Introduction to Management (MB111) : April 2004 - Suggested Answers

Suggested Answers
Introduction to Management – (MB111) : April 2004
1. Answer : (b)
Reason : FW Taylor’s functional foremanship is based on specialization of functions. In this system, eight
persons are involved to direct the activities of workers – four concerned with planning and four
concerned with doing. Hence this runs contrary to Henry Fayol’s unity of command principle,
which means that one worker should receive orders and instructions from only one superior.
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2. Answer : (c)
Reason : (a) In figurehead role, the manager performs activities, which are of ceremonial and symbolic in
nature.
(b) A manager’s leader role involves leading his/her subordinates and motivating them for willing
contributions.
(c) In liaison role, the manager serves as a link between his/her organization and its external
environment.
(d) In monitoring role, the manager constantly collects information about those factors, which
affect his/her activities.
(e) As a spokesperson, the manager represents his/her organization while interacting with others.
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3. Answer : (e)
Reason : Values have all the characteristics stated in the question except option (e). Values are
adaptive which means they are subject to change over a period of time.
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4. Answer : (a)
Reason : The difference between objectives and goals may be drawn in terms of four dimensions: time frame,
specificity, focus, and measurement. The organizational level at which objectives/goals are set has
nothing to do with the distinction between the two.
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5. Answer : (e)
Reason : MBO represents the danger of inflexibility in the organization, particularly when the objectives need
to be changed. In a dynamic environment, a particular objective may not be valid forever. In the
context of revised objectives, changed premises, or modified policies, it’s futile to follow the old
objectives. However, many managers often hesitate to change objectives during a period of time.
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6. Answer : (c)
Reason : Improved effectiveness of performance audit is a benefit of performance budgeting, and not ZBB.
The rest are all benefits of ZBB.
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7. Answer : (c)
Reason : Risk taking tends to be higher in group decision-making because the group is able to share
information in an open environment; members become more familiar with the problem being
discussed; and if the outcome of the decision is negative, it’s easy to pass the buck by the individuals.
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8. Answer : ( c)
Reason : New product lunch is a non-recurring, unstructured (i.e. non-programmed) decision while all the
others are recurring and structured (programmed) decisions.
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9. Answer : (d)
Reason : Linear programming is a mathematical technique for the allocation of limited resources in an
optimal manner. The word ‘linear’ means the relationships handled are those represented by straight
lines. The word ‘programming’ means making decisions systematically. Therefore, LP is the
maximization (or minimization) of a linear function of variables subject to a constraint of linear
inequalities.
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10. Answer : (b)
Reason : Mission statement is a general and enduring statement of the organizational purpose. It implies the
image, which the organization seeks to project.
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11. Answer : (d)
Reason : Corporate strategy addresses what business(businesses) the organization will be operating, how the
strategies of those businesses will be coordinated to strengthen the organization’s competitive
position, and how resources will be allocated among the businesses. Thus, it is concerned primarily
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with the overall scope and direction of the organization.
12. Answer : (c)
Reason : Self-actualization is the need to maximize one’s potential. This is related with the development of
intrinsic capabilities, which lead people to seek situations that can utilize their potential.
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13. Answer : (b)
Reason : Non-verbal communication refers to communication without words. It uses postures, gestures, facial
expressions, etc. to convey messages.
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14. Answer : (a)
Reason : Organization chart shows the major functions/tasks and their respective relationships, the channels
of formal authority, and the relative authority of each manager who is in charge of each respective
function.
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15. Answer : (d)
Reason : Reward power is based on one’s control and allocation of material resources and rewards such as
salaries, wages, commissions, fringe benefits, and amenities.
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16. Answer : (c)
Reason : Job analysis involves the process of identifying the nature of a job (job description) and the qualities
of the likely job holder (job specification). It doesn’t involve fixing the rate of pay for the job.
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17. Answer : (b)
Reason : Narrow spans of management control create tall structures with many levels of management.
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18. Answer : (b)
Reason : Functional structure can result into high degree of specialization because a unit or department is
concerned with only one aspect of total activities. Thus, the organization can employ a greater
variety of skills to achieve high standards of efficiency.
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19. Answer : (c)
Reason : The steps in the process of control include: establishment of control standards, measurement of
performance, comparison between actual performance and standard performance, and correction of
deviations from standards. It doesn’t involve writing reports.
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20. Answer : (e)
Reason : According to Herzberg’s two-factor model, recognition is a motivator while all the others mentioned
in the question are hygiene factors.
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21. Answer : (c)
Reason : Motivation refers to the way in which urges, drives, desires, aspirations, strivings or needs direct,
control, or explain the behavior of human beings. Thus, motivation is basically a need-satisfying
process.
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22. Answer : (e)
Reason : Management By Wandering Around (MBWA) is a practice whereby managers frequently tour work
areas for which they are responsible, talk to the employees, and encourage upward communication.
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23. Answer : (c)
Reason : According to Vroom’s expectancy theory, valence means the strength of an individual’s preference
to a particular outcome. Expectancy is the probability that a particular action/performance will lead
to a particular outcome. It relates efforts to the first-level outcome. Instrumentality is the perceived
likelihood that the first-level outcome will lead to the second-level outcome.
Law of effect and equity are no way related to the expectancy theory.
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24. Answer : (d)
Reason : Job enrichment is a job design approach that upgrades the job-task mix in order to increase
significantly the potential for growth, achievement, responsibility, and recognition. It makes the task
inherently more rewarding, motivating, and satisfying.
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25. Answer : (b)
Reason : Leverage ratios (also known as debt management ratios) assess the extent to which an organization
uses debt to finance investments, as well as the degree to which it is able to meet its long-term
obligations.
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26. Answer : (a)
Reason : When fear and anxiety are responsible for resistance to doing things in a new and different way,
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encouragement and support (facilitation and support) from the management in the form of special training, job
stress counseling, and compensatory time off can be helpful. This method is used when people are
resisting because of adjustment problems.
27. Answer : (e)
Reason : Strategy is the determination of the basic long-term goals and objectives of an enterprise and the
adoption of the course of action and the allocation of resources necessary for carrying out these
goals.
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28. Answer : (b)
Reason : The three elements in terms of which leadership situations can be analyzed are: the quality of leadermember
relationships, task structure, and position power.
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29. Answer : (b)
Reason : Authority in the organization is the power vested in a position (and through it, the person occupying
the position) to exercise discretion in making decisions affecting others, which is accepted by the
subordinates.
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30. Answer : (b)
Reason : Personality refers to the set of characteristics that underlie a relatively stable pattern of behavior in
response to ideas, objects, or people in the environment.
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31. Answer : (c)
Reason : The tendency to place the primary responsibility for one's success or failure either within oneself
(internal locus of control ) or on outside forces (external locus of control) is referred to as locus of
control.
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32. Answer : (b)
Reason : Projection is the tendency to see one's own personal traits in other people.
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33. Answer : (a)
Reason : Contingency approach to leadership describes the relationship between leadership styles and specific
organizational situations.
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34. Answer : (c)
Reason : A key difference between the theories of Fiedler and Hersey and Blanchard is that Fiedler examined
a variety of characteristics, while Hersey and Blanchard focused solely on the individual (the
subordinate’s maturity level i.e. ability and willingness to do a given job).
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35. Answer : (d)
Reason : JS Adam’s equity theory postulates that employees’ satisfaction or dissatisfaction with their jobs
depends on their perceived fairness of the outcomes (rewards) in comparison to the inputs
(qualification, experience, etc.)
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36. Answer : (c)
Reason : Concurrent control is exercised during the operation of a programme. It provides measures for taking
corrective action or making adjustments while the programme is still in operation and before any
major damage is done.
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37. Answer : (c)
Reason : A cash budget estimates cash flows on a daily basis or weekly basis to ensure that the company can
meet its obligations.
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38. Answer : (b)
Reason : Productivity is the ratio of an organization's inputs to its output of goods and services.
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39. Answer : (c)
Reason : Benchmarking is a process whereby companies find out how others do something better than they do
and then try to imitate or improve on it.
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40. Answer : (b)
Reason : Standing plans are plans that used to provide guidance for tasks performed repeatedly within the
organization.
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41. Answer : (d)
Reason : The conditions given in the question warrant that Wintel adopt a matrix organization structure.
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42. Answer : (a) <>
Reason : (a) Linear programming is a mathematical technique used in optimum allocation of resources in
the organization.
(b) Decision tree is a graphical method for identifying alternative actions, estimating probabilities,
and indicating the resulting expected pay-off.
(c) Simulation is the technique of developing a model that represents a real or existing system for
solving complex problems that cannot be readily solved by other techniques.
(d) Waiting-line or queuing model is a mathematical model that describes the operating
characteristics of queuing situations, in which service is provided to persons or units waiting in
line.
(e) Game theory is a technique for determining the strategy that is likely to produce maximum
profits in a competitive situation.
43. Answer : (b)
Reason : (a) Equifinality is a general principle that suggests that open systems can accomplish their tasks
and meet their objectives through different courses of action.
(b) Dynamic homeostasis refers to the process of maintaining the internal balance necessary for
survival by importing needed resources from the environment.
(c) Entropy is the tendency of a system to break down/degrade/become disorganized/get
disintegrated.
(d) Differentiation is the tendency of a system to move towards increased specialization of various
tasks.
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44. Answer : (c)
Reason : (a) Flexi time, a system of flexible working hours, motivates the employees and hence improves
Quality of Work Life.
(b) Job enrichment attempts to design a job in such a way that it becomes more interesting and
challenging so that the jobholder makes meaning out of that. The degree of job enrichment
determines the degree of QWL.
(c) Job enlargement involves performing a variety of jobs or operations at the same time. It does
not motivate an employee because the basic nature of the job remains the same and hence no
improvement in QWL.
(d) Creation of autonomous workgroups helps in creating positive feelings among employees. They
may be given freedom to choose their own teams, etc. which helps improve QWL.
(e) Participation in decision-making, particularly in matters directly concerned with an individual’s
working, has an important bearing on his/her satisfaction and performance. Higher degree of
participation improves QWL.
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45. Answer : (c)
Reason : (a) Work simplification involves teaching workers the concepts of time and motion studies, layout
of work situations, and workflow analysis in order to improve work methods.
(b) Time-event network is a logical extension of the Gantt chart and uses Critical Path Method to
help in planning and controlling operations.
(c) Value engineering involves analyzing the operations of the products or service, estimating the
value of each operation, and modifying that operation so that the cost is lowered.
(d) Total Quality Management (TQM) calls for active participation of all the members at all levels
of the organization in order to ensure its (the organization’s) long-term commitment to
improvement of quality.
(e) A quality circle is a group of people who belong to an organizational area and who meet
regularly to solve the problems they face at work.
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46. Answer : (b)
Reason : (a) The rational decision-making model assumes that managers possess and understand all the
information that is relevant to their decisions. They are also aware of different possible
alternatives, all potential outcomes and ramifications, and hence make optimal decisions.
(b) The incremental model is concerned more about achieving short-run solution of a problem than
making decisions that would facilitate long-term goal accomplishment. This model does not
require managers to process a great deal of information for decision-making.
(c) The satisficing model suggests that the ability of managers to be completely rational in their
decisions is limited by certain factors.
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(d) The garbage can approach to decision-making holds that managers behave in a random fashion
in making non-programmed decisions.
(e) Decision tree is a sophisticated mathematical tool that enables a decision-maker to consider
various alternative courses of action and select the best one.
47. Answer : (d)
Reason : (a) Authority-obedience management assumes efficiency in operations results from arranging
conditions of work in such a way that human elements interfere to a minimum degree.
(b) Team management assumes work accomplishment is from committed people; interdependence
through a common stake in organization purpose leads to relationships of trust and respect.
(c) Country Club management assumes thoughtful attention to needs of people for satisfying
relationships leads to a comfortable friendly organization atmosphere and work tempo.
(d) Impoverished management assumes exertion of minimum effort is required to get work done
and sustain organizational morale.
(e) Organization-man management assumes adequate organization performance is possible
through balancing the necessity to get work done with maintaining the morale of employees at a
satisfactory level.
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48. Answer : (b)
Reason : (a) A knowledge test evaluates the applicant’s knowledge about the company, its competitors and
customers, its products, the target markets and the like.
(b) A work sample test measures practical ability on a job where an applicant completes some job
activity under structured conditions.
(c) An intelligence test explores alertness, comprehension, and reasoning abilities of the
applicants.
(d) A personality test measures characteristics, such as patterns of thoughts, feelings, and
behaviors that are distinctively combined in a particular individual and influence that
individual’s interactions in various situations.
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49. Answer : (e)
Reason : A product structure facilitates growth and diversity of products and services offered by the
organization. The performance of each product line can be compared and analyzed. A product
structure also provides an excellent training ground for managerial personnel. An organization
structure based on geographic division allows a manager to pay special attention to the needs and
problems of local markets.
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50. Answer : (a)
Reason : Authority is vested in organizational positions, not people; authority is accepted by subordinates;
authority flows down.
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51. Answer : (a)
Reason : Halo error is a tendency to rate high or low based on high or low rating on some specific factor.
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52. Answer : (b)
Reason : In this case, planning is done at the divisional level with the assistance provided by the planning
specialists. Hence Runway Robotics is said to be following decentralized planning staff approach.
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53. Answer : (d)
Reason : Brainstorming is a technique used to bring forth many alternative solutions. It involves a group of
people brought together to generate as many novel ideas as possible on a given topic without
evaluating them.
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54. Answer : (a)
Reason : The concept of bounded rationality suggests that the ability of a manager to be completely rational in
making decisions is limited by certain factors viz. inadequate information, time and cost factors,
inability to remember large amounts of information etc.
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55. Answer : (b)
Reason : (a) Participating is appropriate for subordinates with moderate to high maturity who have ability
to do but lack willingness.
(b) Delegating suits subordinates with high maturity i.e. high ability and high willingness.
(c) For subordinates of moderate maturity who have high willingness but lack ability, selling
leadership style is appropriate.
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(d) Subordinates who have low maturity i.e. neither they have neither ability nor willingness to do,
require a telling leadership style.
(e) Forcing is not a leadership style suggested by Hersey and Blanchard.
56. Answer : (b)
Reason : (a) Concurrent control is exercised during the operation of a programme. It provides measures for
taking corrective action or making adjustments while the programme is still in operation and
before any major damage is done.
(b) Feedback control is based on the measurement of the results of an action. Based on this
measurement, if any deviation is found between performance standards and actual performance,
corrective action is taken.
(c) Feedforward control involves evaluation of inputs and taking corrective action before a
particular sequence of operation is completed. Thus, it attempts to eliminate the limitations of
time lag in taking corrective action.
(d) &(e) are made up terms.
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57. Answer : (a)
Reason : Job enlargement involves performing a variety of jobs or operations at the same time. Thus, it
involves horizontal job loading.
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58. Answer : (b)
Reason : Customer divisions are divisions set up to service particular types of clients or customers. Under this
method, activities are grouped according to the customers the organization serves and the service to
different categories of customers is of top priority.
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59. Answer : (a)
Reason : Coercion strategy involves making direct or indirect use of power to pressure change resistors to
conform. Managers who cannot or will not invest the time required by other strategies to overcome
resistance, can force employees to go along with a change by threatening them with termination,
transfer, loss of pay raises or promotions, and the like.
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60. Answer : (d)
Reason : The following are the characteristics of DSS:
(a) Executive decisions are the focal points in DSS.
(b) DSS specializes in easy-to-use software
(c) DSS employs interactive processing.
(d) The control and use of DSS rests with the users and not the central information management
department
(e) DSS is adaptable to change.
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61. Answer : (e)
Reason : A high employee turnover means high costs of recruitment, selection, and training of new employees
due to increased frequency of recruitment.
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62. Answer : (b)
Reason : Organizational culture promotes observed behavioral regularities through the use of common
language and rituals. Thus, it provides shared meaning, which ensures that all the employees are
headed in the same direction.
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63. Answer : (a)
Reason : Directive leadership style has a positive effect on satisfaction and expectancies of subordinates
working on unstructured tasks. All the other statements are true of the path- goal theory of
leadership.
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64. Answer : (b)
Reason : (a) Survey feedback lets people know where they stand in relation to others on important
organizational issues so that constructive problem solving can take place.
(b) In process consultation, the consultant observes the group and gives feedback regarding
dysfunctions in such areas as decision-making, handling of conflicts, and communication
patterns. The main aim of this technique is to help group members gain the skills they need to
identify and resolve group dynamics issues on their own.
(c) Team building aims at helping work groups become effective at task accomplishment. The
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consultant helps in assessing group tasks, member roles and strategies for accomplishing work tasks.
(d) Third-party intervention is concerned with helping individuals, groups, or departments resolve,
through problem solving and conciliation, serious conflicts that may be caused by suboptimal
interpersonal relations or may relate to specific work issues.
(e) Techno structural activities are intended to improve work technology and/or organization
structure.
65. Answer : (d)
Reason : Both BARS and graphic rating scales list a number of factors, including general behaviors and
characteristics, on which an employee is rated by the supervisor. In Graphic rating scales, the
supervisor rates individuals on each factor, using a scale that typically has five grades. BARS contain
sets of specific behavior that represent gradations of performance used as reference points (or
anchors) for rating employees on various job dimensions.
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66. Answer : (a)
Reason : The assumptions given in the question describe expectancy theory.
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67. Answer : (b)
Reason : The organizational features mentioned in the question describe bureaucratic organization.
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68. Answer : (b)
Reason : In a matrix structure, a subordinate reports to two superiors – functional head and project/divisional
head. In other words, it violates the principle of unity of command.
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69. Answer : (a)
Reason : A transformational leader identifies the individual abilities of his/her employees and stimulates them
toward higher levels of performance.
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70. Answer : (b)
Reason : (a) Forecasting manpower demand implies how many people with what abilities the organization
will need in the foreseeable future to remain in operation. While forecasting manpower demand,
factors such as expected growth of the organization, budget constraints, and introduction of new
technology, need to be considered.
(b) A skills inventory is a computerized database containing basic information about each
employee that can be used to assess the availability of candidates for meeting current and future
human resource needs. It typically contains information regarding each employee’s knowledge,
skills, experience, interests, performance, and relevant personal characteristics. A skills
inventory is one of the means of assessing internal labor supply, which is one way of
forecasting manpower supply.
(c) Replacement training is a means of identifying potential candidates to fill specific managerial
positions.
(d) Succession planning is a means of identifying individuals with high potential. It ensures that
individuals receive appropriate training and job assignments aimed at their long run growth and
development.
(e) Human resource actions refer to matching of projected human resource needs with projected
availability of human resources, which provides the basis for taking various actions to ensure
that supply will equal demand at the time specified.
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71. Answer : (c)
Reason : If Managers and subordinates hold theory Y assumptions there is a high likelihood of success. If
they hold theory X assumptions there is a high likelihood of failure.
When managers hold theory X assumptions while the subordinates’ attitudes and behaviors fit into
theory Y, the success or failure of MBO program depends on who changes. Success is ensured if the
managers change their assumptions from theory X to theory Y, failure will follow if subordinates
change their attitudes and behaviors from theory Y to theory X.
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72. Answer : (b)
Reason : Risk is a situation where the decision-maker has incomplete information about available alternatives
but has a good idea of the probability of particular outcomes associated with each alternative. Option
(a) is known as certainty and option (c) is known as uncertainty.
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73. Answer : (c)
Reason : According to Graicunas’ principle the number of relationships = n (2n-1 + n-1), where n is the number
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of subordinates.
If n = 5, the number of relationships is 100.
74. Answer : (b)
Reason : The theories proposed by Alderfer (Existence needs), Maslow (Physiological needs) and Herzberg
(Hygiene factors) take account of physiological needs to explain the motivation. But, Mc Clelland’s
Acquired Needs theory ignores physiological needs as one of the factors of motivation.
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75. Answer : (d)
Reason : Hersey and Blanchard’s Situational Leadership Model recommends a dynamic and flexible
leadership style rather than static style and is based on the premise that the leaders need to alter their
behaviors depending on one major situational factor – the readiness of followers.
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76. Answer : (b)
Reason : In this case Richard would be considered as having an external locus of control, which is thinking
that what happens to them is a result of fate, chance, luck or the behavior of the people Personality
variables such as ego strength have an impact on an individual’s ethical behavior. The strength of a
person’s convictions is referred to as ego strength. People with more ego strength tend to do what
they think is right. People with low ego strength show a lesser consistency between moral judgment
and moral actions where as an intuition is an innate belief about something without conscious
consideration. An individual with an internal locus of control believes that he or she has control over
his or her future.
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77. Answer : (b)
Reason : The ethical guideline “ Primum Non-Nocere” for managers denote above all do no harm whereas
allow room for participation advocates soliciting the participation of stakeholders rather than
paternalism. Upholding human dignity is giving due importance to the element of human dignity and
treating people with respect, Obeying the law defines minimum ethical standards in a given areas of
practice, and telling the truth is to build and maintain long-term trusting and win-win relationships
with relevant stockholders.
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78. Answer : (e)
Reason : If a group of Afro- American female managers meet once a month to discuss possible career paths
within their organization, this is an example of an interest group
Nominal group members are generally used to generate creative and innovative alternatives or ideas.
Delphi groups is a form of group decision making which aims to achieve a consensus of expert
opinion. Interacting form is the most common form of group decision making. It is decision-making
group in which members openly discuss , argue about, and agree on the best alternative. A quality
circle is a small group of operations employees who periodically brainstorm on how to increase the
firm’s output, improve quality, or improve the efficiency of the workplace.
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79. Answer : (d)
Reason : A team has a common purpose and long-term existence and have an approach to hold themselves
mutually accountable. Any congregation of individuals is called a group. An alliance is relatively
temporary group of persons. A federation is one which the constituents (members) act independently,
though bound by a common goal. Cooperation is extending help to other members of a group
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80. Answer : (a)
Reason : The stage of Kurt Lewin's change model where employees need to be helped to integrate changed
attitudes and behaviors into their normal ways of doing things is called Refreezing. Refreezing is
ensuring that the individual, after change, will not revert back to his old ways of doing things.Un
freezing is the process of preparing individuals to accept change. Changing is the actual process of
introducing change which follows unfreezing. Moving is shifting away from existing behavior to
new behavior
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81. Answer : (c)
Reason : If Boeing Aerospace Co. has difficulty communication with the British Air force because of the
abbreviations used by the British Military, this is a problem in Semantics. (a)The grapevine is an
informal communication channel. (b)A message that is generated by the receiver in response to the
sender’s original message is known as feedback.(d) Decoding is the interpretation and translation of
a message into meaningful information. (e) Encoding is the process, in communication, of translating
the intended meaning into words and gestures.
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82. Answer : (d)
Reason : A small group gathered in the conference room to discover the impact they had on others, to explore
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and express their feelings, and to learn more about them. This Organization Development (OD) application
called as sensitivity training. Sensitivity training is the process of group dynamics in laboratory
training that influences a T-group participant’s behavior. (a) Team building is aimed at helping work
groups become effective at task accomplishment. .(b)Hostile confrontation is the reverting back of
employees for the attempted changes (c)A strategic intervention is a systematic attempt to correct an
organizational deficiency uncovered through diagnosis. (e)Process consultation is concerned with the
impersonal relations and dynamics operating in work groups.
83. Answer : (c)
Reason : Mr. Jackson is good at conceptual skills which refer to the ability to think and conceptualize abstract
situations. It is the ability to understand and coordinate the full range of corporate objectives and
activities. (a)Technical skills include knowledge of and proficiency in activities involving method,
process and procedures. (b) Design skills are the ability to solve problems in ways that will benefit
the enterprise. (d)Human skills are the ability to work well with other people both individually and in
a group. (e) PR skills are the skill the manager maintains with his subordinates and people related to
the business.
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84. Answer : (d)
Reason : Corporate culture is the behavioral patterns within an organization that are adopted by each new
generation of employees. Corporate culture is not just built overnight. Hence all other options (a),
(b), (c) and (e) are true.
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85. Answer : (b)
Reason : Advertisements for products and services such as life insurance policies, mouthwash, and deodorants
play upon fear. By showing the unfortunate consequences that a consumer faces if he doesn’t use the
service or product, advertisers force the consumers to purchase the product or service. Such ads use
Coercive power. This is the power to influence behavior through punishment or by withholding
rewards.(a) Legitimate power stems from a member’s perception that the group has the legitimate
right to influence him (c) Expert power results from the expertise gained in due course of time either
by an individual or a group.(d)Referent power is the power that results from being admired,
personally identified with, or liked by others.(e) Reward power is based on the perception one has
about another’s ability to reward him.