Fundamentals of Management Question Bank
Fundamentals of Management Question Bank
Fundamentals of Management Question Bank
TECHNOLOGY
GREATER NOIDA
BBA I SEMESTER
QUESTION BANK
FUNDAMENTALS OF MANAGEMENT
BY MEENAKSHI BHASKAR
ASSISTANT PROFESSOR
MANGALMAY INSTITUTE OF MANAGMENT & TECHNOLOGY
FUNDAMENTALS OF MANAGEMENT
Ans 1 . Definitions
Allen defines Organising as “ the process of identifying and grouping of the work to be performed,
defining and delegating responsibility and authority and establishing relationships for the purpose of
enabling people to work most effectively together in accomplishing their objectives.”
Koontz and O’Donnell defines as “ Organisation is the establishment of authority and relationships
with provision for coordination between them, both vertically and horizontally in the enterprise
structure.
“ An Organization chart is a graphic of the various positions in the enter[prise and the formal
relationships among them”.
Ans 3. Staffing
Functions of Staffing
1. Procurement
– Job analysis
– Man power planning
– Recruitment
– Selection
– Placement
2. Development
- Performance appraisal
- Training
- Management Development
- Career Planning & Development
- Promotion
3. Compensation
– Job evaluation
– Wage and Salary administration
– Incentives
– Fringe Benefits
– Social security measures
4. Human Relations
- is an area of management in integrating people into work situation in a way that motivates them to
work together productively, co-operatively and with economic, psychological and social
satisfaction.
Ans 4.
Authority Responsibility
Main functions Here, orders and commands Here, duties and obedience
play a vital role. play a vital role.
Time duration It stays for a longer period as It gets completed with the
compared to responsibility. completion of the task so it
has a shorter period.
Ques 5. What is decentralization? What are the various factors influencing the centralization
and decentralization?
Ans 5. Decentralization -
Decentralization is the policy of delegating decision making authority throughout the organization,
relatively away from central authority.
Factors-
Centralization -
• Stable environment.
• Low capability of lower level managers to take decision as top level managers.
• Company is large.
• Organization is facing a crises or the risk of company failure.
Decentralization -
• It is however, the essence ( important quality) of management, for achieving harmony among
individual efforts towards the accomplishment of group goals.
• It is through the process of coordination that a manager ensures the orderly arrangement of
individual and group efforts to ensure unity of action in the realisation of common objectives.
Coordination is Coordination is
brain in the the force that
body of binds all the
management other functions
skills. of management.
• Coordination is working together by
Interpreting
programmes, plans,
Providing growth and
policies and practices development of
employees
Ans 7. The planning and controlling functions of management are very closely related. The
relation between both the functions is explained below:
1. Meaning:
Planning is the basic function of every enterprise as in planning we decide what is to be done, how it
is to be done, when it is to be done and by whom it must be done. Planning bridges the gap between
where we are standing today and where we want to reach.
Controlling means keeping a check that everything is in accordance with plan and if there is any
deviation, taking preventive measures to stop that deviation.
On the other hand, the planning function is also dependent on controlling function as plans are not
made only on papers but these have to be followed and implemented in the organisation.
3. Planning and controlling are both backward looking as well as forward looking:
Controlling is backward looking because like a post-mortem of past activities the manager looks back
to previous year’s performance to find out its deviation from standard planning is also backward
looking because planning is guided by past experiences and feedback report of controlling function.
Planning is forward looking because plans are prepared for future. It involves looking in advance and
making policy for maximum utilisation of resources in future.
Controlling is also forward looking because controlling does not end only by comparing past
performance with standard.
PROGRAMMED DECISIONS:
Programmed decisions are routine and repetitive, and the organization typically develops specific
ways to handle them. A programmed decision might involve determining how products will be
arranged on the shelves of a supermarket. For this kind of routine, repetitive problem, standard
arrangement decisions are typically made according to established management guidelines.
Non programmed decisions are typically one shot decisions that are usually less structured than
programmed decision.
Ans 1. Departmentation
As the process of grouping individual jobs in department. It involves grouping of activities and
employees into departments so as to facilitate the accomplishment of Organisation Objectives.
- Specialisation
- Coordination
- Control
- Economy
- Attention
- Human Consideration
Basis of Departmentation
Merits
Demerits
- This type of departmentation shall develop a loyalty towards the functions and not towards the
enterprise as whole.
- Co-ordination of different function shall become difficult
- Only the departmental heads are held responsible for defective work
Departmentation by Territorial basis – A company may have separate departments to serve the
southern region, northern region etc. It has the advantage of the intimate knowledge of local
conditions.
Merits
It motivates each regional head to achieve high performance
Provides each regional head an opportunity to adapt to his local situation and customer need
with speed and accuracy.
It affords valuable top-management training and experience to middle level executives]enables
the organization to take advantage of locational factors, such as availability of raw materials,
labour, market, etc.
Enables the Organisation to compare regional performances and invest more resources in
profitable regions and withdraw resources from unprofitable ones.
Demerits
May give rise to duplication of various activities. Many routine and service functions performed
by all the regional units can be performed centrally b the head office very economically
Various regional units may become so engrossed in short run competition among themselves
that they may forget the overall interest of the total organization.
Departmentation by Process basis – is done on the basis of several discrete stages in the process or
technologies involved in the manufacture of a product. A cotton textile mill have separate
departments for ginning, spinning, weaving, dyeing and printing and packing and sales.
Merits
Demerits
Merits
It ensures full attention to major customer groups and helps the company to earn goodwill.
Demerits
•LINEAR PROGRANNING
•QUEUING THEORY
•GAMES THEORY
•PROBABILITY THEORY
TECHNIQUES FOR
•SIMULATION
NON-
•NETWORKTECHNIQUES
PROGRAMMED
•HEURISTIC TECHNIQUES
•PARTICIPATIVE DECISIONS
MODERN
TECHNIQUES
•CREATIVITY
•BRAINSTROMING
•DELPHI TECHNIQUE
GROUP
TECHNIQUES •NOMINAL GROUP TECHNIQUE
Ques 3. What is line & staff organization? What are its limitations? How can be removed
these limitations?
Line & staff org., the work of administration of business units is divided into two head categories ,
namely ,the ‘staff’ which is responsible for planning the ‘line’ for actual execution of work. Staff
officers are attached to line managers to advice in the area of their specialization. They are advisors.
The staff personnel prepare plans & recommend to the line officials who implement them. The line
officers may or may not rely on their advice. Thus, in simple terms, it can be concluded that, “staff
members are thinkers while the line officials are doers”.
Merits-
Demerits-
If the powers of authority pertaining to the line officer & staff officers are not clearly defined, there
may be confusion through-out the org.,
It is very difficult to control the line officer’s to when they reject the advice of the staff officers.
The line officers may reject the advice without assigning any reasons for their action.
The staff officers may under-estimate the authority of line officers. The reason is that they are
superior to the line officers.
The staff officers are not involved in the actual implementation of the program. So, it is not
obligatory on their part to give advice with care & caution.
The staff officers are not responsible if favorable results are not obtained.
Line and staff conflict - Generally staff people are relatively young, better educated and more
sophisticated in appearance. They also suffer the notion that their ideas, if implemented, will produce
miraculous result.
Line personnel view their staff counterparts as a source of irritation because the advice and
recommendations may involve change in the status.
The ideas, suggestions or recommendations by the staff are theoretical and Impractical.
Many a times, staff officials render untimely advice
Staff people steal the credit for the successful ideas while blame for the failure against line.
There is lack of authority, for the staff.
Line people resist new ideas of the staff.
Line officials consult the staff only as a matter of last resort
There must be clear definition of the authority, responsibility, areas and manners of functioning
of line and staff officials.
Staff must appreciate the problem of line and line must be made to listen to the staff.
There must be open channels of communication between the line and staff for transmission of
understanding and betterment of human relations.
Proper use of the staff—line officers are dependent on staff officers for solving the problems
which require expertise knowledge and the skill.
Setting congenial organizational climate—congenial organizational climate full of mutual trust,
respect, Self-restrain and control, coordinated approach and mutual help is another important
factor for successful operation of line and a staff personnel.
Ans 4. The relationship between planning and control can be divided into the following two parts:
There is a deep relationship between the controlling and planning functions of management. Showing
the importance of their relationship, it is generally said that planning is meaningless without
controlling and controlling is blind without planning. Both the aspects of the interdependence of
planning and control have been detailed below:
If the process of controlling is taken away from management, no person working in the enterprise will
take it seriously to work according to the plans and consequently, the plans will fail.
Under the system of controlling actual work performance is compared with the standards. Hence, if
the standards are not determined there is no justification left for control, and the standards are
determined under planning. It is, therefore, said that control is blind without planning or it is without
any base.
It is correct that planning and controlling are incomplete and ineffective without each other and hence,
dependent on each other. But it does not mean that both are not independent. The following points are
helpful to clarify their independent character:
Plans are always formulated for future and determine the future course of action for the achievement
of objectives laid down.
On the contrary, controlling is looking back because under it a manager tries to find out, after the
work is completed, whether it has been done according to the standards or not. It is thus clear that
planning looks ahead and controlling looks backward or in the past.
This difference between planning and control can be stated in the reverse position also. It means
Planning is looking back whereas controlling is looking ahead. Planning is called looking back
because the plans are formulated on the basis of the happenings of the past or on the basis of
experience.
On the other hand, controlling evaluates the work done in the past but under it corrective action is
taken in respect of future. Hence, there should not be any hesitation in saying that planning looks
backward while controlling looks ahead,
(ii) Planning is the First Function and Controlling is the Last Function of Managerial Process:
The managerial process moves in a definite sequence like planning, organising, staffing, directing and
controlling. This sequence shows that planning is the first step in the managerial process and
controlling happens to be the last step.
Long answer type questions:
Well defined jobs - Organizational structure helps in putting right men on right job which can
be done by selecting people for various departments according to their qualifications, skill and
experience. This is helping in defining the jobs properly which clarifies the role of every person.
Clarifies authority - Organizational structure helps in clarifying the role positions to every
manager (status quo). This can be done by clarifying the powers to every manager and the way
he has to exercise those powers should be clarified so that misuse of powers do not take place.
Well defined jobs and responsibilities attached helps in bringing efficiency into managers
working. This helps in increasing productivity.
Authority responsibility relationships can be fruitful only when there is a formal relationship
between the two. For smooth running of an organization, the co-ordination between authority-
responsibility is very important. There should be co-ordination between different relationships.
Clarity should be made for having an ultimate responsibility attached to every authority. There
is a saying, “Authority without responsibility leads to ineffective behaviour and responsibility
without authority makes person ineffective.” Therefore, co-ordination of authority-
responsibility is very important.
Sense of security - Organizational structure clarifies the job positions. The roles assigned to
every manager is clear. Co-ordination is possible. Therefore, clarity of powers helps
automatically in increasing mental satisfaction and thereby a sense of security in a concern.
This is very important for job- satisfaction.
Scope for new changes - Where the roles and activities to be performed are clear and every
person gets independence in his working, this provides enough space to a manager to develop
his talents and flourish his knowledge. A manager gets ready for taking independent decisions
which can be a road or path to adoption of new techniques of production. This scope for
bringing new changes into the running of an enterprise is possible only through a set of
organizational structure.
Characteristics of organizing
Division of work is the basis of an organisation. In other words, there can be no organisation without
division of work. Under division of work, the entire work of business is divided into many
departments. The work of every department is further subdivided into sub works.
2) Coordination:
Under organisation different persons are assigned different works but the aim of all these persons
happens to be the same the attainment of the objectives of the enterprise. Organisation ensures that the
work of all the persons depends on each other’s work even though it happens to be different. Hence, it
helps in establishing coordination.
Organisation is a group of many persons who assemble to fulfill a common purpose. An individual
cannot create an organisation.
There are various parts of an organisation with different functions to perform but all move in the
direction of achieving a general objective.
Ques 2. Discuss the need for and nature of communication in organizations. And explain
barriers to communication and how to overcome these barriers?
Ans 2. COMMUNICATION
Communication is derived from the Latin word Communis which implies common.
Communication is the interchange of thoughts and information.
ELEMENTS
1. Sender
2. Message – The Subject matter of Communication
3. Encoding – act of translating he msg into words, pictures, symbols
4. Channel – Media used
5. Receiver –
6. Decoding – interprets the msg to draw meaning from it. He converts symbols, signs or
pictures into meaning
7. Feedback –
CHANNELS OF COMMUNICATION
1. Formal Communication – follows the route formally laid down in the organization structure
a. Downward Communication – flow of communication from superior to subordinate
b. Upward Communication - flow of communication from subordinate to superior
c. Horizontal Communication – transmission of information among the positions at
the same level of he Organization.
Oriented towards goals and task of the Directed towards goals and need satisfaction of
enterprises individuals
Merits Demerits
Supplements the channels of official May lead to more talk and less work
communication
Tells mgt when to be firm and when to yield May distort official channels of communication
1. Oral Communication
2. Written Communication
3. Gestural Communication
ORAL COMMUNICATION
Oral Communication involves exchange of messages through spoken words. It may take place. i) by
face- to face contacts ii) through mechanical devices like telephone.
Merits
1. Economical
2. Personal touch
3. Speed
4. Flexibility
5. Quick response
Demerits
1. Lack of record
2. Time Consuming
3. Lengthy message
4. Physical distance
5. Misunderstanding
WRITTEN COMMUNICATION
Written Communication is transmitted through written words in the form of letter, circular, memos,
bulletins, instruction cards, manuals, handbooks, reports, returns,
Merits
1. Effectiveness
2. Lengthy messages
3. Economical
4. Repetition
5. Permanent record
6. Better response
Demerits
1. Time Consuming
2. Expensive
3. Inflexibility
4. Little secrecy
5. Lack of personal touch
6. Misunderstanding
COMMUNICATION NETWORKS
1. Circle Network
2. Chain Network
3. Wheel Network
4. All Channel Network
BARRIERS TO COMMUNICATION
a. Organisational Barriers
b. Mechanical Barriers
1. Overloading
2. Semantic barriers
3. Noise
c. Personal Barriers
2. Failure to Communicate
3. Hasty Conclusion
4. Distrust of communicator
1. Clarity of messages
2. Completeness of message
3. Consistency of message
4. proper timing
5. Credibility
6. Empathy
7. Follow-up
8. Economy
Ques 3. What is leadership and motivation ? and how they contribute in directing function of
management in detail.
Ans 3. Definition
Leadership is defined as influence, the art or process of influencing people so that they will strive
willingly and enthusiastically toward the achievement of group goals.
- Leaders act to help a group attain objectives through the maximum application of its
capabilities.
- Leaders must instill values – whether it be concern for quality, honesty and calculated
risk taking or for employees and customers.
Leadership types-
a) Autocratic leader-the leader expect complete obedience from his subordinates and all
decision making is centralized in the leader. All decision major or small are taken by the
leader & sub-ordinates are forced to obey them without questioning.
c) Democratic leader-under this type the leader act according to the mutual consent & the
decision are reached often consulting the sub-ordinates.
d) Bureaucratic leader-in this style everything is influenced by the rules regulations and
procedures. The leader setup a procedure ordering to the rule book. All the decision are taken
on the basis on the rules & regulation. The employees are not encouraged to take the
initiatives.
e) Manipulative leader-the employees are exploited through different means for extract in
more & more work from them & not compensating them for there additional efforts.
When the co-operation of employees is needed urgently for specific task.
When the projects are of short duration.
When long term relationship may not be required.
(f) Paternalistic leader-it is based upon the sentiments and emotions of people. A paternalistic
leader is like a father figure to the sub-ordinates . the leader looks after the needs & aspirations of sub-
ordinates. He helps guides & protects all of his sub-ordinates.
Motivation:
Motivation is a general term applying to the entire class of drives, desire needs
similar forces. To say that managers motivate their subordinates is to say that they do
those things which they hope will satisfy these drives and desire and induce the
subordinates to act in a desired manner.
The chain explanation is complex. In the first place, except for physiological needs,
such as food, need are not independent of person's environment. Many physiological
needs are stimulated by environmental factors the small of food may cause hunger, a
lower thermometer reaching may cause chills.
COMPLEXITY OF MOTIVATIONS:
Which cause
Tension
Give Rise to
Action
Which result in
Satisfaction
Effective
SUPERVISION motivation
PRINCIPLES OF
DIRECTING
UNITY OF Effective
COMMAND Communication
Ques 4. Explain the importance of control in a business organisation . discuss the process of
control.
Ans 4. Controlling
Definition
as the process of analyzing actual operations and seeing that actual performance is guided towards
expected performance.
- Comparing operating results with plans and taking corrective action when results deviate
from plans
- Def. Koontz and O’Donnell “ The managerial function of controlling is the measurement
and correction of the performance of activities of subordinates in order to make sure that
enterprise objectives and the plans devised to attain them are being accomplished.
Elements of Control
1. Planning
2. Information Feedback
3. Delegation of Authority
4. Remedial action
THE BASIC CONTROLL PROCESS
1. ESTABLISHING STANDARD
2. MEASUREMENT OF PERFORMANCE
It is the second step of control process. Although such measurement is not always
predictable, but if standard are appropriately drown and if means are available for
determining exactly what subordinates are doing then measurement of performance is
fairly easy. But there are many activities for which it is difficult to develop accurate
standards and there are many activities that are hard to measure. Technical kind of
work is hard to measure performance.
3. CORRECTION OF DEVIATIONSS
Magnitude of Change
Time rate of Change
Erroneous standard ( Mistakes in setting standard)
Workers Resistance
Communication Problems
Suitable
Flexible
Economical
Simple
Objective
Prompt
Forward looking
Suggestive
Strategic point control
Motivational
Traditional Techniques
1. Personal Observation ( For E.g. A Factory manager goes around the plant, observes the
performance of Employees and Machines)
2. Good Organisation Structure
3. Unity of Plans
4. Statistical Control Reports
5. Budgetary control – Statement expressed in financial terms
a. Master budget
b. Functional Budget - Sales budget, Production budget, Material budget,
Labour budget, Cash budget, Administrative Overhead budget,
c. Capital & Revenue budget
d. Fixed and Flexible Budget
e. Zero base budgeting ( the budget proposals are considered from the ground
up ( zero base) or from scratch
Objectives of Budgetary Control
a. Planning
b. Coordination
c. Control
d. Motivation
e. Efficiency
Merits