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ENTERPRISE MANAGEMENT SEMESTER-3
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Total Marks = 70
Q.2 (a) Approaches to Negotiation:
There are two basic approaches to negotiation:
Distributive
bargaining
Negotiation is about the distribution of finite resources. One partys gain

is anothers loss: a win-lose or zero sum equation. If a pay increase of,
say, 10% is gained, where the management budget was 5%, the extra
has to be funded from elsewhere shareholders (reduced profits),
customers (increased prices), other employee benefits (cuts in training)
or whatever.
Integrative
bargaining
Negotiation is about joint problem-solving, aiming to find a mutually

satisfying (or win-win) solution to problems. The aim is not just to get the
best outcome for ones own party (win-lose) but to fulfil the needs of all
parties as far as possible.
It is now generally recognised that integrative bargaining is the most constructive,

sustainable and ethical approach to negotiation.
During the conduct of the negotiations themselves, participants should consider the
following.
(a)
Opening presentation
(b)
Fact-finding
(c)
Identifying common ground
(d)
Use of the negotiating strategy and bargaining power
(e)
Considering
(f)
Making concessions
(g)
The negotiating team
(h)
Effective communication skills
(i)
Leadership
(b) Channel Design Decisions:

In designing marketing channels, manufacturers struggle between what is ideal and what
is practical. A new firm with limited capital usually starts by selling in a limited market area.
Deciding on the best channels might not be a problem: The problem might simply be how
to convince one or a few good intermediaries to handle the line.
For maximum effectiveness, however, channel analysis and decision making should be
more purposeful. Marketing channel design calls for analyzing consumer needs, setting
channel objectives, identifying major channel alternatives, and evaluating them.
International marketers face many additional complexities in designing their channels.
Each country has its own unique distribution system that has evolved over time and
changes very slowly. These channel systems can very widely from country. Thus, global
marketers must usually adapt their channel strategies to the existing structures within each
DISCLAIMER: The suggested answers provided on and made available through the Institutes website may only be referred, relied upon or treated as a guide and substitute for
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country.
In some marketers, the distribution system is complex and hard to penetrate, consisting of
many layers and large numbers of intermediaries. At the other extreme, distribution
systems in developing countries may be scattered, inefficient, or altogether lacking.
Sometimes customs or government regulation can greatly restrict how a company
distributes products in global markets.
International marketers face a wide range of channel alternatives. Designing efficient and
effective channel system between and within various country markets poses a difficult
challenge.
Q.3 (a) Quality Circles:

A quality circle is a team of workers from within the organisation which meets at intervals
to discuss issues relating to the quality of the product or service produced.
A typical quality circle comprises employees from many levels of the organisation who
meet regularly. The frequency of meetings varies across organisation every three
months would normally be sufficient.
Suggestions are encouraged regarding how the product or service produced could be
made better, and how processes and working practices could be improved. Members are
encouraged to analyse issues in a logical way.
Wide issues may also be discussed, as it is recognised that complete working environment
will affect quality levels. In some organisations this has led to quality circles having input
on issues such as health and safety, employee benefits and bonuses, and training and
education programmes.
An organisation can encourage the use of quality circles by:
Rewarding the circle for suggestions that are implemented (e.g., a share of any
savings made).
Providing a budget and support to run the quality circle in terms of room provision,
refreshments, staff to take minutes etc.
Ensuring management are supportive and prepared to act on useful suggestions

from the circle.
Providing an explanation as to why suggestions not implemented were rejected.
Management asking the circle for suggestions and comments on specific issues
and problems facing the company, without anticipating the outcomes.
The benefits of quality circles include:

(a) Employee involvement improves morale.
(b) Practical improvements/solutions are likely as workers know the processes

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involved.
(c) Organisation unity is fostered as the circle includes all levels.
(d) Suggestions can result in valuable savings.
(e) A culture of quality is fostered.
Possible drawbacks of quality circles include:
(a) Employee power is hard to control.
(b) The scope of influence can become very wide.
(c) Rejected suggestions may cause resentment.
(d) Business practicalities (e.g., cost) may not be fully understood.
The concept of quality circles has expanded to now include groups drawn from separate
organisations but with a common interest.
(b) Job redesign, rotation, enlargement and enrichment can all be used to improve the
motivation of employees by introducing changes to their work.
(a) Job redesign aims to improve performance through increasing the understanding
and motivation of employees. Job redesign also aims to ensure that an individuals
job suits them in terms of what motivates them and their need for personal growth
and development.
(b) Job rotation allows for a little variety by moving a person from one task to another.
Employees often do this spontaneously. Job rotation permits the development of
extra skills, but does not develop depth of skill.
(c) Job enlargement increases the width of the job by adding extra, usually related,
tasks. It is not particularly popular with workers, many of whom prefer
undemanding jobs that allow them to chat and daydream.
(d) Job enrichment increase the depth of responsibility by adding elements of
planning and control to the job, therefore increasing its meaning and challenge.
The worker achieves greater autonomy and growth in the role.
Hackman and Oldham developed the job characteristics model that sets out the links
between employee motivation, satisfaction and performance (including personal growth)
and the characteristics of their job or role.
Five core characteristics:
(a) Skill variety: the breadth of job activities and skills required
(b) Task identity: whether the job is a whole piece of work with a visible outcome
(c) Task significance: the impact of the job on other people
(d) Autonomy: the degree of freedom allowed in planning and executing the work
(e) Feedback: the amount of information provided about the workers job performance.

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Q.4 (a) Effectiveness is often described as doing the right things that is doing those work activities
that will help the organization to reach goals. Efficiency refers to getting the most output
from the least possible amount of resources.
Explanation
All organization practice management to accomplish organizational mission through
attainment of goals. In this connection activities are performed by people in the
organization and resources are used. This very important in connection to the goal
accomplishment ; that to what extent the activities performed are right (appropriate) ,
performed in right way , and at a right time. Through this it can be determined that to what
extent the goals probably be achieved.
Secondly in connection to the use of organizational resources the amount of resource uses
to attain goals matter a lot. If an organization attains goals by employing more resources,
or wasting the resources the productivity of the organization will be low. If an organization
attains goals by employing least possible resource ensuring as compared to competitors
subject to cont compromising on effectives, the organization can edge over competitor
which if further can lead the organization to gain competitive advantage over competitors.
(b) Customer of today is bombarded by commercial messages form a broad range of sources.
But customers do not distinguish between message sources the marketers do. In
consumers mind messages from different media and promotional approaches all becomes
part of a single message about the company. Conflicting messages from these sources
can result in confused company images, brand positions and customer relationships. Due
the reason mentioned above today more and more companies are adopting IMC. Under
this concept:
The company carefully integrates the many communication channels to deliver a

clear, consistent message about thee organization and its brands. Company
recognizes all touch points where the customer may encounter the company and
its brands.
The company ties together all of the companys messages and images. For
instance the companys television and print advertisements have the same
message look.
Q.5 (a) The global business environment can be analysed against a number of factors, such as
political, economic, social/cultural and technological. This is known as PEST analysis.
There will be differences between different countries.
Political and Legal
Political risk is the risk of an organization incurring losses due to non-market factors.

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These factors are usually related to government policy, for example trade rules, investment
incentives and the tax regime.
Political risk is also related to financial factors such as currency controls and the economy,
and stability factors such as rioting and civil war.
Corporate Political Activity (CPA) refers to the involvement of companies in the political
process with the aim of influencing policies towards their preferences.
Organizations may need to deal with governments and perhaps make their policy
preferences known in a number of situations. Examples include:
(a) Multinational companies from developed countries may negotiate terms for their
investment in that country. For example finance, taxation and export agreements.
(b) Multinationals may lobby governments to provide conditions in the economy that
benefit them. For example reducing restrictions or controls over labour such as
working hours and minimum wages. The MNC may threaten to withdraw its
investment if the government fails to agree.
(c) New industries in developing nations may seek protection from their government,
for example import restrictions.
(d) Developing industries may seek government support such as subsidies or tax
breaks to help them compete in the global market.
(b) Managers can exercise the following controls as per the conditions given in the question:
Feedforward Control: to control an activity before it begins
Concurrent Control: to control an activity when it is going on
Feedback Control: to control an activity after it is completed
Feedforward control prevents problems because it takes place before the actual activity
begins. This control focus on taking action before a problem occurs. Concurrent Control
takes place while a work is in progress, another term for this control is management by
walking managers can benefit from using this control because it can help them correct
problems before they come too costly. Feedback control is the most popular type of control
that relies on feedback. In this control, the control takes place after an activity is done. [
examples X 3]
Q.6 (a) Lean Production:
Lean production is a manufacturing methodology developed originally for Toyota. It is also
known as the Toyota Production System. Its goal is to get the right things to the right place
at the right time, the first time, while minimising waste and being open to change.
Benefits of Lean Production:
Supporters of lean production believe it enables a company to deliver on demand,

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minimise inventory, maximise the use of multi-skilled employees, flatten the management
structure and focus resources where they are most effective.
Other benefits include:
Waste reduction (up to 80%)
Production cost reduction (50%)
Manufacturing cycle times decreased (50%)
Labour reduction (50%) while maintaining or increasing throughput
Inventory reduction (80%) while increasing customer service levels
Capacity increase in current facilities (50%)
Higher quality
Higher profits
Higher system flexibility in reacting to changes in requirements improved
More strategic focus
Improved cash flow through increasing shipping and billing frequencies
Criticisms of Lean Principles:

In many situations, organizations supposedly using lean principles have not experienced
the improvements in productivity and profitability expected. It is difficult to know whether
this is due to shortcomings in the lean philosophy or whether the techniques involved are
being interpreted and applied correctly.
For example, the 5Ss concept should be used with the aim of creating a workplace with
real organisation and order which creates pride by employees in their work, improves
safety and results in better quality. However, in some organisations 5S has become a
cleaning and housekeeping exercise only.
Lean techniques should be seen and treated as outward signs of a more fundamental
approach to operations and quality. Real improvements require a change in thinking and in
culture which are difficult to achieve.
Many companies use lean manufacturing and Six Sigma techniques to reduce costs,
rather than a fundamental commitment to eliminating waste and adding value.
(b)
Consumer purchases are influenced strongly by cultural, social, personal, and

psychological characteristics.
Culture:
Culture is the most basic cause of a persons wants and behaviour. Human behaviour is
largely learned. Growing up in a society, a child learns basic values, perceptions, wants,
and behaviours from the family and other important institutions. Every group or society has
a culture, and cultural influences on buying behaviour may vary greatly from country to

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country. Failure to adjust to these differences can result in ineffective marketing or

embarrassing mistakes.
Marketers are always trying to spot cultural shifts in order to discover new products that
might be wanted.
A consumers behaviour also is influenced by social factors, such as the consumers small
groups, family, and social roles and status.
Many small groups influence a persons behaviour. Groups that have a direct influence
and to which a person belongs are called membership groups. In contrast, reference
groups serve as direct (face-to-face) or indirect points of comparison or reference in
forming a persons attitudes or behaviour. People often are influenced by reference groups
to which they do not belong.
Cultural
Social
Culture
Subculture
Reference groups
Family
Roles and status
Personal
Age and life
Cycle stage
Occupation
Economic
situation
Lifestyle
Personality and
self-concept
Psychological
Motivation
Perception
Buyer
Learning
Beliefs and
attitudes
Social class
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SUGGESTED ANSWERS MODEL PAPER

ENTERPRISE MANAGEMENT SEMESTER-3

Negotiation is about the distribution of finite resources. One partys gain

Negotiation is about joint problem-solving, aiming to find a mutually

It is now generally recognised that integrative bargaining is the most constructive,

Identifying common ground

Use of the negotiating strategy and bargaining power

The negotiating team

Effective communication skills

(b) Channel Design Decisions:

SUGGESTED ANSWERS MODEL PAPER

Q.3 (a) Quality Circles:

Ensuring management are supportive and prepared to act on useful suggestions

Providing an explanation as to why suggestions not implemented were rejected.

The benefits of quality circles include:

SUGGESTED ANSWERS MODEL PAPER

SUGGESTED ANSWERS MODEL PAPER

The company carefully integrates the many communication channels to deliver a

SUGGESTED ANSWERS MODEL PAPER

Feedforward Control: to control an activity before it begins

Concurrent Control: to control an activity when it is going on

Feedback Control: to control an activity after it is completed

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Waste reduction (up to 80%)

Production cost reduction (50%)

Manufacturing cycle times decreased (50%)

Labour reduction (50%) while maintaining or increasing throughput

Inventory reduction (80%) while increasing customer service levels

Capacity increase in current facilities (50%)

Higher system flexibility in reacting to changes in requirements improved

More strategic focus

Improved cash flow through increasing shipping and billing frequencies

Criticisms of Lean Principles:

Consumer purchases are influenced strongly by cultural, social, personal, and

SUGGESTED ANSWERS MODEL PAPER

country. Failure to adjust to these differences can result in ineffective marketing or

Roles and status

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