(SET-I)

Time allowed : 3 Hours

M.M. : 100

General Instructions :

(iii) Marks are indicated against each question.

(iv) Answers should be brief and to the point.

PART-I

(PRINCIPLES AND FUNCTIONS OF MANAGEMENT)

(i) The entire organisational activities are divided into specified functions, such as operations, finance, marketing, personnel relation etc.

(ii) Each functional area is put under the charge of a functional specialists. The specialist has the authority or right to give orders regarding his function wheresoever that function is performed in the enterprise.

According to Vitels, " Supervision refers to direct and immediate guidance and control of subordinates in the performance of their tasks."

Esprit de Corps : Since 'union is strength', the management should create a team sprit among the employees. Only when all the personnel pull together as a team, there is scope for realising the objectives of the concern. Harmony and unity of the staff of a concern is a great source of strength to the undertaking. The management should not follow the policy of 'divide and rule' and it should strive to maintain unity among the staff. If there are any differences or misunderstandings or symptoms of distrust, the management should take timely steps to eliminate them.

1. The plan should be simple : A good plan to be effective should be simple to be understood and worked upon by different individuals and groups.

2. The plan should be specific rather than general : The more explicit it is, less chance there is for it to be misinterpreted. Objectives and goals should be clearly defined. The means for carrying out the plan should also be indicated.

3. The plan should be logical and practical : The more fact it is based on, the better it is. If facts are not available, then reasonable assumptions must be made.

Planning implies strict adherence to predetermined policies, procedures and programmes. This restricts individual's freedom, initiative and desire for creativity.

Line and staff organisation is an improvement over the line organisation as is discussed below :

1. Relief to line executives : Staff executives look after complicated problems of their respective areas. As such, line executives are relieved of matters of technical nature.

2. Expert advice : Line executives and the enterprise as a whole get the benefit of expert advice of staff executives.

3. Better co-ordination : The line and staff organisation provides for better co-ordination us the organisation as the staff provides expert advice and the line officers put them into action.

(a) meaning, and (b) purpose.

The directors of Narmada Ltd., an organisation manufacturing computers have asked their marketing manager to achieve a target sale of 100 computers per day. The marketing manager has delegated the task to his deputy sales managers working under him. The deputy sales managers could not achieve the targets. Is the marketing manager responsible for the failure of his deputy sales managers ? Explain, in brief, the relevant principle in support of your answer. (5)

In this situation the marketing manager is responsible as per Principle of Absolute Responsibility. This principle states that by delegating work to subordinate, a manager cannot escape the responsibility for the successful performance of delegated duties. He remains ultimately responsible for the activities of his subordinates and cannot dissociate himself for their acts. A general manager while arranging the work of the organization assigns jobs to various individuals and departments but remains ultimately responsible for whatever happens in the organisation.

"Control does not require any process." : This statement is not correct. For control there is a need of control process. Controlling in the process through which managers assure that the actual activities confirm to the planned activities

Control Process : Control process is made of three phases or elements which are a ways present :

(i) Determination of standard performance. Standard is a criterion against which actual performance is measured. Fixation of standard is the first step in the process of control. in other words before control can be exercised, things must be planned so that - planned performance can be compared with the actual performance. The standards for this purpose must be set in tangible units so that outcome is in clear cut results.

(ii) Comparison of actual and standard performance : This is the second step in the process of control. The comparison of actual with standard performance may reveal some differences between the two. These differences of discrepancies should be analysed according to the reasons and responsibility of this may be assigned to persons who should be made accountable for these durations from the standard performance. Where, however, standards are not tangible, measurement of variations between planned and actual performances may bot be so easy.

(iii) Corrective action : This is the last stage in the control process. The reasons for the difference between standard and actual results should be put into two categories - controllable and uncontrollable. Uncontrollable factors are those which are not within the control of management e.g., rise in market prices of raw material. Controllable reasons are those which arise because of the inefficiency of the staff. Remedial or corrective action should be related to these controllable factors so that recurrence is avoided in future. In brief remedial action is meant to improve performances in future.

"Management is a profession like medical or legal profession." Do you agree with this statement ? Give reasons in support of your answer. (7)

No, I do not agree with the view that management is a profession like medical or legal profession because it is not obligatory for managers to get registered with any profession body. It has neither been able to restrict entry of non-professional into managerial jobs. Further, managers are also not subject to any formal professional code of conduct enforceable by any regulatory authority like the Bar council of India or Medical council of India. Unlike, other profession managers do not require any minimum qualifications.

Leadership is the process of influencing the behaviour of the people. Leaders are the moving spirits and guiding stars of inspiration to the followers. A leader interprets the objectives of the business, suggests course of action and guide people to achieve the set of objectives.

Koontz and O'Donnell have defined leadership as the ability to exert interpersonal influence towards the achievement of certain goals. Since managers get things does through people, their success depends to a considerably extent upon their ability to provide leader ship." It appears therefore that every manager must attain the qualities of a leader.

Qualities of a Good Leader : - Some of the important qualities of an effective leader are as under :

1. Intelligence : Leaders generally have somewhat higher level of intelligence than the average people. Intelligence is generally expressed in terms of mental ability to think scientifically, and analyse accurately the problems before a person.

2. Self - Confidence : - A good leader must have self-confidence based on self-knowledge. This will enable him to win confidence of others.

3. Physical Features : Physical characteristics and level of maturity determine personality of an individual which is an important factor in determining success of leadership. Physique, health and appearance of an individual are important for leadership to some extent.

4. Good Judgement : A good leader must have wisdom to look ahead into the future and ability to make good judgement.

5. Balance : The leader should be rational and objective in his approach. He should be free from bias prejudice and pre-conceived notions. Only then he would be able to decide issues on their merit.

6. Communicating skill : The leader should be good it communicating ideas, feelings, decisions, orders, etc. He should be a good and effective speaker.

7. Ability to guide : The leader should help his subordinates to learn.

8. Sociability : The leader should show keen interest in his subordinates. He should try to meet them often and encourage them to discuss their problems and difficulties with him. He should be friendly, helpful and easily accessible to to his subordinates.

(FUNCTIONAL MANAGEMENT)

(i)Selection of employees (a) Determination of manpower requirements, (b) preparation of job description, (c) job analysis, (d) selection of the nature and sources of requirement, (e) employees selection, (f) induction and follow up.

According to Philip Kotler, "Marketing management is the analysis, planning, implementation and control of programmes designed to create, build, maintain mutually beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives. "Marketing management deals with planning, organizing, directing and controlling the activities related to the marketing of goods and services to satisfy the customers' needs.

How can internal sources of recruitment be better than external sources of recruitment ? Give three reason in support of your answer ? (3)

Due to the following reasons internal sources of recruitment is better than external source of recruitment :

1. Filling vacancies for higher jobs by promoting employees from within the organisation helps to motivate and improve the morale of the employees. This induces them to work more sincerely.

2. Internal recruitment helps to minimise labour turnover and absenteeism. People wait for promotion and the work-force is more satisfied.

3. It is a cheaper source of recruitment. Full information about the candidates is already available. Time and money need not be spent on advertising of vacancies, tests and interviews, checking references, etc.

Three major decisions which an organisation has to take in respect of financial management :

1. Investment decisions : The financial manager has to decide about the investment of funds in various business activities.

2. Financing Decisions : these relate to raising of funds. The funds are available from various sources and for varying periods of time. The Finance Manager is required to obtain a balanced capital structure for the company.

3. Dividend Decisions : Such decisions are related to dividend policy of the company. The finance manager has to decide whether the company should distribute all profits or retain them, distribute a portion and retain the balance.

"Both under - capitalisation and over-capitalisation are evils, but under-capitalisation is a lesser evil. "Do you agree with this statement ? Give reasons for your answer ? (3)

Yes,I am agree with this statement that both under capitalisation and over- capitalisation are evils, but under - capitalisation is a lesser evil.

As we know that over - capitalisation can prove more dangerous to the company, the shareholders and the society than under capitalisation. It can be remedied only after the shareholders have paid a high cost in the form of sacrificing their interest in the company or bringing more does of capital. This is done by re-organisation of the concern and the creditors also may suffer. But in the case of under -capitalisation the shareholders and the society share in the increased prosperity of the company though it accelerates competition on the part of business rivals, discontentment of employees, and the idea of being exploited on the part of consumers.

Thus it may be concluded that under-capitalisation is the lesser evil through both are bad.

(a) Meaning, (b) Objective, and (c) Scope.

(a) Meaning : According to Cundiff and Still, "Marketing is the business process by which products are matched with the markets and through which transfers of ownership are effected. "Matching products with the market means determining the requirements of potential customers and suppling the products which meet their requirements. Selling is simply a part of the marketing process. Selling involves the transfer of goods from the producer to the customers.

(b) Objective : Marketing concentrates on the satisfaction of the customer, whereas selling attaches more importance to increasing the sales volume. Marketing is more concerned with external things, selling is concerned with the internal improvements. Marketing aims at maximisation of Customer's satisfaction, while selling aims at maximisation of profits.

(c) Scope: Marketing involves the design of the products acceptable to customers and transfer of ownership between the sellers and buyers. But selling simply involves obtaining orders from customers and supplying them the products. It is concerned with the sale of goods already produced.

Which of the methods of wage payment - Time - rate or Piece rate - is suitable under the following circumstances ? Give reasons :

(a) Where units of output can be measured.

(b) Where quality is significant.

(c) Where there is no clear relationship between effort and output

(d) Where work flow is regular.

(a) Piece - rate method of wage payment is suitable as this method differentiates between efficient and non-efficient workers and motivate them.

(b) Time-rate method is more suitable because the workers are not in a hurry to complete their work to get more wages.

(c) Where there is no close relationship between effort and output, time rate system of wage payment is suitable because under this system workers are paid their wages on the basis of the time spend by them on a job irrespective of the quantity of output.

A newly appointed personnel manager is of the view that there is no need for training the workers. Do you agree with his views ? Give reasons in support of your answer. (5)

No, I am not agree with his views ( Personnel Manager). Training is the act of increasing the knowledge and skills of an employee for performing a particular Job. Training is mainly Job oriented, it aims at maintaining and improving current Job performance Training is needed to achieve the following purposes :

Need

1. Newly recruited employees require training so as to perform their tasks effectively. Instruction, guidance, coaching help them to handle Jobs competently, without any wastage.

2. Training is necessary to prepare existing employees for higher level Jobs (Promotion).

3. Existing employees require training so as to keep abreast of the latest development in Job operations.

4. Training is necessary when a person moves from one Job to another (transfer).

5. Training is needed to bridge the gap between what the employee has and what the Job demands. Training is needed to make employees more productive and useful in the long run.

You are the finance manager of a newly established company. The directors have asked you to determine the amount of working capital requirements for the company. State any five factors that you would take into consideration while determining the amount of working capital requirements for the company. (5)

In order to determine the working capital requirements of a newly established company, careful consideration should be given to the following factors :

(i) Nature and Volume of business : The nature and volume of business are important factors in affecting working Capital. For example, public utility services like transport concern, electricity undertaking where much of the investment is in the fixed form, require less amount of working Capital. On the other hand, trading or manufacturing concerns have to invest large amount in raw materials, wages, etc. hence they require a large amount of working capital.

(ii) Production Cycle :Longer the process of production, higher will be the amount of working capital required. Hence efforts should be made to have more working capital.

(iii) Seasonality of Production : Industries, which produce and sell seasonal goods, require large working capital than industries with regular production and sales.

(iv) Rapidity of Turnover : Business units which sell their products quickly such as newspapers, retail shops, bakeries etc. require a lesser amount of working capital.

(v) Terms of Purchase and Sale : Undertakings which procure materials on credit and sell finished goods on cash require less working capital.

You are the advertising manager of an organisation manufacturing toys. Which medium would you choose for advertising your product ? Give reasons for your answer.(5)

As an Advertising Manager of an organisation manufacturing toys, I would recommend Television advertising because of the following advantages over other media :

1. Children like to watch their programmes like Phylwari Bachhon Ki, Cartoon films like Jungle Book, Batman, Spiderman, Superman, etc. Advertising for toys can be given before the commencement of such programmes or in between.

2. T.V. advertising will catch quick attention of the viewing children and leave a lasting impact on them.

3. It combines sight, sound and motion effects.

4. It appeals a wide range covering viewers nation-wide and will create huge demand for toys. IT will appeal to children of all ages, education and economic status.

5. Cost per unit of product will be reduced due to large - scale production and sale through Television advertising.

What is "financial planning" ? Explain briefly the factors that should be kept in mind while formulating a financial plan. (7)

Financial Planning : Finance is the life blood of a business when a new business is established. One of the basic problems of promoters is to make sure that adequate funds are made available to run the business.

Factors : The following factors must be given due consideration in formulating sound financial plans :

1. Nature and Size of Business : The capital needs differ according to the nature and size of business. An enterprise using capital intensive technique will require more fixed capital than labour intensive enterprise. Big firms require more funds as compare to small firms.

2. Objective : The main objectives of financial planning is to secure adequate funds at minimum cost for the planned project. The objectives of financial planning should be consistent with the overall objectives of the business.

3. Present and Future Requirements : The financial plan should take care of both the present and future requirements' of the enterprise.

4. Flexibility : As the business conditions change, financial ajustments become necessary. Therefore, the financial plan should be easily adjustable to such change.

5. Solvency and Liquidity : The financial plan should ensure the survival of the enterprise. The funds should be invested in those ventures which are likely to give sufficient return on investment. Moreover, adequate cash should always be available to meet the requirements of the enterprise.

6. Attitude of Management- The attitude to management towards the control of the company is also very important. If the directors prefer to retain control of the company in their own hands, it is advisable to raise capital through debentures and financial institutions.

According to Daniel s. Warner, "Salesmanship is a face-to-face persuasive communication between a seller and prospective buyer."

Personal selling or salesmanship refers to oral presentation to persuade the customer to buy certain goods and services to satisfy his wants at reasonable costs.

Qualities of Good Salesman :

1. Personal Qualities : Personal quality is a composition of various characteristics - grooming, posture, facial expression, voice and speech. Cleanliness of body and neatness in clothes constitute good grooming. The style of clothing should be attractive good posture enhances the appearance, wins respect and inspires confidence closely related to the attribute of a good personality is the need of a sound health A salesman should also feel free from any physical handicaps like limping, stammering etc. A good salesman should ahve a pleasant voice, forceful and not monotonous. dictation should be clear and words clearly enunciated.

Honesty is an important quality and build permanent goodwill with customers this involves rendering services with satisfaction to the customers.

2. Mental Qualities : Mental qualities include presence of mind, judgement, imagination, initiative, memory, self - confidence, intelligence, observation etc. an alert salesman who is able to diagnose the customers more accurately can do better business. Mental qualities enable a salesman to look at the selling problem from the point of view of customers and to find out ways and means of mutual advantage of customer and salesman.

an alert salesman can judge the need of the customer at the very first instance and can decide his line of action to convince the customer. In order to convince the customer the salesman should be himself fully convinced and confident.

3. Social Qualities : Salesmanship is nothing but "getting along with people." As the salesman has to deal with people, he should possess tact needed for the accomplishment of this task effectively. the social qualities of a salesman include social mixing qualities, tact and diplomacy, sense of humour, sizing up people, sound reasoning etc.

4. Vocational Qualities : Salesmanship is a highly skilled vocation and a salesman who has a thorough knowledge of the product and his job can obtain better business and render better service. HE should have confidence in his knowledge of the product and related things that he should not be afraid of any questions and objections raised by customers. vocational qualities of a salesman include quality of leadership, constructive thinking, tolerance, sincerity, tactfulness, sales aptitude etc. Moreover, the job of a salesman also requires energy and enthusiasm. He should be an optimist and should aim high.

In brief, the qualities of a successful salesman can be summarized as follows: pleasing voice, cheerfulness, intelligence, open mindedness, aptitude, talent, discipline of mind, body and heart, co-operative and helpful attitude, tactfulness, good reputation, thrift, tolerance, clean dress and good habits, strong observation power, good memory, punctuality, loyalty, sound reasoning. Good posture and facial expression.