OB End Term Examination May – June 2009

Q1. Write short notes on the following:

a) What is OB?
Ans. Organizational behaviour can be defined as – “the study and application of knowledge about
human behaviour related to other elements of an organization such as structure, technology and
social systems. Stephen P Robins defines “Organizational behaviour as a systematic study of the
actions and attitudes that people exhibit within organizations.” It has been observed that we
generally form our opinion based on the symptoms of an issue and do not really go to the root cause
of the happening. Science of organizational behaviour is applied in nature. Disciplines like
psychology, anthropology and political science have contributed in terms of various studies and
theories to the field of organizational behaviour. A leader should be able to communicate with his
subordinate and keep them in picture as to the happenings in the organization. People promote
organizational culture for mutual benefit. Politics is often used to create conflict with the aim of
enlarging self-power base to the detrimental of organizational growth. Politics, in Indian context has
made inroads based on religion, caste system in the decision making process which has led to
formation of informal groups in the organization that often exploit the organization for fulfilment of
personal goals at the cost of organizational goals. Conflict and manipulating power bases need to be
handled in an appropriate manner to modify human behaviour and stimulate various individuals
towards achieving higher productivity. Power dynamics plays a significant role in organization
situations in different environment.

b) Define MBO
Ans. The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in
1954. It can be defined as a process whereby the employees and the superiors come together to
identify common goals, the employees set their goals to be achieved, the standards to be taken as
the criteria for measurement of their performance and contribution and deciding the course of action
to be followed. The essence of MBO is participative goal setting, choosing course of actions and
decision making. An important part of the MBO is the measurement and the comparison of the
employee’s actual performance with the standards set. Ideally, when employees themselves have
been involved with the goal setting and the choosing the course of action to be followed by them,
they are more likely to fulfil their responsibilities.

c) Factors affecting stress

Ans. The situations and pressures that cause stress are known as stressors. We usually think of
stressors as being negative, such as an exhausting work schedule or a rocky relationship. However,
anything that puts high demands on you or forces you to adjust can be stressful. This includes posi-
tive events such as getting married, buying a house, going to college, or receiving a promotion.
What causes stress depends, at least in part, on your perception of it. Something that's stressful to
you may not faze someone else; they may even enjoy it. For example, your morning commute may
make you anxious and tense because you worry that traffic will make you late. Others, however,
may find the trip relaxing because they allow more than enough time and enjoy listening to music
while they drive.

Common external causes of stress

Not all stress is caused by external factors. Stress can also be self-generated:

• Major life changes • Financial problems

 • Work • Being too busy

• Relationship difficulties • Children and family

Common internal causes of stress

Not all stress is caused by external factors. Stress can also be self-generated:

• Inability to accept uncertainty • Unrealistic expectations

• Pessimism • Perfectionism

• Negative self-talk • Lack of assertiveness

d) Types of Motivation
Ans. There is no one thing that motivates people to perform certain actions. People are different, so
it follows that their motivations have to be different. Here are some types of motivation:

1) Achievement
This is the motivation of a person to attain goals. The longing for achievement is inherent in every
man, but not all persons look to achievement as their motivation. They are motivated by a goal. In
order to attain that goal, they are willing to go as far as possible. The complexity of the goal is
determined by a person's perception.

To us, the terms "simple" and "complex" are purely relative. What one person thinks is an easy goal
to accomplish may seem to be impossible to another person. However, if your motivation is
achievement, you will find that your goals will grow increasingly complex as time goes by.

2) Socialization
Some people consider socialization to be their main motivation for actions. This is especially
evident in the situation of peer pressure. Some people are willing to do anything to be treated as an
equal within a group structure. The idea of being accepted among a group of people is their
motivation for doing certain things.

3) Incentive Motivation
This motivation involves rewards. People who believe that they will receive rewards for doing
something are motivated to do everything they can to reach a certain goal. While achievement
motivation is focused on the goal itself, incentive motivation is driven by the fact that the goal will
give people benefits. Incentive motivation is used in companies through bonuses and other types of
compensation for additional work.

By offering incentives, companies hope to raise productivity and motivate their employees to work
harder.

4) Fear Motivation
When incentives do not work, people often turn to fear and punishment as the next tools. Fear
motivation involves pointing out various consequences if someone does not follow a set of
prescribed behavior. This is often seen in companies as working hand-in-hand with incentive
motivation. Workers are often faced with a reward and punishment system, wherein they are given
incentives if they accomplish a certain goal, but they are given punishments when they disobey
certain policies.

5) Change Motivation
Sometimes people do things just to bring about changes within their immediate environment.
Change motivation is often the cause of true progress. People just become tired of how things are
and thus, think of ways to improve it.

e) Esprit de Corps
Ans. Morale, also known as esprit de corps when discussing the morale of a group, is an intangible
term used to describe the capacity of people to maintain belief in an institution or a goal, or even in
oneself and others. The second term applies particularly to military personnel and to members of
sports teams, but is also applicable in business and in any other organizational context, particularly
in times of stress or controversy. While the term is often used by authority figures as a generic value
judgment of the willpower, obedience and self-discipline of a group tasked with performing duties
assigned by a superior, more accurately it refers to the level of individual faith in the collective
benefit gained by such individual sacrifices.
According to Alexander H. Leighton, "morale is the capacity of a group of people to pull together
persistently and consistently in pursuit of a common purpose".

f) Difference between Attitude and Values

Ans.
Values Attitudes
1. Values represent judgement of what 1. Attitudes represent predispositions to
ought to be. This judgement is basic to respond.
respond in a given way.
2. A value represents single belief that 2. An attitude represents several beliefs
guides actions and judgement across focused on a specific object or situation.
objects and situations.
3. Values are derived from social and 3. Attitudes are derived from personal
cultural mores. experiences.

g) Factors affecting change

Ans. There can be many factors affecting change depending upon the situation and the issue at
hand. Broadly these factors are of three types which are given below:
1. Radiant Causes
The changes related to technology induction are affected by the following factors which are
known as Radiant causes.
• The change in technology is administratively less feasible.
• Costs of changes are high.
• Leads to skill downgrading or other undesirable conditions.
2. Requires extra efforts to learn and relearn.
When there is change in technology in an organisation, often there will be resistance from
 the employees/workers. Because they are so used to the routine way of doing things, they
fear when there is a change in the way they work. For example, when computer was
introduced in many organisations, it was resisted by employees because they thought they
would loose their jobs. When it was explained properly by authorities, employees accepted
it. The source of such fears which provoke resistance is the lack of awareness. It follows that
before significant changes are introduced in the work patterns, the employees who are likely
to be affected by the change should be taken into confidence and conditions created in
which the level of resistance is minimised.
3. Psychological Causes
People who have introduced innovations in one field or another know what type of
psychological factors crop up during implementation. The major ones are:
• Lack of appreciation or tolerance.
• Conflict between the employees and the management.
• Fear of the unknown or uncertain outcomes of the change.
• Lack of trust in others.
• Need for security.
• Desire for existing position.

h) What is budget?
Ans. A budget is a financial document used to project future income and expenses. The budgeting
process may be carried out by individuals or by companies to estimate whether the person/company
can continue to operate with its projected income and expenses.
A budget may be prepared simply using paper and pencil, or on computer using a spreadsheet
program like Excel, or with a financial application like QuickBooks.
The process for preparing a monthly budget includes:
• Listing of all sources of monthly income
• Listing of all required, fixed expenses, like rent/mortgage, utilities, phone
• Listing of other possible and variable expenses.

i) Functional conflict

Ans. Functional conflict within the context of Organizational Behavior occurs when low to moder-
ate levels of conflict improve the effectiveness of a group. Conflict is constructive when it improves
the quality of decisions, stimulates creativity, innovation and encourages interest and curiosity
among group members. It provides a medium through which problems can be aired and tensions re-
leased and fosters an environment of self-evaluation and change. Conflict is the antidote for group-
think.

Conflict challenges the status quo and therefore furthers the creation of new ideas, promotes re-
assessment of group goals and activities, and increases the probability that the group will respond to
change.
j) Brain storming
Ans. Brainstorming with a group of people is a powerful technique. Brainstorming creates new
ideas, solves problems, motivates and develops teams. Brainstorming motivates because it involves
members of a team in bigger management issues, and it gets a team working together. However,
brainstorming is not simply a random activity. Brainstorming needs to be structured and it follows
brainstorming rules. The brainstorming process is described below, for which you will need a flip-
chart or alternative. This is crucial as Brainstorming needs to involve the team, which means that
everyone must be able to see what's happening. Brainstorming places a significant burden on the
facilitator to manage the process, people's involvement and sensitivities, and then to manage the
follow up actions. Use Brainstorming well and you will see excellent results in improving the
organization, performance, and developing the team.
Brainstorming process contains following steps:
1. Define and agree the objective.
2. Brainstorm ideas and suggestions having agreed a time limit.
3. Categorise/condense/combine/refine.
4. Assess/analyse effects or results.
5. Prioritise options/rank list as appropriate.
6. Agree action and timescale.
7. Control and monitor follow-up.

k) Types of planning
Ans. There are various types of planning which are discussed below:

i. Planning by Direction and Planning by Inducement:

Planning by direction is an integral part of a socialist society. It entails complete absence of laissez-
faire. There is one central authority which plans, directs, and orders the execution of the plan in
accordance with pre-determined targets and priorities. Such planning is comprehensive and
encompasses the entire economy.
Planning by inducement is democratic planning. It means planning by manipulating the market.
There is no compulsion but persuasion. There is freedom of enterprise, freedom of consumption and
freedom of production. But these freedoms are subject to state control and regulation. People are
induced to act in a certain way through various monetary and fiscal measures. Thus, planning by
inducement is able to achieve the same results as are likely to be achieved in planning by direction
but with less sacrifice of individual liberty.

ii. Financial Planning and Physical Planning:

Financial planning refers to the technique of planning in which resources are allocated in terms of
money. Financial planning is essential in order to remove maladjustments between supplies and
demand and for calculating costs and benefits of the various projects. Thus, Financial planning is
thought to secure a balance between demands and supplies, avoid inflation and bring about
economic stability.
Physical planning refers to the allocation of resources in terms of men, materials and machinery. In
physical planning, an overall assessment is made of the available real resources such as raw
materials, manpower, etc., and how they have to be obtained so that bottlenecks may be eliminated
during the plan. Physical planning requires the fixation of physical targets with regard to
agricultural and industrial production, socio-cultural and transportation services, consumption levels
and in respect of employment, income and investment levels of the economy. Physical planning has
to be viewed as an overall long-term planning rather than a short-term piecemeal planning.

iii. Perspective Planning and Annual Planning:

Perspective planning refers to long-term planning in which long range targets are set in advance for
a period of 15, 20, or 25 years. A perspective plan, however, does not imply one plan for the entire
period of 15 or 20 years. In reality, the broader objectives and targets are to be achieved within the
specified period of time by dividing the perspective plan into several short-period plans of 4, 5 or 6
years.
Not only this, a five year plan is further broken up into annual plans so that each annual plan fits
into the broad framework of the five-year plan. Plans of either kind are further divided into regional
and sectoral plans. Regional plans pertain to regions, districts and localities and sectoral plans
pertain to plans for agriculture, industry, foreign trade etc.

iv. Indicative Planning and Imperative Planning:

This is the French system of planning which is based on the principle of decentralization in the
operation and execution of the national plans. This type of planning is not imperative but flexible.
In indicative planning the private sector is neither rigidly controlled nor directed to fulfil the targets
and priorities of the plan. Even then, the private sector is expected to fulfil the targets for the
success of the plan. The state provides all types of facilities to the private sector but does not direct
it, rather indicates the areas in which it can help in implementing the plan.
On the other hand, under imperative planning all economic activities and resources of the economy
operate under the direction of the state. There is complete control over the factors of production by
the state. The entire resources of the country are used to the maximum in order to fulfil the targets
of the plan. There is no consumers’ sovereignty in such planning. What and how much to produce –
such decisions are taken by the managers of firms and factories on the direction of the planning
commission or a central planning authority. Since the government policies and decisions are rigid,
they cannot be changed easily.

v. Democratic Planning and Totalitarian Planning:

In totalitarian or authoritarian planning there is central control and direction of all economic activity
in accordance with a single plan. There is planning by direction where consumption, production,
exchange, and distribution are all controlled by the state. In totalitarian planning, the planning
authority is the supreme body. It decides about the targets, schemes, allocations, methods and
procedures of implementation of the plan. There is absolutely no opposition to the plan. People
have to accept and rigidly implement the plan.
In democratic planning, the philosophy of democratic government is accepted as the ideological
basis. People are associated at every step in the formulation and implementation of the plan.
Cooperation of different agencies, and voluntary groups, and associations plays a major role in the
execution of the plan. Democratic planning respects the institution of private property. Price
mechanism is allowed to play its due role. The government only seeks to influence economic and
investment decisions in the private sector through fiscal and monetary measures. The private sector
operates side by side with the public sector. Democratic planning aims at the removal of inequalities
of income and wealth through peaceful means by taxation and government spending on social
welfare and social security schemes. Individual freedom prevails and people enjoy social, economic
and political freedoms.

vi. Rolling and Fixed Plans:

In a rolling plan, every year three new plans are made and acted upon. First, there is a plan for the
current year which includes the annual budget and the foreign exchange budget. Second, there is a
plan for a number of years, say three, four or five. Third, a perspective plan for 10, 15 or 20 or even
more years is presented every year in which the broader goals are stated and the outlines of future
development are forecast. The annual one-year plan is fitted into the same year’s new three, four or
five year plan, and both are framed in the light of the perspective plan.
In contrast to the rolling plan, there is a fixed plan for four, five, six or seven years. A fixed plan
lays down definite aims and objectives which are required to be achieved during the plan period.
For this purpose, physical targets are fixed along with the total outlay. Physical targets and financial
outlays are seldom changed except under emergencies. Planning in India (Five-Year) and Russia
(Seven-Year) is of the fixed type.

vii. Centralised and Decentralised Planning:

Under centralized planning, the entire planning process is under a central planning authority. The
authority formulates a central plan, fixes objectives, targets, and priorities for every sector of the
economy. The principle problems of the economy – what and how much to produce, how and for
whom to be produced etc, are decided by this authority. The entire planning process is based on
bureaucratic control and regulation. Naturally, such planning is rigid. There is no economic freedom
and all economic activities are directed from above.
On the other hand, decentralized planning refers to the execution of the plan from the grass roots.
Under it, a plan is formulated by the central planning authority in consultation with the different
administrative units of the country. The central plan incorporates plans under the central schemes,
and plans for the states under a federal set-up. The state plans incorporate district and village level
plans. Under decentralized planning, prices of goods and services are determined by the market
mechanism despite government control and regulation in certain fields of economic activity.

l) Organizational culture
Ans. A single definition of organizational culture has proven to be very elusive. No one definition
of organizational culture has emerged in the literature. One of the issues involving culture is that it
is defined both in terms of its causes and effect. For example, these are the two ways in which
cultures often defined.
1. Outcomes: Defining culture as a manifest pattern of behaviour- Many people use the term
culture to describe patterns of cross individual behavioral consistency. For example, when
people say that culture is “The way we do things around here,” they are defining consistent
way is in which people perform tasks, solve problems, resolve conflicts, treat customers, and
treat employees.
2. Process: Defining culture as a set of mechanisms creating cross individual behavioral
consistency- In this case culture is defined as the informal values, norms, and beliefs that
control how individuals and groups in an organization interact with each other and with
people outside the organization.

UNIT-I

Q2. How will you classify the levels of management in an organization? Describe the functions
performed by different levels of management.
Ans. The term “Levels of Management’ refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of the
business and work force increases and vice versa. The level of management determines a chain of
command, the amount of authority & status enjoyed by any managerial position. The levels of
management can be classified in three broad categories: -
 1. Top level / Administrative level
2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the three levels
is discussed below:

LEVELS OF MANAGEMENT

Top Level of Management

It consists of board of directors, chief executive or managing director. The top management
is the ultimate source of authority and it manages goals and policies for an enterprise. It
devotes more time on planning and coordinating functions.
The role of the top management can be summarized as follows -
a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the
performance of the enterprise.

Middle Level of Management

The branch managers and departmental managers constitute middle level. They are
responsible to the top management for the functioning of their department. They devote
more time to organizational and directional functions. In small organization, there is only
one layer of middle level of management but in big enterprises, there may be senior and
junior middle level management. Their role can be emphasized as -
a. They execute the plans of the organization in accordance with the policies and
directives of the top management.
 b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or
department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better
performance.

Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of
supervisors, foreman, section officers, superintendent etc. According to R.C. Davis,
“Supervisory management refers to those executives whose work has to be largely with
personal oversight and direction of operative employees”. In other words, they are
concerned with direction and controlling function of management. Their activities include -
a. Assigning of jobs and tasks to various workers.
b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in the
organization.
e. They communicate workers problems, suggestions, and recommendatory appeals etc
to the higher level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contact with
the workers.

Q3. What managerial functions and roles are most prominent in the activities of the
organization? Discuss tasks and responsibilities of a professional manager.

Ans. MANAGERIAL FUNCTIONS

Managerial functions of personal management involve planning, organizing, directing and
controlling all these functions influence the operative functions.

1. Planning: it is a predetermined course of action. Planning pertains to formulating strategies

of personnel programs and changes in advance that will contribute to the organizational
goals. In other words, it involves planning of human resource requirements, recruitments,
selection, training etc.
2. Organizing: an organization is a means to an end. It is essential to carry out the determined
course of action. An organization “structure and a process by which a co- operative group of
human beings allocates its tasks among its members, identifies relationship and integrates its
 activities towards a common objectives”.
3. Directing: directing the subordinates at any level is a basic function of the managerial
personnel. The willing and effective co operation of employees for the attainment of
organizational goals is possible through proper direction.
4. Controlling: controlling involves checking, verifying and comparing of the actual with the
plans, identification of devotions if any and correcting of identified devotions. Thus, action
and operation are adjusted to predetermined plans and standards through control.

Mintzberg’s Ten Management Roles

Tasks of a Professional Manager

• Deciding the basic mission of firm.

• Unrelenting existence and growth.
• Sustaining firm’s effectiveness, profit creation and adopting technological advancements.
• Confronting the test of increasing competition and transformation.
• Managing for novelty and modernity.
• Edifying human organization.
• Keeping hold of talent and inculcating sense of devotion.
• Sustaining headship value.
• Maintaining equilibrium between inventiveness and conventionality.
• Pushing back managerial obsolescence.
• Enduring the mounting communal disparagement and opinionated antagonism.
 • Safeguarding relations with various general public fragments.

Responsibilities of a Professional Manager

• Towards understanding the organizational context

• Towards administering the activities and resources
• Towards “customer – the king”,
• Towards shareholders,
• Towards people working in the organization
• Towards purveyors, whole - sellers, distributors and retailers
• Towards competitors
• Towards employees’ union
• Towards commanding regime
• Towards the social order

UNIT-II

Q4. What do you understand by “decision- making”? What are the characteristic of decision
making? Explain various types of decision making?

Ans. Decision-making is a process of selection from a set of alternative courses of action, which is
thought to fulfil the objectives of the decision problem more satisfactorily than others. It is a course
of action, which is consciously chosen for achieving a desired result. A decision is a process that
takes place prior to the actual performance of a course of action that has been chosen. In terms of
managerial decision-making, it is an act of choice, wherein a manager selects a particular course of
action from the available alternatives in a given situation. Managerial decision making process
involves establishing of goals, defining tasks, searching for alternatives and developing plans in
order to find the best answer for the decision problem. The essential elements in a decision making
process includes the following:
1. The decision maker,
2. The decision problem,
3. The environment in which the decision is to be made,
4. The objectives of the decision maker,
5. The alternative courses of action,
6. The outcomes expected from various alternatives, and
7. The final choice of the alternative.
Characteristics of decision-making:
1. It is a process of choosing a course of action from among the alternative courses of action.
2. It is a human process involving to a great extent the application of intellectual abilities.
3. It is the end process preceded by deliberation and reasoning.
4. It is always related to the environment. A manager may take one decision in a particular set
of circumstances and another in a different set of circumstances.
5. It involves a time dimension and a time lag.
6. It always has a purpose. Keeping this in view, there may just be a decision not to decide.
7. It involves all actions like defining the problem and probing and analyzing the various
alternatives, which take place before a final choice is made.
Various Types of decision-making:
Irreversible
These are those types of decisions, which, if made once cannot be unmade. Whatever is decided
would than have its repercussions for a long time to come. It commits one irrevocably when there is
no other satisfactory option to the chosen course. A manager should never use it as an all-or-nothing
instant escape from general indecision.
Reversible
This are the decisions that can be changed completely, either before, during or after the agreed
action begins. Such types of decisions allow one to acknowledge a mistake early in the process
rather than perpetuate it. It can be effectively used for changing circumstances where reversal is
necessary.
Experimental
These types of decisions are not final until the first results appear and prove themselves to be
satisfactory. It requires positive feedback before one can decide on a course of action. It is useful
and effective when correct move is unclear but there is a clarity regarding general direction of
action.
Trial and Error
In this type of decisions, knowledge is derived out of past mistakes. A certain course of action is
selected and is tried out, if the results are positive, the action is carried further, if the results appear
negative, another course is adopted and so on and so forth a trial is made and an error is occurred.
Till the night combination this continues. It allows the manager to adopt and adjust plans
continuously before the full and final commitment. It uses both, the positive and negative feedback
before selecting one particular course of action.
Made in Stages
Here the decisions are made in steps until the whole action is completed. It allows close monitoring
of risks as one accumulates the evidence of out- comes and obstacles at every stage. It permits
feedback and further discussion before the next stage of the decision is made.
Cautious
It allows time for contingencies and problems that may crop up later at the time of implementation.
The decision-makers hedge their best of efforts to adopt the night course. It helps to limit the risks
that are inherent to decision- making. Although this may also limit the final gains, it allows one to
scale down those projects which look too risky in the first instance.
Conditional
Such types of decisions can be altered if certain foreseen circumstances arise. It is an ‘either / or’
kind of decision with all options kept open. It prepares one to react if the competition makes a new
move or if the game plan changes radically. It enables one to react quickly to the ever changing
circumstances of competitive markets.
Delayed
Such decisions are put on hold till the decision–makers feel that the time is right. A go-ahead is
given only when required elements are in place. It prevents one from making a decision at the
wrong time or before all the facts are known. It may, at times result into forgoing of opportunities in
the market that needs fast action.
Being Decisive
The ability to take timely, clear and firm decisions is an essential quality of leadership, but the type
of decision needed varies according to the circumstances. Learning to recognize the implications of
taking each type of different decisions leads to error minimisation.
Being Positive
Taking decisive action does not mean making decisions on the spur of the moment. But, it may be
necessary in emergencies and also occasionally desirable for other reasons. A true leader approaches
the decisions confidently, being aware of what must be taken into account and fully in command of
the decision–making process.
Making Fast Decisions
It is important to be able to assess whether a decision needs to be made quickly or it can wait. Good
decision-makers often do make instant decisions, but they then assess the long-term implications.
Identifying Issues
It is crucial to diagnose problems correctly. Before any decision is made identifying and defining
the issue removes the criticality. This also means deciding who else needs to be involved in the
issue, and analyzing what their involvement means.
Prioritizing factors
While making a decision, a manager needs to prioritize on important factors. Some factors in a
process are more important than others. The use of Pareto’s rules of Vital few and trivial many helps
in setting up of the priorities. Giving every factor affecting a decision equal weight makes sense
only if every factor is equally important; the Pareto rule concentrates on the significant 20 percent
and gives the less important 80 percent lower priority.
Using advisers
It is advisable to involve as many people as are needed in making a decision. In making collective
decisions, specific expertise as well as experience of a person both can be used simultaneously. The
decision-maker, having weighed the advice of experts and experienced hands, must then use
authority to ensure that the final decision is seen through.
Vetting decisions
If one does not have the full autonomy to proceed; it is advisable to consult the relevant authority –
not just for the final go, but also for the input. It is always in the interest of the subordinate to have
the plans vetted by a senior colleague whose judgment is trusted and is experienced. Even if there is
no need to get the decision sanctioned, the top people are likely to lend their cooperation well if
they have been kept fully informed all the way along the decision path.

Q5. What is control? Explain the characteristic of Managerial control.

Ans. According to Henri Fayol, Control of an undertaking consists of seeing that everything is
being carried out in accordance with the plan which has been adopted, the orders which have been
given, and the principles which have been laid down. Its object is to point out mistakes in order that
they may be rectified and prevented from recurring.
In 1916, Henri Fayol formulated one of the first definitions of control as it pertains to management:
Control consists of verifying whether everything occurs in conformity with the plan adopted, the
instructions issued, and principles established. Its objective is to point out weaknesses and errors in
order to rectify them and prevent recurrence.
Also control can be defined as "that function of the system that adjusts operations as needed to
achieve the plan or to maintain variations from system objectives within allowable limits". The
control subsystem functions in close harmony with the operating system. The degree to which they
interact depends on the nature of the operating system and its objectives. Stability concerns a
system's ability to maintain a pattern of output without wide fluctuations. Rapidity of response
pertains to the speed with which a system can correct variations and return to expected output.
A political election can illustrate the concept of control and the importance of feedback. Each party
organizes a campaign to get its candidate selected and outlines a plan to inform the public about
both the candidate's credentials and the party's platform. As the election nears, opinion polls furnish
feedback about the effectiveness of the campaign and about each candidate's chances to win.
Depending on the nature of this feedback, certain adjustments in strategy and/or tactics can be made
in an attempt to achieve the desired result.

Characteristics of Control
• Control is a continuous process
• Control is a management process
• Control is embedded in each level of organizational hierarchy
• Control is forward looking
• Control is closely linked with planning
• Control is a tool for achieving organizational activities

UNIT –III

Q6. “Sound organization structure is an essential pre requisite of efficient management”.

Discuss the above statement and point out the various principles while establishing and
developing organization structure.

Ans. Organization is a process of welding together a frame work of positions, which can be used as
a management tool for the most effective pursuit of the objective of an enterprise. It is one of the
fundamental function of the management. Various authors have defined the term organization in
different ways. According to Davis "Organization is a group of people who are co-operating under
the direction of leadership for the accomplishment of a common end." According to Denyers
"organization is concerned with the arrangement of work, with division of activities and with the
allocation of duties authority and responsibility."
The above definitions of organization reveal the following features :
1. It consists of a group of persons.
2. It shows a clear definition of objective.
3. The overall objective is broken into several objectives.
4. he group of persons in the organization work under the direction of executive leadership.
5. It arranges task in such a way as to ensure one way flow of work.
Every living organism has within it the seeds of its own destruction. Like this the success or failure
of an organization depends on its constituents. Establishment of a sound organization is of greatest
importance because it facilitates better administration and it provides optimum use of the
technological improvements. If the organization attains the desired objective it is a sound
organization.

Principles of a Sound Organization

The soundness or unsoundness of an organization largely depends on its degree of attainment of the
organizational objectives. Some of the important principles of a sound organization are:

1. Principles of Organizational Objectives

The object of an organization should be clearly defined as lack of design in organization is illogical,
cruel, wasteful and inefficient. So every part of the organization should be intended for the
attainment of the enterprise objective.
2. Principles of Specialization
In small scale organization the manager becomes jack-of-all- trades as he performs all the functions.
But in large scale organisation the situation is completely different and thus the primary function of
an organization is to determine and establish separate entities and thereby encourage division of
work. Division of work encourages specialization.

3. Principles of Unity of Function

The modern business consists of various functions like production, marketing, finance and
personnel. Each of the above functions are again subdivided into number of sub functions. These
functions are interrelated and organization tries to attain the principles of unity of functions which
means working together for the accomplishment of the common organizational objective.

4. Principles of Definition
The authority, responsibility and duties in the organization should be clearly defined and it should
be in writing. When there is clear-cut definition of the above, the individuals in the organization
tries to attain the work within the specified time span.

5. Principles of Span of Control

There is a limit to the number of persons that an individual can manage effectively and efficiently.
The maximum number of persons that can be supervised effectively by a person is known as span
of supervision or span of control. The span of control should be limited to a reasonable number and
a span of control of 6 subordinates is considered to be an effective span.

6. The Scalar Principles

The chain of authority or command must be clearly defined. The chain of authority refers to the
formal specifications of "Who reports to whom". Each employee in the organization must know
who is his superior and to whom policy matters will be referred for decision making.

7. Principle of Delegation
This principle states that when the manager is overburdened with official work, he divides the work
among the subordinates so as to ensure proper accomplishment of the objective. The authority
delegated to an individual should be adequate so as to ensure that he discharges his duties
efficiently.
8. Authority should Commensurate with Responsibility
Assignment of responsibility should be coupled with authority sufficient to carry them out because
a man's responsibility without authority is just like to place the man in an impossible position.
Without commensurate authority and responsibility, a man can-not be held accountable for
unsuccessful completion of the work.

9. Principles of Simplicity
The set up of organization should be simple and easy to understand as simple organization structure
results in better understanding of the goal of the enterprise.

10. Principles of Flexibility

The organization structure should be flexible so that adjustments due to changed^ circumstances
can be planned properly.
Q7. What do you mean by managerial communication? Discuss the steps for making
managerial communication effective in an organization.

Ans. Communication between managers and employees provides the information necessary to get
work done effectively and efficiently in organizations. In this and following lecture, basic concepts
in managerial communications will be presented including: the interpersonal communication
process, methods of communicating, barriers to effective communications and ways to overcome
these barriers, communication flow and communication networks, and contemporary issues and
challenges associated with electronic communications and information technology.

The Nature of managerial communication

A. Communication is the transfer and understanding of meaning.

1. If no information or ideas have been conveyed or transferred, communication hasn’t taken
place.
2. For communication to be successful, the meaning must be imparted and understood.
B. Good communication does not require agreement with the message, just clear understanding of
the message.
C. Managerial communication encompasses both interpersonal communication (between two or
more people) and organizational communication (all the patterns, networks, and system of
communication within an organization).
D. Communication and associated interpersonal processes are important ingredients of
organizational effectiveness.
E. Communication is the exchange of messages between people for the purpose of achieving
common meanings.
F. Managers use two types of communication in their work.
1. Verbal communication is the use of words to communicate.
a. Written communication includes letters, memoranda, reports, newsletters,
policy manuals, etc.
b. Disadvantage includes the fact that the conversations may be time
consuming and difficult to terminate, and that additional time may have to
be spent to document what was said.
2. Nonverbal communication is communication by means of elements and behaviors that are
not coded into words.
3. Nonverbal Communication is communication transmitted without words. The best-known
types of nonverbal communication are body language and verbal intonation.
a. Body language refers to gestures, facial expressions, and other body movements that
convey meaning.
b. Verbal intonation refers to the emphasis someone gives to words or phrases that
convey meaning.
Strategies for Effective Managerial Communication:

1. Determining Plan: A policy or planning tells the members what to do, how to do, etc. It
acts as a guide to the members particularly operating employees of the organization. Well
thought policies or planning aid the smooth flow of effective communication. So a proper
planning or policy must be determined beforehand.

2. Avoiding Assumption: Unclarified assumptions may sometimes lead to draw different

conclusion by the different people. To stop it, messages should be clearly spelled out.
Whatever intention is in the mind of the sender, it should clearly be encoded. In no way,
there should be any scope open to the receiver to interpret the message differently.
3. Appropriate Encoding: Communication is intended to inform others as well as to know the
others. When it is done for others, management (i.e. source of the message) should be
serious in the organization of ideas, sentence structure, coherence etc. It is noted that good
encoding is an art that can be mastered through practice. So, every effort should be taken to
make the message attractive, impressive, coherent and clearly & easily understandable to the
receivers.
4. Repeating Message: To overcome the problem of loss by transmission and poor retention,
the same message may be sent repeatedly. Several channels may also be used
simultaneously so as to avoid loss by transmission.
5. Effective Listening: Mere listening is not sufficient if it is not done with understanding.
There are many guidelines to be followed for effective listening. For avoiding listening
barrier we can follow these steps:
a) Stop talking
b) Put the talker at ease
c) Show a talker that you want to listen
d) Remove distractions
e) Empathize with talkers
f) Be patient
g) Hold your temper
h) Go easy on argument and criticism
i) Ask question
And
j) Stop talking

6. Creating Credibility: Distrust is to a great extent, overcome through creating trust or

credibility. A person’s credibility in general is high if others perceive him or her as
knowledgeable, trustworthy and sincerely concerned about the welfare of others. Source
credibility means trust, confidence and faith that a communicate assigns to the words and
actions of the source. It is the result of a long-term process. There are no shortcuts to
creating a trusty climate. But this atmosphere is must, because it facilitates open and honest
communication.

7. Regulating Information Flow: Regulating the flow of communication ensures an optimum

flow of information, which facilitates the elimination of information overload. One way to
regulate information flow is the adoption of ‘exception principle’ of management, which
states that only significant deviations from policies and procedures should be brought to the
attention of managers.
8. Recognizing the Receiver’s Personal Factors: To overcome the preconceived perception
of the receiver, the communicator must try to anticipate the factors that will influence the
 symbolic interpretation or decoding of the message. For this purpose, the communicator
must be empathetic i.e. he or she must place himself or herself in the receiver’s position to
anticipate how the message is likely to be decoded. For an example, if the receiver is skeptic
about the sender, this skepticism must be taken into consideration while transmitting any
message. The communicator must try to remove the skepticism from the receiver’s mind.
This may take more than one trustworthy message to modify such behavior of the receiver.
9. Using Appropriate Language: Effective communication is sometimes impeded by
semantic problems. To overcome this problem, a grate care is to be taken while encoding a
message to ensure that words having varieties of meaning are not there. Words chosen for
the purpose should have as far as possible, positive and specific connotations.
10. Simplifying Language: Technical jargons used in communication transforms simple
concepts into complex puzzles. It is to be remembered that the job of communication is done
not only for transmission of information, but for promotion of understanding and acting
accordingly also. Obviously, management or any other communicator must emphasize using
simple but correct language for effective communication to take place. If technical jargons
are to be used at all, their clear meaning should be given so that the receivers need not
decipher the meaning.
11. Clear Definition: To remove any sort of confusion developed from unclarified roles, duties
& responsibilities of each staff member of the organization should be clearly defined.
Employees and officers having clear idea about their respective duties can exchange freely
the needed information among themselves.

12. Making Sound Objectives: Employees do not usually discharge their duties directed to the
achievement of unsound objectives. Thus, before any direction given to the employees, the
organization must ensure that the objectives are sound and not contrary to the interest of the
employees or to the society.
13. Utilizing Feedback: According to systems theory communication is complete only when
the sender receives feedback from the receiver. Feedback enables the communicator to
determine whether the message has been received as intended by the communicator. It
provides the sender with clues about the acceptance of his message. As feedback is an
important element in effective two-way communication, necessary steps should be taken to
elicit receiver’s feedback.
14. Selecting Appropriate Channel: One best way to deal with the channel problem is to use
appropriate channel of communication. For effective communication to take place, a
message must be transmitted through the channel, which is most appropriate for the
particular situation. For this purpose, a cautious communicator is expected of judiciously
evaluating the alternative channels, giving due consideration to the receiver’s state of
knowledge, gravity of the situation, need of immediacy, importance of feedback, relevant
expenditure etc. This technique will indicate which particular channel proves to be
appropriate for a given message to be transmitted effectively.

UNIT-IV

Q8. How does the selectivity affect perception? Give an example of how selectivity can create
perceptual distortion?

Ans. SELECTIVE PERCEPTION

• Any characteristic that makes a person, object, or event stand out will increase the
 probability that it will be perceived.

• It is impossible for us to assimilate everything we see—only certain stimuli can be taken in.

• A classic example:

a. Dearborn and Simon performed a perceptual study in which 23 business executives read
a comprehensive case describing the organization and activities of a steel company.

b. The results along with other results of the study, led the researchers to conclude that the
participants perceived aspects of a situation that were specifically related to the activities
and goals of the unit to which they were attached.

c. A group’s perception of organizational activities is selectively altered to align with the

vested interests they represent.

d. Selectivity works as a shortcut in judging other people by allowing us to “speed-

read” others, but not without the risk of drawing an inaccurate picture. Because we see
what we want to see, we can draw unwarranted conclusions from an ambiguous
situation.

Stereotypes are the best example of selective distortion.

• Stereotyping—judging someone on the basis of our perception of the group to which he or

she belongs

• Generalization is not without advantages. It is a means of simplifying a complex world, and

it permits us to maintain consistency. The problem, of course, is when we inaccurately
stereotype.

• In organizations, we frequently hear comments that represent stereotypes based on gender,

age, race, ethnicity, and even weight.

• From a perceptual standpoint, if people expect to see these stereotypes, that is what they will
perceive, whether or not they are accurate.

Q9. Why is change resisted in organization? What can management do to overcome it?

Ans. Factors That Causes Resistance to Organizational Change

1. Threat of power on an organizational level: With organizational change some groups,

departments or sectors in organization become more powerful, it affects appearing resistance
to change of those that lose some part of that power;
2. Losing the control by employees: Organizational change can make a decrease level of
control that needs to conduct managers, and it affects appearing resistance to change of
those that has taken common law on control;
3. Increasing the control of employees: Organizational change can increase control of
employees, and it affects appearing resistance to change;
4. Economic factors: Organizational change may see in an eye of employees simply as
decreasing or increasing of payment and others economic privileges that bring some
workplace. This will influence on appearing resistance of those that will be covered with
this change;
 5. Image, prestige and reputation: Every workplace brings adequate image, prestige and
reputation that are important to every employee. Organizational changes shift this
convenience of employees. This will influence on appearing resistance of those that will be
covered with this change;
6. Threat of comfort: Organizational change results to personal discomfort and make
employee life more difficult. They represent transfer of comfort of status quo to discomfort
to new situation. Employees have skills to do an old job without some especially attention to
accomplish that job. Every new job requires forgetfulness on old methods of doing a job and
learning new one that lead to dissipation on energy, and it affects on appearing resistance to
change;
7. Job’s security: Organizational change may eliminate some work places, may produce
technological excess, layoffs and so on. Job’s security has influence on appearing resistance
of those that will be covered with this change;
8. Reallocation of resources: With organizational change some groups, department or sector
in organization obtains more resources on damage on others; it affects on appearing
resistance on those who are devoid resources;
9. Acquired interest of some groups: Organizational change can make new groups more
significant of success, and it represents a threat on old coalition that will influence on
appearing resistance on those groups that arise more insignificant;

Overcoming Resistance at Organisational and Individual Level

Organisational Level
Overcoming Undefined Goals and Objectives
Goals and Objectives should be frequently redefined and relayed to all employees. This shall aid
towards clearing up any misunderstanding and possible conflicts.
Overcoming Financial and Environmental Issues
Organisations should have a contingency fund to cater for changes in demand or develop a very
good relationship with their bank manager in case you need to borrow money at hard times. At the
other end of the scale if demand sores suppliers must be able to satisfy demand. Benchmarking
suppliers shall help determine your best suppliers.
A good supplier may be one that allows you to have a 30 day or more credit accounts, which leave
you with more working capital. Essentially corporate business strategies should have a degree of
flexibility to act as a defence to sudden changes.
Overcoming Structural Problems and Insufficient Communication
In a large organisation, employees may wish to elect a spokes person who can act as a collective
voice to air potential barriers directly to management. Surveys can be conducted and results
analysed. In a small organisation employees should be encouraged to speak up if they feel that
change is causing a conflict.
Overcoming Lack of or Bad Leadership
It is a natural human instinct to follow leadership as children we look up to our parents and as adults
we look up towards our superiors. Leaders must lead the way and be an example for others to
follow. In leading and setting an example to others leaders must take an active role a “hands on
approach” side by side with the employees in order to motivate and encourage. As in the words of
the great, Mahatma Gandhi; “We must become the change we want to see” (Mahatma Gandhi)
Overcoming Lack of Preparation for New Roles
The importance of planning must be emphasised and reflected. The new roles should be concisely
explained to the respective employees prior to implementing change, to stifle out any doubts, fears
or resistance.
Overcoming Cultural Issues
The cultural characteristics once identified need to be overcome and evolved into a non-blame
culture. By doing so the employees shall have the freedom to evolve and try innovative ways of
doing their jobs without the fear of being penalised for mistakes.

Individual Level
Employees should be directly involved in the change process, which shall motivate and reduce
resistance. Extra incentives should be made available to further encourage and reward compliance.
Support networks should be established as a means to reinforce the change theory. Appendix 1
Maslow's Hierarchy of Needs depicts the theory of psychological needs, values of authority,
hierarchy and rationality, security needs.
The model consists of many levels. Maslow argues that once the basic level of Air food water and
sex are met the next “hierarchical” or “rational” need is for safety. An organisation must concentrate
on invoking a sense of “Belonging” to the organisation by keeping them informed, involved and
sharing the success.
“Esteem by others” should be achieved by promoting team work and the occasional appraisals by
management.

Force Field Analysis

The force field analysis helps identify the forces for change (drivers) and forces against change
(resistance) in an organisation. Through analysis the author concludes that it important to note that
even if you have more forces for change than against this may not actually guarantee you successful
change. The key is to remove the barriers to change on the organisational and individual level.