Introduction to Management-I (MB111): July 2006:Suggested Answers

Suggested Answers Introduction to Management-I (MB111): July 2006

1. Answer : (c)
Reason : MBO (Management By Objectives) is the process of joint setting of goals/objectives by the superior and the subordinate, and clarifying on the objective itself.
The various steps in the MBO Process are:
(i) Develop overall organizational goals.
(ii) Clarify organizational roles.
(iii) Establish specific goals for various departments, subunits and individuals.
(iv) Formulate action plans.
(v) Implement and maintain self-control.
(vi) Do periodic review.
(vii) Do performance appraisal.
Hence, from above discussion, we can infer that option (c) is correct.
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2.
Answer : (b)
Reason : Decentralization is a function of how much decision-making authority is pushed down to lower levels in the organization.
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3.
Answer : (c)
Reason : The fact that managers make consistent, value-maximizing choices within specified constraints is known as rational decision-making.
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4.
Answer : (a)
Reason : Stage 1 is a traditional structure and follows the unity of command principle.
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5.
Answer : (e)
Reason : Management is best understood as a process of reaching organizational goals, utilizing people and other resources.
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6.
Answer : (d)
Reason : The eight key result areas in which Peter Drucker advises managers to set strategic goals include market standing, innovation, human resources, financial resources, physical resources, productivity, social responsibility, and profit requirements. Inventory control is not included.
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7.
Answer : (c)
Reason : When a planning exercise is implemented in production cycle, it is controlling and guiding the work schedules that helps in reaching the desired goals. Option (c) is correct answer.
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8.
Answer : (a)
Reason : Strong coordination among functions in R&D, product development and marketing is a ‘common organizational requirement’ with respect to Porter’s differentiation strategy.
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9.
Answer : (d)
Reason : A statement of manager intuition is generally not an important component of a plan.
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10.
Answer : (b)
Reason : Programmed decision making doesn’t pay much attention to development of alternatives as the solution already exists.
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11.
Answer : (b)
Reason : Managerial Vacuum is created as a functional structure provides a fairly narrow training base for managers because they tend to move up within one function. This limits their knowledge to their area of specialization.
Hence from above discussion, we can infer that option (b) is correct.
Options (a), (c), (d) and (e) are all advantages of Functional Departmentation.
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12.
Answer: (e)
Reason : The factors that determine an effective span of control are:
I. Clarity and Delegation of Authority.
II.Use of Objective Standards.
III. Rate of Change.
Hence, from above discussion, we can infer that option (e) is correct.
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13.
Answer: (a)
Reason : Anil, in the example given, is operating under conditions of uncertainty.
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14.
Answer: (a)
Reason : Volunteerism refers to the involvement of employees in civic activities.
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15.
Answer: (a)
Reason : A centralized structure is more suitable when the product line is homogeneous.
Hence, from above discussion, we can infer that option (a) is correct.
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16.
Answer: (a)
Reason : The behavioral approach began with the Hawthorne studies.
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17.
Answer: (c)
Reason : Delegate means to grant or confer. Thus, a manager grants or confers on subordinates certain tasks and duties along with sufficient authority, to accomplish these.
Explaining the relevance of delegated tasks to larger projects or to department or organization goals is most likely to increase the effectiveness of delegation.
Hence, from above discussion, we can infer that option (c) is correct.
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18.
Answer: (b)
Reason : The strength of the functional structure is that it gains advantages due to work specialization.
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19.
Answer: (b)
Reason : Game Theory is a decision-making technique, which involves selecting the best strategy, taking into consideration one's own actions and the actions of one's competitors. Minimizing the maximum loss (minimax) and maximizing the minimum gain (maximini) are the two concepts used in the Game Theory.
Hence, from above discussion, we can infer that option (b) is correct.
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20.
Answer: (a)
Reason : The business level strategies described by Michael E. Porter are also referred to as Generic strategies.
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21.
Answer: (b)
Reason : Equifinality implies reaching the same result by different means.
Hence, from above discussion, we can infer that option (b) is correct.
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22.
Answer: (d)
Reason : A procedure is a series of interrelated sequential steps that can be used to respond to a well-structured problem. (a) Rules are statements of actions that must be taken or not taken in a given situation. (b) A policy is defined as a general guideline for taking an action. (c) A budget is a statement that outlines the expected results of a given future period in numerical terms. (e) Norms are standards set by a group that regulate and foster uniformity in member behaviors.
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23.
Answer: (d)
Reason : In monitoring stage of the decision-making process, actual performance is compared with the planned performance. Feedback is usually used in monitoring stage.
Hence, from above discussion, we can infer that option (d) is correct.
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24.
Answer: (b)
Reason : Social audit is a technique for measuring the social impact of an organisation in relation to its stakeholders. Hence, from above discussion, we can infer that option (b) is correct.
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25.
Answer : (d)
Reason : Using the BCG matrix requires considering market shares and growth of markets in which products are selling
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26.
Answer : (c)
Reason : Well defined hierarchy of authority is a principle that advocates the need for designing a hierarchy of authority where individuals work in co-ordination and contribute to the achievement of organizational goals. (c) is correct answer.
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27.
Answer : (a)
Reason : Operational decision is most likely to be the type of decision the members of Jim's team make.
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28.
Answer : (d)
Reason : A standing plan is used for activities that occur regularly over a period of time and are predetermined courses of action developed for repetitive situations. Hence, statement I is not true.
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29.
Answer : (a)
Reason : The general type of managerial role identified by Mintzberg that includes the specific roles of entrepreneur, disturbance handler, resource allocator, and negotiator, is decisional role.
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30.
Answer : (e)
Reason : All the stated reasons cause line-staff conflict as seen from a line personnel perspective.
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31.
Answer : (d)
Reason : The major difference in skill requirements between middle and top managers is that top managers generally require higher level conceptual skills but less technical skills than middle managers. Hence, we can infer that option (d) is correct.
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32.
Answer : (d)
Reason : After all factors have been determined, weights have been assigned, and alternatives have been identified, the next step in decision-making is to implement the alternative.
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33.
Answer : (b)
Reason : Organizational Culture is the collection of shared beliefs, values, rituals, stories, myths and specialized language that foster a feeling of community among organization members.
It is distinctive in nature, as each organization has its own management philosophy, mission and objectives etc.
Hence from above discussion, we can infer that option (b) is not a characteristic of Organizational Culture.
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34.
Answer : (b)
Reason : The following are organizational problems/reasons for avoiding planning:
I. Faulty reward schemes.
III. The ‘get stuck in’ culture.
The following are individual reasons for avoiding planning:
II. Experience.
IV. Resistance to change.
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35.
Answer : (a)
Reason : Economies of scale and the ability to coordinate interdependent projects is the primary strength of the matrix structure.
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36.
Answer : (c)
Reason : Geographic Departmentation is designed to serve different geographic areas.
It helps managers get extensive knowledge of mostly diverse activities.
Hence, from above discussion, we can infer that option (c) is false regarding Geographic Departmentation.
Options (a), (b), (d) and (e) are all true regarding Geographic Departmentation.
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37.
Answer: (d)
Reason : As per Mintzberg, Spokesperson managerial role involves transmitting selected information to outsiders.
Hence, from above discussion, we can infer that option (d) is correct.
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38.
Answer: (c)
Reason : Functional authority is the authority to control the functions or roles of other departments, related to specific tasks.
Hence, we can infer that option (c) is correct.
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39.
Answer: (d)
Reason : Management science approach does not include the philosophy that individual work is better than teamwork.
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40.
Answer: (d)
Reason : The Gantt chart used today in production planning areas of many organizations, is a method of comparing the actual and planned performances. It was the first visual device to maintain production control. Option (d) is the correct answer.
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41.
Answer: (c)
Reason : Decentralization facilitates product diversification. Therefore, option (c) is the answer.
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42.
Answer: (d)
Reason : Allowing those impacted by the outcome to participate in the process is important in effectively implementing the chosen alternative in the decision-making process.
Hence from above discussion, we can infer that option (d) is correct.
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43.
Answer: (b)
Reason : Strategic Management is the process by which managers find out ways to achieve a competitive advantage for the organization's product or service offerings.
Hence, from above discussion, we can infer that option (b) is correct.
Options (a), (c), (d) and (e) are all incorrect regarding Strategic Management.
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44.
Answer: (c)
Reason : In an organic organization a large amount of collaboration occurs and decision-making authority is decentralized. There are few rules, and duties are adaptable.
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45.
Answer: (a)
Reason : Planning gives direction, reduces the impact of change, minimizes waste and redundancy, and sets the standards used in controlling.
Hence from above discussion, we can infer that option (a) is correct.
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46.
Answer: (d)
Reason : Organizing is a continuous process of determining
I. Which tasks are to be performed?
III. How tasks can be grouped into jobs and various units?
IV. What are the authority and reporting relationships?
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47.
Answer: (d)
Reason : Andrew Ure and Charles Dupin advocated management education.
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48.
Answer: (e)
Reason : The following are characteristics of Weber’s Ideal bureaucracy:
II. Specialization of labor.
IV. Well-defined hierarchy.
V. Career advancement based on merit.
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49.
Answer: (c)
Reason : The strengths and weaknesses of each alternative become obvious in “analyzing the alternatives” stage of the decision-making process.
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50.
Answer : (b)
Reason : Porter’s five competitive forces are:
(i) Intensity of rivalry
(ii) Bargaining power of suppliers
(iii) Bargaining power of customers
(iv) Threat of new entrants
(v) Threat of substitutes
Threat of technological advances is not one of Porter’s five competitive forces.
Hence, from above discussion, we can infer that option (b) is the answer.
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51.
Answer : (b)
Reason : Planning is a primary function as it precedes the execution of all other management functions. So it is not a secondary function.
Hence from above discussion, we can infer that option (b) is not a characteristic of planning.
Options (a), (c), (d) and (e) are all characteristics of planning.
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52.
Answer : (d)
Reason : Duplication of activities and resources is a major disadvantage of the divisional structure.
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53.
Answer : (d)
Reason : Sometimes cohesive “in groups” let the desire for unanimity override sound judgement when generating and evaluating alternative courses of action.
Hence, from above discussion, we can infer that option (d) would generally not be considered an advantage of group decision-making.
Options (a), (b), (c) and (e) are all advantages of group decision-making.
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54.
Answer : (c)
Reason : Division of labor tends to result in specialized work.
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55.
Answer : (b)
Reason : The social responsiveness of an organization can be measured on the basis of fair treatment of employees; fair pay and safe working conditions.
Hence from above discussion, we can infer that option (b) is correct.
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56.
Answer : (e)
Reason : The repetitive process by which an organization receives inputs from its environment, processes them and produces the output required by a system is calledCycle of events.
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57.
Answer : (e)
Reason : Legitimate power is the manager’s ability to influence behaviour because of the manager's formal position within the organization. The extent of power is influenced by the type of organization.
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58.
Answer : (e)
Reason : Strategic control system is not one of the elements that require to be synchronized in caryying out strategic plans. It is important in maintaining strategic control.
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59.
Answer : (b)
Reason : The following is/are mechanisms for ethical management:
I. Code of ethics.
II. Ethics hot line.
The following are ethical guidelines for managers and not mechanisms for ethical management:
III. Adhering to golden rule.
IV. Allowing room for participation.
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60.
Answer : (a)
Reason : A staff manager is a specialist not a generalist. A line manager is a generalist.
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61.
Answer: (d)
Reason : Planning involves defining the organization’s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate organizational work.
Hence from above discussion, we can infer that option (d) is correct.
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62.
Answer: (d)
Reason : A plan that comprises general guidelines, does not lock managers into a specific course of action and does not have defined objectives is referred to as a directional plan.
Hence, from above discussion, we can infer that option (d) is correct.
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63.
Answer: (c)
Reason : Immoral Management not only ignores ethical concerns, it is also actively opposed to ethical behaviour. A characteristic of Immoral Management is that managers show lack of concern about others' desire to be treated fairly. Hence from above discussion, we can infer that option (c) is correct. Options (a), (b), (d) and (e) are all characteristics of Moral Management.
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64.
Answer: (a)
Reason : Programmes and budgets are examples of single-use plans.
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65.
Answer: (b)
Reason : Strategic plan is used to establish overall objectives for the organization and position the organization in terms of its environment.
Facts for strategic planning are generally more difficult to gather than facts for tactical planning.
Hence, from above discussion, we can infer that option (b) is correct.
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66.
Answer: (c)
Reason : Obsolete facilities are a potential resource weakness not a threat.
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67.
Answer: (d)
Reason : The major difference between a Nominal Group technique and Delphi technique is that Nominal Group members are brought together for discussions on the problem whereas Delphi Group involves anonymous participation of experts. Other options (a), (b), (c) and (e) are not correct.
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68.
Answer: (a)
Reason : Pre-conventional Level of Moral Development is influenced exclusively by personal interest. It is concerned with following rules only when it's of interest.
Hence from above discussion, we can infer that option (a) is correct.
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69.
Answer: (c)
Reason : Planning is defined as the process by which managers set missions and objectives, assess the future and develop courses of action to accomplish these objectives.
Management that does a good job of planning will have direction and purpose, and planning is likely to minimize wasted effort. All this can occur, even if the objectives being sought are missed.
Hence, from above discussion, we can infer that option (c) is a common misconception about planning.
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70.
Answer: (d)
Reason : Management by objectives is a method under which a manager is given specific objectives to achieve and is evaluated according to the accomplishment of these objectives.
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71.
Answer: (b)
Reason : Group decisions tend to be more accurate than individual decisions due to pooling o f knowledge and expertise.
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72.
Answer : (a)
Reason : According to the Scientific Management School of Thought, Work Methods Study is defined as the systematic, objective and critical examination of all the factors governing the operational efficiency of a specified activity to bring about improvement.
Hence, from above discussion, we can infer that option (a) is correct.
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73.
Answer : (c)
Reason : It aids in scanning the business environment is not a strength of a ‘management by objective’ (MBO) program.
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74.
Answer : (b)
Reason : Efficiency is not one of the structural methods for promoting innovation, that help in implementing strategies and organizational goals. Efficiency is an organizational goal.
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75.
Answer : (a)
Reason : Restructuring involves major changes in organizational structure and changes in some major components of the organization
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76.
Answer : (e)
Reason : Programmed Decisions are those involving simple, common, frequently occurring problems that have well-established and understood solutions. These decisions are made in routine, repetitive, well-structured situations through the use of predetermined decision rules, such as policies, procedures and rules.
Hence, from above discussion, we can infer that option (e) is correct.
Options (a), (b), (c) and (d) are all examples of Non-Programmed Decisions.
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77.
Answer : (d)
Reason : The following are features of competitive advantage:
I. It is strongest when it is extremely difficult for or expensive for competitors to copy
II. It is not possible for a firm to build a competitive advantage over all other competitors
III. It should ultimately create increased value for customers
IV. It is generated on the basis of organizational competencies
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78.
Answer : (e)
Reason : The following are steps that can help overcome problems associated with the MBO process:
I. Motivational assessment.
II. Group action.
III. Appraisal of appraisers.
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79.
Answer : (d)
Reason : Team members must be given adequate authority and power. Thereofre, option (d) is not true.
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80.
Answer : (e)
Reason : In departmentation by time, workers may concentrate on narrow and specified technical aspects rather than the total system. Therefore, option(e) is the answer.
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81.
Answer : (b)
Reason : The limitation of the sociotechnical systems approach to management is that it places emphasis only on blue-collar and lower level office work.
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82.
Answer : (c)
Reason : Matrix structure combines the advantages of the functional specialization with the focus and accountability of product departmentalization.
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83.
Answer: (a)
Reason : In Departmentation by Process or Equipment, activities are grouped on the basis of processes or equipment.
This type of Departmentation enables an organization to get the benefits of specialization, and makes optimum maintenance of resources and equipment.
Hence from above discussion, we can infer that option (a) is false regarding Departmentation by Process or Equipment.
Options (b), (c), (d) and (e) are all true regarding Departmentation by Process or Equipment.
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84.
Answer: (b)
Reason : An information organization main characteristics are: (a) unofficial, (b) power and politics, (c) Person, (d) Norms and sanction. Option (b) is the correct answer.
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85.
Answer: (d)
Reason : Business level strategies are developed by heads of specific business units and not top management. Hence, statement (III) is not true about business level strategies. All other statements are true.
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86.
Answer: (e)
Reason : As per the classical ideas of management thought, Fayol stressed the need of managerial activities. So, (e) is correct answer.
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87.
Answer: (d)
Reason : Organization Chart is a vital tool for providing information about organizational relationships.
It shows authority relationships and neglects significant informal and informational relationships
Hence from above discussion, we can infer that option (d) is false with respect to Organization Chart.
Options (a), (b), (c) and (e) are all true with respect to Organization Chart.
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88.
Answer: (c)
Reason : Human skills are important at all levels in the organization.
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89.
Answer: (c)
Reason : Planning can be defined as the process by which managers set missions and objectives, assess the future, and develop courses of action to accomplish these objectives.
However, it need not increase the amount of time available for other managerial functions.
Hence, from above discussion, we can infer that option (c) is correct.
Options (a), (b), (d) and (e) are all potential advantages of planning.
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90.
Answer: (e)
Reason : Stars generate considerable income and require investment of more funds for future growth.
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91.
Answer: (d)
Reason : The preference or utility theory is based on the belief that individual attitudes toward risk vary with events, with people and positions.
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92.
Answer: (d)
Reason : Raj, Ramesh and Rajesh are all making decisions about how to approach the team project and they will probably rely on Bounded rationality, which is defined as a concept that suggests that the ability of managers to be perfectly rational in making decisions is limited by such factors as cognitive capacity and time constraints. (a) In rational decision making, managers possess and understand all the information that is relevant to their decisions at the time they make them. (b) Break-even analysis is a measure by which the level of sales, which is necessary to cover all fixed costs, can be determined. (c) Intuition is "direct perception of truth, fact, etc., independent of any reasoning process; immediate apprehension." (e) Garbage can model is a nonrational model of managerial decision-making stating that managers behave in virtually a random pattern in making nonprogrammed decisions.
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93.
Answer : (d)
Reason : Allow the person to proceed with the task without interferenceis included in the ‘monitoring progress’ stage. Options (a), (b) and (c) are included in the briefing stage whereas option (e) is included in the evaluation stage.
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94.
Answer : (b)
Reason : Ego Strength is the strength of a person’s convictions. Hence from above discussion, we can infer that option (b) is correct.
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95.
Answer : (b)
Reason : Departmentation by simple numbers was used in classifying tribes, clans, and armies.
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96.
Answer : (d)
Reason : Whistle-blowing is the phenomenon in which an employee reports a real or perceived wrongdoing under the control of his or her employer, to those who may be able to take remedial action.
Hence from above discussion, we can infer that option (d) is correct.
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97.
Answer : (d)
Reason : The following is/are factor(s) which force an organization to reorganize:
I. Merger or acquisition.
II. Government policies.
IV. Labor union demands.
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98.
Answer : (d)
Reason : Customer Departmentation is done to service particular types of clients or customers. Coordination between sales and other functions becomes difficult, as Customer-based Departmentation is applicable only to the sales function.
Hence from above discussion, we can infer that option (d) is not true about Customer Departmentation.
Options (a), (b), (c) and (e) are all true about Customer Departmentation.
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99.
Answer : (b)
Reason : Boundary spanningsub-system consists of jobs that require the interaction of personnel with the general environment.
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100.
Answer : (d)
Reason : Integrating forward or backward is a potential opportunity not a resource strength.