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F-2,Block, Amity Campus

Sec-125, Nodia (UP)

India 201303

ASSIGNMENTS

PROGRAM: BFIA

SEMESTER-I

Subject Name :BUSINESS ORGANISATION AND MANAGEMENT

Study COUNTRY :MALAWI

Permanent Enrollment Number (PEN) :BFIA01172009-2012041

Roll Number :

Student Name :FRANCIS ODALA MTAMBO

ASSIGNMENT DETAILS MARKS

Assignment A Five Subjective Questions 10

Assignment B Three Subjective Questions + Case Study 10

Assignment C 40 Objective Questions 10

Signature :

Date : 16TH DECEMBER 2010

Assignments Submitted:

Assignment A Assignment B Assignment C


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BUSINESS ORGANISATION AND MANAGEMENT

ASSIGNMENT A

Q1.What is Management? Discuss its essential features.

Answer:

MANAGEMENTManagement refers to the work that managers do which, according to Henry Fayol is to

forecast and to plan, to organize, to coordinate and to controlhuman efforts to accomplish

pre-determined goals.

Management also refers to a group of people comprised of the personnel who perform

managerial functions in an organization.

It also covers the various concepts and principles, the knowledge and application of which aids

in managing an organisation.

ESSENTIAL FEATURES OF MANAGEMENT

The following are the essential features of management:

1.Getting things done.A manager does not do any operating work himself but gets it done through others. He must

motivate the subordinates for the accomplishment of the task assigned to them so that he gets

things done.

2. Activity.Management is a process of organized activity. It is concerned with the efficient use ofresources like men, money and materials in the organization. There can not be managementwithout activity.

3.Group activity.Management cannot exist independent of the group or organization it manages. Management is

the powerhouse of any group activity and inspires workers to put forth their best efforts to

accomplish its goals.

4.Universal activity.Management is a universal phenomenon, i.e. it is found wherever are people working together

to accomplish goals. Though no one principle can be applicable in all situations, the principlesare modified to suit the given situation and the type of organization but still they are variants of

the same core principles.

5.Purposeful.Management is a goal-oriented activity. There can not be management without having

objectives to be accomplished. Thus is concerned with the accomplishment of goals through itsvarious functions like planning, organizing, staffing, directing, and controlling.


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6.Accomplishment of certain goals.Management is a process which involves planning, organizing, directing and controlling theefforts of human resources in the use of material resources. These basic functions are

performed by managers to accomplish certain goals. These certain goals are the one that

necessitates management.

7.An integrating process.Management integrates men, machines and materials for performing various operations andaccomplishing the defined goals. Thus, management acts as a catalytic agent for gettingmaximum productivity from all the resources.

8.It is intangible.Management is abstract and cannot be touched or seen with the eyes. It is only evidenced by

the quality of the organization and the results.

9.It is a profession.Management is a profession because some of its established principles are being applied in

practice.

10.It is interdisciplinary.This implies that, even though management has been developed as a separate discipline, it

draws knowledge and concepts from other social sciences like psychology, sociology,anthropology, economics, and others. Management integrates the ideas and concepts taken

from these disciplines and presents newer concepts for application in the improvement of the

management of organizations.

11.It is both a science and an art.As a science, management has developed certain principles and laws which have wide

applications. As an art, it is concerned with the practical application of knowledge for the

solution of organizational problems. Thus management is both a science and an art.

12.It is dynamic.Management is dynamic because it adapts itself to the social changes and introduces

innovation in methodology.

.

13.It involves decision-making.Management process involves decision-making at various levels for getting things done by

others. It involves selecting the most appropriate alternative out of the available ones.

14.Applies economic principles.It applies economic principles to the control the use of resources in an organization.

15.It is concerned with direction and control.Management is concerned with the direction and control of the various activities in an

organisation. It deals particularly with the active direction ofthe human effort.


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Q2.What is Planning? Explain briefly the different types of Plans giving suitable examples.

Answer:

PLANNING

Planning is the process of determining objectives and selecting a course of action that willachieve the objectives.

In planning the manager has to look ahead and decide in advance what is to be done, when andwhere it is to be done and by whom it is to be done. Planning is the most primary function of

management. It precedes all other functions because a manager plans before he is able to

initiate any activity and his other functions.

It is a mental process consisting of forecasting, decision-making and problem solving, and

therefore requires the use of intellectual faculties, foresight, imagination and sound judgment.

A plan is simply stated as a predetermined future course of action.

The process of planning involves formulating policies, programmes, budgets, schedules, etc, to

achieve the objectives; and lying down of procedures and standards of checking performance.

TYPES OF PLANS

a. ObjectiveObjective is the goal or target to be achieved. It is the basis of all plans i.e. all other plans are

designed to help achieve the objective. An example of objective would be to increase numberof subscribers by 50%.

b. PolicyPolicy is a general statement or understanding to guide thinking regarding a particular matter inan organisation. It prescribes the boundary within which decisions are to be made. An example

of policy would be students shall be admitted on merit.

c. StrategyStrategy is the action plan to be adopted in face of environmental uncertainties. It relates the

organizations activities to its environment taking into consideration its objective. An exampleof strategic plan would be improvement of quality to face increasing market competition.

d. ProcedureProcedure refers to the manner in which activities are to be performed, i.e. modi operandi ofthe activities. It is a sequence of steps to be followed for a particular process or activity.

Examples under this type of plan would be purchase procedure, assembling procedure for

manufacturing and fabrication works.

e. RuleRules state what should and should not be done in a situation. Rules are rigid plans which offerno scope for discretion. Examples of rules are No phones in the control room or Do not stay

in the production without supervisor.

f. ProgrammeA programme is a combination plan for goal achievement. It states the activities and resources

to be undertaken. An example of a programme would be organic production of foods stuffs.


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g. ScheduleA schedule is a time-table for activities. It specifies priority of work and time for each activity.Example of schedule would be move to organic production by December 2010.

h. BudgetBudget is the statement of expected results and required resources for accomplishment of theresults. It is a quantitative and time bound plan of action. Example of budget is Generate 10

Megawatts of power by 2012. Under this will be included the resources needed to generate the10 Megawatts of power.

i. ProjectA project is a cluster of interrelated activities that constitute a separate unit from that of theusual and continuous business of the organisation. A project is a temporary endeavor

undertaken to create a unique product or service.1

Ii is a scheme for deployment of resources

for accomplishment of particular results. Examples of projects are construction of a dam andinstallation of CCTV.


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Q3.Explain in brief the essential features of a joint stock company?

Answer:

AJOINT STOCKCOMPANY

Ajoint stock company is a type of business entity which is run on common stock of resourcesin form of money brought up from members as capital. The capital is divided into small equal

parts called shares and the proportion of the company owned by each shareholder is

determined by the proportion of shares that he owns. Certificates of ownership are issued bythe company in return for each contribution, and the shareholders are free to transfer their

ownership interest (shares) at any time by selling their stockholding to others.

ESSENTIAL FEATURES OF A JOINT STOCKCOMPANY

The essential features of a joint stock company are as below:

1. Legal formation:No single individual or a group of individuals can start a business and call it a joint stock

company. A joint stock company can come into existence only when it has been registered

after completion of all the legal formalities required by the Indian Companies Act, 1956.

2. Separate legal entityBeing an artificial person, a joint stock company has its own separate existence independent ofits investors. This means that a joint stock company can own property, enter into contracts and

conduct any lawful business in its own name. It can sue and can be sued by others in the court

of law. The shareholders are not the owners of the property owned by the company. Also, theshareholders cannot be held responsible for any of the acts of the company.

3. Limited liability of its membersEvery member who takes share in a company is known as a shareholder. The liability of everyshareholder is limited to the face value of the shares held by him.That means even if there is

liquidation of the company, the personal property of shareholders can not be used to pay the

debts of the company.

4. Perpetual successionMen may come and go but the company continues to exist. It has a continuous existence whichis not affected by death, insanity insolvency or retirement of any shareholder or director.

5. Common sealA company being an artificial person cannot sign documents for itself. Therefore, it has gotcommon seal as device to inscribe on its documents and important papers. Any document, on

which the company's seal is put and is duly signed by any official of the company, becomes

binding on the company.

6. Transfer of sharesThe company has to state its maximum capital required at any given time in the future in itsMemorandum of Association. The capital is divided into small denominations, known as

shares. These shares can be transferred from one person to another.


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7. Ownership is Distinct from ManagementThe company is owned by the shareholders, who have subscribed for its shares. It is

managed by director(s), and other managers or staff to run the business of the shareholdersindependently.

8. Separate propertyA company, being a legal body, can own, and sell property in its own name. Theshareholders do not have any right to lay a claim to it privately or jointly.

9. Artificial person:Just like an individual takes birth, grows, enters into relationships and dies, a joint

stock company takes birth, grows, enters into relationships and dies. However, it is

called an artificial person as its birth, existence and death are regulated by law.


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Q4.What is an organization? Distinguish between functional and product departmentation.

Answer:

AN ORGANIZATION

An organization is a network of horizontal and vertical relationships among the members of a

group designed to accomplish some common objectives. This network forms a system or

pattern of formal relationships that govern the activities of people, functions and facilitieswithin which people work together for accomplishment of desired objectives.

According to James D Mooney, organization is the form of every human association for theattainment of some common purpose. Thus organisation is the skeleton framework of

business.

FUNCTIONAL AND PRODUCT DEPARTMENTATION DISTINGUISHED

The major departments of an organization are established by top-management. Supervisors are

only concerned with activities within their own areas of supervision. Nevertheless, they arechallenged by the need to departmentalize within their areas from time to time

The criterion used by top-level managers when they define the major departments is the sameas that used by supervisors when they are faced with the challenge to departmentalize their

areas.

Departmentation is basically done according to function, products or services, territory,

customer, process and equipment, time, or matrix design.

Here, we will discuss and distinguish functional departmentation and product departmentation.

Functional departmentation groups activities by function i.e. by the jobs to be done. It is

consistent with the idea of specialization and division of work. It places activities that are alikeor similar together in one department and under a single chain of command. For example, word

processing, data-processing, and printing services may be grouped together into a computer

services department; sales and advertising may be grouped together into a marketingdepartment, etc. Functional departmentation is the most widely used form of departmentation.

Functional departmentation is a natural and logical way of arranging activities. It takes

advantage of occupational specialization by placing together jobs and tasks that are performedby people with the same kinds of training, experience and skills; and that need the same type of

equipment and facilities.

Functional departmentation also facilitates coordination since a supervisor is in charge of one

major area of activity. Coordination will be easier this way than to have the similar functions

performed in different departments under different supervisors as it is done in productdepartmentation.

Product departmentation establishes each major product (or group of closely relatedproducts) in a product line as a relatively independent unit within the overall framework of the

enterprise. For example, a beverage products company may divide its operations into alcoholic

beverages department and non-alcoholic beverages department. As such there is no application


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of the principle of specialization since each department would comprise of people withdifferent training and skills, and people of the same technical skills would be in different

departments and under different chains of command, as contrasted to functionaldepartmentation. There is also little or no coordination at all among personnel of the same

knowledge and skill that are placed in different departments.

Considering the example of a beverages company, we would have quality control personnel ineach department. This would be avoided if departmentation was by function.


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Q5. (a)Distinguish between delegation and decentralization

Answer:

Delegation (of authority) is the process a manager follows in dividing and assigning the workassigned to him among others so that he performs that part which only he, because of his

unique organizational placement, can perform effectively.

As contrasted from delegation, decentralization is the dispersal of authority throughout the

organization.It is the systematic delegation to the lowest levels possible of all authority exceptthat which can only be exercised at central points.From the above definitions, the following distinctions can be drawn between delegation and

decentralization:

i. Delegation means temporary transfer of authority from one individual to another whiledecentralization means diffusion of authority throughout the organization.

Decentralization is theprocess of transference of authority. It is the end result which isachieved when delegation is systematically repeated up to the lowest level.

ii. Delegation denotes relationship between a superior and a subordinate whiledecentralisation denotes relationship between the top management and variousdepartments or divisions.

iii. Delegation is always essential for performance managerial activities whiledecentralization is optional as top management may or may not disperse authority.

iv. Delegation can take place between two individuals and be a complete process, whiledecentralization is completed only when the fullest possible delegation is made at all

levels of the organization.

v. Delegation is a technique for management while decentralization is a philosophy ofmanagement.

vi. In delegation, the delegator exercises control over the subordinates to whom authorityis delegated. In decentralization, management may delegate the control to departmental

heads.

vii. Delegation of authority can take place without decentralization, but decentralizationcannot take place without delegation.


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Q5. (b)Explain in brief the significance of staffing.

Answer:

Staffing is the process of filling all positions in the organisation with adequate and qualifiedpersonnel. Staffing consists of manpower planning, recruitment, selection, training,

compensation, integration and maintenance of employees.

According to Koontz and ODonnell, The managerial function of staffing involves manning

the organizational structure through proper and effective selection, appraisal and development

of personnel to fill the roles designed into the structure.

Staffing is significant to an organisation for the following reasons:

1. It provides human resourcesFor all other resources of capital and raw-materials and even other people in an

organization to be put to useful application it requires the most vital of assets human

resources, because it is the people who make other resources (and other people) get towork.

2. For Filling organisational positionsWith increasing competition for human resources, the cost of acquiring them has increased

tremendously thereby necessitating systematic staffing so that the organization can fill its

various positions with good quality personnel.

3. For Development of competenciesThe filling of the various positions in an organisation is necessary but it is not exclusively

sufficient for staffing. There should also be the development of competencies amongpersonnel because of changing nature of the job profile.

4. For retention of personnelIt would be detrimental for an organisation to be acquiring and developing personnel, andthen be losing them out to other organisations. Thus retention of personnel is an equally

significant aspect of staffing.

5. For enhancement productivityStaffing facilitates discovery of competent and qualified personnel to fill various positions

in the organizations thereby enhancing productivity by placing the right people on the rightjobs.

6. For the development of the workforceStaffing is concerned with the placement, growth and development of all those members of

the organization whose function is to get the things done through their own and otherpeoples efforts. It reinforces the workforce through training and developmentprogrammes.


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ASSIGNMENT B

Q1. Compare Maslows Need Hierarchy theory with that of Herzbergs Two factor theory.

Answer:

INTRODUCTIONA H Maslow and Frederick Herzberg have each come up with general theories which can be

used to understand motivational needs of employees based upon identifying and classifyinghuman needs. Before we are able to compare the two theories, let us take a closer look at eachof them separately and try to understand what each of the theories is really based on.

MASLOWSNEED HIERARCHY THEORYMaslows hierarchy of needs theory is based on the premise that the behavior of an individual

at a particular moment is determined by his strongest need. It further claims that the needs have

priorities, as such, when the more basic needs are satisfied, an individual seeks to satisfy thehigher needs.

According to A.H. Maslow, human needs are arranged into the following hierarchy in

ascending order: physiological needs, safety and security needs, social needs, ego or esteemneeds, and self-actualization needs.

HERZBERGS TWO-FACTORTHEORYAccording to Herzbergs motivation hygiene theory or two-factor theory, needs priority are

related to types of behavior of individuals. This behavior is either directed towards achieving

certain desirable positive goals or towards avoiding other undesirable, negative consequences.

Herzberg conducted a study after which he concluded that there are two categories of needs

essentially independent of each other affecting behaviour in different ways. He found that there

are some job conditions which he called maintenance or hygiene factors which operate

primarily to dissatisfy employees when the conditions are absent, however, their presence doesnot motivate them in a strong way. Another set of job conditions which he called motivational

factors operates primarily to build strong motivation and high job satisfaction, but theirabsence rarely proves strongly dissatisfying.

According to Herzberg, there are ten maintenance or hygiene factors, namely: company policyand administration, technical supervision, interpersonal relationship with supervisors,

interpersonal relationship with peers, interpersonal relationship with subordinates, salary, job

security, personal life, working conditions and status. These do not make the job itself but theyare related to conditions under which a job is performed.

For employee motivation, Herzberg stipulated six motivational factors that are capable of

having a positive effect on job satisfaction and often result in an increase in ones total output.These are: achievements, recognition, advancement, work itself, possibility of growth, and

responsibility.

COMPARISON OF MASLOWS AND HERZBERGS THEORIES OF MOTIVATION

Both Maslow and Frederick Herzberg have come up with content theories of motivation, whichhave attempted to identify and classify human needs.


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It is clearly observable that most of the maintenance factors of Herzberg come under low levelneeds of Maslow. Maslow says that when the lower needs are satisfied, they stop being

motivators and what Herzberg says is the same in the sense that they are maintenance factors.

The difference is that Maslow emphasizes that any unsatisfied need, whether lower or higher

level, will motivate people while Herzberg clearly identifies certain needs and call them

maintenance factors which can never motivate people.

Thus Herzbergs needs fall in one or the other category of Maslows hierarchy of needs asshown in the figure below:

Figure B1: Comparison of Maslows Need Hierarchy and Herzbergs Two-Factor theories

The figure shows that Maslows self actualization and all but two (status and technical aspectsof supervision) esteem needs are regarded by Herzberg as motivational factors. All the

Maslows social, safety, and physiological needs are regarded by Herzberg as maintenance or

hygiene factors.

However, there are some other noteworthy differences between the theories of Maslow and

Herzberg:

1. Nature of theoryMaslows theory is descriptive in nature and based on long experience of human

needs. It does not make any suggestion on how to deal with motivational problems.Herzbergs theory is prescriptive in nature and is based on actual information collected

through interviewing 200 engineers and accountants. It suggests job enrichment to deal

with motivational problems.


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2. Order of needsMaslow thinks that human needs have a priority and therefore arranges them in a

hierarchy in which higher order needs become significant only when the lower order

needs are reasonably satisfied.

According to Herzberg there is no such ordering of needs all needs are operational

at all times.

3. MotivatorsAccording to Maslow theory any need can be a motivator if it is relatively unsatisfied.

However, according to Herzbergs theory only higher order needs are motivators.

4. EmphasisMaslows theory gives much emphasis on human needs whereas Herzberg talks of

goals and incentives or rewards which satisfy those needs. Maslow focuses on what

impels individuals to behave as he does, whereas Herzberg talks about what makes an

individual satisfied or dissatisfied with his job.

5. Essence of theoryWhat Maslows theory implies is that unsatisfied needs can be used to energise

behavior which would in turn cause performance. He thinks that satisfaction of any

satisfied need is motivating to the individual.

Herzbergs theory implies that gratified needs cause performance. He thinks that

satisfaction of only intrinsic or job content needs, i.e. growth, achievement, recognition,

etc. has a motivating effect on the individual. On the other hand, satisfaction of

extrinsic or job context needs, i.e. company policy, pay, status, working conditions, etc.

has no motivating effect it only creates conditions for the satisfaction of motivating

needs.

6. Scope and ApplicabilityMaslows hierarchy of needs theory deals with general motivation and applies to all

people in the society whereas Herzbergs two-factor theory deals with work related

motivation and applies to people in organisations.

Further, even if we go into the organisation, Maslows theory takes a general view of

motivational problems of all workers it has universal applicability i.e. can be applied

to all kinds of employees. Herzbergs theory takes a micro-view and deals with work-

oriented motivational problems of professional workers. Thus it has limited

applicability it is mostly applicable to white-collar or professional jobs.

7. Position on Financial RewardsMaslows theory states that financial rewards can motivate behavior and as such is

suitable for application in poor and developing countries where money is still a very

important motivating factor. According to Herzbergs theory financial rewards can not

motivate behavior and as such is applicable for rich countries where money is no longer

a very important motivating factor.


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Q2.Critically examine Mc. Gregors Theory X and Theory Y.

Answer:

CRITICAL EXAMINATION OF MC.GREGORS THEORY X AND THEORY Y.

Theory X and Theory Y were proposed by Douglas McGregor for application in employee

motivation. These theories are based on the premise that management's role is to assemble the

factors of production, including people, for the economic benefit of the firm.

Theory X assumes that the average person, dislikes and attempts to avoid work; has no

ambition, wants no responsibility, and would rather follow than lead; is self-centred andtherefore does not care about organizational goals; resists change; and is nave and gullible and

not particularly intelligent.

Thus, in essence, theory X assumes that people work only for money and security.

However, according to Theory Y, employees can best be motivated through higher-level needs

of esteem and self-actualization since these are continuing needs that can never be completelysatisfied.

Theory Y assumes that: work can be as natural as play and rest; people will be self-directed tomeet their work objectives if they are committed to them; people will be committed to their

objectives if rewards are in place that address higher needs such as self-fulfillment; and under

these conditions, people will seek responsibility. It also holds as true that most people canhandle responsibility because creativity and ingenuity are common in the population.

Under Theory X, management approaches can range from a hard approach that relies on

coercion, implicit threats, close supervision, and tight controls, etc., to a soft approach that ispermissive and seek harmony with the hope that in return employees will cooperate when

asked to do so.

The optimal management approach under Theory X probably would be somewhere between

these extremes. The hard approach would result in hostility, purposely low-output, and hard-

line union demands while the soft approach would result in ever-increasing requests for moreincentives in exchange for ever-decreasing work output. McGregor asserts, however, that

neither approach is appropriate - for the assumptions of Theory X are faulty.

According to the assumptions of Theory Y, it is possible to align personal goals withorganizational goals using the employee's own quest for fulfillment as the motivator.

McGregor recognized that some people may not have reached the level of maturity assumed byTheory Y and therefore, might need tighter controls that can be relaxed as the employee

develops thus Theory Y does not imply soft approach on employees.

Theory X implies that only incentives can satisfy employees' lower needs, and once those

needs are satisfied the source of motivation is lost. Thus the application of Theory X in

employee motivation would not allow for the satisfaction of higher-level needs.

The only way to satisfy their higher level needs in their work is by seeking more compensation,

so that they will focus on monetary rewards. While money may not be the most effective way


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Q3.Why is managing diversity significant? Explain.

Answer:

According to Fred Luthans, diversity is the presence of members of different ages, genders,ethnic groups, and/or educational backgrounds in an organization.

Management of diversity is significant since the composition of the workforce has changedover the past few years and no organization can avoid it.

To be precise, management of diversity is a requirement and necessity for every organizationfor the following reasons:

1. Change in demographic structure of the workforce: the composition of theworkforce has changed over the years. The modern workforce includes women,minorities, older employees and highly educated people in large numbers. This is due to

increase in skills and education levels across the entire population.

2. Government legislation: legislation in many countries has made it binding onorganizations to provide equal employment opportunity for all employees.

3. Improves competitiveness of firms: the firms that recruit people from diversebackgrounds generally have a talented and capable workforce, and are most likely to

gain a reputation as fair employers and are more likely to attract competent employees.

4. Globalization of firms: when an organization goes multinational, managers andtechnical personnel who go to a foreign country to put an organizational system in

place will meet people from diverse cultures, customs, and social norms an will have tochange their leadership styles, communication patterns, etc. i.e. they must be able to

manage diversity. Thus it will be easy for organisations which value and manage

diversity well to go multinational or global.

Furthermore, better management of diversity has the following advantages:

It reduces costs It improves staffing It improves marketing It promotes creativity It facilitates problem solving It increases flexibility

Thus, management of diversity is not only significant for purposes of the demographicstructure of the workforce, legislation, globalization and improvement of competitiveness of

the firm but also for the reduction of costs, improvement of staffing, improvement of

marketing functions, promotion of creativity and skill, facilitation of problem solving, andincrease in flexibility.


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CASE STUDY

I expect every manager in my department to act completely rational in every decision he makes , declared Ishwar Dayal,Director Marketing in Overseas Plastics Ltd.. Everyone of us , irrespective of his position in the organisation has to be a

professional rationalist and I expect him not only to know what he is doing and why he is doing it , but also to be right in hisdecisions. I know someone has said that a good manager needs to be right only in more than half of his decisions. But that isnot good enough for me. However , one may be excused for an occasional mistake especially on matters beyond ones control

but no one can be pardoned for acting irrationally.

I endorse your views , Sir , said Indu Alluwalia , his Advertising Manager , and I always try to be rational and logical inmy decisions but would you mind helping me to be sure of this by explaining what rational decisions are?Read and analyse the above case and answer the following questions :

(A) Explain , how Mr. Ishwar Dayal might describe what is involved in making rational decisions.(B) If Ms. Indu Alluwalia then declares that there is no way that she can be completely rational , what would you

suggest as a reply ?

Answers:

(A)RATIONAL DECISION MAKING PROCESSIn answering his Advertising Manager, Mr Ishwar Dayal might first of all need to explain the

meaning of the word rational, which according to the sixth edition of Oxford Advanced

Learners Dictionary of Current English by A.S. Hornby, is an adjective used to refer to

behavior or idea, etc. based on reason rather than emotions; or to refer to a person who isable to think clearly and make decisions based on reason rather than emotions.

According to Haynes and Massie, Decision making is a process of selection from a set of

alternative courses of action (that) which is thought to fulfill the objective of the decision

problem more satisfactorily than others.

With reference to the above definitions, a rational decision is therefore the best decision or

course of action chosen from among available alternatives to achieve a desired goal with all

due prudence and in the best possible way any logically and scientifically thinking person

would do, by studying the available and appropriate facts basing on reason, and excluding all

emotional or personal attachment to the subject matter.

As guidance to the rational decision making process, the Director for Marketing might give thefollowing steps that when followed by decision makers will ascertain the rationality of their

decisions:

1. Identification of decision problemThis is the recognition of a problem that requires a decision. The problem may arise due to

various reasons like discrepancies between present and desired state of affairs, changes in the

business or working environment leading to threats or opportunities, etc.

For managers to identify problems quickly to have ample time for rational decision making,

they must continuously monitor the decision-making environment. This requires imaginationcapabilities, experience and good judgment.

2.Diagnosis of the ProblemThis involves analyzing the problem in terms of its elements, its magnitude, its urgency, its

causes, and its relation with other problems in order to know exactly what the real problem is.


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For correct diagnosis, a manager must acquire all the relevant facts and analyze them critically.This will bring out the real causes or sources of the problem.

In diagnosing the problem managers must be careful not to mistake symptoms for real

problems. For example, management might mistake incompetence or negligence in a

technician and start disciplinary proceedings when the real problem is lack of training or staff

development to keep up with advances in technology.

3.Discovering AlternativesAt this stage we seek out for the various possible alternatives. Managers should not rush for thefirst apparent feasible solution so as to solve the problem quickly there might be some better

alternatives. But he has to bear in mind the time and cost limitations as he is seeking out the

feasible solutions. Careful and critical exploration around the problem will enable collectionand analysis of relevant information which will in turn ensure identification of the best

alternatives.

4.Evaluation of AlternativesThis is the assessment of pros and cons of each decision alternative. The the positive and

negative consequences of each alternative are measured systematically. Management must

balance the costs against possible benefits (i.e. risks versus returns) .

Management must set some systematic and scientific criteria against which the alternatives can

be evaluated.

According to Peter Drucker, the following criteria can be used to weigh the alternative courses

of action: (i) degree of risk involved in each alternative (ii) cost, time and effort involved ineach alternative (iii)the urgency problem, and (iv)resources available with the organization.

5.Selection of the Best AlternativeAfter evaluation the alternative that will maximize the results or returns under given conditions

is selected. The choice of this optimum alternative is the most critical point in decision making it is the final determinant of the rationality of the decision to be made.

The ability to select the best course of action from several possible alternatives separates the

successful managers from the unsuccessful ones. Past experience, experimentation research

and analysis are useful in selecting the best alternative.1

6.Implementation and follow-up:Once the optimum alternative is selected it has to be put to action or implemented and thefollowing steps are involved in process:

(i) Communication of the decision to those responsible for its implementation.(ii)Acceptance of the decision by those responsible for implementation.(iii)Establishment of procedures and time sequence for implementation.

(iv)Allocation of necessary resources and assignment of responsibility for specific tasks toindividuals.

1.Business Organisation and Management,Geeta Mishra.


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The implementation of the decision needs to be constantly monitored and its consequencesanalysed by periodic progress reports.

If the reports indicate unfavourable consequences then variations should be applied to the

decision or its implementation.

Following the steps and methods outlined above in decision making will ensure that managersdo always - and in 100 percent of the cases, as emphasized by Mr. Ishwar Dayal make

rational decision with all certainty and confidence.

(C)RESPONSE TO MS.INDU ALLUWALIA DECLARATIONMs. Indu Alluwalia has declared that there is no way she can be completely rational - but thatis very far from the truth.

Rational decision making is a scientific process and scientific ways are always exact. Fordecision making to be scientific and therefore rational, Ms. Indu Alluwalia has to know, the

steps outlined above have to be followed. The steps above, when applied correctly and

appropriately, will ascertain the rationality of decisions.

Ofcourse, as the Director for Marketing pointed out, one may be excused for an occasional

mistake as a matter of erroneous application of variables in the process, but that does not

mean he could not and does not act rationally.

As in statistical methods, the more the samples assessed the more accurate the analysis and the

better the prediction of the behaviour of the remainder of the population or future values ofvariables. In the same way, as one strives to always make rational decisions by applying the

necessary steps for rational decision making, and he occasionally makes errors, he will

eventually come to learn and be able to detect possible sources of error with ease, from

experience. Thus in the end, he will be able to be rational when making decisions.

The last step in the process above (implementation and follow-up) prescribes that the

implementation of the decision needs to be constantly monitored and its consequencesanalysed by periodic progress reports. It further prescribes that if the reports indicate

unfavourable consequences then variations should be applied to the decision or its

implementation. This will ensure that the ultimate decision or mode of implementation reducesthe effect of errors and therefore make the decision atleast very close to being rational.

Therefore, the more the decisions that one makes by application of the process of rationaldecision making, the more accurate she will be or the less errors she will make, and eventually

she will be a professional rationalist.

As a conclusive advise to Ms. Indu Alluwalia, I would tell her to go and apply correctly,and be assured of becoming a professional rationalist.


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ASSIGNMENT C

Multiple Choice Questions

Q-1- Which of the following is a middle level function?

a) Reviewing daily and weekly production or sales report.b) Selecting board members.c) Supervising day-to-day operations.d) Evaluating the all-round performance of various department.

Q-2- The process of designing and maintaining an environment in which individuals working

together in groups, efficiently accomplish specific aims is termed as_______.

a) Administration.b) Management.c) Organization.d) Staffing.

Q-3- The analysis and measurement of actual operations against the established standards

developed during the planning process is called__________.

a) Controlling.b) Monitoring.c) Leading.d) Organizing.

Q-4- Which of the following theories ignored the concepts of leadership, motivation, power,

and informal relations?

a) Pre-Classical.b) Classical.c) Behavioral.d) Modern.

Q-5- __________ Managers deals with the actual operation of an organizations units.

a) First-level.b) Top-level.c) Middle-level.d) Link-level.

Q-6- Which of the following skills is important at all levels of an organization?

a) Conceptual.b) Design.c) Human.d) Technical.

Q-7- Under which system does a workers wage increases in proportion to the output

produced?

a) Time-and-motion study.b) Piece-rate incentive system.c) Micromotion study.d) Gantt chart.


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Q-8- Decreasing the role of subordinates in decision-making is known as__________.a) Decentralization.b) Stabilization.c) Centralization.d) Organization.

Q-9- The two major managerial practices that are emerged from Taylors approach tomanagement are the piece-rate incentive system and __________________

a)

Time and motion studyb) Work studyc) Fatigue studyd) Organization study

Q-10- Weber coined the term ________ to identify large organizations tat operated on a

rational basis .

a) Autocracyb) Dictatorshipc) Bureaucracyd) Diplomacy

Q-11- A company has the following managers-Manager(Production),Manager(Finance),

Manager(Marketing).This is an example for departmentation by:

(a)Functions(b)Products(c)Territory

Q-12 -..consists of a set of activities aimed at attracting and selecting

individuals for positions in a way that will facilitate the achievement of organizational

goals

(a)Recruitment

(b) Selection(c)Staffing

Q-13 - . is the process of identifying and attempting to attract candidates who are

capable of effectively filling job vacancies.

(a) Recruitment

(b) Staffing(c) Selection

Q-14 - ...involves choosing the candidates who best meet the qualifications and havethe greatest aptitude for the job.

(a)Staffing(b)Recruitment

(c)Selection


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Q-15- A virtual organizational structure can be defined as:a) a virtual structure of company functions which come together to serve a specific

purpose and then disappear.b) a temporary network of company functions which come together to serve a specific

purpose and then disappear.

c) a non-permanent form of organization which encourages the growth of regional

groupings, thus allowing a degree of autonomy.d) an organizational form based on a functional corporate structure with a mainly '

domestic' focus and a small international division.

Q-16- There are many types of organizational forms. Which of the following is not a type of

organization form?

a) Functionb) Geographical

c) Matrix

d) Subsidiary

Q-17- Which one of the following is not a type of single-out plan?

a) Programs.b)

Policies.c) Budgets

d) Projects.Q-18- Which one of the following is the first step in the planning process?

a) Establishing objectives.b) Analyzing opportunities.c) Determining planning premises.d) Identifying alternatives.

Q-19- Which of the following is not the limitations of planning?

a)

Time consuming process.b) Expensive.c) Flexible.d) Lack of accurate information.

Q-20- When developing a contingency plan, manager should not try to_____________.a) Increase interruption to the operations of the business.b) Speed up the restoration of services.c) Reduce financial losses.d) Resume critical operation within a specified time after a disaster.

Q-21- Te open systems approach to planning is effective as it leads to____________ in

planning.a) Rigidity.b) Flexibility.c) Inelasticity.d) Invariability.


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Q-22- The management function tat involves setting goals and deciding how best to achievetem is known as___________.

a) Planning.b) Organizingc) Leading.d) Controlling.

Q-23- Generally `strategic plan` is an important aspect of the jobs of________ managers.

a)

Operation-level.b) Middle- Level.c) Top-level.d) At all levels

Q-24-There is no universal definition of Knowledge Management. Nonetheless, Knowledge

Management can be described as the involvement of:

a) Ideasb) Human mindc) Time horizond) Process

Q-25-Adopting Knowledge Management can lead to sustainable competitive advantage. Which

of the following statement is not true:

a) We view Knowledge Management strategy as an exclusive part of the organizationb) Our top priority is to treat people like assets rather than costs

c) We believe that Knowledge Management is contributing to stronger relationships among

partners/suppliers/customers and the organizationd) It creates strategic advantage by enabling an innovative strategy that would not

otherwise be possible

Q-26-The concept of "ba" refers to what?

a) The creation of knowledgeb) Transformation of information

c) Conversion of datad) Management of key human resources

Q-27-The main barrier to implementing Knowledge Management within an organization is:a) The willingness to initiate change.

b) Weak leadership and commitment.

c) IT infrastructure.d) The lack of clear process and procedures.

Q-28- The importance of assessing Knowledge Management as part of the overall

organizational performance measurement process is attributed to:a) the significance of intellectual capital/asset.

b) individual accountability.

c) changes in business strategy.d) contemporary accounting reporting standards.


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Q-35- ___________ is the result of the business policies.a) Formal organization.b) Informal organization.c) Line organization.d) Staff organization.

Q-36- In case of line organization authorities are_____________.a) Centralised.b)

Decentralised.c) Equally distributed.

d) None of the above.

Q-37- Supervisors are link between___________

a) Directors and managers.b) Workers and middle level managers.c) Directors and workers.d) Workers and workers.

Q-38- The supervisor has to ___________ under his control.a) Plan the work.b) Organize the work.c) Control the work.d) All the above.

Q-39- Controlling is the __________ function of the management.a) Firstb) Lastc) Both (a) and (b)d) Neither (a) nor (b).

Q-40 In business enterprises controlling is required __________

a) While establishing business.b) In the beginning of the year.c) At the end of the year.d) Continuously.

References:

AgarwalR. D.,Organisation and Management

JainN. K., OrganisationalBehaviour

Mi h G t B i O i ti d M t

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