Introduction to Management-II (MB112): April 2007:Suggested Answers

Suggested Answers
Introduction to Management-II (MB112): April 2007

1. Answer : (c)
Reason: Kacho refers to a manager whose task is not only to supervise people at work but also to show
fatherly concern for their subordinate’s private life.
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2. Answer : (b)
Reason : Measuring performance against standards help managers in eliminating the need to watch every step
in the execution of plans. Hence, option (b) is not true about standards.
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3. Answer : (a)
Reason : Data management refers to the standards and procedures for the storage and preservation of data in a
form that ensures access across a variety of applications and uses.
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4. Answer : (a)
Reason: Japanese companies tend to make decisions by consensus because it is a reflection of the larger
societal cultural value on groups.
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5. Answer : (c)
Reason : Feedback returns the message to the sender and provides a check on whether understanding has been
achieved. Hence, option (c) is correct.
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6. Answer : (e)
Reason : In cooptation, a leader or an influential person among the potential resisters is given a seemingly
desirable role in the change process in order to gain the leader’s cooperation.
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7. Answer : (d)
Reason : The primary objective of the trait theory is to provide a profile of an effective leader.
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8. Answer : (d)
Reason : The cost of not having the inventory or stock of the product requested by the customer is called
stock-out cost.
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9. Answer : (c)
Reason: Statement (I) - It helps individuals gain insights into their behavior and helps them analyze the way
they appear to others and statement (II) - It helps individuals develop the skills necessary for
diagnosing and understanding of group processes are objectives of sensitivity training. Statement (III)
is an objective of university programs.
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10. Answer : (b)
Reason : Standard cost centers are also referred to as engineered expense centers.
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11. Answer : (e)
Reason : The third set of needs are related to extrinsic needs is the statement which cannot be considered true
about Alderfer's ERG theory.
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12. Answer : (c)
Reason : Critical limits involves identifying the maximum or minimum level at which the food safety hazard
has to be controlled to reduce it to an acceptable level.
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13. Answer : (a)
Reason : Brainstorming is one of the best-known techniques for facilitating creativity, developed by Alex F.
Osborn. Hence, from above discussion, we can infer that option (a) is correct.
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14. Answer : (e)
Reason : The manager has strong diagnostic skills and a certain level of expertise in the evaluation and,
correction implementation stage.
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15. Answer : (a)
Reason : Technostructural activities are used to help organization members enhance their own effectiveness by
showing them how to evaluate and make appropriate changes in task design, work methods and
organization structure.
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16. Answer : (e)
Reason : Improper feedback is not an example of noise. Noise occurs while sending the message, during
transmission or while receiving the message. As feedback takes place after the message is delivered
and decoded, improper feedback cannot be considered as noise.
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17. Answer : (a)
Reason : Leadership involves the use of non-coercive influence to shape the group’s/organization’s
goals. Therefore, option (a) is not a feature of leadership.
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18. Answer : (e)
Reason : All four statements are approaches for formal performance appraisals.
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19. Answer : (c)
Reason : Need implies a felt deprivation of physiological or psychological well-being. Hence, option (c) is
correct.
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20. Answer : (b)
Reason : Satisfaction is an intrinsic reward.
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21. Answer : (b)
Reason : Planned change reflects a change in goals or operating philosophy and involves implementation of
a new policy thus preparing the entire organization, or a major part of it, to adopt significant
transformation in goals and direction in terms of scope and magnitude.
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22. Answer : (d)
Reason : Creative individuals use the emotional aspects of their personalities in problem solving besides
intellectual and rational aspects.
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23. Answer : (c)
Reason : The following are reasons why productivity of knowledge workers is more difficult to measure than
productivity of industrial workers”
I. The quality of a knowledge worker’s output cannot be determined immediately.
II. The output of a knowledge worker often contributes only indirectly to the achievement of the
end-result.
IV. Knowledge workers often assist other organizational units and this contribution is difficult to
measure.
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24. Answer : (c)
Reason : Potential pitfalls of using budgets as control tools include placing too much emphasis on relatively
insignificant organizational expenses, and increasing budgeted expenses year after year without
adequate information.
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25. Answer : (e)
Reason : Existence need in ERG theory corresponds to physiological needs in Maslow’s need hierarchy theory.
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26. Answer : (e)
Reason : Enhancing superior-subordinate interpersonal relationship is not an objective of a performance
appraisal.
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27. Answer : (d)
Reason : Content theory of motivation focuses on analyzing what motivates people. Hence, option (d) is
correct.
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28. Answer : (c)
Reason: In case of oral presentation, there should be clear communication between the sender and receiver.
Thought or idea is the origin of the communication process. There is no scope for using fillers such
‘like’ in oral presentations. Option (c) is the correct answer.
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29. Answer : (e)
Reason : Ratios can be meaningful even when studied in isolation is not true about ratio analysis.
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30. Answer : (d)
Reason : Putting the solution into effect is the last and most critical step in the operations research
methodology.
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31. Answer : (e)
Reason: The given example is an illustration of horizontal communication.
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32. Answer : (e)
Reason : Developing countries have become more adept in international negotiations and have become aware
of their resources is not an advantage to a multinational corporation, instead is a challenge for them.
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33. Answer : (a)
Reason : Structured interviews yield more valid data than unstructured interviews, therefore, option (a) is the
answer.
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34. Answer : (b)
Reason : Limiting the self-guidance of the follower and specifically defining procedures for followers’ task
performance is called initiating structure.
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35. Answer : (a)
Reason : Steering controls are used during the performance of activity. So option (a) is the answer.
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36. Answer : (a)
Reason : As the future cannot be predicted with absolute accuracy, career plans are developed in an
environment of uncertainty. Hence, individuals should develop contingency plans based on alternate
assumptions.
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37. Answer : (a)
Reason : The information attribute which is oriented towards past, present or future activities and events is
known as information time horizon.
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38. Answer : (d)
Reason : BARS minimizes subjective interpretation inherent in graphic rating scales. They make use of
‘anchors’ (common reference points of performance) and they concentrate on job-specific behaviors
and hence are highly meaningful. However, BARS are time-consuming and costly to develop, as they
should cover each dimension of all jobs in the department. As a result, BARS tend to be used in
situations in which relatively large numbers of individuals perform similar jobs.
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39. Answer : (d)
Reason : Mc Gregor’s Theory X manager assumes that individuals dislike work and will avoid it whenever
possible. Hence, option (d) is correct.
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40. Answer : (a)
Reason : Luck plays an important role in the performance of an individual is a weakness of appraisal against
verifiable objectives.
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41. Answer : (d)
Reason : The following are true about informal appraisals:
I. They usually occur on a day to day basis.
III. The feedback is usually spontaneously expressed or alternatively the subordinate can get
immediate feedback from the superior as and when the job is completed.
Superior’s rating, peer assessment and subordinate rating are the approaches used in formal
appraisals. Hence, statement (II) is not true.
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42. Answer : (d)
Reason : David C. McClelland discussed three major needs as important in understanding motivation (1)
achievement need (2) affiliation need and (3) power need. Option (d) is correct answer.
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43. Answer : (b)
Reason : In the Japanese management style, the management function of controlling is characterized by
III. Saving face.
IV. Extensive use of quality control circles.
Control by superior and focus on individual performance are characteristics of American style. In the
Japanese style control is exercised by peers and focus is on group performance.
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44. Answer : (c )
Reason : Most risks arise from uncertainty and not vice versa. Hence, statement (III) is not true.
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45. Answer : (e)
Reason : Low level managers use budgetary control system to ensure organizational activities re carried out
according to the budgets allocated, quality control systems &inventory control low-level managers
use systems. Low level mangers generally not concerned with financial control system. Top-level
management usually uses financial control system.
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46. Answer : (d)
Reason : Intelligence tests explore alertness, comprehension and reasoning abilities of applicants. (a) Work
sampling tests are a means of measuring practical ability of the candidate on a specific job. (b)
Knowledge tests evaluate the applicant’s knowledge about the company, its competitors and
customers, its products, the target market and the like. (c)Personality tests are means of measuring
characteristics such as patterns of thoughts, feelings etc., of an individual. (e) Performance tests are
same as work sampling tests.
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47. Answer : (a)
Reason: The inability of organizations to adapt to the changing environment is called organizational
inflexibility.
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48. Answer : (b)
Reason : Internet in itself is not an application of office automation systems, although it may aid in office
automation.
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49. Answer : (e)
Reason : Manager Inventory Chart does identify employees who are not performing up to expectations and
help in training or replacing them.
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50. Answer : (b)
Reason : Value engineering involves analyzing the operations of the product or service, estimating the value
of each operation, and modifying or improving the operation so that the cost is reduced.
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51. Answer : (d)
Reason : With respect to the equity theory, when employees perceive an inequity, they may resign from the
organization, induce others to change their inputs or outcomes, change their own inputs or outcomes
or reduce quantity or quality of output.
Employees work harder on their job when the rewards are more than equitable. Therefore, option (d)
is the answer.
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52. Answer : (c)
Reason : The selection process consists of the following steps:
(i) Preliminary Screening.
(ii) Application Blank.
(iii) Selection Test.
(iv) Comprehensive Interview.
(v) Reference Check.
(vi) Physical examination of the candidate.
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53. Answer : (d)
Reason : The following statements are true about executive support systems:
I. They provide market intelligence, investment intelligence and technology intelligence.
III. They support decision-making at the top level of management.
The executive support systems make less use of analytical models and are highly interactive. Hence,
statement (II) is not true about ESS.
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54. Answer : (a)
Reason : Making the control activities the goals of the control process will be least likely to increase the
quality of the controlling process. Hence, option (a) is correct.
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55. Answer : (c)
Reason : The performance of which of the following cannot be measured
I. Creativity.
II. Foresight and judgement in decision-making.
IV. Effectiveness of research.
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56. Answer : (c)
Reason : Emphasis on the logical physical presentation of a problem in the form of a model is a characteristic
of operations research and not a limitation.
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57. Answer : (b)
Reason : Behavior is an ‘activity’ performed by an individual. Employee skills and employee traits and abilities
are inputs provided by an individual. Services delivered and results obtained are outputs of an
individual.
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58. Answer : (d)
Reason : Lewin found that work quality and group satisfaction were highest under democratic leadership style.
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59. Answer : (b)
Reason : In investment centers the control system examine the role of assets in generating profit apart from
measuring the monetary value of inputs and outputs.
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60. Answer : (d)
Reason : A major difference between management and leadership is that leadership includes the ability to
inspire people. Hence, option (d) is correct.
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61. Answer : (c)
Reason : The following statements are true about instrumental leadership:
II. It involves providing clear guidelines to subordinates.
IV. It corresponds to task-centered leadership described in other leadership theories.
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62. Answer : (b)
Reason: The budgetary control system helps a manager to match the actual and the planned revenues and costs
of various organizational activities.
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63. Answer : (a)
Reason: A balance sheet describes the company in terms of its assets, liabilities and net worth.
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64. Answer : (a)
Reason : Successful leaders adapt their styles to the demands of a situation is the theme of Hersey and
Blanchard’s theory of leadership.
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65. Answer : (c)
Reason : Herzberg's motivation-hygiene theory proposes that the factors that help prevent dissatisfaction on the
job do not necessarily lead to satisfaction.
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66. Answer : (c)
Reason: Operational Control regulates the activities or methods an organization uses to produce the goods and
services it supplies to customers and clients.
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67. Answer : (b)
Reason : Path-goal theory states that it is a leader's job to assist followers in attaining their goals and to provide
the necessary direction and support.
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68. Answer : (e)
Reason : The following are control techniques used in a formal appraisal system:
I. Standards.
II. Information.
III. Corrective action.
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69. Answer : (d)
Reason : The following statements about revenue centers are true:
I. Sales and marketing departments are examples of revenue centers.
III. A revenue center cannot be responsible for changes in profit levels.
Statement (II) is not true because in revenue centers, outputs are measured in monetary terms but are
not directly compared with input costs. Hence, option (d) is the answer.
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70. Answer : (b)
Reason : A PERT network depicts the sequence of activities needed to complete a project and the time
associated with each activity. Hence, option (b) is correct.
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71. Answer : (d)
Reason : In non-directive counseling, a manager should
• Be attentive and friendly
• Raise appropriate questions.
• Be tactful and enable the employee to think through the problem clearly
• Create an atmosphere of privacy to help the employee communicate freely
• Be a patient listener to help the employee to express his emotions freely
• Encourage the employee to examine his own ideas and do some introspection.
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72. Answer : (e)
Reason : Budgeting decisions do not constitute a set of decisions that are included in an operations
management program.
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73. Answer : (d)
Reason : Kanban is a subsystem of the just-in-time approach and involves the use of cards and containers to
move parts and components from one work area to another.
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74. Answer : (b)
Reason: Creation of “assistant-to” positions is an on-the-job training technique.
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75. Answer : (d)
Reason : The following are advantages of preventive control:
I. Greater accuracy at work is achieved.
II. Corrective actions improve the processes and make them more effective.
Statement (III) is not an advantage since preventive control encourages managers implementing
controls through self exercised control, which helps in taking corrective actions voluntarily whenever
deficiencies are found.
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76. Answer : (a)
Reason : Geographical information system is computer software that displays spatial data from the real world
such as giving the position of objects with respect to a known coordinate system or place, describes
their attributes and provides numerous details about objects.
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77. Answer : (b)
Reason : It is the performance-reward linkage that is explained in the given example.
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78. Answer : (e)
Reason : Boss-centered and subordinate-centered are the approaches at the two ends of this continuum.
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79. Answer : (e)
Reason : The following are factor(s) that affect productivity in organizations:
I. Time spent by employees in learning new technology reduces their productivity.
II. Social and legal obligations make it necessary for organizations to employ people without
adequate skills.
III. Workers going on strike as they believe that employers are exploiting them by increasing
their workload on the pretext of improving productivity.
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80. Answer : (d)
Reason : Impoverished management assumes that exertion of minimum effort to get required work done is
appropriate to sustain organization membership.
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81. Answer : (a)
Reason : The assumptions of the human relations model of management are:
• People want to feel useful and important
• People desire to belong and to be recognized as individuals
• Creative needs are more important than money in motivating people to work
Statements (I) and (II) are assumptions of the human resources model. Statement (IV) is an
assumption of the traditional model of management. Hence option (a) is the answer.
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82. Answer : (d)
Reason: Compromise is a traditional way of coping with conflict and involves agreeing in part with the other
person's point of view.
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83. Answer : (d)
Reason : The following are financial statements used by managers, creditors, investment analysts, shareholders,
unions and other stakeholders to evaluate the performance of the organization:
I. Balance sheet.
II. Income statement.
Ratio analysis is a technique to exercise financial control and not a financial statement.
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84. Answer : (c)
Reason : In forecasting human resources supply, like any other resources human resources are subject to subtle
erosion, employees leave the organization for wide variety of reasons. Human resources subject to
current inventory, turnover, production and movement among jobs. Strategic plans come under
forecasting manpower demand but not under supply forecasting (c) is correct answer.
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85. Answer : (e)
Reason : Both transnational and multinational organizations transcend the home country. Therefore, option (e)
is the correct answer.
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86. Answer : (a)
Reason : The following elements at the workplace would constitute ‘social needs’:
I. Appropriate office layout.
III. Teamwork.
Statement (II) – opportunity to handle challenging projects – constitutes self-actualization needs.
Statement (IV) – wages – constitutes physiological needs.
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87. Answer : (d)
Reason : Cross training is also referred to as Job rotation which is defined as a job design approach that
involves periodically shifting workers through a set of jobs in a planned sequence. Job enlargement is
a job design approach that involves the allocation of a wider variety of similar tasks to a job in order
to make it more challenging. Job specification is an approach whereby jobs are configured so that job
holders have only small number of narrow activities to perform whereas job sharing is an alternative
work schedule in which two or more people share a single full-time job. Job enrichment is a job
design process aimed at providing the employee with better chances of personal growth, achievement,
responsibility and recognition.
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88. Answer : (e)
Reason : In the exploitative-authoritative style, managers are autocratic retaining all decision-making powers,
hardly trust subordinates, and use negative motivation tactics like fear and punishment.
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89. Answer : (b)
Reason : The attitude that regards home-country practices as superior to foreign-country practices is known as
an ethnocentric attitude.
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90. Answer : (c)
Reason : Debt ratio measures the percentage of total assets financed by debt (including current liabilities). So,
it tests how leveraged an organisation is. Hence, option (c) is correct.
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91. Answer : (a)
Reason : Physiological assumptions are not assumptions on which Edgar H. Schein based his study of human
behavior.
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92. Answer : (b)
Reason : The following are disadvantages of internal recruitment:
I. Unsuccessful contenders may become disgruntled.
II. Selection is more susceptible to office politics.
Statements (III) and (IV) are disadvantages of external recruitment.
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93. Answer : (c)
Reason : Creativity is the ability to develop new ideas and is a function of knowledge, imagination, and
evaluation.
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94. Answer : (d)
Reason : The following are the characteristics of the ‘leading’ function adopted in US Management style:
III. Often divergent values, individualism sometimes hindering cooperation.
IV. Face-to-face confrontation; emphasis on clarity.
V. Communication primarily top-down.
Statement (I) and (II) pertain to the Japanese management style as in the American style the leader
acting as a decision maker and head of the group and the management style is directive in nature.
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95. Answer : (c)
Reason : An organization undertakes the following actions if manpower demand is high and manpower supply
is low:
III. Internal promotions.
IV. Training and development.
Hence, option (c) is the answer.
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96. Answer : (e)
Reason : According to Bernard M. Bass, a transformational leader displays or creates charismatic leadership,
inspirational leadership, intellectual stimulation, and a feeling that each individual follower counts.
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97. Answer : (a)
Reason: Sanctioning means giving formal permission or approval. It not a part of the human resource
management function in most organizations. Hence, from above discussion, we can infer that option
(a) is correct. Options (b), (c), (d) and (e) are all parts of the human resource management function in
most organizations.
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98. Answer : (a)
Reason: Transaction processing system systems records any event or activity that involves the interaction of
the organization with external agents.
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99. Answer : (c)
Reason : The Recruitment Procedure consists of the following steps:
• Performing Job Analysis.
• Designing Job Description.
• Developing a Job Specification.
• Attracting a Pool of Applicants.
• Selecting Best Recruits.
Hence, from above discussion, we can infer that option (c) is correct.
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100. Answer : (b)
Reason : Simulation models used in constructing mathematical models.
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