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ASSIGNMENT SOLUTIONS GUIDE (2014-2015)

E.C.O.-3
Management Theory
Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions given in the
Assignments. These Sample Answers/Solutions are prepared by Private Teacher/Tutors/Auhtors for the help and Guidance
of the student to get an idea of how he/she can answer the Questions of the Assignments. We do not claim 100% Accuracy
of these sample Answers as these are based on the knowledge and cabability of Private Teacher/Tutor. Sample answers
may be seen as the Guide/Help Book for the reference to prepare the answers of the Question given in the assignment. As
these solutions and answers are prepared by the private teacher/tutor so the chances of error or mistake cannot be denied.
Any Omission or Error is highly regretted though every care has been taken while preparing these Sample Answers/
Solutions. Please consult your own Teacher/Tutor before you prepare a Particular Answer & for uptodate and exact
information, data and solution. Student should must read and refer the official study material provided by the university.

Answer the following questions:

Q. 1.Management Principles focus on the one best way of doing things and are Prescriptive. Do you
agree? Give reasons and explain the need for principles of management.
Ans. Principles of Management: The word principles mean a fundamental truth that can establish relationship
between cause and effect and also helps in thinking out a plan for an action. The principles help in predicting the
results expected to follow through a set actions undertaken and thus provide basis for a scientific action plan.
Meaning and Nature of Principles: Meaning of management principles in simple word is that they form the
basis of all managerial actions through which desired goals needs to be achieved.
By nature these principles are flexible and are more or less based on experiences and can adopt to changing
situations and problems and thus became the pillars of management as scientific process.
Characteristics: The following characteristics will help in understanding the management principles:
(1) Management principles are based on analysis of management functions and smoother the practice of
management.
(2) Management principles are descriptive and normative: Normative principles fix the norms for an action
whereas descriptive principles give the description of behaviour of member of organisation.
(3) The Management principles have been formulated by early management practitioners in classical times and
have been refined from time to time.
(4) Management principles are the result of experience over the period and have proved themselves valid in
present times.
Attributes of Sound Principles of Management
(1) It should be simple and workable.
(2) It should be consistent.
(3) It could be empirically tested.
(4) It should be serve as tool for complete understanding.
(5) It must be helpful as practical guide.
Need for Management Principles: Management principles are needed for successful practice of managerial
process. They help the managers to use the basic principles for decision making. They help the art of management
by suggesting as to how the things should be done to obtain the optimum benefits. These principles simplify
management practice by bringing out the core aspects of management activities for the good of the organisation.
Contributors to Principles of Management: A number of management thinkers have contribute to the
development of principles of management. Some of them are being detailed along with their contribution to the
principles of management.

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(a) Division of Work: Division of labour helps specialisation and improve efficiency.
(b) Authority and Responsibility: There must always be a balance between the authority and responsibility.
(c) Discipline: Discipline at all levels is necessary for success of the organisation.
(d) Unity of Command: Command from a single source of direction gives out better results and avoid conflict
and confusion.
(e) Unity of Direction: A set of activities having same objective should be under a single supervisor/manager.
(f) Subordination of individual interest to central interest: The collective good and common interest of the
organisation must pervail upon individual interest.
(g) Remuneration of Personnel: The remuneration of personal should be fair and to the satisfaction of the
personnel.
(h) Centralisation: Centralised authority does pose some problems therefore decentrali-sation is necessary to
an extent and can be achieved through delegation.
(i) Hierarchy or Scalar Chain of Command: A well defined hierarchy be planned and established.
(j) Order: Order means placement of the people and arrangement of material in an organisation.
(k) Equity: Equal treatment to all employees based on fair judgement.
(l) Stability of tenure of personnel: An effort must be made to provide a stable tenure for all personnel as
long as they perform well.
(m) Initiative: All organisation smust encourage initiative among its employees.
Frederich Taylor: His significant principles of scientific management are:
(1) All personnel be selected scientifically, trained and assigned work best suited to their skills.
(2) Workers performance be carefully observed analysed and measured and develop a most efficient method of
doing it.
(3) Workers should be restricted to perform the assigned work in a prescribed manner.
(4) The workers and managers must have very cordial relations for efficiency.
(5) Managers should only intervene in exceptional deviations from the prescribed standards of behaviour and
performance.
Mooney and Reiley: The principles management as developed by Mooney and Reiley are given below:
(1) Principle of Coordination: Coordination is an orderly arrangement of group and authority is the basis of
coordination.
(2) Principle of Scalar Process: Management hierarchy is achieved through means of coordination of
organisational decisions and activities.
(3) Functional Principle: In an organisation functional responsibility has to be delegated through a scalar
process and division of work assigned.
Lyndall Urwick: Urwick advocated the principles of:
(a) Span of control
(b) Unity of command
(c) Deligation of authority
(d) Departmentalisation.
Mary Parker Follet: She evolved the following principles:
(1) Principle of direct contact: In all coordination efforts managers and other individuals involved in a task get
in touch with each other directly ignoring the hierarchical channels.
(2) Principles of coordination in easy stages: Managers and lower level should participate in the process of
coordination at the start itself.
(3) Principle of continuous process of coordination: Coordination has to be on going activity and flexible.
(4) Principle of reciprocal relation of all factors: Every activity is dependent on reciprocal relationship.
(5) Principle of situational authority: Each new situation warrants a new action and dictates and determines the
action to be taken.

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Q. 2. (a) Orders will be obeyed if they make sense. Comment

Ans. It has been very aptly said that orders will be obeyed if they make sense. An order which does not make
any sense simply can not be carried out.
Orders are instructions or directions given by a superior to a subordinate to carry out an act or not to carry out
a particular act. Orders can be given by superior to a subordinate and subordinate must be able to make sense of the
order so as to carry it out. Order is enforceable instruction and punishment can be given for not carrying out the
order, but an order to be carried out must have the following characteristics:
(1) It must be reasonable, understandable and carriable.
(2) Order must be complete for immediate compliance.
(3) An order must be compatible with ones duties and responsibility and he should have the tools and resources
to carry it out.
(4) The order should be clear, intelligible and complete.
(5) The tone of the order should be appropriate. It should stimulate ready acceptance.
(6) It must specify the time within which the instruction should be carried out and competed.
Orders have to follow a technique of issuance as follows:
(1) General of specific order: The manager while issuing the order should decide whether the order is of
general concerning all operations or is specific in nature and for a specific group or individual.
(2) Written or oral order: An order should be properly written will complete set of operating instructions and
other relevant information it may be oral of it is ordinary and immediate type.
(3) Formal or informal: It may be formal or informal
(4) Timely: Order should be timely and give enough time for compliance.
(b). Money holds the key to work motivation in modern business organisations Discuss.
Ans. Money is round and spins and let people spin around it. Money motivates the people most and holds the
key to all locks in a modern business organization. No organization can survive without money and its motivation
aspect, though non-money motivation does help. It is the money (financial motivation) which works wonders for a
modern business organization.
When the needs of men are to be met, it is money which helps with the meeting of human needs. Money is a
positive motivation and it has the capability of being given different names and shapes. Even the non-financial
motivation like higher responsibility like job enrichment, efforts for self-actualisation have to spend and use money
for all these motivators.
Every modern business organization uses motivation for the successful achievement of objectives, even customer
satisfaction involves money and its expenditure.
Money is the key to all programmes and efforts by the organization not only for successful acheivement of its
objectives but also is vital for the organisation to keep it going.
Money is perceived as power and every on waits to wield it.Human nature is based on greed and greed for
money is the greatest. Money or financial motivation covers a vast majority in the organization and majority
cooperation is vital for the success of modern business organisation.
Q. 3. Distinguish the following:
(a) Strategic and Tactical Planning
Ans. Strategic Planning: Strategic planning is aimed at integrated organisation on a wide course of action to
believe the major objectives of the organisation.
Strategic planning consists of formulation of strategies which are in the nature of critical and intelligent
courses of action to gain upper hand over competitive and other complex external forces in the environment.
Strategic planning is means of improving the enterprises competitive position.
(b) Tactical Planning: Tactical planning is limited in its scope and is based on detailed decision applicable to
lower level so as to encash all opportunities to the advantage of enterprises tactical planning is time bound and
provides detailed specifications of various activities.

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Strategic planning provides inputs for technical planning and the outcome of technical planning form the basis
of changes in strategic planning.
(b) Procedures and Schedules
Ans. Procedures: Procedures is the sequence of various steps under taken to perform a specific job:
Procedures are certain steps determined in advance and standardised and to be carried out to carry our an
activity in time bound manner.
The characteristics of a good procedures are as follows:
Procedures should be functional and purposeful.
Procedure should be laid down and communicated in written format.
Procedures should be simple, clear and easily understandable.
Procedures should not be like guidelines for those who have to follow it.
Procedure should not be unduly rigid.
Procedures should be open to review and correction.
Uses and Importance of Procedures
Procedures help and guide in carrying out specific work in a particular manner with in time constraints.
Procedures tend to help reduction in wasteful activities and materials.
Procedures help in smooth, effective and orderly flow of activity. Procedures help in suspension, control and
coordination of tasks and their timely and accurate performance Procedures provide to proper ways of doing work.
Procedure safegaurd all those who adhere to procedures.
Procedures help in correct evolution of results. Relationship and distinction between policies and procedures
procedures are part of the policies and are meant to subserve and implement polices.
An organisation usually have a policy of safety and provides for procedures to ensure safety.Policies are the
reflection of objective, procedures are operational and tactical plans. Policies are the guide posts for supervisors,
procedures are for guiding the workman. Polices are broad guide lines and have room for innovation. Procedures
are detailed instructions and do not provide for change or innovation.
Schedules: Schedules are basically a time table to be followed in competing a specific job. Schedule is basically
a of plan action to be completed in the allocated time and sequence, schedules are drawn for specific action is
sequence of priorities depending upon availability of men, material and machinery for undertaking a job.
Distinction between Procedures and Schedules: Procedure lay down the sequence of operations schedules
lay down the time for completion of job. Procedures are basically supervisors aid and tools, schedules are for
technical workers. Procedures are detailed while schedules need lot of coordination and balancing synchronisation.
(d) Formal and Informal Communication.
Ans. Formal and Informal Communication: Formal communication in an organisation is essentially in official
communication from a superior to a subordinate as an instruction or order in the form of horizontal downward
communication, and upward communication more as a report or information related work. Informal communication
is not official, rather it is socio-psychological based on inter relationship and is not in the form of order or instructions
or reports or information. This type of communication is horizontal or lateral. It may even exist within an organisation
and between a superior and subordinate on social basis.
Formal communication is through the established channel of command or through proper channel and is liable
to distortion at different level. Informal communication has no channel to follow and flows freely, but can give rise
to rumors. Formal commu-nication delays information and action.
Informal communication is rapid and spreads very fast.
Grapevine: Informal communication is called grapevine because it does not follow the formal channels and is
communicated more as a personal or group related information and flows in unidirectional manner and is supposed
to be based on some kind of internal secret knowledge of the communication.
(e) PERT Vs CPM
Ans. PERT: Programme Evaluation and Review Technique.

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PERT: Programme Evaluation and Review Technique is based on network analysis which uses estimates of
time required to complete tasks for scheduling and controlling execution of projects.
PERT is basically used for projects which are one time and may not be repeated. It helps in fixing the time and
cost parameters of the project.
CPMCRITICAL PATH METHOD
CPM technique allows the characterising of path for various sequential events which will lead to completion of
the project.
CPM follows the critical path method in estimating the time to complete the event (Path). Critical path is the
path of maximum duration of time and reflects the minimum time necessary for the completion of project. The
critical path is so called because in the completion of the activities lying on the path would cause a delay in the
whole project.
PERT is used rapidly changing technology work while CPM is used more for construction projects.
PERT is event centered CPM is activity centered.
Q. 4. Briefly comment on any four of the following:
(a) Individual behaviour is closely linked with group behaviour.
Ans. Individual behaviour is closely linked with the behaviour of the group to which he belongs. The group
dictates changes in his behaviour. Individuals observe those work standards which are prescribed by the group.
Informal leadership, rather than formal authority of managers is more important for setting and enforcing group
standards of performance. A a leader, a manager may be more effective and acceptable to subordinates, if he adopts
the democratic style of leadership. Behavioural scientists maintain that by nature most people enjoy work and are
motivated by self-control and self-development. Managers should try to identity and provide necessary conditions
conducive to the proper and sufficient use of human potential. The managers attitude towards human behaviour
should positive. They should know that average man is not lazy by nature. But he is ambition. Every man likes to
work and prefers to assume responsibilities. MacGregor maintains that employees favour self-direction and selfcontrol. Behaviouralists believe that in place of the concept of social man the concept of self-actualizing man would
be more appropriate to explain human motivations.
(c) Delegation is essential for management but decentralization is optional.
Ans. Delegation has been said to be the key of organisation so the importance of delegation of authority is selfevident. The importance of delegation of authority in effective management is obvious. Following will illustrate the
importance of delegation of authority:
(1) Wherever a persons job grows beyond his capacity, his success lies in his ability to multiply himself through
other personnel. But this multiplication is possible with the delegation of authority.
(2) Delegation is necessary for extending the personal capacity of individual manager.
(3) Delegation of authority enables the manager to distribute their load of work to others and, thus, making him
little free to attend to more important functions.
(4) Formal organisation can not exist or survive without delegation of authority.
(5) Delegation helps the human resources development.
(6) Delegation helps the organisation to grow expand and diversify
(7) Delegation establish internal relationships.
(8) Delegation is key to motivation of people.
How delegation is related to decentralization?
(1) Decentralisation means the systematic effort to delegate to the lowest level all authority except that what
which can only be exercised at the central point.
(2) Delegation is out come of the process of decentralisation.
(3) Decentralisation is another form of delegation.
(4) Decentralisation and delegation has the same objectives to achieve.
(5) Decentralisation makes the unit autonomous delegation give autonomy to an individual.

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(6) Delegation of authority achieve the major objectives decentralisation.

(d) Money can be a motivator to an unlimited extent.
Ans. Money is round and spins and let people spin around it. Money motivates the people most and holds the
key to all locks in a modern business organization. No organization can survive without money and its motivation
aspect, though non-money motivation does help. It is the money (financial motivation) which works wonders for a
modern business organization.
When the needs of men are to be met, it is money which helps with the meeting of human needs. Money is a
positive motivation and it has the capability of being given different names and shapes. Even the non-financial
motivation like higher responsibility like job enrichment, efforts for self actualisation have to spend and use money
for all these motivators.
Every modern business organization uses motivation for the successful achievement of objectives, even customer
satisfaction involves money and its expenditure.
Money is the key to all programmes and efforts by the organization not only for successful acheivement of its
objectives but also is vital for the organisation to keep it going.
Money is perceived as power and every on waits to wield it.Human nature is based on greed and greed for
money is the greatest. Money or financial motivation covers a vast majority in the organization and majority
cooperation is vital for the success of modern business organisation.
(e) Organizational efficiency is ensured with the help of controls
Ans. Need and Significance of Coordination: Need for Coordination: Growth of organisation necessities the
division of the different activities into divisions or sub-divisions. These divisions and sub-divisions are allocated
resources for achievement of certain goals. These divisional and sub-divisional when put together add to the
achievement of organizational goals.
Significance: Coordination in an organisation is significance for the following reasons:
(1) Increase in organisation size and complex operations: The size of organisation is growing and its operations
are becoming very diverse and complex and the work has to be divided and sub-divided. Without coordination
synchronisation of various works is not possible.
(2) Specialisation: All functions are becoming highly specialised handled by skilled professional. Coordination
is necessary for the unity of purpose.
(3) Clash of interests: Coordination ensures that there is no conflict between the interest of its employees and
organisational goals.
(4) Different outlook: Every individual has an individual approach to work. Coordination ensures that individual
approach does not effect the achievement of organizsational goals.
(5) Interdependence of units: All department in an organisation has dependence on other departments,
coordination ensures that the pace of work is equal in all departments so as to achieve the goals.
(6) Human nature: Human nature and attitudes are different. Coordination helps integrated these attitudes and
nature for a common goal achievement.
5. Write short notes on the following:
(a) Span of Control
Ans. Span of Control: Span is the distance between two points, so the span of control refers of effective
control a supervisor can undertake span of control is also known as span of supervision or span of authority. Span
of control should be limited to effective control. Narrow span of control allows a close supervision where as wide
span allows only general control, but the span depends on the type of activities being undertaken.
Factors affecting Span of Control
The following factors affect the span of control:
(a) Nature of work: Nature of work its continuity and repetition of the function decide the span of control.
(b) Ability of the manager: A manager who has proper leadership qualities and effective communication
ability may be able to supervise more people.

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(c) Efficiency of the organisation: An organisation which has efficient work terms and systems can have
large span of control.
(d) Staff assistants: It the managers have staff assistants, they can handle a wide span of control.
(e) Term available for supervision: Since the time available for supervision is very less with the top
management, it should have narrow span to control.
(f) Ability of the subordinates: More able and skilled staff do not need close supervision where as fresh or
skilled workers need more supervisory control.
(g) Degree of decentralisation: More decentralised activity needs a narrow span of control, an executive who
has to take many decisions is not able to supervise many people.
(b) Recruitment
Ans. Recruitment: Once the human resource plan is ready the next step is recruitment of competent personnel
to meet the objectives.
Recruitment is a long drawn affair and involves securing applications, securing the applicants and their placement
in the organization as per its needs.
The Two Main Sources of Recruitment: Internal source, External source
Internal Source of Recruitment: Every organisation have within it potential candidates who can either be
groomed or already developed to undertake the challenge of new job and duties. The manpower department has
always the basic data of all its employee and line manager have a definite feel of the potential of his subordinates.
Advantages of Internal Sources
(1) Familiarity with own employees: An organization is familiar with skills, expertise and attitude and aptitude
of an internal employee and have knowledge of his potential and suitability.
(2) Better use of talent: It provides for better use of available internal talent.
(3) Inexpensive recruitment: It is the most inexpensive system of recruitment.
(4) Improve the morale: It helps in improving the morale of all employees.
(5) A Source of Motivation: Internal recruitment provide motivation to employees.
Limitations of Internal Source: Internal source of recruitment suffers from following limitations:
(i) Restricts the options
(ii) Lack of suitable candidates
(iii) Discourage comptetion
(iv) May create controversies
(v) May set in stagnation of skills.
External Sources of Recruitment: External sources of recruitment can be as follows:
Professional Institutes for fresh talent.
Private Consultants for skilled professionals.
Professional Association for senior professionals.
Government Employment Agencies for unskilled work force Labour Unions for various types of workers.
Advantage of External Sources of Recruitment
(1) Availability of large number of candidates.
(2) Open Process.
(3) Opportunity of find best kind of people.
(4) Promotes health competition.
Limitations of External Recruitment
(i) Expensive system
(ii) Time consuming
(iv) Unfamiliar candidates with unfamiliarrs apptitude
(iv) Effect organisation morale adversely.
(c) Leadership Effectiveness

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Ans. Leadership Effectiveness: Effectiveness of leadership is dependent upon the types of leadership as given
below:
Employee centred
Production centred
People and production centred
People and production centered leadership is found to be the most effective. Blake and Muton developed the
concept of managerial grid.
Managerial grid identified the following types of leadership.
Impoverished Management: Minimum concern for people as well production.
Task Management: Highest concern for production and least concern for people.
Country Club Management: Maximum concern for people and least concern for production.
Middle Road Management: Moderate concern for both-people and production.
Team Management: Maximum concern for people and production through team management.
Effective and Ineffective Styles
Effective Styles: Effectiveness is subject to situational demands of an environment, when the leader is appropriate
to a particular situation he is effective.
Ineffective Styles: If the leadership styles is not appropriate to the situation the leadership ineffective.
Effective Style of Leadership
Executive Style: The executive manager attaches a maximum importance to work as well as people for effective
results.
Developer Style: The manager gives maximum attention to the development of people and has less concern for
work.
Benevolent Autocrat Style: He is work cubic and uses his authority but still does not cause any resentment
among his people.
Bureaucratic Style: This type of manager has more concern for rules and regulations and less concern for
work as people, but achieves the goals.
Ineffective Style of Leadership
Compromiser Style: A manager who can not take firm decision and make compromises with work and workers
is ineffective leader.
Missionary Style: This style of manager is a missionary of workers good and pays least attention to work, and
thus is ineffective.
Autocrat Style: An autocrat managerial style leads by authority and does get work done, but demolishes the
people.
Deserter Style: The manager who is an escapist by nature and temperament does not care either for worker is
an escapist leader.
Factor Influencing Leadership Effectiveness: Following factors influence effectiveness of leadership:
Organisation culture and policies.
Expectations of peers group.
The type of work to be performed by subordinates.
Past experience, inherent qualities and expectations.
Behaviour and expectations of superior.
Trust and confidence of subordinates.
Situations and resources available for action.
Qualities of an Effective Leader: A leader has to have a certain qualities of leadership through which he can
be effective; some of these are as follows:
Good Physical and Mental Health: The leadership job is very demanding and puts lot of mental and physical
pressures. So a leader must have very good physical and mental health.

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Empathy: A leader must have an empathetic attitude and should have the capacity to look at things from the
view point of his subordinates.
Self-confidence: A leader must have a very high degree of self-confidence in his thoughts and actions.
Objectivity: A good leader needs to be very fair and objective.
Decisiveness: He should be decisive and open minded.
Ability to Communicate: A leader should be very effective in his communications.
Sense of Purpose and Responsibility: An effective leader needs a high sense of purpose and responsibility.
Knowledge and Intelligence: He must have very high level of intelligence and very good knowledge about his
work.
(e) Functional Organisation
Ans. Functional Organization: In this form of organization, all activities of the enterprise are grouped and
divided according to functions like production, marketing, finance and others. Each department is in the charge of a
specialist who is called functional manager. The functional manager has a control over the functions in his charge
and no matter on those functions found in other part of the organization. Functional organization was advocated by
F.W. Taylor. In this organization activities of foreman are classified into eight sub-divisions which are again included
in two broad groups.
At planning level, the specialists are known as route clerk, time and cost clerk, instruction card clerk and a shop
disciplinarian. A route clerk is meant to lay down steps, time, cost clerk calculates time, cost, instruction card clerk
prepares instructions, and the shop disciplinarian is in the charge of observing rules.
At the shop level, the specialists are called gang boss, speed boss, repair boss and the inspector. The gang boss
is the in charge of tools, speed boss cares for the speed of the machines, repair boss attends break down of the
machines and inspector checks the quality of the products.
Advantages: There are some definite advantages to grouping all staff by function:
Staff is managed by a person with experience in their same specialty who can adequately understand and
review their work.
Staffers have the opportunity to move up within their functional areas, which gives a reason for them to stay
long term. The company gets the advantage of their expertise and company knowledge over time.
Staffers work with others in their field, which allows for knowledge sharing and lateral job moves to learn new
skills.
Disadvantages: The functional structure also has some disadvantages, including:
Functional areas may have difficulties working with other functional areas. There is often a perception that they
are competing with other functional areas for resources and a lack of understanding of what other areas do for the
company. So, the accounting department may be upset that its request for an additional headcount is denied, but the
company financial results point to a need for additional sales people rather than accountants.
As the company grows larger, the functional areas can become difficult to manage due to their size. They can
become almost like small companies on their own, with their own cultures, facilities and management methods.
Functional areas may become distracted by their own goals and focus on them, rather than on overall company
objectives. For instance, there may be a desire by the I.T. department to implement a new, state of the art computer
system, but the overall company objectives support investment in new products instead. Since the unit doesnt have
an overview of the entire company, it may focus attention on goals that it believes are important but which are not
priorities for top management.

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