Introduction to Management-I (MB111): April 2006

Question Paper
Introduction to Management-I (MB111): April 2006

• Answer all questions.
• Marks are indicated against each question.
1. Ethical decision-making can fall under any of the three levels of moral development. Which of the
following stages describes the ‘principled level’ of moral development?’
I. Following rules only when it is in one’s immediate interest.
II. Valuing rights of others and upholding absolute values and rights, regardless of the majority's
opinion.
III. Sticking to rules to avoid physical punishment.
IV. Living up to what is expected by people who are close to oneself.
V. Following self-chosen ethical principles even if they violate the law.
(a) Both (I) and (II) above (b) Both (II) and (V) above
(c) Both (III) and (IV) above (d) (I),(III) and (IV) above
(e) (II), (III) and (V) above.
<>
2. A careful analysis of arguments ‘for’ and ‘against’ the involvement of organizations in social welfare is
necessary to determine whether an organization should implement social initiatives. The belief that
improvement of the social environment benefits both society and business relates to which of the
following arguments ‘for’ social responsibility of business?
(a) Public expectation
(b) Business is a part of society
(c) Balance of responsibility and power
(d) Favorable public image
(e) Prevention is better than cure.
<>
3. All of the following are characteristics of organizational culture except
(a) Observed behavioral regularities (b) Distinctiveness (c) Uniform strength
(d) Dominant and stable values (e) Member identity.
<>
4. Which of the following is not a way by which business firms can fulfill their obligations towards their
customers?
(a) Charging reasonable prices for their products
(b) Ensuring provision of standardized and quality goods and services
(c) Abstaining from unethical practices
(d) Ensuring easy availability of goods and services
(e) Creating a long-term and healthy relationship with creditors.
<>
5. Anusheel Gupta is considering the following questions as he approaches a planning period: (a) What
industries should we get into or out of? (b) In which businesses should the corporation invest money?
Which of the following levels would be appropriate to address the questions facing Mr. Gupta?
(a) Corporate level (b) Operational level (c) Business level
(d) Functional level (e) Departmental level.
<>
6. An organization can be described as an open system because it
I. Has interrelated and interdependent parts (departments and divisions) that function as a whole.
II. Gets inputs from and distributes outputs to the external environment.
III. Impacts, and is impacted by, the external environment.
IV. Is perfectly deterministic and predictable.
(a) Only (II) above (b) Both (I) and (II) above
(c) Both (III) and (IV) above (d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.
<>
7. Which kind of organization structure represents a form of departmentalization that adopts both the
functional and the divisional structures at the same level of management?
<>
2
(a) Matrix (b) Functional (c) Hybrid
(d) Product (e) Divisional.
8. Which of the following statements is/are true about delegation of authority?
I. Delegation establishes a pattern of authority between superiors and sub-ordinates.
II. Effective managers perform most of the tasks themselves and delegate few tasks.
III. Delegation becomes important as the organization grows.
IV. A manager has to delegate authority if his span of control crosses a certain limit.
(a) Only (I) above (b) Both (I) and (II) above
(c) Both (III) and (IV) above (d) (I), (III) and (IV) above
(e) (II), (III) and (IV) above.
<>
9. Which of the following organizations, consists of the unofficial but influential means of
communication, decision-making, and control that are part of the habitual way things get done in the
organization?
(a) Informal (b) Formal (c) Vertical
(d) Horizontal (e) Functional.
<>
10. Decision-making deals with situations of (i) certainty, (ii) risk and (iii) uncertainty. Which of the
following is a characteristic of decision-making under uncertainty?
(a) The decision-maker has complete information about available alternatives, and has a good idea of
the probability of particular outcomes for each alternative
(b) The decision-maker has complete information about available alternatives, but has no idea of the
probability of particular outcomes for each alternative
(c) The decision-maker has incomplete information about available alternatives, but has a good idea
of the probability of particular outcomes for each alternative
(d) Future environment is unpredictable and everything is in a state of flux
(e) The decision-maker is not aware of all alternatives, the risks associated with each, or the
consequences of each alternative, or their probabilities.
<>
11. Bounded rationality differs from the rational model, in that decision makers
(a) Act irrationally (b) Focus on easy-to-find choices
(c) Seek advice from employees (d) Seek advice from experts
(e) Focus on constraints.
<>
12. A reason for organizations to scan the environment is to
(a) Analyze their internal weaknesses
(b) Eliminate the need for change
(c) Reverse their engineering
(d) Be able to establish required controls
(e) Identify and interpret changes or conditions that could affect the success of their activities and
their revenues.
<>
13. Which of the following decision-making models emphasizes short-run solution of a problem rather than
long-term goal accomplishment?
(a) Rational model (b) Incremental model (c) Game theory
(d) Garbage-can model (e) Decision tree.
<>
14. Which of the following is/are pre-judgement(s) of the ‘Hawthorne Studies?’
I. Perceived meaning and importance of the work determine the output.
II. Job performance depends on the individual worker.
III. Workplace culture sets its own production standards.
(a) Only (I) above (b) Only (II) above
(c) Only (III) above (d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
<>
15. If a manager develops a new idea and gives a plan for development of a new product in his workplace,
then he is carrying out which of the following roles?
(a) Liaison (b) Entrepreneur (c) Disseminator
(d) Disturbance handler (e) Negotiator.
<>
3
16. Which of the following is the employer-employee authority relationship that follows the chain of
command?
(a) Staff authority (b) Referent power (c) Line authority
(d) Functional authority (e) Expert power.
<>
17. Which of the following steps in the planning process should be completed before the others can be
addressed?
(a) Putting plans into action
(b) Stating organizational objectives
(c) Listing alternative ways of reaching objectives
(d) Developing premises on which to base each alternative
(e) Evaluating alternatives by weighing them in the light of premises and goals.
<>
18. Which of the following is a factor that affects delegation of authority from the delegant’s aspect?
(a) Love for authority (b) Fear of exposure
(c) Experiences of the superior (d) Personality traits of the superior
(e) Fear of criticism.
<>
19. Standing plans that furnish broad guidelines for channeling management thinking in specified direction
are called
(a) Single-use plans (b) Programs (c) Procedures
(d) Policies (e) Rules.
<>
20. Which of the following is/are advantage(s) of a functional structure?
I. Permits growth and diversity of products and services.
II. Power and prestige.
III. Clarity about career paths.
IV. Furnishes measurable training ground for general managers.
(a) Only (I) above (b) Both (I) and (IV) above
(c) Both (II) and (III) above (d) (I), (II) and (III) above
(e) (II), (III) and (IV) above.
<>
21. Various moderating variables determine whether a manager will act in an ethical or unethical manner.
Which of the following individual characteristics indicates the degree to which people believe they are
masters of their own fate?
(a) Perception (b) Value (c) Attitude
(d) Locus of Control (e) Ego Strength.
<>
22. Power based upon identification with a person who has desirable resources or personal traits is known
as
(a) Coercive power (b) Legitimate power (c) Expert power
(d) Referent power (e) Reward power.
<>
23. Departmentation by ‘time’ is one of the oldest forms of departmentation, generally used at lower levels
of the organization. Which of the following is not an advantage of departmentation by ‘time?’
(a) It aids efficient utilization of manpower
(b) Round-the-clock services can be rendered
(c) It mostly results in improved coordination and communication
(d) It results in a continuous cycle without interruption
(e) Expensive equipment can be used more than eight hours a day.
<>
24. If Coca-Cola wished to examine its general environment before constructing its business strategy, the
company would explore all of the following environments except
(a) Sociocultural (b) Knowledge (c) Global
(d) Economic (e) Legal/political.
<>
25. Many sophisticated techniques or tolls are useful in decision-making. Which of the following is a tool
that helps managers figure out how much to produce and points out the relationship between revenues,
costs, and profits?
(a) Marginal analysis (b) Breakeven analysis (c) Ratio analysis
(d) Financial analysis (e) Decision tree.
<>
4
26. With respect to factors that affect reorganization, when a single change triggers off a sequence of
related changes, it is called the
(a) Halo effect (b) Hawthorne effect (c) Domino effect
(d) Sensitivity effect (e) Environmental effect.
<>
27. Which of the following is a method that can be used to overcome the tendency toward conformity in
group decision-making?
(a) Brainstorming (b) Nominal group technique (c) Groupthink
(d) Electronic meetings (e) Sensitivity training.
<>
28. Which of the following is a strength of the divisional structure?
(a) It focuses on results
(b) It gains advantages due to work specialization
(c) Employees have more than one boss
(d) It is based solely on teams
(e) It combines the advantages of functional and product structures.
<>
29. Planning by a supervisor of a goods processing department to rearrange the location of several pieces of
equipment so that the new order can begin on time, three months from now, would be an example of
a/an
(a) Tactical plan (b) Operational plan (c) Tactical goal
(d) Operational goal (e) Strategic goal.
<>
30. Which of the following statements is/are true about effectiveness and efficiency?
I. Effectiveness refers to the achievement of stated organizational objectives while efficiency
denotes the judicious use of resources to achieve organizational objectives.
II. Effectiveness means “doing things right” while efficiency means “doing the right things”.
III. Effectiveness is the foundation of success whereas efficiency is a minimum condition for survival
after success is achieved.
(a) Only (I) above (b) Both (I) and (II) above
(c) Both (I) and (III) above (d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
<>
31. Which of the following is not an area of managerial decision-making to which the linear programming
technique can be applied?
(a) Product mix decisions
(b) Pricing decisions
(c) Determining optimal scale of operations
(d) Allocation of scarce resources
(e) Scheduling production facilities and maintenance.
<>
32. Three aspects – delegator’s, delegant’s and organizational – affect delegation. Which of the following
is/are factor(s) that affect delegation of authority from the organizational aspect?
I. Policy towards centralization or decentralization.
II. Availability of managerial personnel.
III. Type of control mechanisms.
(a) Only (I) above (b) Only (II) above
(c) Only (III) above (d) Both (I) and (III) above
(e) All (I), (II) and (III) above.
<>
33. Which of the following statements about objectives is/are true?
I. Objectives and planning programs are co-existential and co-relational.
II. Goals and plans are always linear.
III. A manager can effectively pursue only a few objectives.
IV. Objectives do not require deadlines for results to be accomplished.
(a) Only (I) above (b) Only (II) above
(c) Both (I) and (III) above (d) Both (II) and (IV) above
(e) (I), (II) and (III) above.
<>
34. Which of the following statements is not true about planning? <>
5
(a) It focuses attention on objectives
(b) It provides a sense of direction
(c) It provides efficiency in operations
(d) It is an instinctive procedure and allows little scope for innovation and creativity
(e) It ensures better coordination.
35. In strategic management, any organizational skills or resources that are exceptional or unique are the
organization’s
(a) Potential external opportunities (b) Potential internal strengths
(c) Core competencies (d) Bargaining Power
(e) Marketing niche skills.
<>
36. Which of the following is not a limitation of strategic planning?
(a) It is very expensive
(b) It does not yield obvious and immediate results
(c) It can be a lengthy and time-consuming process
(d) It encourages firms to adopt risky decisions
(e) It takes time for the process to function smoothly.
<>
37. Which of the following is a limitation of Weber’s bureaucracy?
(a) It destroys individual creativity and the flexibility to respond to complex changes in the
environment
(b) It does not focus on management of an organization from a manager’s point of view
(c) It overlooks social needs of workers
(d) It overemphasizes economic and physical needs of workers
(e) It ignores the human desire for job satisfaction.
<>
38. A large organization that has three levels of managers but each one has ten or more subordinates reporting
directly to that manager is organized to have which of the following structures?
(a) Flat (b) Wide (c) Narrow (d) Tall (e) Long.
<>
39. Which of Henry Fayol’s principles of management states that ‘work specialization leads to efficiency of
operations’?
(a) Division of labor (b) Stability (c) Esprit de corps
(d) Discipline (e) Decentralization.
<>
40. In which step of the extended model of the planning process, does an organization focus on its strengths
and weaknesses, competition, and customers’ needs?
(a) Formulating supporting plans
(b) Comparing alternatives in the light of goals
(c) Considering planning premises
(d) Being aware of opportunity
(e) Setting objectives or goals.
<>
41. Some researches focus their attention on the internal culture of an organization, while others examine
the impact of external culture on managerial practices. The most significant ways that culture is
transmitted to employees in an organization, consist of
(a) Language, stories, rituals, and rewards
(b) Rituals, tales of woe, symbols, and language
(c) Stories, rituals, myths, and language
(d) Symbols, rituals, language, and systems
(e) Values, beliefs, stories and systems.
<>
42. Product divisions are created to concentrate on a single product or service or at least a relatively
homogenous set of products or services. Which of the following is not an advantage of product
division/departmentation?
(a) It facilitates the use of specialized capital, promotes coordination and allows optimum utilization
of personal skills and specialized knowledge
(b) It facilitates growth and diversity of products and services offered by the organization
(c) The performance of each product line can be compared and analyzed
(d) It provides an excellent training ground for managerial personnel
(e) Managerial costs are lower because of the decentralization of various activities such as personnel,
<>
6
production, sales and accounts.
43. Sairah is associated with a committee that is given the responsibility to review and institute a process
for employees to use when requesting upgrades in computer equipment. Which type of objectives
would Sairah most likely develop?
(a) Intermediate-term objectives (b) Long-term objectives
(c) Short-term objectives (d) Organizational objectives
(e) Divisional objectives.
<>
44. Under which of Porter's five sections for analyzing a firm's task environment, would ‘an absolute cost
advantage’ most likely appear as a decision variable?
(a) The nature of rivalry (b) New entrants (c) Substitutes
(d) Bargaining power of buyers (e) Bargaining power of suppliers.
<>
45. As a manager, Radha has a good grasp of the "big picture," visualizing the relationship of her business
to the industry and to the larger community. She is also able to see how the various parts of her
organization depend upon one another. Which of the following skills is Radha demonstrating?
(a) Diagnostic (b) Technical (c) Conceptual
(d) Human (e) Design.
<>
46. Organizations that adopt a matrix structure generally pass through some structural stages. In which of
the following stages do bosses have equal power?
(a) Functional (stage 1) (b) Temporary overlay (stage 2)
(c) Permanent overlay (stage 3) (d) Mature matrix (stage 4)
(e) Hybrid matrix (stage 5).
<>
47. In order to understand the opportunities and threats faced by an organization, managers should analyze
their organization’s environment. What are the three most effective tools that managers can use to
analyze their organization’s environment?
(a) Benchmarking, planning, and evaluating
(b) Environmental scanning, forecasting, and benchmarking
(c) Strategic planning, environmental scanning, and TQM
(d) Forecasting, budgeting, and time management
(e) Strategic planning, environmental scanning, and management control.
<>
48. Although having some plans is important, a criticism of planning would be that
(a) Plans reinforce previous failure
(b) Plans are usually ignored by managers
(c) Plans are too flexible to be useful
(d) Formal plans can’t replace intuition and creativity
(e) It requires expertise.
<>
49. Which of the following is not a characteristic of an organic structure?
(a) Unstable environment (b) Few rules and regulations
(c) Centralisation (d) Hierarchical communication
(e) Lateral communication.
<>
50. Situations of certainty, risk and uncertainty affect decision-making. In an environment or condition of
high uncertainty, which of the following strategies should be used to make a plan more effective?
(a) Rely on long-term forecasting in the industry
(b) Place less reliance on lower and middle management’s advice
(c) Adopt long-term planning, i.e., more than five years duration
(d) Adopt a directional plan with an emphasis on the short-term
(e) Adopt a specific plan, which lays down clearly defined objectives.
<>
51. The major disadvantage of the matrix structure is
(a) Duplication of resources
(b) Lack of employee satisfaction
(c) Lack of economies of scale
(d) Its propensity to foster power struggles
(e) Monotony of work.
<>
7
52. Middle level managers would engage in setting which of the following objectives?
I. Division objectives.
II. Overall organization objectives.
III. Individual performance objectives.
IV. Specific overall organization objectives such as those pertaining to key result areas.
(a) Only (I) above (b) Both (I) and (II) above
(c) Both (I) and (IV) above (d) Both (II) and (III) above
(e) (II), (III) and (IV) above.
<>
53. Which of the following is a limitation of the empirical approach to management?
(a) It is not integrated with management concepts, principles, theory and techniques
(b) Too broad a field for the study of management
(c) Emphasis only on blue-collar and lower level office work
(d) Situations are all different
(e) Managers have realized that there is no one best way to do things.
<>
54. All of the following are quantitative decision-making tools except
(a) Linear programming (b) Decision tree
(c) Waiting line theory (d) Behaviorally Anchored Rating Scales
(e) Game theory.
<>
55. SWOT analysis helps companies identify their strengths and weaknesses and, opportunities and threats
in the environment it operates. Which of the following cannot be considered a potential ‘opportunity’
for a company?
(a) Serving additional customer groups
(b) Ability to take advantage of economies of scale
(c) Falling trade barriers in attractive foreign markets
(d) Integrating forward or backward
(e) Using Internet technologies to pursue sales growth.
<>
56. Assessment of arguments ‘for’ and ‘against’ involvement in social welfare is necessary for
organizations to implement social initiatives. Which of the following arguments ‘against’ social
responsibility of business points out that, since the cost of social initiatives would be added to the price
of products, multinational companies selling in domestic markets would be at a disadvantage when
competing with domestic companies not involved in social activities?
(a) Opposing the profit maximization principle
(b) Excessive costs
(c) Weakened international balance of payments
(d) Increase in firm’s power and influence
(e) Lack of accountability.
<>
57. In an organization, a superior has the right to get tasks accomplished by his subordinates, but the
responsibility remains with the superior. This principle which intends to eliminate the practice of
“passing the buck”, is known as
(a) Hierarchy of authority (b) Downward delegation of authority
(c) Unity of direction (d) Authority on par with responsibility
(e) Unity of command.
<>
58. Which of the following are weaknesses of the Delphi method of group decision-making?
I. It is difficult to carry out the process with a large group.
II. It requires a skilled group facilitator.
III. There is too much emphasis on obtaining consensus.
IV. It consumes considerable amount of time.
V. It does not produce accurate results.
(a) Both (I) and (IV) above (b) Both (II) and (III) above
(c) (I), (II) and (V) above (d) (III), (IV) and (V) above
(e) All (I), (II), (III), (IV) and (V) above.
<>
59. Decentralizing an organization is a structural change aimed at
I. Reducing the cost of coordination.
<>
8
II. Increasing the controllability of subunits.
III. Increasing motivation.
IV. Developing multiple power centers.
(a) Only (I) above (b) Both (I) and (II) above
(c) Both (III) and (IV) above (d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.
60. Companies can achieve a sustainable competitive advantage with
I. Non-physical assets, such as customer database information.
II. Online ordering systems and other continual product and process innovations.
III. Employee knowledge sharing.
(a) Only (I) above (b) Only (II) above
(c) Only (III) above (d) Both (I) and (III) above
(e) All (I), (II) and (III) above.
<>
61. Unlike the rational view, several non-rational models of managerial decision-making suggest that
limitations of information gathering and information-processing make it difficult for managers to make
optimal decisions. In which of the following situations, is the garbage-can model of decision-making
more appropriate?
(a) When managers do not have a goal preference
(b) When managers do not have adequate information
(c) When managers are unable to remember large amounts of information
(d) When managers ignore critical information
(e) When the amount of information to be obtained is limited by time and cost factors.
<>
62. Centralisation is the systematic and consistent reservation of authority at central points within an
organization. Which of the following characteristics makes centralisation more appropriate?
(a) The environment is complex and uncertain
(b) Decisions are relatively minor
(c) Lower level managers are capable and experienced decision-makers
(d) The company is geographically dispersed
(e) Lower level managers are reluctant to be involved in decision-making.
<>
63. Which of the following refers to the practice of employees deliberately working at a slower pace than
their capabilities?
(a) Commandeering (b) Bounded rationality (c) Soldiering
(d) Espirit de corps (e) Satisficing.
<>
64. Decision-making is the process by which a course of action is selected so as to deal with a specific
problem. Which of the following stages in the decision-making process attempts to understand the
performance gap between predicted or expected level of performance and the actual level?
(a) Problem identification stage (b) Resources and constraints identification stage
(c) Alternative evaluation stage (d) Alternative selection stage
(e) Implementation stage.
<>
65. Which of the following is an organizational requirement with respect to Porter’s cost leadership
strategy?
(a) Strong coordination among functions in R&D, product development and marketing
(b) Subjective measurement and incentives
(c) Amenities to attract skilled labor
(d) Incentives based on meeting quantitative targets
(e) Cooperation from channels.
<>
66. Which of the following is defined as the possibility that individuals selected to participate in a study
may show higher productivity only because of the added attention they receive from the researchers
rather than any other factor being tested in the study?
(a) Bank wiring observation (b) Hawthorne effect (c) Halo effect
(d) Illumination effect (e) Interview phase observation.
<>
67. Span of management includes
I. Assigning equal number of subordinates to managers at the same level.
<>
9
II. Assessing employee skill and motivation levels.
III. Determination of how many people working with each other report to a single manager.
IV. Determination of the number of individuals a manager can effectively supervise.
(a) Only (II) above (b) Only (IV) above
(c) Both (I) and (III) above (d) Both (III) and (IV) above
(e) (I), (II) and (IV) above.
68. Functional authority violates the principle of
(a) Unity of command (b) Specialized knowledge (c) Equity
(d) Unity of direction (e) Division of labor.
<>
69. The anticipated environment in which plans are expected to operate is known as
(a) Macro environment (b) Micro environment
(c) Planning premise (d) Open system
(e) Closed system.
<>
70. From the viewpoint of staff personnel, major reason(s) for line-staff conflict is that line personnel
I. Do not make proper use of staff personnel.
II. Resist new ideas.
III. Do not give staff personnel enough authority.
IV. Lack a first-hand experience of operations.
(a) Only (I) above (b) Only (II) above
(c) Both (III) and (IV) above (d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.
<>
71. It is essential that an organization clearly defines every managerial position. Which of the following is
not a benefit of position descriptions?
(a) They identify duties and responsibilities that are overlapping or neglected
(b) They help in deciding upon the organization design
(c) They provide guidance regarding candidate requirements, salary levels and training needs of new
employees
(d) They help managers determine the tasks to be done and the employees who should do them
(e) They act as means of control over the organization by furnishing standards against which the
necessity of the position can be ascertained.
<>
72. Which of the following is a term coined by Gilbreths to refer to the seventeen basic hand motions they
identified while carrying out motion studies?
(a) Therbligs (b) Telecommuting (c) Semantics
(d) Blogs (e) Micromotion.
<>
73. The management function of organizing involves determining
I. Tasks to be performed.
II. How tasks can best be combined into specific jobs.
III. Authority and reporting relationships within the corporate hierarchy.
IV. Promotions and career planning.
(a) Both (I) and (III) above (b) Both (II) and (IV) above
(c) (I), (II) and (III) above (d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
<>
74. Changes occur in the internal environment or external environment, no matter what management does.
Planning cannot eliminate change, but managers usually plan in order to
(a) Decide what needs to be done when a change in environment takes place
(b) Anticipate changes and develop the most-effective response to changes
(c) Have the appropriate materials available when the demand for them comes about
(d) Be prepared for when changes in management at the top occur
(e) Recruit new people if old employees leave.
<>
75. With respect to a SWOT analysis of the competitive environment in which a company operates, which
of the following could be a ‘potential resource weakness for a company?’
(a) Narrow product line relative to rivals
(b) Loss of sales to substitute products
<>
10
(c) Entry of new competitors
(d) Technological changes that undermine demand for a product
(e) Growing bargaining power of customers.
76. Which of the following can be said to be an appropriate technique for line personnel in reducing linestaff
conflict?
(a) Work independent of staff personnel
(b) Make proper use of the staff abilities
(c) Obtain any necessary skills they do not already possess
(d) Treat staff personnel as sub-ordinates instead of partners so that there is no overlap of roles
(e) Do the critical work themselves.
<>
77. Which of the following is not a factor that effects ethical/unethical behavior?
(a) Individual characteristics (b) Stage of moral development (c) Ethical hotline
(d) Organizational culture (e) Issue intensity.
<>
78. Which of the following steps in the ‘Nominal Group Procedure’ precedes the others?
(a) Individuals vote by rank ordering the alternatives
(b) Poll voted results in references
(c) Discussion, clarification and evaluation
(d) Ideas listed for review
(e) Decision made.
<>
79. Delegation includes the three stages of briefing, monitoring progress, and evaluation and feedback.
Which of the following is included in the briefing stage?
(a) Discuss the areas of the task that are sensitive to error or risk
(b) Allow the person to proceed with the task without interference
(c) Stand back from the process and retain a view of the bigger picture
(d) Encourage frequent informal discussions
(e) Assess if there were unforeseen problems.
<>
80. The function of planning in organizations is
(a) Not as important today because of the increased speed of communication
(b) Carried out only by top management
(c) Not as important today because of the increased volume of information available to managers
(d) Very closely linked to controlling, because it sets the goals or standards against which
performance is measured
(e) Secondary to other functions.
<>
81. Which of the following is true about a highly decentralized organization?
(a) Very few decisions are made at the lower levels in the hierarchy
(b) Very few functions rely on the lower levels for decision-making
(c) Decisions made at the lower levels are very important
(d) Top management exercises a great deal of monitoring on lower level decision-making
(e) The organization is primarily built by an individual’s efforts.
<>
82. Which of the following is not one of Taylor’s principles of ‘Scientific Management?’
(a) Replacing rules of thumb with organized knowledge
(b) Obtaining harmony in group action, rather than discord
(c) Working for maximum output, rather than restricted output
(d) Achieving cooperation of human beings, rather than chaotic individualism
(e) Discipline is vital for running an organization.
<>
83 The MBO process is characterized by an emphasis on the clarity and balance of objective and
participation of managers with accountability for results. The MBO process has many steps. Which of
the following is a final step of a typical MBO process?
(a) The organisation’s overall objectives and strategies are formulated
(b) Successful achievement of objectives is reinforced by performance based rewards
(c) The action plans are implemented
(d) Progress towards objectives is periodically reviewed, and feedback is provided
(e) Major objectives are allocated among divisional and departmental units.
<>
11
84. An organization characterized by a very formal structure, strict lines of communication, existence of
many rules, and fixed duties, has a/an
(a) Strategic structure (b) Mechanistic structure
(c) Organic structure (d) Matrix structure
(e) Divisional structure.
<>
85. Departmentation helps an organization take advantage of functional specialization. Which of the
following is not a reason why departmentation is required?
(a) It defines the role of every individual, indicating activities to be performed
(b) It facilitates control, coordination and communication
(c) It helps in avoiding conflicts among power centers
(d) It provides the necessary platform to build loyalty among members of the organization
(e) It helps identify sources of skills, information and competence that aid in managerial decisionmaking.
<>
86. Which approach to management emphasizes managing people by understanding their individual
psychological needs?
(a) Group behaviour approach (b) Decision theory approach
(c) Contingency approach (d) Interpersonal behaviour approach
(e) Management science approach.
<>
87. Henry R. Towne was one of the prominent contributors to preclassical management thought. Which of
the following did Henry R. Towne advocate/propose?
(a) Division of labor
(b) Legislative reforms to improve working conditions of labor
(c) Profit-sharing plan
(d) Study of management
(e) Emphasis on the importance of business skills for running a business.
<>
88. Which of the following is/are not assumption(s) of the rational decision-making model?
I. The problem is clear and unambiguous.
II. A single well-defined goal is to be achieved.
III. Preferences change slowly.
IV. Final choice will maximize economic payoff.
(a) Only (II) above (b) Only (III) above
(c) Both (I) and (III) above (d) Both (I) and (IV) above
(e) Both (II) and (IV) above.
<>
89. The decision-making process has seven steps. Which of the following is/are approache(s) for ‘selecting
among alternatives’, in the decision-making process?
I. Experience.
II. Experimentation.
III. Research and analysis.
IV. Brainstorming.
(a) Only (III) above (b) Both (I) and (IV) above
(c) Both (II) and (IV) above (d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.
<>
90. Which strategic business units (SBU) mapped on the BCG matrix, either need more investment or can
be considered for withdrawal?
(a) Question marks (b) Bulls (c) Dogs (d) Cash cows (e) Stars.
<>
91. Which of the following is not true about why an organization adopts a strategic business unit (SBU)
structure?
(a) To ensure that a product is not ignored among others that generate high profits
(b) To integrate goals and plans of the SBU with goals and plans of other SBUs
(c) It aids in concentrating energies on promoting a product or product line
(d) It conserves entrepreneurial attention and initiative
(e) To manage resources efficiently in key areas.
<>
12
92. Which of the following is not a problem associated with a poor ‘span of control?’
(a) Problems in structuring the organization
(b) Delay in decisions
(c) Decreased levels of initiative and morale
(d) Over-supervision
(e) Less opportunity for responsibility and development.
<>
93. A subordinate identifies communication from the superior as being authoritative only if he
I. Receives it in writing.
II. Understands the message.
III. Believes that it is in agreement with the organization’s purpose.
IV. Feels that it serves his interests.
(a) Only (I) above (b) Both (I) and (III) above
(c) Both (II) and (IV) above (d) (I), (II) and (III) above
(e) (II), (III) and (IV) above.
<>
94. The intensity of an ethical issue is greater when
I. The number of people harmed is large.
II. Everyone agrees that the action is wrong.
III. The consequences of the action may be felt immediately.
IV. Financial loss incurred is great.
(a) Both (I) and (II) above (b) Both (III) and (IV) above
(c) (I), (II) and (III) above (d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.
<>
95. The key result areas in business suggested by Peter Drucker include
I. Physical and financial resources.
II. Profitability.
III. Innovation.
IV. Worker performance and attitude.
(a) Both (I) and (II) above (b) Both (III) and (IV) above
(c) (I), (II) and (IV) above (d) (I), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
<>
96. Which of the following is not a guideline for successful planning and implementation?
(a) Involve the right people in the planning process
(b) Communicating the plan throughout the organization
(c) Goals should be ‘SMARTER’
(d) There should be no deviations from the plan
(e) Evaluate the plan.
<>
97. An organization’s leaders should follow certain principles for clarity and simplicity in the way the
organization is managed. Which of the following principles relates to ‘working relationships?’
(a) The optimal reach of management should be determined
(b) Responsibility should be clearly defined and assigned to one person
(c) An organization should provide for the development of leaders
(d) Separate functions should, as far as possible, work toward a common objective
(e) Each individual should be accountable to only one superior.
<>
98. According to Moskowitz, which of the following is not a characteristic of the work environment in
well-managed companies?
(a) It highlights distinction in ranks
(b) It makes people feel they are part of a team
(c) It encourages open communication
(d) It stresses quality
(e) It lays emphasis on profit sharing.
<>
99. Group decision-making is the norm in most large and complex organizations. Which of the following is
a disadvantage of group decision-making?
<>
13
(a) Greater comprehension (b) Logrolling
(c) Greater pool of knowledge (d) Different perspectives to a problem
(e) Increased acceptance.
100. Which of the following statements about ‘managerial functions’ is/are not true?
I. Time spent by top-level managers in planning and organizing is much more than that spent by
middle level and first level managers.
II. Leading is substantially more important for higher-level managers than first level supervisors.
III. Time spent on controlling is similar at all levels.
(a) Only (I) above (b) Only (II) above
(c) Only (III) above (d) Both (I) and (III) above
(e) Both (II) and (III) above.
<>