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Question 6 Read the following case and answer the questions given at the end: At noon, one day, Mr. Janardhan, a Cashier in a local suburban bank, was suddenly confronted by a man, with a pistol in hand, who demanded all the currency in the Cashiers cabin. Mr. Janardhan complied and put all his money in a bag. The robber left swiftly through the front door, jumped in a car, and drove away. Mr. Janardhan immediately sounded the alarm, ran to his own car, and followed the robber. Driving at high speed, he overtook the robber, forced him to stop and chased him on foot until overtaking him. There ensued a struggle in which Janardhan was shot in the leg, but he successfully detained the robber until the local police arrived. The local press gave Mr. Janardhan wide coverage for his heroism. He also received recognition from various individuals and groups for his bravery. The bank officials, however, had mixed reactions about the incident. The bank had a long-standing policy that a Cashier, when confronted with an attempt at robbery, was to comply completely with the demands, so as not to endanger employees and customers. Each Cashier had been further instructed to give alarm only when it was safe to do so and then await action by police and insurance agents. Any bank employee who failed to follow this procedure would be immediately discharged. The bank manager felt that Mr. Janardhan should be discharged since he had violated the policy. But the personnel officer argued that his bravery, devotion to duty, and loyalty to the bank did reduce the intensity of the wrong done. The public relations officer reminded the banks Chairman that the public might view Mr. Janardhans discharge from office with misgivings since he, after all, had saved their deposits. The training officer said that a dangerous precedent would be established, if any exception to the policy is permitted. Questions: (i) What is the problem as you see it? Elaborate. (6 marks) (3 marks) (3 marks) (6 marks) (ii) What do you think about bank managers views in this matter? (iii) Do you think that the personnel officer was right? (iv) What is your recommendation in this situation? Answer (i) The cashier has put himself in great risk by confronting the robber. The problem is whether the bank should look at the incident in a rule bound bureaucratic manner or should the bank consider other issues. If the bank looks in a bureaucratic manner then the bank is totally ignoring the behavioural aspects. It may be curbing the initiative required for bringing novelty in operations and triggering organizational changes. In bureaucracy written rules and work procedures serve as guides to action by managers and non-managers. Norms of conduct are established and everyone is expected to follow them in a mechanized

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manner. On the other hand, if the bank deviates from the established norms and procedures then these start losing their sanctity. Individuals in the organisation may not always adhere to them. While deviating from established policies, they may take the plea that the deviations were done because of the needs of the circumstances. (ii) In my opinion the bank manager was acting purely on the basis of the written policy of the bank. He did not take into consideration the unusual circumstances of this case. As a matter of fact Mr. Janardhans case should be treated as a special one. The bank managers advice that Janardhan should be discharged is not desired. Conceptually, policies lay down the broad scope, critical constraints and boundaries within which managers are expected to take decisions and action initiatives. Good policies should leave sufficient discretion and freedom to managers within the set boundaries. In the given case, the bank manager should keep in mind that employees have to work towards accomplishment of overall organisational goals. They should be result oriented and not procedure driven. (iii) Yes. In fact, Mr Janardhan has taken due care to act in a manner which takes care of the basic intention of the policy. He did not adventure within the premises to ensure the security of customers and other staff of the bank. He allowed robber to leave as per the policy, sounded the alarm and then only further acted outside the bank to control the robber. In a way, he has acted within the boundaries set by policy. The personnel officer was right because Mr. Janardhan had acted in good faith of protecting the bank employees and the bank deposits. He took the human element in view and thought that this particular case should not be merely covered by policies existing in the bank. (iv) Considering the different opinions, the bank manager and training officer feel that Mr. Janardhan should be punished, the personnel officer and public relations officer feel that he should not be punished. In this particular incident, Mr. Janardhan has indeed in the first place observed the rules. He took the initiative to chase the robber only after the robber left the premises. Mr. Janardhan had acted in good faith of protecting the bank employees and the bank deposits. These types of incidents cannot be covered merely by policies. The bank should also consider that under such situations, the credibility of the bank is also at stake. Some persons may get vary of opening or maintaining an account with the bank where robbery has taken place. This may happen at least for a brief period. Therefore, it is recommended that Mr. Janardhan should be rewarded rather than punished. However, employees may be clearly told to avoid confrontation with such elements to ensure any unhappy situations in future. Question 7 Define the term coordination. Why is coordination considered so important for effective management? (2 + 6 = 8 marks)

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Answer The term coordination is defined as the process of bringing about unity and harmony of functioning among the diverse elements and sub-systems of an organization. It is a conscious and rational managerial task of pulling together the different threads of organized activity and weaving them into a unified whole to achieve pre-determined goals in an effective manner. The need and importance of coordination for effective management may be explained as follows: (a) Channelisation of group effort: Co-ordination is directed towards channelising the cooperative efforts, energies and skills of work groups along organisationally determined lines. In the absence of co-ordination, group members are likely to pull in different directions and work at cross purposes. (b) Unity in diversity: Co-ordination represents unity of action in a setting characterised by diversity and multiplicity of goals, resources, activities and so on. Without a conscious bid for unity of action, organised activity is likely to be wayward and haphazard. (c) Managing inter-dependencies and interactions: Co-ordination is the management of interactions and inter-dependencies among the different units of an organisation. For example, in a business enterprise, the marketing department depends on the manufacturing department for production of required volume, range and quality of products within reasonable schedules, to serve customers. (d) Harmonisation of goals: Co-ordination aims at ensuring that each department or unit in an organisation has knowledge of and commitment to harmonise its own goals, activities and requirements with the goals, activities and requirements of other departments. Also, each department has to strive to assign its sub-goals within the framework of overall organisational goals. (e) Differentiation and integration: The activities of an organisation are divided into homogeneous and specialised sub-tasks. Similarly, authority is also divided and delegated in a graded manner among the various managerial levels. Differentiation calls for integration or co-ordination, so as to fuse the differentiated work units and authority centers. (f) Congruence of flows: An organisation is a dynamic system of flows of information, resources, authority, activities and outputs. These flows have to be harnessed and harmonised in a pre-determined but dynamic manner as to their timing, volume and direction.

Co-ordination is thus an essential and integrated element of all functions of mangers. A mature and well-rounded manager keeps co-ordination in the forefront and ensures its supremacy while performing his functions. Question 8 What do you understand by delegation of authority? What are the important steps taken in the process of delegation of authority? (3 + 5 = 8 marks)

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Answer Delegation of authority is a process, by which a manager assigns some of the task within his work jurisdiction to his subordinates on a selective basis, allows them to exercise authority on his behalf to accomplish the tasks and makes them accountable for performance. Delegation of authority is at the core of the process of organizing and entails the establishment of superior-subordinate relations among the members of the organization. The subordinate to whom authority is delegated by his superior is empowered to decide and do certain specified things; he can act on behalf of his superior as his representative in certain respects. Steps in delegation: As a process, delegation of authority is effected through certain integrated steps. At every managerial level, the manager who delegates authority to his immediate subordinates has to take the following steps: (a) He has to size up the total work load in his unit - the results expected, the functions, tasks or activities to be under taken in clear and operational terms. (b) He has to divide the tasks into two sets: those which he alone should handle normally and those which he can assign to his subordinates. (c) He has to assign the tasks to his individual subordinates. As far as possible, the task content assigned to subordinates has to be kept compact and homogeneous. (d) He has to delegate a part of his authority to his subordinates to enable them to perform the assigned tasks. He has to ensure that his subordinates are given enough authority content to enable them to function effectively. (e) He has to impose a personal obligation or accountability on each of his subordinates for effective performance of the assigned tasks and for proper exercise of delegated authority. Question 9 What do you mean by decision-making? Explain the necessary steps involved in the process of decision-making. (2 + 6 = 8 marks) Answer Decision-making may be defined as a managerial process and function of choosing a particular course of action out of several alternative courses for the purpose of achieving the given goals. It involves committing the organisation to specific courses of action and entails commitment of resources in specified ways. In a sense, decision-making is an important step towards the desired position, solving problems and crises and making use of opportunities. The situations that call for managerial decision-making are numerous. Most of the managerial decisions are directed towards making the organisation survive, succeed, grow and prosper. These decisions are means to ensure good performance of the organisation. Sometimes managers have to make painful decisions for example, reduction of staff or scale of

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operations. Steps Involved in Decision Making: (a) Perception or identification of decision problem: The decision making process begins with the uncovering of or discovering a problem situation which is basically either an unsatisfactory or a promising situation calling for a conscious intervention. In the course of his job, a manager confronts several such situations in the internal and external environment of the organisation. Problems may be major or minor, strategic or operational, novel or routine. (b) Diagnosis and definition of the decision problem: Once a problem is identified, the next task of the manager is to analyse what exactly is the problem. He has to define it in clear terms so as to pinpoint its scope and ramifications. It involves critically looking into the problem and piercing through it to find out the origin and its degree of gravity or importance. Several managerial problems are entangled with one another; an attempt has to be made to separate them to the extent possible so that the specific problem gets isolated Also, in the case of a very complex problem, it may be necessary to break it down into sub-problems. (c) Specification of objectives: In this step, the manager has to set the objectives, which he would like to achieve by solving the problem. He has to be clear in his mind what the decision is about and what the decision is for. Objectives may be qualitative or quantitative. Objectives are the end points and serve as yardsticks for measuring and evaluating the outcomes of alternative courses of action, for implementing the decision and for sizing up its effectiveness. (d) Collection of relevant information: Information is an important resource input for decision making. It provides the knowledge base for unravelling the complexity and uncertainty associated with the problem and the alternative courses of action. The manager has to design or rely on the information system so that he gets the relevant and required information bearing on the decision environment. Collection of information is especially critical for the subsequent step of generating and evaluating alternative courses of action. (e) Search for alternative courses of action: In this stage, the manager tries to discover and develop alternative courses of action, which are in the nature of potential and possible solutions or strategies to the decision problem. Some alternative courses may be quickly developed by the manager by reference to his experience or expertise. New alternatives or options have to be generated through creative thinking and other processes. (f) Evaluation of alternative courses of action: Alternatives have value to the extent that their outcomes are likely to meet the goals of the manager. Hence, evaluation of alternatives by reference to some objective criteria is essential. The expected outcomes or values of alternative courses have to be estimated through forecasting and other devices.

(g) Making the final choice: The choosing process involves the narrowing down of the

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range of alternative courses by a progressive elimination process by reference to the predetermined objective criteria. The manager has to also apply his judgmental skills in making the final choice, which is governed by several factors, such as its congruence with the objectives and values of the manager, the feasibility and acceptability of the decision, relative simplicity of the likely outcomes and so on. (h) Implementation of the decision: It is the managers responsibility to operationalise the decision and make it implementable. He has to make the necessary structural, administrative and logistic arrangements for translating the decision into effective action initiatives and outcomes. Question 10 Distinguish between any two of the following: (i) Line and Staff Authority (4 X 2 = 8 marks) (ii) Policies and Procedures (iii) Leader and Manager Answer (i) Line and Staff Authority: Line authority is related to primary and core activities of a organisation. On the other hand staff authority is related to secondary and supportive activities. Line authority refers to the formal right vested in a manager to perform his managerial functions of planning, decision-making, organising, direction and control concerning resources, activities and people. On the other hand staff authority refers to the formal right vested in a manager to undertake advisory, supportive activities and services in relation to line authority positions and units. Latter is devoid of the formal right to make decisions committing the organization in particular ways and concerning deployment of organisational resources. (ii) Policies and Procedures: Policies may be defined as well-established or crystallised points of view of an organisation and its top management on major matters of orgnisational functioning, which call for recurring managerial decisions and action initiatives. On the other hand, procedures are defined as clear administrative action guides which lay down the sequence in which certain activities are to be done. They are operational, tactical devices for routinised, orderly and efficient flow of administrative and other activities. The distinction may also enumerated as follows: (a) Policies are guidelines to decision making while procedures are guidelines for sequential action. (b) Policies are relatively flexible as compared to procedures that are detailed and deterministic.

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(c) Policies form part of the basic strategic postures of the organization. Procedures are operational and tactical tools to the efficient guidance of routine internal organizational activity. (d) Policies in general are formulated at top management level while procedures are laid down at a somewhat lower managerial level. (e) Policies serve as bridges between organizational purpose and performance while procedures serve as bridges between activities and outcomes. (f) Policy-centered thinking on the part of managers is considered as a healthy sign. Procedure-centered thinking is considered bureaucratic, rigid and self-defeating.

(iii) Difference Between Leader and Manager: Many consider the terms leader and manager as synonyms. A manager is required to lead his team of subordinates through processes of interaction, he is likely to develop and sharpen, at least a few more leadership abilities like for example, sociability, tolerance, resolution of conflict, verbal facility. However, an effort can be made to distinguish the two as follows: Leader 1. 2. 3 Leader is informal. Leader leads people. A leader may define and set his own goals Manager Manager holds formal position in the organization. Manager manages people, things. A manager has to function within the organisational boundaries and has to set goals which are in harmony with organisational goals. Managers achieve results directing the activities of others. by

4.

Leader creates a vision and inspires others to achieve this vision. Leader enjoys influence. power by

5. 6.

Manager enjoys authority which is formally assigned to them. The rules, roles and relationship are well defined and tend to be tightly structured in case of a manager.

The rules, roles and relationship tend to be loosely structural in case of a leader.

Question 11 Write short notes on any two of the following: (i) Sources of Power

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(ii) Managerial Grid (iii) Control by Exception Answer (i) Source of Power: The term is defined as the ability of an individual to gain control, influence and even dominance over events, things and people in ways desired by him. Some of the sources of power are discussed below: (a) Reward: Reward is a remuneration or return which is offered by one to another in exchange of some behavioural act like effort, performance, obedience and so on. The reward may be salary increase, bonus, promotion or any other financial/nonfinancial benefit. (b) Coercion: Coercion is the act of forcing or compelling individual to do or not to do something against his will. In organizational situation, it may be in the form of action for or threat for dismissal, suspension, demotion, or other method of embarrassments for the people working with the organization. (c) Expertise: It is said that knowledge is power. An individual who knows more, who is conceptually sound and has information at his command which others do not have in equal measure commands power over those who seek his knowledge and information. (d) Charisma: Charisma may be described as a magnetic and magical personality attribute or quality of a person, which arouses spontaneous attraction from others. Charismatic personalities have some Mystique about them and have a natural propensity to influence people. (e) Reference: Reference power is an exclusive power that is based on interpersonal attraction. This power arises when an individual or a group possesses certain inner or outer attributes, which others admire and even try to imitate. (f) Legitimate: This is derived from the position a person occupies in a formal or organizational setting. Legitimate power is in the form of authority, which is delegated to the positions or to the organizational members. (4 X 2 = 8 marks)

(ii) Managerial Grid: Managerial Grid : Managerial grid, developed by Robert Blake and Jane Mouton, is a graphic model of alternative combinations of managerial styles or orientations or behaviours, on a two dimensional space. The two styles or orientations are: concern for production and concern for people. These are shown on horizontal and vertical dimensions of the grid on a 1 to 9 scale or degree. Blake and Mouton argued that a leaders managerial style is a point on the grid; they have identified five combinations of styles. These five combinations are given as follows: Impoverished leadership - 1,1 - Low concern for production and for people: In this combination, leaders (managers) are apathetic and irresponsible. Their attitude towards getting things done from and maintaining relationships with people are casual and confused.

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Country club leadership - 1,9 - Low concern for production and high concern for people: In this combination, the leader takes great interest in keeping his people in good humour and in catering to their needs. He tries to maintain friendly relations with people so that an amiable climate will motivate people to work with enthusiasm. Task leadership - 9,1 - High concern for production and low concern for people: This is an antithesis of country club leadership. The leader adopts a directive style to get his people work for the organisation. His focus is on task performance by planning and controlling the production environment. Middle of the road leadership - 5,5 - Moderate concern for production and people: This is a safe style, not to push too much in either direction but to achieve a satisfactory balance between the requirements of production and of people. Team leadership - 9,9 - High concern for production and people: This is regarded as the most effective leadership. An attempt is made to bring about an integration and harmony between the needs of people and of production.

(iii) Control by Exception: Also known as management by exception, the principle is widely practised by managers in organisations. It means that managers at each level should pay attention to only exceptional and significant deviations from planned results. Only exceptional instances of off-line functioning of the system should deserve managerial attention and remedial action. Performance which is largely within the permissible standards in spite of the presence of minor deviations or disorders need not be referred to managerial attention. The idea behind the principle of control by exception is that no news is good news. If there is nothing to report, the presumption is that the system is functioning alright. The system of control by exception is a system of identification and communication that signals the manager when his attention is needed. It helps managers to broaden their control responsibilities and utilize their skills to tackle only exceptional matters needing their attention. However, managers should not be complacent with respect to normal planned results and minor deviations. There may be instances when normal planned performance needs to be modified but is not done. It could also be that people at operating level suppress the information related to serious deficiencies and distortions. Question 12 State with reasons, which of the following statements are correct and which are incorrect. (Attempt any four statements): (i) Conceptual skill is most needed at the middle level of management. (ii) Behavioural science approach attempts to remove the deficiencies of human relations

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approach. (iii) Authority is vested in a position. (iv) Planning and control are interrelated and interdependent. (v) Motivation and ability reinforce each other. Answer (i) Incorrect: Conceptual skill is the ability to think in abstract term to form images and ideas. It is more needed at top level than middle and lower level management, because top-level management takes major decisions, frames policies and set organizational goals. They are required to have more innovative and creative ideas. (2 X 4 = 8 marks)

(ii) Correct: Human Relations Approach is criticized on the ground that it tries to soft-pedal the requirements of organization and the realities of work situations. Behavioural science approach focuses on a scientific study of human behaviour, although it is a partly a natural evolution for human relations. (iii) Correct: Authority is vested in a position thus it is a positional right and not a personal right. Once a person vacates a managerial position he ceases to have authority. Authority flows downwards along the various managerial positions. Authority is a fundamental concept in the context of formal organizations. (iv) Correct: Managerial planning seeks consistent, integrated and articulated programmes while management control seeks to compel events to confirm to plans. Planning is looking ahead to achieve goals whereas control is looking back to ensure completion of tasks. Hence, both planning and control are inter-related and interdependent. (v) Correct: Motivation and ability reinforce each other. An individual needs motivation to acquire, recognize and improve his abilities and to put them into use. Similarly, he needs ability to back his motivation. Other things being equal, ability injects a sense of confidence and adequacy in the individual and energises him towards effort. A person may be somewhat deficient in his ability, but if he is highly motivated, he can get over the problem to some extent.