MANAGEMENT EXAMS IOB 2012



MANAGEMENT – MAY 2012 SOLUTIONS

SECTION A

30 Multiple Choice Questions each carrying 2 marks

1. c

2. a

3. a

4. c

5. a

6. b

7. b

8. b

9. c

10. a

11. b

12. a

13. a

14. b

15. b

16. c

17. c

18. c

19. d

20. a

21. b

22. a

23. c

24. a

25. b

26. a

27. b

28. c

29. c

30. a

SECTION B

Choose any two questions out of the four provided. Each question carries 20 marks

Question 31

a) Controlling is one of the managerial functions like planning, organizing, staffing and directing. It is an important function because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of the organization are achieved in desired manner.

b) Organizational Practices in diversity management

Organizations can also help manage diversity through a variety of ongoing practices and procedures.

1. Benefits packages, for example, can be structured to better accommodate individual situations. An employee who is part of a dual-career couple and who has no children may require relatively little insurance (perhaps because his spouse’s employer provides more complete coverage) and would like to be able to schedule vacations to coincide with those of his spouse. An employee who is a single parent may need a wide variety of insurance coverage and prefer to schedule his vacation time to coincide with school holidays.

2. Flexible working hours are also a useful organizational practice to accommodate diversity. Differences in family arrangements, religious holidays, cultural events, and so forth may each dictate that employees have some degree of flexibility in when they work. For example, a single parent may need to leave the office everyday at 4:30 to pick up the children from their day care center. An organization that truly values diversity will make every reasonable attempt to accommodate such a need.

3. Organizations can also facilitate diversity by making sure that its important committees and executive teams are diverse. Even if diversity exists within the broader organizational context, an organization that does not reflect diversity in groups like committees and teams implies that diversity is not a fully ingrained element of its culture. In contrast, if all major groups and related work assignments reflect diversity, the message is a quite different one.

c) (i) Advantages of internal recruitment(any three)

- Gives existing employees greater opportunity to advance their careers in the business

- May help to retain staff who might otherwise leave

- Requires a short induction training period

- Employer should know more about the internal candidate's abilities (= a reduced risk of selecting an inappropriate candidate)

- Usually quicker and less expensive than recruiting from outside

(ii) Disadvantages of internal recruitment(any three)

- Limits the number of potential applicants for a job

- External candidates might be better suited / qualified for the job

- Another vacancy will be created that has to be filled

- Existing staff may feel they have the automatic right to be promoted, whether or not they are competent

- Business may become resistant to change; by recruiting from outside, new perspectives and attitudes are brought in

Question 32

(a) Any four of Ouichi's Theory Z management assumptions about people

1. Job Security

The Japanese Theory Z approach believes that people are a far too valuable resource to be lost when the economy has a downturn. In a recession, the Japanese don't fire people, they'll reduce their hours until things pick up. By contrast, when a US company is in trouble, they waste no time laying people off and as a result lose all the knowledge, skills, and expertise that go with them.

2. Trust

The Japanese feel that you should never give people a reason to distrust you. Loyalty is expected of all employees. In American companies, distrust and suspicion are endemic. If a person or supplier is not delivering, the company will go elsewhere for a better deal.

3. Decision-Taking

There are two differences between the Japanese and American approaches to decision-making. In Japanese companies, everyone gets involved in the decision-taking process as part of their commitment to the organisation. As a result, the process is slow. In the US, decision-taking is the responsibility of the few and so is quick.

4. Teamwork

In Japan, organisational success is viewed as the result of team effort, so it is illogical to reward individuals. In the US, there is still a belief that, if you do the work and claim the results, you should get the reward.

5. Motivation and Target-Setting

The Japanese corporation rarely sets individuals targets as a way of motivating them. They believe that individual motivation comes from others in the team. As a result, it often takes years before a Japanese employee receives their first performance evaluation and even longer before they are promoted. By contrast, the American corporation believes that the role of management is to set their subordinates targets and ensure that these are met, using evaluation and promotion as incentives and rewards.

a) Behavioral Effects of information systems

Information systems affect the behaviors of people in organizations. Some of these effects are positive; others are negative.

Any two of the following:

-On the plus side, information systems usually improve individual efficiency. Some people also enjoy their work more because they have fun using the new technology. As a result of computerized bulletin boards and electronic mail (e-mail), groups can form across organizational boundaries.

-On the negative side, information systems can lead to isolation as people have everything they need to do their jobs without interacting with others.

-Managers can work at home easily, with the possible side effects of making them unavailable to others who need them or removing them from key parts of the social system.

-Computerized working arrangements also tend to be much less personal than other methods. For example, a computer-transmitted “pat on the back” will likely mean less than praise delivered in person.

(c) Any two of the following on impact of stress on an individual

-An individual needs to be aware of implications of unmanaged stress. Reactions to stress before reaching the extreme state, attacking the stressor directly, adoption of a behaviour that was successful earlier, forgetting the stressor, engaging in purposive escape from the stressful situation and persisting in a response regardless of its effectiveness, are some important stress management strategies.

-The exhaustion stage is the most dangerous stage as the individual is defenseless and may result in heart disease, severe depression or dissolution of relationships.

-The impact of personal stress at the work place include; increased workload due to restructuring, job insecurity, rapid change, long working hours, difficult work/life balance, unrealistic management expectations, poor management practices, productivity/performance targets and harassment.

-The impact also includes; equal opportunity, effective processes for business needs, good work conditions, health and safety, good job design, work distribution, training and development, communication, grievance and discipline procedures, performance review and rewards.

-Stress can help spur one to achieve and it can result in a new awareness and perspective, but it also can result in feelings or distrust, rejection, fear and anger, which turn can lead to health problems such as headaches, digestive issues, skin irritation, insomnia, ulcers and high blood pressure.

Question 33

a) There are five common forms of departmentalization. Any three of the following: each 3 marks. I mark for definition of departmentalization.

i. Functional departmentalization - Grouping activities by functions performed. Activities can be grouped according to function (work being done) to pursue economies of scale by placing employees with shared skills and knowledge into departments for example human resources, IT, accounting, manufacturing, logistics, marketing, and engineering. Functional departmentalization can be used in all types of organizations.

ii. Product departmentalization - Grouping activities by product line. Tasks can also be grouped according to a specific product or service, thus placing all activities related to the product or the service under one manager. Each major product area in the corporation is under the authority of a senior manager who is specialist in, and is responsible for, everything related to the product line. LA Gear is an example of company that uses product departmentalization. Its structure is based on its varied product lines which include women’s footwear, children’s footwear and men’s footwear. Similarly, banks may have departments structured according to the products they are offering e.g. Current account department, forex department, credit department, mortgage department, Leasing and Finance Department and so on.

iii. Customer departmentalization - Grouping activities on the basis of common customers or types of customers. Jobs may be grouped according to the type of customer served by the organization. The assumption is that customers in each department have a common set of problems and needs that can best be met by specialists. The sales activities in an office supply firm can be broken down into three departments that serve retail, wholesale and government accounts.

iv. Geographic departmentalization - Grouping activities on the basis of territory. If an organization's customers are geographically dispersed, it can group jobs based on geography. For example, the organization structure of Coca-Cola has reflected the company’s operation in two broad geographic areas – the North American sector and the international sector, which includes the Pacific Rim, the European Community, Northeast Europe, Africa and Latin America groups. Banks in Malawi also have branches in different parts each with a complete structure reporting to the Head office.

v. Process departmentalization - Grouping activities on the basis of product or service or customer flow. Because each process requires different skills, process departmentalization allows homogenous activities to be categorized. For example, the applicants might need to go through several departments namely validation, licensing and treasury, before receiving the driver’s license.

b) (1) Mechanistic and Organic Organizations

A term created by Tom Burns and G.M. Stalker in the late 1950s, organic organizations, unlike mechanistic organizations (also coined by Burns and Stalker), are flexible and value external knowledge.

Also called organismic organization, this form of organizational structure was widely sought and proposed, but never proved to really exist since it, adversely to the mechanistic organization, has the least hierarchy and specialization of functions.

(Ii) Advantages:

|Team Structure |-A structure in which the entire organization is made up of work groups or teams |

| | |

| |-Employees are more involved and empowered. There is reduced barrier among functional areas |

|Advantages | |

| | |

| | |

|Matrix-project Structure |-Matrix is a structure that assigns specialists from different functional areas to work on |

| |projects but who return to their areas when the project is completed. Project is a structure in|

| |which employees continuously work on projects. As one project is completed, employees move on |

| |to the next project. |

| | |

| |-fluid and flexible design that can respond to environmental changes. There is also speed in |

|Advantages |making decisions. |

| | |

| | |

|Boundaryless Structure |-A structure that is not defined by or limited to artificial horizontal, vertical, or external |

| |boundaries; includes virtual and network types of organizations. |

| | |

| |-Highly flexible and responsive. It also draws on talent wherever it’s found. |

|Advantages | |

| | |

| | |

Question 34

(a)

i. Goal-Setting Theory

Goal-setting theory suggests that managers and subordinates should set goals for the individual on regular basis. These goals should be moderately difficult and very specific. Moreover, they should by of a type that the employee will accept and commit to accomplishing. Rewards should also be tied directly to reaching the goals. Goal-setting helps the manager tailor rewards to individual needs, clarify expectancies, maintain equity, and provide systematic reinforcement. Thus, it provides a comprehensive framework for integrating the other approaches.

ii. The Japanese Approach

Another approach to motivation that has earned increasing popularity is the so-called Japanese approach. This is not really a theory or model but a philosophy of management. In many ways, it extends from the human resource perspective. The basic idea underlying the Japanese approach is to bring management and workers together as partners. Historically, in the United States the management-workers relationship has ranged from antagonistic to merely indifferent. In Japan, however, managers and workers see themselves as one group, and the result is that everyone is highly committed and motivated.

a) Three types of leadership styles:

Servant leadership

This term, created by Robert Greenleaf in the 1970s, describes a leader who is often not formally recognized as such. When someone, at any level within an organization, leads simply by meeting the needs of the team, he or she is described as a "servant leader."

In many ways, servant leadership is a form of democratic leadership, because the whole team tends to be involved in decision making.

Supporters of the servant leadership model suggest that it's an important way to move ahead in a world where values are increasingly important, and where servant leaders achieve power on the basis of their values and ideals. Others believe that in competitive leadership situations, people who practice servant leadership can find themselves left behind by leaders using other leadership styles.

Laissez faire leadership

This French phrase means "leave it be," and it's used to describe leaders who leave their team members to work on their own. It can be effective if the leader monitors what's being achieved and communicates this back to the team regularly. Most often, laissez-faire leadership is effective when individual team members are very experienced and skilled self-starters. Unfortunately, this type of leadership can also occur when managers don't apply sufficient control.

Autocratic leadership

Autocratic leadership is an extreme form of transactional leadership, where leaders have absolute power over their workers or team. Staff and team members have little opportunity to make suggestions, even if these would be in the team's or the organization's best interest.

Most people tend to resent being treated like this. Therefore, autocratic leadership usually leads to high levels of absenteeism and staff turnover. For some routine and unskilled jobs, the style can remain effective because the advantages of control may outweigh the disadvantages.

b) Three roles as identified by Benne and Sheats in a group structure. Any three:

Initiator/Contributor - Proposes original ideas or different ways of approaching group problems or goals. This role initiates discussions and move groups into new areas of exploration.

Information Seeker - Requests clarification of comments in terms of their factual adequacy. Seeks expert information or facts relevant to the problem. Determines what information is missing and needs to be found before moving forward.

Information Giver - Provides factual information to the group. Is seen as an authority on the subject and relates own experience when relevant.

Opinion Seeker - Asks for clarification of the values, attitudes, and opinions of group members. Checks to make sure different perspectives are given.

Opinion Giver - Expresses his or her own opinions and beliefs about the subject being discussed. Often states opinions in terms of what the group "should" do.

Elaborator - Takes other people's initial ideas and builds on them with examples, relevant facts and data. Also looks at the consequences of proposed ideas and actions.

Co-ordinator - Identifies and explains the relationships between ideas. May pull together a few different ideas and make them cohesive.

Orienter - Reviews and clarifies the group's position. Provides a summary of what has been accomplished, notes where the group has veered off course, and suggests how to get back on target.

Evaluator/Critic - Evaluates proposals against a predetermined or objective standard. Assesses the reasonableness of a proposal and looks at whether it is fact-based and manageable as a solution.

Energizer - Concentrates the group's energy on forward movement. Challenges and stimulates the group to take further action.

Procedural Technician - Facilitates group discussion by taking care of logistical concerns like where meetings are to take place and what supplies are needed for each meeting.

Recorder - Acts as the secretary or minute-keeper. Records ideas and keeps track of what goes on at each meeting.

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