Introduction to Management (MB111): July 2005

Introduction to Management (MB111): July 2005

Section A : Basic Concepts
• Answer all questions.
• Each question carries one mark.
1. In the area of diversity, establishing task forces or committees to explore issues and provide ideas,
carefully choosing work assignments to support the career development of all employees, and
evaluating the extent to which diversity goals are being achieved, would most likely be classified under
which of the following managerial roles?
(a) Planning (b) Staffing (c) Leading (d) Organizing (e) Controlling.
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2. When a General Manager tries to resolve a dispute between marketing department and the production
department on rescheduling of orders, he is acting in which managerial role of Mintzberg?
(a) Mediator (b) Disturbance handler
(c) Leader (d) Spokesperson (e) Controller.
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3. Which of the following skills is most important for first level managers and includes knowledge of and
proficiency in activities involving methods, processes, and procedures?
(a) Human (b) Conceptual (c) Design
(d) Technical (e) Administrative.
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4. Managerial functions are general administrative duties that need to be carried out in virtually all
productive organizations. When a General Manager is trying to determine the number of personnel
required for achieving the forecasted targets, it comes under which type of management function?
(a) Planning (b) Organizing (c) Controlling (d) Staffing (e) Leading.
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5. The Gantt Chart was invented by Henry L. Gantt. It is still used today in the production planning area
of many organizations. It was the first simple visual device to maintain production control. The chart
visually shows when tasks are supposed to be done and compares that with the
(a) Scheduled delivery of materials
(b) Supervisors’ estimate of completion
(c) Customer’s requested date of delivery
(d) Actual progress on each
(e) Scheduled release of future orders.
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6. Which of the following is not a generally accepted advantage of division of labor in an organization?
(a) Workers’ skills in performing their jobs tend to increase
(b) Workers need to know only how to perform their specific work tasks
(c) Workers do not waste time in moving from one task to another
(d) Workers try to make their individual tasks easier and more efficient
(e) Workers obtain cross-functional expertise.
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7. Tanya must constantly report to the departmental head as well as her immediate supervisor. Which of
the following is being violated?
(a) Work specialization (b) Unity of command
(c) Span of control (d) Departmentalization
(e) Decentralization.
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8. Which of the following is not one of the philosophies of the management science approach?
(a) Managers can improve the organization by using scientific methods
(b) Mathematical techniques can solve organizational problems
(c) Models should be used to represent the system
(d) Individual work is better than teamwork
(e) Observation of the system must take place.
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9. Practicing ethical guidelines enables managers to become followers of moral management approach.
They facilitate ethical business decisions. One such ethical guideline is Primum Non-Nocere, which
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means
(a) Telling the truth (b) Above all, doing no harm
(c) Always acting when one has responsibility (d) Obeying the law
(e) Allowing room for participation of stakeholders in the decision-making process.
10. Today, many organizations are involved in social activities. Since the expectations of the society have
changed, organizations have become more aware of their social responsibilities. A careful analysis of
argument for and against the involvement of organizations in social welfare is necessary to determine
whether an organization should implement social initiatives. The belief that businesses are being
socially responsible when they attend only to economic interests is known as which argument against a
firm being socially responsible?
(a) Too much power (b) Violation of profit maximization
(c) Excessive costs (d) Lack of social skills
(e) Lack of accountability.
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11. Archie B. Carroll, an eminent researcher in the area of social responsibility, identified three types of
management, based on how ethical or moral their decisions are. The three types are Moral
Management, Amoral Management and Immoral Management. Which of the following is a
characteristic of Immoral Management?
(a) Managers strive for success, but never violate the parameters of ethical standards
(b) Managers follow the law not only in letter, but also in spirit
(c) Managers show lack of concern about others' desire to be treated fairly
(d) This type of management strives to follow ethical principles and precepts
(e) It is in the best interests of the organization in the long run.
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12. Which of the following refers to the basic convictions that individuals hold about what is right and
wrong?
(a) Perception (b) Attitude (c) Value
(d) Ego Strength (e) Locus of Control.
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13. The only thing that is permanent in this world is change. Changes will happen in the internal
environment or external environment, no matter what management does. Planning can’t 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.
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14. Planning is an endless process. The process is constantly modified to suit changes in environmental
conditions and changes in objectives and opportunities for the firm. As organizations differ in terms of
their size and complexity, no single planning procedure is applicable to all organizations. However, all
planning processes contain some basic steps. Which of the following steps in the planning process
should be completed before the others can be addressed?
(a) Put plans into action
(b) State organizational objectives
(c) List alternative ways of reaching objectives
(d) Develop premises on which to base each alternative
(e) Evaluate alternatives by weighing them in the light of premises and goals.
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15. Just as organizations define goals at different levels, they also establish plans at different levels. On the
basis of the organizational level, plans can be strategic, tactical and operational. Which of the following
would not be an accurate depiction of the differences between strategic and tactical planning?
(a) Strategic planning is developed mainly by upper-level management and tactical planning is
generally developed by lower-level management
(b) Facts for strategic planning are generally easier to gather than facts for tactical planning
(c) Strategic plans generally contain less detail than tactical plans
(d) Strategic plans generally cover a longer period of time than tactical plans
(e) Managers who are engaged in the development of strategic plans tend to work in more uncertainty
than those managers engaged in the development of tactical plans.
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16. Most of the planning is carried out in today's complex environment under a state of uncertainty.
Conditions of uncertainty exist when the future environment is unpredictable and everything is in a
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state of flux. In an environment of such 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) Go for 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.
17. The Japanese Management organizing process usually involves
I. Collective responsibility and accountability.
II. Ambiguity of decision responsibility.
III. Clear and specific decision responsibility.
IV. Informal organization structure.
V. Formal bureaucratic organization structure.
(a) (I), (II) and (III) above (b) (I), (II) and (IV) above
(c) (I), (II) and (V) above (d) (II), (III) and (IV) above
(e) (III), (IV) and (V) above.
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18. In US Management style, the usual staffing position is
I. Rapid advancement desired.
II. Slow promotion through ranks.
III. Loyalty to the profession.
IV. Appraisal of short-term results.
V. Promotions based on multiple criteria.
(a) (I), (II) and (III) above (b) (I), (II) and (IV) above
(c) (I), (II) and (V) above (d) (I), (III) and (IV) above
(e) (II), (III) and (IV) above.
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19. Globalization has become the buzzword in today's corporate world. A large number of firms is
expanding their businesses globally to stay ahead of the cut-throat competition. Therefore it becomes
necessary that managers manage their global businesses effectively. Successful global management
requires an attitude that is best described as
(a) Ethnocentric (b) Parochial (c) Geocentric (d) Polycentric (e) Regiocentric.
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20. If an employee of a multinational company indicates that she believes that since she is a citizen of the
host country, she would be best suited to manage the company, then her attitude toward the operation
of the organization would most likely be classified as
(a) Ethnocentric attitude (b) Polycentric attitude
(c) Regiocentric attitude (d) Gendercentric attitude
(e) Geocentric attitude.
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21. Management Information System (MIS) is used for effective utilization of a major organization
resource, viz., management information. Which of the following is not true about MIS?
(a) It can be defined as an integrated, user-machine system for providing information to support
managerial, operational and decision-making functions in an organization
(b) Many of the terms used in MIS are imprecise and controversial
(c) It incorporates a limited variety of knowledge areas
(d) MIS problems are not easy to define or structure
(e) The body of knowledge in MIS is relatively recent and limited.
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22. Information that originates within the organization is internal information and is essential for day-today
operations. Which of the following is an example of internal information in an organization?
(a) Information about demand of new products or services
(b) Information describing change in policies of suppliers
(c) Details of changes in government regulations
(d) Salesperson Quotas
(e) Descriptions of customer satisfaction with products and services.
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23. Information needs vary by level of activity and also by levels in the managerial hierarchy. For which
level of management would information about environmental trends be most appropriate?
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(a) Top management (b) Middle management
(c) First-line management (d) Lower-level management
(e) The information would be valuable to all levels of management.
24. Direct control is the control that is exercised after the deviations from plans have occurred. Which of
the following is not the underlying assumption of direct control?
(a) Performance can be measured
(b) Personal responsibility is absent
(c) The time expenditure is warranted
(d) Mistakes can be discovered in time
(e) The individual who is responsible will take corrective steps.
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25. JIT (Just-In-Time) inventory control is an approach to inventory control which stipulates that materials
should arrive just, as they are needed, in the production process. Which of the following would
generally not be associated with a successful JIT program, for the purpose of inventory control?
(a) Well-organized receiving and handling of materials purchased from suppliers
(b) Strong management commitment
(c) Suppliers located in diverse and distant locations
(d) High quality of materials purchased from suppliers
(e) Dependable and long-lasting relationships with suppliers and customers.
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26. Managers often have to choose the best alternative from a given set of alternatives. What is the
technique that managers use for selecting an optimum combination of factors from a series of
interrelated alternatives?
(a) Economic order quantity (b) Linear programming
(c) JIT system (d) Kanban
(e) Distribution logistics.
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27. Productivity is one of the major concerns of managers as it helps organizations survive in a competitive
environment. Productivity includes the overall output of goods and services that is __________ by the
inputs.
(a) Divided (b) Multiplied (c) Subtracted (d) Added (e) Differentiated.
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28. A TQM programme is not characterized by
(a) A continual process
(b) Efforts by all organization members
(c) A focus on only a few critical work activities
(d) A focus on the production process
(e) Efforts to involve organization members.
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29. Financial ratios are particularly important to managerial control in an organization. One such financial
ratio, viz., return on investment, is a ratio that attempts to measure a firm's
(a) Leverage (b) Profitability (c) Liquidity (d) Reliability (e) Serviceability.
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30. Control systems used in organizations can be of different kinds, depending upon the specific
requirements of the organization. Which of the following statements is true with regard to
noncybernetic control system?
(a) It is a self-regulating control system
(b) It can automatically monitor the situation and take action
(c) It is a sophisticated control system and is not easy to understand
(d) It relies on human discretion
(e) Comparison of actual costs with budgeted costs is done.
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31. Debts are an important source of finance for a business. Which of the following ratios indicates the
company’s ability to pay long-term debts?
(a) Asset Management (b) Leverage
(c) Liquidity (d) Profitability (e) Activity.
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32. Control is an essential part of every organization. The management process is incomplete and
sometimes useless without the control function. Control function plays an important role of assisting
managers in
I. Coping with uncertainty.
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II. Detecting irregularities in the organization activities.
III. Centralising authority.
IV. Avoiding complex situations.
(a) Both (I) and (II) above (b) Both (I) and (III) above
(c) Both (II) and (III) above (d) Both (III) and (IV) above
(e) Both (I) and (IV) above.
33. Management by walking around (MBWA) may be used as a control technique by managers to monitor
the performance of their employees while they are performing their tasks. MBWA is based primarily
on which of the following sources of information?
(a) Statistical information (b) Oral reports
(c) Written reports (d) Computer databases
(e) Personal observation.
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34. General Manager (Marketing) of Sumit Ltd., who monitors fortnightly achievements of each manager
and gives instructions for better results in marketing, is acting in terms of which function?
(a) Planning (b) Auditing (c) Controlling (d) Leading (e) Organizing.
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35. For becoming a successful interpersonal communicator for efficient and effective management, a
manager must be able to grasp all of the following except
(a) How interpersonal communication works
(b) The importance of verbal versus non-verbal interpersonal communication
(c) How to get the most out of the grapevine
(d) The relationship between feedback and interpersonal communication
(e) How certain factors act as barriers to effective interpersonal communication.
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36. Listening is one of the most essential ingredients of effective communication. No message can be
properly understood without intent listening. Which of the following is not an effective listening
technique?
(a) Avoiding premature evaluation
(b) Avoiding eye contact
(c) Exhibiting affirmative nods and appropriate facial gestures
(d) Finding an area of interest in what the other person is saying
(e) Judging the content of the message, but not the weakness of the speaker.
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37. Andrew Carnegie said, "As I grow older, I pay less attention to what men say. I just watch what they
do." He was suggesting the importance of
(a) Face-to-face verbal communication (b) Non-verbal communication
(c) Cross-cultural communication (d) Upward communication
(e) Downward communication.
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38. Communication is a process of exchanging ideas or information between two persons. During the
communication process, when the message is converted to a symbolic form, it is known as
(a) Encoding (b) Expanding (c) Contracting (d) Decoding (e) Deciphering.
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39. Interpretation of messages plays a very important role in communication within or outside
organizations. The interpretation of a message by an individual is known as
(a) Message interference (b) Perception
(c) Noise (d) Semantics (e) Feedback.
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40. The communication process is made up of various components. A look at the various components of
the communication process helps one appreciate the challenge of effective communication in
organizations. Which of the following is the actual physical product from the source, i.e., the sender?
(a) Feedback (b) Filter (c) Message
(d) Channel (e) Understanding.
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41. The managerial grid identified five specific leadership styles. The _____ leader believes that thoughtful
attention to the needs of people for a satisfying relationship leads to a comfortable, friendly
organizational atmosphere and work tempo.
(a) Task (b) Middle of the road
(c) Country club (d) Team
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(e) Impoverished.
42. According to Kurt Lewin, a leader who allows his employees complete freedom to make decisions and
to complete work in whatever way they think is best, is using which leadership style?
(a) Democratic-participative (b) Laissez-faire
(c) Autocratic (d) Democratic-consultative
(e) Team management.
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43. Which theory of leadership states that the leader's job is to clarify the objectives they wish their
employees to reach and to remove roadblocks that employees find as they work toward their
objectives?
(a) Fiedler’s Model (b) Path-goal Theory
(c) Hersey and Blanchard's Model (d) The Ohio State Studies
(e) Vroom-Yetton Model.
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44. German Sociologist, Max Weber, introduced the concept of ‘charisma’ into discussions of leadership.
Which of the following is not generally regarded as a characteristic of charismatic leadership?
(a) Behaviour that is out of the ordinary
(b) Vision and the ability to articulate the vision
(c) Environment sensitivity
(d) Self-confidence
(e) Excess attention to detail.
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45. According to the Tannenbaum and Schmidt Leadership model, which of the following would be most
accurate regarding someone exhibiting behavior toward right of the continuum of leader behaviours?
(a) He would be a boss-centered leader
(b) He would be more likely to ask the group to make a decision
(c) He would be more autocratic
(d) He would be more likely to "sell" the decision
(e) He would present ideas and invite questions.
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46. One important issue involving leadership is the argument that managers and leaders are not necessarily
one and the same. As per the argument, a major difference between management and leadership is that
leadership includes
(a) Bringing together resources to achieve organizational goals
(b) Designing organizational structures
(c) Bringing about order and consistency
(d) The ability to inspire people
(e) Drawing up formal plans.
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47. When managers have substantial but not complete confidence and trust in subordinates and solicit
advice from subordinates while retaining the right to make final decision, Likert’s four systems of
management describes it as
(a) Participative leadership style (b) Benevolent-authoritative leadership style
(c) Consultative leadership style (d) Exploitative-authoritative leadership style
(e) Trait theory of leadership style.
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48. Jyotsna strives to develop friendships, prefers to work in cooperative situations, and works toward a
high degree of mutual understanding in her relationships. Which need is she demonstrating?
(a) Achievement (b) Power (c) Recognition
(d) Affiliation (e) Self-actualization.
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49. Building on the work of Abraham Maslow, psychologist Frederick Herzberg interviewed two hundred
accountants and engineers in the vicinity of Pittsburgh in U.S.A. He propounded the famous two-factor
theory of motivation, which was based on the question
(a) What do people want from their jobs?
(b) What is satisfaction in a job?
(c) Will a person receive justice in awarding pay?
(d) Who is the right boss?
(e) Will the person receive respect from his/her peers and subordinates?
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50. According to Herzberg, the various job content factors that make individuals satisfied with their jobs
are known as motivators. Which of the following can be classified as a motivator as per his two-factor
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theory of motivation?
(a) Supervision (b) Job Security
(c) Working Conditions (d) Recognition of work
(e) Socializing in work.
51. To overcome the criticisms of Maslow's Need Hierarchy theory, motivation researcher Clayton
Alderfer proposed an alternative theory known as ERG theory. Which of the following is not true
about Alderfer's ERG theory?
(a) Alderfer proposed a condensed version of Maslow's Need Hierarchy theory with only three
groups of core needs, viz., existence, relatedness and growth
(b) The existence needs are related to Maslow’s physiological and safety needs
(c) The relatedness needs are the desire to establish and maintain interpersonal relationships
(d) The growth needs are the desires to be creative and to have opportunities for personal
development
(e) ERG theory assumes a rigid hierarchy where a lower level need must be substantially gratified
before one can move on.
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52. Managers need to know the different motivation theories in order to motivate individual employees
perform to the best of their ability in any type of organization. Which of the following motivation
theories states that people develop beliefs about the fairness of the rewards they receive relative to their
contributions?
(a) Two-factor theory (b) ERG theory
(c) Needs theory (d) Expectancy theory
(e) Equity theory.
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53. Creative thoughts are the result of hard work and there are various techniques to foster creativity.
Which of the following is one of the best-known techniques for facilitating creativity, developed by
Alex F. Osborn?
(a) Brainstorming (b) Synectics
(c) Delphi Technique (d) Nominal Group Technique
(e) Simulation.
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54. Managers vary in their assumptions about people working in an organization. Which of the following
manager types would best describe an individual who believes that most people dislike work and will
avoid it whenever possible?
(a) Creative manager (b) Transformational manager
(c) Theory Y manager (d) Theory X manager
(e) Autocratic manager.
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55. Behavioral problems can arise in an organization due to a number of factors. One has to know the
underlying cause behind behavioral problems. Which of the following will not be a cause for
behavioral problems?
(a) Lack of team-spirit (b) Lack of positive attitude
(c) Blind adherence to rules (d) Personality problem
(e) Perception problem.
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56. An intervention, in Organization Development (OD) terms, is a systematic attempt to correct an
organizational deficiency uncovered through diagnosis. Which of the following intervention techniques
is concerned with the interpersonal relations and dynamics operating in work groups?
(a) Technostructural Activity (b) Team Building
(c) Skill Development (d) Process Consultation
(e) Survey Feedback.
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57. Every organization makes minor structural adjustments in reaction to changes. Change is any alteration
of the "status quo". The forces of change can be internal or external to the organization. An example of
an internal force for change is
(a) Marketplace (b) Government regulation
(c) Technology (d) Workforce
(e) Economic change.
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58. Most of the conflict-resolution approaches either focus on interpersonal relationships or structural
changes. There are different conflict-resolution approaches. The conflict-resolution approach that
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corresponds with a high level of assertiveness and a low level of cooperativeness, is referred to as
(a) Compromising (b) Collaborating
(c) Forcing (d) Avoiding
(e) Accommodating.
59. Performance appraisal involves the formal evaluation of an individual’s job performance. Which of the
following is not a useful suggestion for providing effective feedback in an appraisal review?
(a) Make the feedback goal-oriented
(b) Ensure understanding
(c) Keep the feedback impersonal
(d) Direct negative feedback toward behaviour that is uncontrollable
(e) Focus on specific behaviours.
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60. Which of the following contain sets of specific behaviours that represent gradations of performance
and are used as common reference points for rating employees on various job dimensions?
(a) Behaviourally anchored rating scales
(b) Graphic rating scales
(c) Behaviour rating scales
(d) Behaviour scales
(e) Performance rating scales.
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61. There are various appraisal techniques used in an organization. A performance appraisal technique that
makes use of feedback from supervisors, subordinates and co-workers, is known as
(a) Results-oriented appraisal (b) 360-degree appraisal
(c) Informal appraisal (d) Graphic Rating Scale
(e) Behaviourally Anchored Rating Scale.
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62. A person who had applied for the post of a service representative, is asked to handle a simulated
situation involving a complaining customer, by the company. Which of the following selection devices
is being made use of?
(a) Application Blank (b) Intelligence Test
(c) Personality Test (d) Work Sampling Test
(e) Knowledge Test.
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63. Which of the following is a computerized database containing basic information about each employee
that can be used to assess the likely availability of individuals for meeting current and future human
resource needs?
(a) Manpower Inventory (b) Replacement Planning
(c) Succession Planning (d) Skills Inventory
(e) Inventory Record File.
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64. Two widely used systematic job analysis approaches are the Functional Job Analysis and the Position
Analysis Questionnaire. Of the two, Functional Job Analysis focuses on which of the following
dimensions of an individual job?
I. What does the worker do with respect to data, people and jobs?
II. Which machines, tools and equipment does the worker use?
III. Which products or services does the worker produce?
(a) Only (I) above (b) Both (I) and (III) above
(c) Both (II) and (III) above (d) Both (I) and (II) above
(e) (I), (II) and (III) above.
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65. The selection process involves choosing the candidates who best meet the qualifications and have the
greatest aptitude for the job. There are various steps in the selection process. Which of the following
steps usually precedes the others in the selection process?
(a) Selection Test (b) Comprehensive Interview
(c) Application Blank (d) Reference Check
(e) Physical examination of the candidate.
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66. In modern times, organizations have been trying to create a corporate culture with a distinct identity by
moulding the behaviour of their members. The original source of an organisation’s culture is most
strongly associated with
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(a) Overseas influences (b) Political factors in the external environment
(c) General economic trends (d) The vision of the organisation’s founder(s)
(e) The make-up of organisational members when the organisation was established.
67. Each of the following is a characteristic of organizational culture except
(a) Member identity (b) Distinctiveness
(c) Observed behavioral regularities (d) Uniform strength
(e) Dominant and stable values.
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68. Power is a much broader concept than authority, and it is the ability of individuals or groups to induce
or influence the beliefs or actions of other persons and groups. There can be different types of powers.
According to which of the following powers, people or groups may exercise influence, because others
believe in them and their ideas?
(a) Position (b) Legitimate (c) Expert (d) Referent (e) Coercive.
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69. Subordinates are vital in an organization for implementation of the ideas set forth by top management.
The willingness of subordinates to take on additional responsibilities, is a factor that affects the degree
of
(a) Centralization (b) Decentralization
(c) Decision-making (d) Controlling (e) Staffing.
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70. An important issue in organizing is the extent to which authority is centralized, or its opposite,
decentralization, in a formal organization structure. Centralization is at one end of a continuum and at
the other end is decentralization. Centralization refers to
(a) The number of employees a manager can supervise
(b) The degree to which jobs within the organization are standardized
(c) The degree to which decision making is concentrated at a single point in the organization
(d) The unity of command within an organization
(e) The systematic delegation of authority in an organization-wide context.
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71. Which of the following refers to the rights inherent in a managerial position to give orders and expect
the orders to be obeyed?
(a) Responsibility (b) Authority
(c) Span of control (d) Unity of command (e) Unity of direction.
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72. Divisional structure is a type of departmentation in which positions are grouped according to similarity
of products, services or markets. Which of the following is not an advantage of Divisional Structure?
(a) Each unit or division can respond or react quickly, when required, because they normally do not
need to coordinate with other divisions before taking an action
(b) Coordination is simplified as each division is similar to an organization, containing the various
functions within it
(c) Individuals are able to develop in-depth areas of specialization to the same extent as in a
functional structure
(d) It helps the organization to focus on serving a particular customer
(e) It helps to fix responsibility and accountability for performance.
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73. There are three major forms of divisional structure: product division, geographic division and customer
division. Geographic Divisions are divisions designed to serve different geographic areas. Which of the
following statements is false regarding Geographic Division or Departmentation?
(a) It allows a manager to pay special attention to the needs and problems of the local markets
(b) It provides facilities to local customers
(c) It helps managers get extensive knowledge of specialized activities
(d) Product function can be organized on the basis of territory by establishing plants in a particular
region
(e) It requires more persons with managerial capabilities.
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74. Strategic Business Unit (SBU) is a more recent form of organization structure adopted by several
companies. Which of the following is not correct regarding Strategic Business Unit (SBU)?
(a) All SBUs of an organization have the same mission
(b) An SBU has well defined competitor groups
(c) An SBU efficiently manages its resources in prime areas
(d) An SBU should have a proper size, that is neither too small nor too large
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(e) A Business Manager is appointed for each SBU and delegated the responsibility for guiding and
promoting the product.
75. Departmentation can be done through four major structural alternatives: Functional structure,
Divisional structure, Hybrid structure, Matrix structure. Of these, Functional departmentalization
groups jobs by
(a) Tasks they perform (b) Territory they serve
(c) Type of customer they serve (d) Products they manufacture
(e) Services they provide.
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76. Which of the following factors determine(s) an effective span of control?
I. Clarity and Delegation of Authority.
II. Use of Objective Standards.
III. Rate of Change.
(a) Only (I) above (b) Both (I) and (III) above
(c) Both (II) and (III) above (d) Both (I) and (II) above
(e) (I), (II) and (III) above.
< Answer >
77. Purchasing agents are responsible for timely and reliable flow of raw materials and public relations
staff is responsible for developing and maintaining a favorable public image of the organization. All
these jobs, also known as interface functions form part of the
(a) Boundary spanning sub system (b) Technical subsystem
(c) Operational subsystem (d) Managerial subsystem
(e) Formal subsystem.
< Answer >
78. If in an organization, individuals have adequate authority and also responsibility in achievement of
organizational goals, the situation is called
(a) Downward delegation (b) Authority on par with responsibility
(c) Well-defined hierarchy of authority
(d) Unity of direction (e) Unity of command.
< Answer >
79. Anil, the manager of Internet Made Easy, is concerned. He is trying, like all technological based
companies, to stay ahead of the competition by being the first to offer the new services available on the
Internet. His business offers training to local businesses, and so he must offer the latest available
information; however, he must also advertise the classes and the content, which means going to the
publisher with that information six weeks before a class is to begin. He also has to think what he should
offer in his next series of classes. Anil is operating under which of the following conditions?
(a) Uncertainty (b) Certainty
(c) Risk (d) Optimal decision-making (e) Maximin.
< Answer >
80. When predictability is lower, a condition of risk exists. Which of the following is a characteristic of
decision-making under risk?
(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.
< Answer >
81. The strap of Rahul's backpack tears off as he starts to throw it over his shoulder. On the way to school,
he stops at the first store that carries backpacks, walks in, and purchases one off the front rack. Rahul
has just made what type of a decision?
(a) Irrational decision (b) Satisficing decision
(c) Risky decision (d) Optimal decision (e) Optical decision.
< Answer >
82. Once the best available alternative has been selected, it must be effectively implemented to achieve the
objective for which it was selected. It is very much possible for a good decision to become ineffective
due to poor implementation. Which of the following is important in effectively implementing the
< Answer >
11
chosen alternative in the decision-making process?
(a) Double-checking your analysis for potential errors
(b) Ignoring criticism concerning your chosen alternative
(c) Getting upper-management support
(d) Allowing those impacted by the outcome to participate in the process
(e) Getting lower-management support.
83. Managers who use a rational, intelligent and systematic approach are more likely than others to come
up with high quality solutions to the problems they face. There are two major types of decision-making
models. viz., the Rational Model and the Non-rational Models. Which of the following is false
regarding Rational Model of decision-making?
(a) Managers are completely involved in rational decision-making processes
(b) Managers possess and understand all information that is relevant to their decisions at the time they
make them
(c) Managers always make decisions, which are in the best social interests of their firms
(d) This view was in vogue during the first half of the nineteenth century
(e) The rational view is useful in providing a benchmark against which the actual managerial
decision-making patterns can be compared.
< Answer >
84. Tyrone currently holds a management position at XYZ Corporation. He is excellent at time
management and does not hesitate to delegate tasks to subordinates. Tyrone feels the most challenged
and performs at his best level when unique problems arise at his company. He is most often one of the
first managers to come up with an effective solution for the problem. Which of these can be stated of
Tyrone?
(a) Tyrone is excellent with programmed decisions
(b) Tyrone relies too heavily on the work of others
(c) Tyrone is apparently risk averse
(d) Tyrone excels at deriving non-programmed decisions
(e) Tyrone is an excellent resource allocation manager.
< Answer >
85. The success of an organization greatly depends on the decisions that managers make. Decision-making
is the process by which a course of action is selected so as to deal with a specific problem. It is a
systematic process and involves a series of steps. Feedback is usually used in which of the following
stages of the decision-making process?
(a) Problem identification stage (b) Resources and constraints identification stage
(c) Alternative evaluation stage (d) Monitoring stage
(e) Implementation stage.
< Answer >
86. Every company wants to gain competitive advantage over its competitors. So, a company follows
certain strategies to achieve it. If a company is able to be unique in its industry in a manner widely
valued by the market, it is likely to follow a
(a) Diversification strategy (b) Differentiation strategy
(c) Focus strategy (d) Cost-leadership strategy
(e) Growth strategy.
< Answer >
87. An objective is the object or aim of an action. It implies an explicit direction or the action taken and a
specific quality of work to be accomplished within a given period of time. Decisions relating to
determining organizational objectives and designating the corresponding action necessary to reach
them are
(a) Operational control decisions (b) Strategic planning decisions
(c) Management control decisions (d) Management information decisions
(e) Financial control decisions.
< Answer >
88. As an organization grows in size and complexity, specialization of various tasks becomes a necessity,
in most of the cases. Which of the following refers to the tendency of a system to move towards
increased specialization of various tasks?
(a) Equifinality (b) Focus
(c) Differentiation (d) Dynamic Homeostasis
(e) Cost leadership.
< Answer >
89. The eight key result areas in which Peter Drucker advises managers to set objectives include all of the
following except
< Answer >
12
(a) Market standing (b) Productivity
(c) Public responsibility (d) Inventory control
(e) Manager performance and development.
90. If you were responsible for setting up an MBO program, which of the following steps would you need
to complete before the others?
(a) Establish specific goals for various departments, subunits and individuals
(b) Formulate action plans (c) Clarify organizational roles
(d) Implement and maintain self-control (e) Do performance appraisal.
< Answer >
91. Management by Objectives (MBO) is a management process that is popular in many organizations. It
is the joint setting of goals and objectives by superiors and subordinates. A major difference between
traditional objective setting and MBO is
(a) In MBO, there are multiple objectives covering a range of organisational activities
(b) In traditional objective setting the objectives, once formulated, provide direction for management
decisions
(c) In traditional objective setting the objectives, once established, form the criteria against which
actual accomplishments can be measured
(d) In MBO, organisation members may actually pursue objectives other than the formal
organisational objectives
(e) Traditional objective setting is ‘top down’ only, while MBO is both a ‘top down’ and ‘bottom up’
process.
< Answer >
92. A local firm has earned a good reputation because of quality paper bags manufactured by it. Moreover,
it is environmental conscious and makes use of only recycled paper for manufacturing the bags. So
when the firm advertises that it uses only recycled paper products, it is
(a) Meeting its social obligation
(b) Being socially responsive
(c) Meeting its ethical responsibilities
(d) Paying attention to the bottom line
(e) Paying attention to the top line.
< Answer >
93. Complex interactions between the manager’s stage of moral development and the various moderating
variables determine whether he will act in an ethical or unethical manner. Moderating variables include
individual characteristics, structural design of the organization, the organizational culture and the
intensity of the ethical issue. Which of the following is/are not individual characteristic(s)?
(a) Perception (b) Attitudes (c) Motivation (d) Roles (e) Ego Strength.
< Answer >
94. The most important resources of an organization are its employees - the people who work in the
organization and give it their talent, creativity and drive. Employees are vital for effective operation of
a company. Which of the following is/are true about organizationally committed and satisfied
employees?
(a) Lower rates of turnover and absenteeism
(b) Higher rates of voluntary turnover (c) Higher rates of absenteeism
(d) Low motivation (e) Early voluntary retirement.
< Answer >
95. The social responsiveness of an organization can be measured on the basis of which of the following
criteria?
(a) Contributions to profit-oriented projects
(b) Fair treatment of employees; fair pay and safe working conditions
(c) Unequal employment opportunity
(d) Unsafe and poor quality products to customers
(e) Disregard to environment pollution.
< Answer >
96. An open system model is based on organization-environment interaction. A business takes the inputs,
processes and transforms them and gives the output. There is a set of interactive subsystems in such a
system. Identify from the following, the interactive subsystems.
(a) Technical and managerial
(b) Managerial and accounting
(c) Accounting, non-technical and organizational
(d) Technical, managerial and boundary spanning
(e) Boundary spanning, accounting and organizational.
< Answer >
13
97. Formal planning in an organization involves formal documentation, with properly laid-down guidelines
to be followed. Which of the following statements is not a correct criticism of formal planning?
(a) Planning may create rigidity
(b) Planning may focus managers’ attention on today’s competition, not on tomorrow’s survival
(c) No relationship exists between formal planning and organisational performance
(d) Formal planning reinforces success, which may lead to failure
(e) Formal plans can’t replace intuition and creativity.
< Answer >
98. There are many steps to be followed in creating sustainable competitive advantage for any firm. Which
one of the following is not a part of this process?
(a) Identify the specific target market the firm wants to serve
(b) Identify the potential opportunities that have not been tapped
(c) Analyze the resources and abilities to find out whether it can exploit the opportunities that have
been identified
(d) Motivate employees
(e) Integrate resources and capabilities to build distinctive competencies.
< Answer >
99. The principle of preventive control makes a sharp distinction between analyzing performance reports
and determining whether managers adopted the established principles in actual practice. All of the
following are advantages of preventive control except
(a) One need not have a thorough understanding of managerial principles, functions and techniques
and the management philosophy
(b) Greater accuracy at work is achieved in assigning personal responsibility to managers
(c) Managers will be able to take corrective actions in time
(d) It encourages self-control
(e) It provides psychological advantage to subordinates.
< Answer >
100. In Aid Labs, the main department is of research and development and it is very difficult for them to
measure the output in monetary terms. So, the budgets for it are developed only in terms of the
maximum resources that can be consumed by them in the past year. This kind of responsibility center is
known as
(a) Standard cost center (b) Revenue center
(c) Discretionary expense center (d) Investment center (e) Profit center.
< Answer >
END OF QUESTION PAPER
14
Suggested Answers
Introduction to Management (MB111): July 2005
1. Answer : (d)
Reason : L.A. Allen defined organizing as "the process of identifying and grouping the work to be
performed, defining and delegating responsibility and authority, and establishing
relationships for the purpose of enabling people to work most effectively together in
accomplishing objectives".
In the area of diversity, organizing involves establishing task forces or committees to
explore issues and provide ideas, carefully choosing work assignments to support the
career development of all employees, and evaluating the extent to which diversity goals
are being achieved
Hence, from above discussion, we can infer that option (d) is correct.
< TOP >
2. Answer : (b)
Reason : General Manager’s action is to handle a dispute between two departments which was
leading to a lot of disturbance in work atmosphere. He is acting as disturbance handler. So,
(b) is correct answer.
< TOP >
3. Answer : (d)
Reason : Technical skills are most important for first level managers and include knowledge of and
proficiency in activities involving methods, processes, and procedures.
< TOP >
4. Answer : (d)
Reason : Whenever a General Manager is planning for recruiting/increasing manpower in an
organization, it comes under staffing function of management. So, (d) is correct answer.
< TOP >
5. Answer : (d)
Reason : The Gantt chart visually shows when tasks are supposed to be done and compares that with
the actual progress on each.
Hence from above discussion, we can infer that option (d) is correct.
< TOP >
6. Answer : (e)
Reason : Division of labor enables workers to gain specialized knowledge of a single task, and not
cross-functional expertise.
< TOP >
7. Answer : (b)
Reason : When an individual reports to two people, the principle of unity of command is violated.
< TOP >
8. Answer : (d)
Reason : Management science approach does not include the philosophy that individual work is
better than teamwork.
< TOP >
9. Answer : (b)
Reason : Primum Non-Nocere means above all, doing no harm. It serves as an ethical guideline for
managers.
Hence from above discussion, we can infer that option (b) is correct.
< TOP >
10. Answer : (b)
Reason : The belief that businesses are being socially responsible when they attend only to
economic interests is known as “Violation of profit maximization” argument against a firm
being socially responsible.
Hence from above discussion, we can infer that option (b) is correct.
< TOP >
11. 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.
< TOP >
15
12. Answer : (c)
Reason : Values are the basic convictions that individuals hold about what is right and wrong.
Hence from above discussion, we can infer that option (c) is correct.
< TOP >
13. Answer : (b)
Reason : Planning can’t eliminate change, but managers usually plan in order to anticipate changes
and develop the most-effective response to changes.
Hence from above discussion, we can infer that option (b) is correct.
< TOP >
14. Answer : (b)
Reason : The various steps in the planning process are as follows:
(i) Analyse opportunities.
(ii) Establish organizational objectives.
(iii) Determine planning premises.
(iv) Identify alternatives.
(v) Evaluate alternatives by weighing them in the light of premises and goals.
(vi) Select the best alternative.
(vii) Implement the plan.
(viii) Review the implemented plan.
Hence, from above discussion, we can infer that option (b) is correct.
< TOP >
15. 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.
< TOP >
16. Answer : (d)
Reason : In an environment of high uncertainty, one should adopt a directional plan with an
emphasis on the short-term, to make a plan more effective.
< TOP >
17. Answer : (b)
Reason : The Japanese Management organizing process usually involves
(1) Collective responsibility and accountability.
(2) Ambiguity of decision responsibility.
(3) Informal organization structure.
Hence, (b) is the correct answer.
< TOP >
18. Answer : (d)
Reason : In US Management style, the usual staffing position is
(1) Rapid advancement desired and demanded.
(2) Loyalty to the profession.
(3) Appraisal of short-term results.
Hence, (d) is the correct answer.
< TOP >
19. Answer : (c)
Reason : Successful global management requires an attitude that is best described as geocentric. It is
an approach whereby executives believe that a global view is needed in both the
headquarters of the parent company and its various subsidiaries.
Hence from above discussion, we can infer that option (c) is correct.
< TOP >
20. Answer : (b)
Reason : Polycentric attitude is based on the notion that it is best to give foreign subsidiaries, staffed
by local nationals, a great deal of managerial freedom.
Hence, from above discussion, we can infer that option (b) is correct.
< TOP >
21. Answer : (c) < TOP >
16
Reason : MIS (Management Information System) incorporates an unusually wide variety of
knowledge areas.
Hence from above discussion, we can infer that option (c) is not true about Management
Information System (MIS).
Options (a), (b), (d) and (e) are all true about Management Information System (MIS).
22. Answer : (d)
Reason : Salesperson Quotas is an example of internal information in an organization.
Hence from above discussion, we can infer that option (d) is correct.
Options (a), (b), (c) and (e) are all examples of external information.
< TOP >
23. Answer : (a)
Reason : The level of management for which information about environmental trends would be
most appropriate is top management.
Hence from above discussion, we can infer that option (a) is correct.
< TOP >
24. Answer : (b)
Reason : The underlying assumptions of direct control are:
(i) Performance can be measured.
(ii) Personal responsibility exists.
(iii) The time expenditure is warranted.
(iv) Mistakes can be discovered in time.
(v) The individual who is responsible will take corrective steps.
Hence, from above discussion, we can infer that option (b) is not the underlying
assumption of direct control.
Options (a), (c), (d) and (e) are all underlying assumptions of direct control.
< TOP >
25. Answer : (c)
Reason : A successful JIT program requires that suppliers be located in close proximity of the
company, so that materials can arrive as and when needed.
Hence from above discussion, we can infer that option (c) would generally not be
associated with a successful JIT program.
Options (a), (b), (d) and (e) would all be associated with a successful JIT program.
< TOP >
26. Answer : (b)
Reason : Linear programming is a technique for selecting an optimum combination of factors from a
series of interrelated alternatives, each subject to limitations, to achieve a desired goal.
< TOP >
27. Answer : (a)
Reason : Productivity includes the overall output of goods and services, that is divided by the inputs.
Hence, from above discussion, we can infer that option (a) is correct.
< TOP >
28. Answer : (c)
Reason : A TQM programme is a continual process involving all organization members that spans
all production activities in the organization.
< TOP >
29. Answer : (b)
Reason : Return on investment is the ratio of earnings before taxes to that of total assets. So, it
attempts to measure profitability.
Hence, from above discussion, we can infer that option (b) is correct.
< TOP >
30. Answer : (d)
Reason : Noncybernetic control system relies on human discretion.
Hence from above discussion, we can infer that option (d) is true with regard to
noncybernetic control system.
Options (a), (b), (c) and (e) are all false with regard to noncybernetic control system.
< TOP >
31. Answer : (b)
Reason : Leverage or debt management ratios indicate the company’s ability to pay long-term debts.
< TOP >
32. Answer : (a) < TOP >
17
Reason : Controlling function is gaining importance in today’s organizations due to a number of
factors. It plays an important role in assisting managers with changes like coping with
uncertainty and detecting irregularities. Centralizing authority and avoiding complex
situations are not applicable.
33. Answer : (e)
Reason : Management by walking around (MBWA) is based primarily on personal observation.
Hence, from above discussion, we can infer that option (e) is correct.
< TOP >
34. Answer : (c)
Reason : Monitoring of work in a fixed period of time and analyzing and advising is a controlling
function of management. So, (c) is correct answer.
< TOP >
35. Answer : (c)
Reason : The grapevine is an informal communication system and is popularly known as "rumour
mill". It is not of relevance to interpersonal communication.
Hence, from above discussion, we can infer that option (c) is correct.
< TOP >
36. Answer : (b)
Reason : Avoiding eye contact is not an effective listening technique. Effective listening requires
eye contact.
Hence, from above discussion, we can infer that option (b) is not an effective listening
technique.
Options (a), (c), (d) and (e) are all effective listening techniques.
< TOP >
37. Answer : (b)
Reason : Non-verbal communication includes body posture, eye contact, distance from the receiver,
voice inflection, rate of speech, gesture, silence etc.
Hence, from above discussion, we can infer that option (b) is correct.
< TOP >
38. Answer : (a)
Reason : The process of converting a message into a symbolic form is called Encoding.
Hence from above discussion, we can infer that option (a) is correct.
< TOP >
39. Answer : (b)
Reason : Perception is the process that individuals use to acquire and make sense out of information
from the environment.
Hence, from above discussion, we can infer that option (b) is correct.
< TOP >
40. Answer : (c)
Reason : The communication process is made up of various components. The message is the actual
physical product from the source. i.e., the sender.
Hence, from above discussion, we can infer that option (c) is correct.
< TOP >
41. Answer : (c)
Reason : According to the managerial grid, the country club leader believes that thoughtful attention
to the needs of people for a satisfying relationship leads to a comfortable, friendly
organizational atmosphere and work tempo.
< TOP >
42. Answer : (b)
Reason : According to Kurt Lewin, a laissez-faire leader allows his employees complete freedom to
make decisions and to complete work in whatever way they think is best.
< TOP >
43. Answer : (b)
Reason : Path-goal theory states that the leader's job is to clarify the objectives they wish their
employees to reach and to remove roadblocks that employees find as they work toward
their objectives.
< TOP >
44. Answer : (e)
Reason : Charismatic leaders inspire followers to pursue extraordinary levels of effort. They have
magnetism, divine grace and exceptional ability to respond to crises. However, they need
not give excess attention to detail.
Hence, from above discussion, we can infer that option (e) is the answer.
< TOP >
18
45. Answer : (b)
Reason : According to the Tannenbaum and Schmidt Leadership model, the statement that would be
most accurate regarding someone exhibiting behavior toward right of the continuum of
leader behaviours is option (b), i.e., He would be more likely to ask the group to make a
decision.
< TOP >
46. Answer : (d)
Reason : A major difference between management and leadership is that leadership includes the
ability to inspire people.
Hence, from above discussion, we can infer that option (d) is correct.
< TOP >
47. Answer : (c)
Reason : When managers have substantial but not complete confidence and trust in subordinates
and solicit advice from subordinates while retaining the right to make final decision,
Likert’s four systems of management describes it as consultative leadership style. (a) In
Participative leadership style, the manager has complete trust and confidence in the
subordinates in all the matters. (b) In Benevolent-authoritative leadership style, the
managers have a patronizing confidence and trust in subordinates, solicit some ideas and
opinions from subordinates, motivate with rewards and some fear and punishment, permit
some upward communication and allow some delegation of decision-making but with
close policy control. (d) In Exploitative-authoritative leadership style, the manager
represents dictatorial leadership behavior with all decisions made by the manager. (e) Trait
theory of leadership style assumes that leaders share certain inborn personality traits.
< TOP >
48. Answer : (d)
Reason : People with a need for affiliation strive to develop friendships, prefer to work in
cooperative situations and work toward a high degree of mutual understanding in their
relationships.
< TOP >
49. Answer : (b)
Reason : Herzberg’s two-factor theory of motivation was based on the question, “What is
satisfaction in a job?”.
Hence from above discussion, we can infer that option (b) is correct.
< TOP >
50. Answer : (d)
Reason : Motivation factors give rise to good feelings and raise performance levels by influencing
the "will to work well".
Recognition of work can be classified as a motivator according to Herzberg’s Two-Factor
Theory of Motivation.
Hence, from above discussion, we can infer that option (d) is correct.
< TOP >
51. Answer : (e)
Reason : Alderfer proposed a condensed version of Maslow's Need Hierarchy theory with only three
groups of core needs. viz., existence, relatedness and growth. According to this ERG
theory, different needs can emerge simultaneously, and people can move backward and
forward through the need continuum as circumstances change. There is every possibility
that a higher-level need may emerge before a lower-level need, given the right
circumstances.
Hence, from above discussion, we can infer that option (e) is not true about Alderfer's
ERG theory.
Options (a), (b), (c) and (d) are all true about Alderfer's ERG theory.
< TOP >
52. Answer : (e)
Reason : Equity theory states that people develop beliefs about the fairness of the rewards they
receive relative to their contributions.
< TOP >
53. 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.
< TOP >
54. Answer : (d) < TOP >
19
Reason : Mc Gregor's Theory X manager assumes that individuals dislike work and will avoid it
whenever possible.
Hence, from above discussion, we can infer that option (d) is correct.
55. Answer : (c)
Reason : Blind adherence to rules will not be a cause for behavioral problems.
Hence, from above discussion, we can infer that option (c) is correct.
< TOP >
56. Answer : (d)
Reason : Process Consultation intervention technique is concerned with the interpersonal relations
and dynamics operating in work groups.
Hence, from above discussion, we can infer that option (d) is correct.
< TOP >
57. Answer : (d)
Reason : An example of an internal force for change is workforce.
Hence, from above discussion, we can infer that option (d) is correct.
Options (a), (b), (c) and (e) are all incorrect as they are all external forces for change.
< TOP >
58. Answer : (c)
Reason : The conflict-resolution approach that corresponds with a high level of assertiveness and a
low level of cooperativeness, is referred to as Forcing.
Hence, from above discussion, we can infer that option (c) is correct.
< TOP >
59. Answer : (d)
Reason : Directing negative feedback toward behaviour that is uncontrollable, is not a useful
suggestion for providing effective feedback in an appraisal review, as the situation might
become more uncontrollable.
Hence, from above discussion, we can infer that option (d) is not a useful suggestion for
providing effective feedback in an appraisal review.
Options (a), (b), (c) and (e) are all useful suggestions for providing effective feedback in
an appraisal review.
< TOP >
60. Answer : (a)
Reason : Behaviourally anchored rating scales contain sets of specific behaviours that represent
gradations of performance, are used as common reference points (or anchors) for rating
employees on various job dimensions.
Hence, from above discussion, we can infer that option (a) is correct.
< TOP >
61. Answer : (b)
Reason : A performance appraisal technique that makes use of feedback from supervisors,
subordinates and co-workers, is known as 360-degree appraisal.
Hence, from above discussion, we can infer that option (b) is correct.
< TOP >
62. Answer : (d)
Reason : Work Sampling Test is used as a means of measuring practical ability on a specific job.
The applicant completes some job activity under structured conditions.
Hence from above discussion, we can infer that option (d) is correct.
< TOP >
63. Answer : (d)
Reason : Skills Inventory is a computerized database containing basic information about each
employee that can be used to assess the likely availability of individuals for meeting
current and future human resource needs.
Hence, from above discussion, we can infer that option (d) is correct.
< TOP >
64. Answer : (e)
Reason : Functional Job Analysis focuses on the following dimensions of an individual job:
I. What does the worker do with respect to data, people and jobs?
II. Which machines, tools and equipment does the worker use?
III. Which products or services does the worker produce?
Hence, from above discussion, we can infer that option (e) is correct.
< TOP >
20
65. 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.
(vii) Making the selection.
Hence, from above discussion, we can infer that option (c) is correct.
< TOP >
66. Answer : (d)
Reason : The original source of an organisation’s culture is most strongly associated with the vision
of the organisation’s founder(s).
Hence, from above discussion, we can infer that option (d) is correct.
< TOP >
67. Answer : (d)
Reason : The following are the characteristics of organization culture: distinctiveness; based on
strong norms; observed behavioral regularities; member identity; stable and dominant
values; and variable strength (weak and strong cultures).
< TOP >
68. Answer : (d)
Reason : According to Referent power, people or groups may exercise influence, because others
believe in them and their ideas.
Hence, from above discussion, we can infer that option (d) is correct.
< TOP >
69. Answer : (b)
Reason : Decentralization is the systematic delegation of authority in an organization-wide context.
The willingness of subordinates to take on additional responsibilities, is a factor that
affects the degree of decentralization.
Hence, from above discussion, we can infer that option (b) is correct.
< TOP >
70. Answer : (c)
Reason : Centralization refers to the degree to which decision making is concentrated at a single
point in the organization.
Hence, from above discussion, we can infer that option (c) is correct.
< TOP >
71. Answer : (b)
Reason : Authority refers to the rights inherent in a managerial position to give orders and expect
the orders to be obeyed.
Hence, from above discussion, we can infer that option (b) is correct.
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72. Answer : (c)
Reason : Divisional Structure is a type of departmentation in which positions are grouped according
to similarity of products, services or markets.
Individuals are unable to develop in-depth areas of specialization to the same extent as in a
functional structure.
Hence from above discussion, we can infer that option (c) is not an advantage of
Divisional Structure.
Options (a), (b), (d) and (e) are all advantages of Divisional Structure.
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73. 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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74. Answer : (a) < TOP >
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Reason : Strategic Business Units (SBUs) are distinct little businesses set up as units in a larger
company to ensure that a certain product or product line is promoted and handled as though
it were an independent business.
An SBU has a mission for itself that is unique and different from the missions of other
SBUs.
Hence, from above discussion, we can infer that option (a) is not correct regarding
Strategic Business Unit (SBU).
Options (b), (c), (d) and (e) are all correct regarding Strategic Business Unit (SBU).
75. Answer : (a)
Reason : Functional departmentalization groups jobs by tasks they perform.
Hence from above discussion, we can infer that option (a) is correct.
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76. 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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77. Answer : (a)
Reason : The Boundary spanning sub system consists of jobs that require the interaction of
personnel with the general environment.
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78. Answer : (b)
Reason : When a manager delegates authority, commensurate responsibility must be given as well.
Equally, when responsibility is allocated, adequate authority should be conferred to enable
a person to fulfill the given task. This situation is called authority on par with
responsibility. So, (b) is correct answer.
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79. Answer : (a)
Reason : Anil, in the example given, is operating under conditions of uncertainty.
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80. Answer : (c)
Reason : The characteristic of decision-making under risk is that the decision-maker has incomplete
information about available alternatives, but has a good idea of the probability of particular
outcomes for each alternative.
Hence, from above discussion, we can infer that option (c) is correct.
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81. Answer : (b)
Reason : Rahul, in the given example, made a satisficing decision.
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82. 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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83. Answer : (c)
Reason : According to Rational Model of decision-making, managers always make decisions, which
are in the best economic interests of their firms.
Hence, from above discussion, we can infer that option (c) is false regarding Rational
Model of decision-making.
Options (a), (b), (d) and (e) are all true regarding Rational Model of decision-making.
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84. Answer : (d)
Reason : Non-programmed decisions are those that deal with unusual or exceptional problems. They
are the decisions for which predetermined decision rules are impractical because the
situations are novel and/or ill-structured. So, we can say that Tyrone excels at deriving
non-programmed decisions.
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85. Answer : (d)
Reason : In monitoring stage of the decision-making process, actual performance is compared with
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the planned performance. Feedback is usually used in monitoring stage.
Hence, from above discussion, we can infer that option (d) is correct.
86. Answer : (b)
Reason : Differentiation strategy involves attempting to offer products and services that are
considered unique in the industry.
Hence, from above discussion, we can infer that option (b) is correct.
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87. Answer : (b)
Reason : Decisions relating to determining organizational objectives and designating the
corresponding action necessary to reach them are strategic planning decisions.
Hence from above discussion, we can infer that option (b) is correct.
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88. Answer : (c)
Reason : Differentiation is the tendency of a system to move towards increased specialization of
various tasks.
Hence, from above discussion, we can infer that option (c) is correct.
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89. 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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90. 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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91. Answer : (e)
Reason : MBO is the joint setting of goals and objectives by superiors and subordinates and
clarifying on the objective itself.
Traditional objective setting is ‘top down’ only, while MBO is both a ‘top down’ and
‘bottom up’ process.
Hence, from above discussion, we can infer that option (e) is correct.
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92. Answer : (b)
Reason : When a firm advertises that it uses only recycled paper products, it is being socially
responsive.
Hence from above discussion, we can infer that option (b) is correct.
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93. Answer : (d)
Reason : Roles are not associated with the study of individual characteristics.
Hence from above discussion, we can infer that option (d) is correct.
Options (a), (b), (c) and (e) are all associated with individual characteristics.
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94. Answer : (a)
Reason : Lower rates of turnover and absenteeism are true about organizationally committed and
satisfied employees.
Hence from above discussion, we can infer that option (a) is correct.
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95. Answer : (b) < TOP >
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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.
96. Answer : (d)
Reason : An open system model is based on organization-environment interaction. This system is
viewed as comprising a set of interactive subsystems, out of which three important
subsystems can be identified. They are (i) Technical, (ii) Boundary-spanning and (iii)
Managerial.
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97. Answer : (c)
Reason : Formal planning increases organizational effectiveness and provides efficiency in
operations, thus improving organizational performance.
Hence, from above discussion, we can infer that option (c) is not a correct criticism of
formal planning.
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98. Answer : (d)
Reason : Motivating employees is not part of the process of creation of competitive advantage.
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99. Answer : (a)
Reason : One needs to have a thorough understanding of managerial principles, functions and
techniques and the management philosophy for wide application of the principle of
preventive control.
Options (b), (c), (d) and (e) are all advantages of preventive control.
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100. Answer : (c)
Reason : Responsibility centers where the budgets are developed only in terms of the maximum
resources that can be consumed by them in a particular period of time are called
discretionary expense centers.
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