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ASSIGNMENT

Course Code : MS-01

Course Title : Management Functions and Behaviour
Assignment Code : MS- 01/TMA/SEM-I/2019
Coverage : All Blocks

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Note : Attempt all the questions and submit this assignment on or before 30 April, 2019 to
the coordinator of your study center.

1. What are the assumptions of different decision making models which either describe
how decisions are made, or prescribe how decisions should be made? Identify
varying degrees of knowledge under which the decisions are made. Explain with

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examples, you are familiar with. Briefly describe the context and the organization,
you are referring to.

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2. Define and describe strategic and operational planning. What are the essential steps
involved in planning for an enterprise? Explain with the examples you are familiar
with. Briefly introduce the organisation, you are referring to.
yh a.
3. Briefly describe the responsibilities a professional manager has towards various
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stakeholders with respect to sustainability of a business organisation. Explain with
examples you are familiar with. Briefly describe the organisation, you are referring
to.
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b

4. What is the process of communication? What are the intentional and unintentional
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barriers that prevent communications to be effective? What measures can be taken

to prevent these barriers. Explain with examples you are familiar with. Briefly
describe the organisation, you are referring to.
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ASSIGNMENT REFERENCE MATERIAL (Jan-19 to June-19)

M.S.-01

Management Functions and Behaviour

Q1. What are the assumptions of different decision making models which either describe how
decisions are made, or prescribe how decisions should be made? Identify varying degrees of
knowledge under which the decisions are made. Explain with examples, you are familiar with.
Briefly describe the context and the organization, you are referring to.

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Ans. These are the standards which suggest how decisions are made and how they should be made.
The models are based on the various types of individuals that make the decisions regarding various
processes. This includes economic, bounded rationality and games man model. Decision making is
based on the assumption of economy related matters. Decision making models help to ascertain the

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course of action that have advantageous approach to the management. They utilize various decision
making techniques to arrive at a solution for the problems. In this various decision rules are proposed
and implemented. It gives a descriptive approach to the decision making. Rationality is the key
component of the decision making. Models emphasis on the various situations that have an impact on
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the decision making. These models give a detail description of problem from the start till the end of
decision making. These models generally associate decision making in multiple dimensions and act
accordingly. Decision making models uses a systematic approach and also defines and solves the
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problem clearly. These three models are: (1) the econologic model, or the economic man, (2) the
bounded rationality model or the administrative man; and (3) the implicit favourite model or the game
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man. We will notice that each model differs on the assumptions it makes about the person or persons
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making the decision.

i) Econologic Model or Economic Man Model

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The econologic model represents the earliest attempt to model decision process. Briefly, this model
rests on two assumptions: (1) It assumes people' are economically rational; and (2) that 'people
attempt to maximise outcomes in an orderly and sequential process. Economic rationality, a, basic
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concept in many models of decision making, exists when people attempt to maximise objectively
measured advantage, such as money or units of goods produced. That is, it is assumed that people will
select the decision or course of action that has the greatest advantage or payoff from among the many
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alternatives. It is also assumed that they go about this search in a planned, orderly, and logical fashion.

ii) Bounded Rationality Model or Administrative Man Model

An alternative model, one not bound by the above assumptions, has been presented by Simon. This is
the bounded rationality model, also known as the administrative man model. As the name implies, this
model does not assume individual rationality in the decision,' process. Instead, it assumes that people,
while they may seek the best solution, usually settle for much less because the decisions they confront
typically demand greater information processing capabilities than they possess. They seek a kind of
bounded (for limited) rationality in decisions.

iii) Implicit Favourite Model or Gamesman Model

This model deals primarily with non-programmed. decisions. Non-programmed decisions are
decisions that are novel or unstructured, like seeking one's first job. Programmed decisions, in

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contrast, are more routine or repetitious in nature, like the procedures for admitting students to a
secondary school. The implicit favourite model developed by Soelberg (1967) emerged when he
observed the job choice process of graduating business students and noted that, in many cases, the
students identified implicit; favourites very early in the recruiting and choice process. However, they
continued their search for additional alternatives and quickly selected the best alternative candidate,
known as the confirmation candidate. Next, the students attempted to develop decision rules the
demonstrated unequivocally that the implicit favourite was superior to the alternative confirmation
candidate. This was done through perceptual distortion of information about the two alternatives and
through weighing systems designed to highlight the positive features of the implicit favourite. Finally,
after a decision rule was derived that clearly favoured the implicit favourite, the decision was
announced. ironically, Soelberg noted that the implicit favourite was typically superior to the
confirmation candidate on only or or two dimensions. Even so, the decision makers generally
characterised their decision rules as being multi-dimensional in nature.

Degrees of Knowledge

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A decision-maker may not have complete knowledge about decision alternatives (i.e., High Problem,
Complexity) or about the outcome of a chosen, alternative (i.e., High Outcome Uncertainty). These
conditions of knowledge are often referred to as states of nature and have been labelled:

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1. Decisions under Certainty: A decision is made under conditions of certainty when a manager
knows the precise outcome associated with each possible alternative or course of action. In such
situations, there is perfect knowledge about alternatives and their consequences. Exact results are
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known in advance with complete (100 per cent) certainty. The probability of specific outcomes is
assumed to be equal to one. A manager is simply faced with identifying the consequences of available
alternatives and selecting the outcome with the highest benefit or payoff.
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Managers rarely operate under conditions of certainty. The future is only barely known. Indeed, it is
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difficult to think of examples of all but the most trivial business decisions that are made under such
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conditions. One frequent illustration that is often cited as a decision under at least near certainty is the
purchase of government bonds or certificates of deposit. For example, as per the assurance provided
by Government of India, Rs. 1,000 invested in a 6-year National Savings Certificate will bring a fixed
sum of Rs. 2,015 after six complete years of investment. It should still be realised, however, that the
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Government defaulting on its obligations is an unlikely probability, but the possibility still exists. This
reinforces the point that very few decisions outcome can be considered a sure thing.
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2. Decisions under Risk: In some situations, a manager is able to estimate the probability that certain
variables could occur. The ability to estimate may be due to experience, incomplete but reliable
information or, in some cases, an accurate report. When estimates are made, a degree of risk is
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involved, but some amount of information about the situation is available. The situation requires
estimating the probability that one or more known variables might influence the decision being made.
If the basis for the decision is stated in terms of maximizing results e.g., service levels-the decision
maker would select the alternative which produces the best result. However, if the basis for the
decision is stated in terms of minimizing the outcome-e.g., costs-the decision maker would select the
alternative which minimizes the results.

3. Decisions under Uncertainty: A condition of uncertainty exists when a manager is faced with
reaching a decision with no historical data concerning the variables and/or unknowns and their
probability of occurrence. In these circumstances, the manager can decide:

· to maximize the possible results;

· to minimize the results;

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· to maximize the results that are the minimum possible under the circumstances;

· to minimize the maximum possible results;

· to avoid or delay the decision.

Q2. Define and describe strategic and operational planning. What are the essential steps
involved in planning for an enterprise? Explain with the examples you are familiar with. Briefly
introduce the organisation, you are referring to.

Ans. Strategic planning – Strategic planning Known as long range planning. It has two important
elements. First covers a long period of time from 5 to 20 years. Second it takes in to account
(consideration) the totally of activities of the enterprise. In other words, it refers to planning for the
total enterprise over a longer duration.

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Operations planning – Operations planning means short range planning. It usually extends over a
period of one year or more. Operations planning are prepared in more specific terms. These plans are
concerned with operations and deal with the various function are as of the enterprise like marketing,
production, finance, etc. This guide the lower and operational level of an enterprise and serve as

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yardsticks for measuring their performance.
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Steps: Preparing a plan is step by step exercise. Generally, the four under mentioned steps would be
involved in planning for an enterprise:

(a) Identifying the opportunities – The first step for planning is to be aware of the opportunities.
Planning is effective if it anticipates and meets the future conditions. Forecasting therefore is a pre –
requisite to planning, means making an intelligent estimate of the conditions that will exist during the
planned period.

(b) Setting the goal or target – The second step of planning is establishment of goals or target to be
achieved during the specified period. Thus establishment of goals for whole enterprise and for each
sub – unit, which are measurable various kinds of budgets and cost standards provided a menu of
establishing the standards.

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(c) Examination of environment – Premises refer to the factors in the environment that affect the
achievement of goals. Government policy is one of those factors which can have significant impact
either favourable or unfavourable on any plan formulated by an enterprise. Take for example a recent
change in the Government policy regarding the conversion of debentures into equity. Until recently a
conversion of debentures into equity was permissible under certain conditions. A large business house
which had taken recourse to such conversion in the past and benefited by it, had planned for new
projects banking upon the conversion of a new series of debentures into equity. Almost an overnight
ban on such conversion into equity by the Government not only created a crisis situation for that
enterprise in respect of the financing of the new projects but it also led to the erosion of confidence of
investors in the future plans of the company. As a result the market prices of equity share of the
company severely declined.

Planning in any organization result on several condition and environment factors as these affect the
achievement of goals. Obviously a change in any one or more assumed conditions will need an
interaction in the plan. Such assumption related to factor which may affect the plans either from
within the enterprise or from outside.

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(d) Explore and determine action paths – The final steps in the planning function is to explore and
evaluate alternative plan of actions and determine a specific action plan. Once the goals and factor has

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been establishment and plan taken care of, actual action plan in the form of programmers and budget
are formulated. A programme shows:

i. Major steps required to reach an objective.

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ii. Organizational unit and person responsible for each step.
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iii. Sequence and timing of each step.

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A programme may be accompanied by a budget which indicates the financial resources allocated by
the organisation for the implementation of the plan. Actually in order to achieve the overall goals of
the organisation, a number of activities will have to be performed, each activity having a separate
programme and a separate budget within the overall programme and budget. The system under which
budgets are used for purposes of planning is known as the Budgetary Planning System.
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Q3. Briefly describe the responsibilities a professional manager has towards various
stakeholders with respect to sustainability of a business organisation. Explain with examples
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you are familiar with. Briefly describe the organisation, you are referring to.

Ans. Except in the case of a proprietorship firm where the capital is fully contributed by the
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proprietor, in all other companies, capital is collected from a variety of sources. The sources may be
friends and relatives of the owners, financial institutions and, in case of public limited companies,
individual members of the public. All those people who contribute capital to a firm are known as its
shareholders.

The prime responsibility of the manager is to ensure the security of the shareholders' capital. The
manager must ensure that the firm does not become bankrupt or it is faced with a situation where the
shareholders' capital is endangered. In other words, the manager must, at least, ensure the survival of
the firm.

Having done that, the manager has to ensure that the shareholders are able to earn profit on their
capital. Shareholders invest their hard earned savings in our firm with the hope that they will be able
to earn more on it than if they keep the money in a bank. Money invested by shareholders is
representative of the faith they have in our competence and ability as a manager to put their money to

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good use and give them a satisfactory return. The onus is on us to make our firm profitable and
provide regular dividends to our shareholders.

By virtue of the capital invested in our firm, shareholders are owners of our firm. As a manager we
have to keep them regularly informed about all important decisions, activities and results. The
balance-sheet and the annual general meeting are the usual yearly forums for such information
sharing. We have to ensure that the information provided in reports and balance-sheets is correct and
authentic, and does not in any way mislead the shareholders. During the annual general meeting or
any other such meeting with shareholders we must encourage them to ask questions about the working
of the firm and also provide ideas for improvement, and not threaten or intimidate them in any
manner.

Q4. What is the process of communication? What are the intentional and unintentional barriers
that prevent communications to be effective? What measures can be taken to prevent these
barriers. Explain with examples you are familiar with. Briefly describe the organisation, you
are referring to.

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Ans. There are many communication models which serve a variety of purposes. They range from
single event analyses which can be used to instruct beginners, to complex models which are usually

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understood only by specialists in the field of communication. We have chosen the SENDER-
MESSAGE-CHANNELRECEIVER (S.M.C.R.) Model. The S.M.C.R. model is helpful for examining
a single communicative event; that is, it can isolate one event out of the ongoing communication
process and illustrates the actions which takes place.
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Sender
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The sender (or source in the S.M.C.R. model) is the transmitter of the message. There are five factors
which influence the sender in any communication he transmits:
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1. Communications skills

2. Attitudes
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3. Knowledge
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4. Position in the social system

5. Culture
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These five factors also influence the receiver as will only be summarized here. There are five verbal
communication skills which determine our ability to transmit and receive messages. Two are sending
skills: speaking and writing. Two are receiving skills: listening and reading. The fifth is important to
both sending and receiving: thought or reasoning. The extent of the development of these skills helps
determine our ability to communicate verbally.

Message: In the S.M.C.R. Model, the message is what the sender attempts to transmit to his specified
receivers. Every message has at least two major aspects: content and treatment.

The content of the message includes the assertions, arguments, appeals, and themes which the sender
transmits to the receivers. For instance, community leaders may wish to send a message to community
organizations appealing for financial support for a new swimming pool. The content of the message
may include the results of a survey showing the need for a new swimming pool, the proposed plan for
the new pool, the costs involved, and the appeal for financial support.

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Channel: Social scientists recognize two types of channels: (1) sensory channels based on the five
senses of sight, sound, touch, smell, and taste, and (2) institutionalized means such as face-to-face
conversation, printed materials, and the electronic media.

We use the institutionalized means to transmit most of our messages. Each institutionalized medium
requires one or more of the sensory channels to carry the message from the sender to the receiver. For
instance, when we use faceto-face conversation (an institutionalized medium) we make use of sight
(gestures, expressions), sound (voice, other noises), and possibly touch, smell, or taste.

Receivers: The receiver in the S.M.C.R. model must attend to, interpret, and respond to the
transmitted message. The goal of communication is reached when the receiver accepts the sender’s
message. Attention and comprehension are the means the receiver used to attain the goal of
acceptance of the message. Attention is the process by which the receiver tunes in on a message and
listens to it, watches it, or reads it. The sender must consider his receiver and treat the message in such
a way that the receiver’s attention is more easily gained and retained.

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Feedback: Feedback is the sender’s way of determining the effectiveness of his message. During
feedback the direction of the communication process is reversed. When providing feedback, the
original receiver goes through the same process as did the original sender and the same factors

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influence him as they did the sender.

Barriers
yh a.
The interruptions that interfere with the understandings of the communication are of three kinds:
semantic, psychological and organizational. We shall discuss them one by one.
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Semantic Interruptions: Most of the difficulty in communication arise because the same word or
symbol means different things to different individuals. Perhaps we remember what happened to Shiny
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Abraham at the (1986) Asian Games at Seoul. Despite coming first by a very wide margin in the 800
m. race, she was disqualified and lost her gold medal for having crossed the track at the place where
she should not have done.

Psychological Interruptions: In interpersonal communication psychological interruptions are the

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prime interruptions. This meaning that is defined to a message depends upon the status of both
emotional and psychological parties anxious. As such the psychological interruptions almost set up by
the sender or the receiver of the message.
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Organizational Interruption: An organization supplies a formal framework through which

communication is designed to flow. The structuring of the flow itself tends to act as a barrier against
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freer flow of communication between persons and levels in the organization. Rules may prescribe
how communications are to move from one level to another in upward or downward directions. Not
only is there a possibility of delay in the communication reaching its destination, but also there is
every possibility of communication getting distorted through the process of filtering described.

Measures

The biggest interpersonal communication is said to be the inability to listen intelligently,

understandingly and skillfully to another person. Listening actually is much more than hearing, it
involves understanding. Real communication takes place when the listener truly hears and
understands the position and intent of the speaker. Most managers are, however, poor listeners. The
main reason is the discrepancy in the speeds of speaking and of listening. In order to be a successful
manager we must attempt to develop our listening ability by utilizing us idle time in projecting
ourselves into the mind of the other party and understanding the factual and emotional content of the
message, without making any attempt at criticizing, approving or disapproving it until after we have

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fully heard and understood the remarks. The empathic listening, as it is called, vastly improves the
understanding of both the parties, bringing in its wake improved interpersonal relationship in the
organization.

If we can create a climate in which people can be confident that what they day will be listened to with
sympathy and considered constructively, we can be sure of a successful and creative communication.
This is, however, possible only in an environment of trust that has to be generated by management
through its policies and actions. The significant fact of organizational life for a manager is
communication, and his success will depend upon how effectively he can communicate with others in
the organization; in other words, how successfully he can put his ideas across to those who work with
him and thereby, work persuade in the direction of the opportunities of objectives of the organization.
In simple words, we are trying to communicate the management concepts, and whether we have been
successful in meeting our goal will depend upon the exceed to that we are able to ‘understand’ what
we are trying to communicate to us therefore communication goals to develop understanding.

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