
ending the interdepartmental conflicts.
unattractive qualities. In avoidance-avoidance
conflict situation, the person may resort to other 5. Compromise
means to get relief from anxiety aroused by the An easy and effective way of conflict management is
conflict. through mutual compromise. There is no clear winner or loser.
Both the groups gain something and agree to forgo something in 5.5 Organizational Climate
favour of the other group. Example: Management may offer five
percent pay hike while the trade unions demand for an increase Q10. Define organizational climate. Explain the
of fifteen percent. Both parties may be agreed at a figure of 10% factors and impact of organizational climate.
which is referred to as a “compromise figure”. Answer : Model Paper-IV, Q10
6. Identifying a Common Enemy Organizational Climate
By identifying and working with common enemy, “Organization Climate is a pattern of basic assumptions,
conflicts can be temporarily resolved. This has been proved by invented, discovered or developed by a give group as it learns
Sherif and his colleagues through an experiment at a boys camp to cope with its problems of external adaptation and internal
where conflicting parties worked together for repairing the truck integration that has worked well enough to be considered valid
when it underwent sudden breakdown on the way to a tour. and therefore, to be taught to new members as the correct way
7. Procedural and Structural Changes to perceive, think and feel in relation to those problems”.
Sometimes, improper organizational structure or Edgar Schein
procedures may lead to organizational conflicts. Thus, to
Organisation Climate comprises of a set of specific
resolve them, a few structural changes have to be implemented.
conditions such as goals, value system, rules, ethics, reward
Example: In some organizations, the sales and distribution
system, administrative policies and different other variables
departments are required to report to a single senior manager
which influence the behavior of people working within it.
instead of two different managers.
8. Super-ordinated Goals Factors/Determinants of Organizational Climate
A super-ordinate goal is a common goal whose Many internal and external factors/determinants which
accomplishment demands the cooperation from all the parties affect the organizational climate. Some of them are listed below,
of the organization. It cannot be independently achieved by a 1. Physical environment
single party. Such goals force the various departments to resolve 2. External environment
their differences and work together towards the attainment of
goals. 3. Nature of job
9. Integrated Problem Solving 4. Facilities available
This approach requires both the parties to come together 5. Organization culture
and to define and make mutual decision about the problems. 6. Human virtues and qualities
Both the groups freely exchange the ideas and identify goals 7. Organizational process
which are mutually acceptable to both the parties. It is effective
for resolving conflicts arising due to misunderstanding or conflict 8. Structure of the organization.
due to different languages. Impact of Organization Climate
10. Member Relations The climate of an organization has an impact on behaviour
A conventional method of conflict resolution is to of employees. The overall organizational performance can be
exchange people between the departments wherein the newly achieved through positive and conductive climate. Therefore, an
entered employee of the department is allowed to exchange his appropriate climate is essential for attaining objectives. Whereas,
views about the consequences. This helps in understanding the an inappropriate climate has a bad impact on work performance
perspectives of others and reduces the misunderstanding thus, and relations. Almost all organizations aim at establishing and
enabling them to resolve the conflict. maintaining a healthy climate where in both organization and
11. Appeal Procedure employees are benefited equally.
An easy way of conflict resolution is to take the matter The various positive impacts of a sound organization
to a higher authority. The decision of the higher authority will climate can be viewed in the form of,
be final and is agreed upon by both the parties. 1. Strong motivation and high morale
12. Third Party Mediator/Liaison Group 2. Better adjusting ability
Another approach of conflict resolution is to appoint a 3. Good image in the market
neutral and a full-time third party integrator who would use his
4. Stability in the tough times
expertise to enable both parties arrive at a mutually agreeable
and acceptable solution. 5. Healthy industrial relations
13. Reduce Interdependence 6. Effective implementation of change
As, all the departments are making use of the same set 7. Enhanced competitive strengths
of scarce resources, they are found to be interdependent on 8. Better external relations
each other. Such interdependence (a sources of conflict) can
9. Job satisfaction and excellent performance
be reduced to a great extent by providing them with decoupled
resources. 10. High operational economy or efficiency.
5.6 Organizational Culture 2. Authoritarian and Participative Culture

In the authoritarian culture, power is concentrated on
Q11. What do you mean by "Organizational Culture"? the leader and employees/subordinates are expected to obey
What are its important characteristics? Discuss orders and maintain discipline. Any disobedience is punished
the important dimensions of an organizational severely to set an example to others. The basic assumption is
culture. that the leaders know what is good for the organisation and he
Answer : Model Paper-II, Q10(b) or she always acts in its interests.
Organizational Culture Participative cultures tend to emerge where most
organisational members are professionals or see themselves
Organisational culture is defined as the set of assumptions, as equals. It is premised on the notion that people are more
beliefs, values and norms that are shared by an organisational committed to the decisions that are participatively made than
members. to those which are imposed on them.
“Culture is the single most important factor accounting 3. Dominant and Subculture Culture
for the success or failure of an organization”. When a majority of members in the organization share a
– Deal and Kennedy set of core values, it is referred to as dominant culture. On the
Characteristics of Organizational Culture other hand, a set of core values shared by minority of members
in the organization is referred to as a sub-culture.
The important characteristics of organisational culture
4. Strong and Weak Culture
are,
In an organisation having strong culture, the core values
1. Behavioural Regularities: When organisational are both intensely held and widely shared by its members. Such
members interact with one another, they use common employees develop strong loyalty to the organisation. A strong
terminology, language and rituals related to respect and culture demonstrates high agreement among members about
behaviour. what the organisation stands for. The opposite will happen when
2. Norms: Norms include behavioural standards including culture is weak.
guidelines on how much to work. The danger with strong organisational culture is that it
3. Values: Every organisation advocates and expects its leads to “group think”, collective blind spots and resistance to
employees to share values. Some examples are high change and innovation.
product quality, low absenteeism and high efficiency. 5. National Culture and Organisational Culture
4. Philosophies: Philosophies are some policies that an Organisational culture is influenced by the culture of
organisation believes as how to treat its customers and/ nation, irrespective of the origin of the company. Go to any
or employees. company operating in India, Indian or foreign, the local culture
is visible. The holidays declared, festivals celebrated, functions
5. Rules: Rules are some guidelines to get along in the
organised and other cultural activities reflect Indian ethics.
organisation. New employees should learn them to be
Q12. Discuss the process of creating an organizational
treated as a member of the organisation.
culture.
6. Organisational Climate: Organisational climate refers
Answer : Model Paper-III, Q10(b)
to the physical layout, the way the participants interact,
the way in which the members of the organisation The process of creating an organizational culture
conduct themselves with customers, outsiders etc. involves four sequentially followed steps. They are,
Establishment of Values
Dimensions of Organizational Culture
The following are the important dimensions of an
organizational culture, Creation of Vision
1. Mechanistic and Organic Culture
The mechanistic organisational culture exhibits the Operationalising Values and Vision
values of bureaucracy and feudalism. Authority is thought of as
flowing down from the top of the organisation to the lower levels Socialisation of Employees
and communication flows through prescribed channels. There
is a great deal of departmental loyalty and interdepartmental Figure: Process of Creating Organizational Culture
animosity, a strong “we” versus “they” perception. This sort of 1. Establishment of Values
culture resists change and innovation. Establishment of the values that govern the members
In organic culture, there exist formal hierarchies of of the organisation is the first step in creating organisational
authority, departmental boundaries, formal rules and regulations culture. Values of a business that guide the action, are created
and prescribed channels of communications. There is great deal by the people responsible for managing it. In this connection,
of emphasis on task accomplishment, team work and free flow Peters and Waterman described the type of values followed by
of communication. many famous companies.
(a) A belief is being the best. 1. Recruitment of Entry Level Personnel
(b) A belief in the importance of the details of execution. Entry level personnel must be carefully selected with
(c) A belief in the imporatnce of people as individuals. the help of standardized procedures and by identifying qualities
of effective performance. Trained recruiters were assigned
(d) A belief in superior quality and service. with responsibility to interview candidates and select those
(e) A belief that most members of the organisation should personnel whose personal styles and values are appropriate
be innovative. for organisational culture. It has proved that personnel with
realistic preview of the culture are more efficient.
(f) A belief in the importance of informality to enhance
communication. 2. Placement on the Job
(g) A belief in importance of economic growth and profits. In the second step after hiring an appropriate personnel,
a series of different responsibilities are imposed on them. The
2. Creation of Vision
purpose behind imposing of responsibilities is to make them
Vision is the projection about what should be done in the aware of norms and values of organization. And to understand
future to achieve the stated goals. It is derived from the values the significance of humility in organisational culture and to
created in the first step. A visionary company has following make new personnel vulnerable and develop closeness with
characteristics, as stated by Collins and Porras. colleagues. Hence, ultimately developing group cohesiveness.
(a) A visionary company holds a distinctive set of values 3. Job Mastery
from which it does not deviate.
The next step is job mastery, which is carried out through
(b) It expresses its core purpose in enlightened terms which extensive and reinforced field experience. Usually, Japanese
provides challenges for actions.
firms put new employees into training program for long period
(c) It develops a visionary scenario of its future, decides and of time. Based on progress of personnel, their performance is
implements actions accordingly. evaluated and additional responsibilities are imposed on them.
3. Operationalising Values and Vision 4. Measuring and Rewarding Performance
Values and vision created in first two steps are put into The next step focus on measuring and rewarding
action in this step. This can be done by undertaking the following individual performance. Comprehensive and consistent
activities. systems are used which emphasize on competitive success
(a) A written statement of values and vision is included in and corporate values. If employees of the organization with
employee handbook or circulated among employees. strong culture violate any cultural norm, they are transferred
to penalty box which is less desirable location. These kind of
(b) An organisational structure that facilitates the employees
employees are not on the track and their career progress will
to perform their activities freely is designed.
slow down.
(c) Implementing various organisational processes that
5. Adherence to Important Values
inspire and motivate the employees.
In the next step, employees must carefully follow
(d) Recruiting and selecting the employees whose values
the important values of the firm. These values facilitates
match with that of the organisation.
employees to balance their personal sacrifices emerged due
(e) Following a reward system that encourages the to their membership in the organization. Employees learn to
employees and enhances their committment. accept these values and trust that organization won't hurt them.
4. Socialisation of Employees 6. Reinforcing the Stories and Folklore
Socialisation is the process by which an individual The next step involves reinforcing of organisational
develops into a functioning member of a group according to stories to keep them alive, validating of organization's culture
its standards, conforming to its modes, observing its traditions and way of doing activities. Organizations try to reinforce those
and adjusting himself to the social situations. In organisational stories which has a moral and help employees to understand
context, it is an adaptive process that takes place as new the way of doing things.
employees attempt to learn and inculate values and norms that
are a part of organisational culture. 7. Recognition and Promotion
Q13. Discuss the steps of socialization for maintaining The last step of socialization involves recognition and
organizational culture. promotion of hard working individuals who can be treated
as role models to new people. By considering employees as
Answer : winners, organization motivate others to follow them. It is
Following are the steps of socialization which facilitates proved that recognition can act as a powerful reinforce and
in accepting core values and maintaining organizational hence employees who are given recognition from others can
culture. They are, build and maintain organisational culture.
5.7 Stress – Causes, Effects and 2. Group Factors

Group interaction also causes stress on an individual.
Coping Strategies of Stress The group factors that cause stress are,
Q14. Define Stress. What are the various causes and (a) Lack of Group Cohesiveness: Group cohesiveness is the
effects of stress? major binding force of a group. It is the essential factor
Answer : for interaction among group members. In its absence,
people feel stressed due to lack of coordination among
Definition of Stress group members.
According to Robbins, Stress is "a condition in which (b) Lack of Social Support: To participate actively in a
an individual is confronted with an opportunity, constraint or group, group members need social support from other
demand related to what he or she desires and for which the group members. In its absence, they become stressed.
outcome is perceived to be both uncertain and important". (c) Conflict: Any conflict among group members causes
stress on the individual.
Stress is a state of tension experienced by individuals
facing extraordinary demands, constraints or opportunities. It 3. Organisational Factors
forces people to focus more sharply on the problem and come Organisational factors that cause stress are as follows,
out of it with a solution. (a) Organisational Policies: Unfavourable and ambiguous
policies affect the individual performance and may cause
Causes of Stress
stress. Factors such as unfair performance evaluation,
There are numerous factors that cause stress. They all unrealistic job description, frequent reallocation of
are grouped into four categories as depicted in the figure below, activities, rotating work shifts, ambiguous procedures,
rigid rules etc., causes stress.
Individual Factors Group Factors (b) Organisation Structure: Ineffective organisation
structure does not facilitate in achieving the stated goals.
It disturbs the communication, co-ordination and work
Causes of Stress commitment.
(c) Organisational Processes: Faulty organisational
processes such as poor communication, inadequate
feedback, ambiguous and conflicting roles, unfair control
Organizational Extra-organizational system etc., put stress on individuals.
Factors Factors
(d) Physical Conditions: Ineffective work environment
and unsound physical conditions affect the performance
Figure: Causes of Stress
standards of employees by causing them stress.
1. Individual Factors 4. Extraorganisational Factors
There are many factors at the individual level that causes In addition to intraorganisational factors, many factors
stress. They are as follows, outside the organisation causes stress to an employee. Factors
such as social and technical changes, economic and financial
(a) Changes in Life and Career: Any changes in life of an conditions, community conditions etc. cause stress.
individual, disturbs his equilibrium and he experiences
Effects/Consequences of Stress
stress. Changes in the career such as promotion,
demotion, transfer, separation etc. impose greater stress There are various effects or consequences of stress. They
on the individual. are as follows,
1. Physiological Effects
(b) Personality Type: The personality characteristics
Stress is found to primarily disturb the physiological
specific to an individual form one of the factor for
system of individual. Person suffering from stress initially faces
individual stress. The personality characteristic include
health disorders such as high blood pressure, increase in heart
authoritarianism, rigidity, masculinity, femininity,
beat, inconsistent breathing rates, headaches, respiratory illness
extroversion, supportiveness, spontaneity, emotionality,
and so on. Researchers also studied that coronary heart diseases
tolerance for ambiguity, locus of control, anxiety and and heart-attacks can also takes place due to high levels of stress.
need for achievement etc.
2. Psychological Effects
(c) Role Characteristics: An individual faces role related Psychologically, stress results in effects such as tension,
stress because of role conflict or role ambiguity. Role boredom, negative feeling, emotional hurt, anxiety etc. As
conflict arises due to incompatibility of two or more roles, a result, these symptoms finally result in job dissatisfaction.
job tasks, resources, rules, policies etc; role ambiguity Individuals work better under certain stress levels but stress
arises when people are not clear about the actual above that can lead to irritability and mental disturbance. In an
expectations from a role, non-availability of adequate organizational context, the more the stress, the more will be job
information about role etc. dissatisfaction.
3. Behavioural Effects
Researchers studied that stress has significant impact on behaviour of employees. Stress has close relationship with
performance. Higher stress levels lead to low performance levels, increased absenteesm, smooking, consumption of alcohol,
uneasy sleeping and so on.
Q15. What are the coping strategies for stress?
Answer :
Stress has a direct effect on the individual’s personal life and also the organization in which they work. Efforts are to be
made to overcome the negative impact of stress using the following strategies both at individual and organizational level,
1. Strategies to Cope/Manage Stress at Individual Level
The following strategies can be used to cope/manage stress at individual level,
(a) Physical Exercises
Physical exercises such as walking, yoga, swimming etc., help to reduce the anxiety, depression and fear. Physical exercises
help the individuals to focus more on the body/physical health thereby reducing the stress to maximum extent.
(b) Time Management
Lack of proper time management leads to unfinished work, confusion, remarks from management etc., which leads to
stress at work. One can overcome this by using time management tips such as carrying “to do list”, reviewing the list at
the end of the day etc.
(c) Relaxation Techniques
Relaxation techniques such as bio feedback and meditation help to overcome the stress. Meditation relaxes the mind by
negating the negative thoughts. Bio feedback helps to focus on the internal body pressures and to control them by adjusting
the one’s own mental condition in order to reduce the stress, anxiety etc.
(d) Cognitive Therapy
It is a contemporary technique used to overcome stress. In this, lectures and interactive sessions are arranged to help the
employees in,
(i) Recognizing the cognitions of the events at work.
(ii) Identifying the effects of such cognitions on their physiological and emotional responses.
(iii) Evaluating the objective consequences of events at work.
(iv) Replacing the self-defeating cognitions that unnecessarily cause stress.
(e) Other Strategies
The other strategies that are often used to overcome stress include spending time with kids, pets or friends, listening to
music, taking good sleep (Napping and Dozing) enjoying the favourite shows on T.V. etc.
2. Strategies to Cope/Manage Stress at Organizational Level
The following are the strategies that are often used to cope with stress at organizational level,
(a) Sound Organizational Climate
An effective organization climate such as freedom to take decisions, friendly communication along the hierarchy, participative
decision making etc., facilitate the employees to overcome stress. An effective and supportive organizational climate leads
to increased employee morale and confidence.
(b) Role Clarity
Stress is also caused due to the unclarified roles and expectations of the organization. The organizations need to clearly
define and communicate the role of the employees and their expectations from the employees. So that employees will
understand their role and feel confident to meet the expectations of the management. Management should redefine the role
of the employees when identified increased stress in their role.
(c) Job Enrichment
It is a technique used to reduce the monotonous and disinteresting jobs, thereby facilitating the employees to overcome
stress.
(d) Career Planning and Counselling
Career planning and employee counselling are the techniques that guide the employees to overcome personal as well as
professional stress.
(e) Other Strategies/Programmes
Organizations also use number of strategies to manage stress which include training and development, establishing
autonomous work groups, different work schedules, setting up health clubs, offering benefits such as birthday bonus,
transportation subsidy, long service bonus, etc.
Important Questions

Q1. Explain the various types of groups.
Q2. What are the stages of group development?
Q3. Discuss the various factors affecting group performance.
Q4. Discuss the consequences of organizational conflicts.
Q5. What strategies can be used for managing conflicts?
Q6. Define organizational climate. Explain the factors and impact of organizational climate.
Q7. Discuss the process of creating an organizational culture.
Q8. What are the coping strategies for stress?

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L AT ES T

B.Tech : II-Year II-Sem

- Electronic Circuit Analysis

Unit-wise Questions with Solutions

Unit - I Introduction Q1 - Q25 1.1 - 1.22

1.1 Concepts of Management and Organization Q1 1.2

1.2 Nature, Importance and Functions of Management Q2 - Q5 1.2

1.3 System Approach to Management Q6 1.6

1.4 Taylor’s Scientific Management Theory Q7 - Q8 1.6

1.5 Fayol’s Principles of Management Q9 - Q10 1.8

1.7 Social Responsibilities of Management Q12 - Q14 1.11

1.8 Designing Organizational Structures – Basic Concepts

Related to Organization Q15 - Q19 1.12

1.9 Departmentation and Decentralization Q20 - Q22 1.16

1.10 Management By Objectives (MBO) – Meaning, Process and

Concepts Q23 - Q25 1.19

Frequently Asked and Important Questions 1.22

Unit - II Functional Management Q1 - Q29 2.1 - 2.30

2.1 Human Resource Management (HRM) – Definition, Objectives

2.2 Concepts of HRM Q3 - Q4 2.5

2.3 Basic Functions of HR Manager Q5 2.7

2.3.1 Manpower Planning Q6 - Q7 2.7

2.3.2 Recruitment Q8 - Q9 2.8

2.3.3 Selection Q10 2.10

2.3.4 Training and Development Q11 - Q13 2.11

2.3.5 Wage and Salary Administration Q14 - Q15 2.13

2.3.6 Performance Appraisal Q16 - Q18 2.14

2.3.7 Grievance Handling and Welfare Administration Q19 - Q20 2.17

2.3.8 Job Evaluation Q21 - Q24 2.18

2.3.9 Merit Rating Q25 2.23

2.4 Marketing Management – Concepts of Marketing Q26 - Q27 2.25

2.4.1 Marketing Mix Elements Q28 2.27

2.4.2 Marketing Strategies Q29 2.28

Important Questions 2.30

3.1 Strategic Management and Contemporary Strategic Issues Q1 - Q2 3.2

3.2 Mission, Goals, Objectives, Policy, Strategy and Programmes Q3 - Q9 3.3

3.3 Elements of Corporate Planning Process Q10 - Q11 3.8

3.4 Environmental Scanning Q12 - Q13 3.11

3.5 Value Chain Analysis Q14 3.12

3.6 SWOT Analysis Q15 - Q16 3.14

3.7 Steps in Strategy Formulation and Implementation Q17 - Q18 3.15

3.8 Generic Strategy Alternatives Q19 3.17

3.9 Benchmarking and Balanced ScoreCard as Contemporary

Frequently Asked Questions 3.22

Unit - IV Individual Behavior Q1 - Q25 4.1 - 4.22

4.1 Perception – Definition and Perceptual Process Q1 - Q4 4.2

4.2 Impression Management Q5 - Q6 4.6

4.3 Personality Development Q7 4.7

4.3.1 Socialization Q8 4.8

4.5 Change Q12 - Q13 4.11

4.6 Learning Q14 - Q15 4.13

4.6.1 Learning Organization Q16 - Q17 4.15

4.6.2 Reinforcement Q18 4.17

4.7 Motivation – Definition, Process and Motives Q19 - Q20 4.17

4.7.1 Theories of Motivation: Maslow’s Theory of Human

Frequently Asked and Important Questions 4.22

5.1 Group – Definition, Characteristics and Types of Groups Q1 - Q2 5.2

5.2 Stages of Group Development Q3 5.3

5.3 Group Behavior and Group Performance Factors Q4 - Q5 5.4

5.4 Organizational Conflicts – Concept, Reasons for Conflicts,

5.4.1 Strategies for Managing Conflicts Q9 5.8

5.5 Organizational Climate Q10 5.9

5.6 Organizational Culture Q11 - Q13 5.10