F-2,Block, Amity Campus Sec-125, Nodia (UP) India 201303 ASSIGNMENTS PROGRAM: BFIA SEMESTER-I Subject Name Study

COUNTRY Permanent Enrollment Number (PEN) Roll Number Student Name ASSIGNMENT Assignment A Assignment B Assignment C :BUSINESS ORGANISATION AND MANAGEMENT :MALAWI :BFIA01172009-2012041 : :FRANCIS ODALA MTAMBO MARKS 10 10 10

DETAILS Five Subjective Questions Three Subjective Questions + Case Study 40 Objective Questions

Signature : Date : 16TH DECEMBER 2010

Assignments Submitted: Assignment A Assignment B Assignment C

BUSINESS ORGANISATION AND MANAGEMENT ASSIGNMENT A Q1.What is Management? Discuss its essential features. Answer: MANAGEMENT Management refers to the work that managers do which, according to Henry Fayol is to forecast and to plan, to organize, to coordinate and to control human efforts to accomplish predetermined goals. Management also refers to a group of people comprised of the personnel who perform managerial functions in an organization. It also covers the various concepts and principles, the knowledge and application of which aids in managing an organisation. ESSENTIAL FEATURES OF MANAGEMENT The following are the essential features of management: 1. Getting things done. A manager does not do any operating work himself but gets it done through others. He must motivate the subordinates for the accomplishment of the task assigned to them so that he gets things done. 2. Activity. Management is a process of organized activity. It is concerned with the efficient use of resources like men, money and materials in the organization. There can not be management without activity. 3. Group activity. Management cannot exist independent of the group or organization it manages. Management is the powerhouse of any group activity and inspires workers to put forth their best efforts to accomplish its goals. 4. Universal activity. Management is a universal phenomenon, i.e. it is found wherever are people working together to accomplish goals. Though no one principle can be applicable in all situations, the principles are modified to suit the given situation and the type of organization but still they are variants of the same core principles. 5. Purposeful. Management is a goal-oriented activity. There can not be management without having objectives to be accomplished. Thus is concerned with the accomplishment of goals through its various functions like planning, organizing, staffing, directing, and controlling.

6. Accomplishment of certain goals. Management is a process which involves planning, organizing, directing and controlling the efforts of human resources in the use of material resources. These basic functions are performed by managers to accomplish certain goals. These certain goals are the one that necessitates management. 7. An integrating process. Management integrates men, machines and materials for performing various operations and accomplishing the defined goals. Thus, management acts as a catalytic agent for getting maximum productivity from all the resources. 8. It is intangible. Management is abstract and cannot be touched or seen with the eyes. It is only evidenced by the quality of the organization and the results. 9. It is a profession. Management is a profession because some of its established principles are being applied in practice. 10. It is interdisciplinary. This implies that, even though management has been developed as a separate discipline, it draws knowledge and concepts from other social sciences like psychology, sociology, anthropology, economics, and others. Management integrates the ideas and concepts taken from these disciplines and presents newer concepts for application in the improvement of the management of organizations. 11. It is both a science and an art. As a science, management has developed certain principles and laws which have wide applications. As an art, it is concerned with the practical application of knowledge for the solution of organizational problems. Thus management is both a science and an art. 12. It is dynamic. Management is dynamic because it adapts itself to the social changes and introduces innovation in methodology. . 13. It involves decision-making. Management process involves decision-making at various levels for getting things done by others. It involves selecting the most appropriate alternative out of the available ones. 14. Applies economic principles. It applies economic principles to the control the use of resources in an organization. 15. It is concerned with direction and control. Management is concerned with the direction and control of the various activities in an organisation. It deals particularly with the active direction of the human effort.

Q2.What is Planning? Explain briefly the different types of Plans giving suitable examples. Answer: PLANNING Planning is the process of determining objectives and selecting a course of action that will achieve the objectives. In planning the manager has to look ahead and decide in advance what is to be done, when and where it is to be done and by whom it is to be done. Planning is the most primary function of management. It precedes all other functions because a manager plans before he is able to initiate any activity and his other functions. It is a mental process consisting of forecasting, decision-making and problem solving, and therefore requires the use of intellectual faculties, foresight, imagination and sound judgment. A plan is simply stated as a predetermined future course of action. The process of planning involves formulating policies, programmes, budgets, schedules, etc, to achieve the objectives; and lying down of procedures and standards of checking performance. TYPES OF PLANS a. Objective Objective is the goal or target to be achieved. It is the basis of all plans i.e. all other plans are designed to help achieve the objective. An example of objective would be to increase number of subscribers by 50%. b. Policy Policy is a general statement or understanding to guide thinking regarding a particular matter in an organisation. It prescribes the boundary within which decisions are to be made. An example of policy would be students shall be admitted on merit. c. Strategy Strategy is the action plan to be adopted in face of environmental uncertainties. It relates the organizations activities to its environment taking into consideration its objective. An example of strategic plan would be improvement of quality to face increasing market competition. Procedure Procedure refers to the manner in which activities are to be performed, i.e. modi operandi of the activities. It is a sequence of steps to be followed for a particular process or activity. Examples under this type of plan would be purchase procedure, assembling procedure for manufacturing and fabrication works. Rule Rules state what should and should not be done in a situation. Rules are rigid plans which offer no scope for discretion. Examples of rules are No phones in the control room or Do not stay in the production without supervisor. Programme A programme is a combination plan for goal achievement. It states the activities and resources to be undertaken. An example of a programme would be organic production of foods stuffs.

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Schedule A schedule is a time-table for activities. It specifies priority of work and time for each activity. Example of schedule would be move to organic production by December 2010. h. Budget Budget is the statement of expected results and required resources for accomplishment of the results. It is a quantitative and time bound plan of action. Example of budget is Generate 10 Megawatts of power by 2012. Under this will be included the resources needed to generate the 10 Megawatts of power. i. Project A project is a cluster of interrelated activities that constitute a separate unit from that of the usual and continuous business of the organisation. A project is a temporary endeavor undertaken to create a unique product or service.1 Ii is a scheme for deployment of resources for accomplishment of particular results. Examples of projects are construction of a dam and installation of CCTV.

Q3.Explain in brief the essential features of a joint stock company? Answer: A JOINT STOCK COMPANY A joint stock company is a type of business entity which is run on common stock of resources in form of money brought up from members as capital. The capital is divided into small equal parts called shares and the proportion of the company owned by each shareholder is determined by the proportion of shares that he owns. Certificates of ownership are issued by the company in return for each contribution, and the shareholders are free to transfer their ownership interest (shares) at any time by selling their stockholding to others. ESSENTIAL FEATURES OF A JOINT STOCK COMPANY The essential features of a joint stock company are as below: 1. Legal formation: No single individual or a group of individuals can start a business and call it a joint stock company. A joint stock company can come into existence only when it has been registered after completion of all the legal formalities required by the Indian Companies Act, 1956. 2. Separate legal entity Being an artificial person, a joint stock company has its own separate existence independent of its investors. This means that a joint stock company can own property, enter into contracts and conduct any lawful business in its own name. It can sue and can be sued by others in the court of law. The shareholders are not the owners of the property owned by the company. Also, the shareholders cannot be held responsible for any of the acts of the company. 3. Limited liability of its members Every member who takes share in a company is known as a shareholder. The liability of every shareholder is limited to the face value of the shares held by him.That means even if there is liquidation of the company, the personal property of shareholders can not be used to pay the debts of the company. 4. Perpetual succession Men may come and go but the company continues to exist. It has a continuous existence which is not affected by death, insanity insolvency or retirement of any shareholder or director. 5. Common seal A company being an artificial person cannot sign documents for itself. Therefore, it has got common seal as device to inscribe on its documents and important papers. Any document, on which the company's seal is put and is duly signed by any official of the company, becomes binding on the company. 6. Transfer of shares The company has to state its maximum capital required at any given time in the future in its Memorandum of Association. The capital is divided into small denominations, known as shares. These shares can be transferred from one person to another.

7. Ownership is Distinct from Management The company is owned by the shareholders, who have subscribed for its shares. It is managed by director(s), and other managers or staff to run the business of the shareholders independently. 8. Separate property A company, being a legal body, can own, and sell property in its own name. The shareholders do not have any right to lay a claim to it privately or jointly. 9. Artificial person: Just like an individual takes birth, grows, enters into relationships and dies, a joint stock company takes birth, grows, enters into relationships and dies. However, it is called an artificial person as its birth, existence and death are regulated by law.

Q4.What is an organization? Distinguish between functional and product departmentation. Answer: AN ORGANIZATION An organization is a network of horizontal and vertical relationships among the members of a group designed to accomplish some common objectives. This network forms a system or pattern of formal relationships that govern the activities of people, functions and facilities within which people work together for accomplishment of desired objectives. According to James D Mooney, organization is the form of every human association for the attainment of some common purpose. Thus organisation is the skeleton framework of business. FUNCTIONAL AND PRODUCT DEPARTMENTATION DISTINGUISHED The major departments of an organization are established by top-management. Supervisors are only concerned with activities within their own areas of supervision. Nevertheless, they are challenged by the need to departmentalize within their areas from time to time The criterion used by top-level managers when they define the major departments is the same as that used by supervisors when they are faced with the challenge to departmentalize their areas. Departmentation is basically done according to function, products or services, territory, customer, process and equipment, time, or matrix design. Here, we will discuss and distinguish functional departmentation and product departmentation. Functional departmentation groups activities by function i.e. by the jobs to be done. It is consistent with the idea of specialization and division of work. It places activities that are alike or similar together in one department and under a single chain of command. For example, word processing, data-processing, and printing services may be grouped together into a computer services department; sales and advertising may be grouped together into a marketing department, etc. Functional departmentation is the most widely used form of departmentation. Functional departmentation is a natural and logical way of arranging activities. It takes advantage of occupational specialization by placing together jobs and tasks that are performed by people with the same kinds of training, experience and skills; and that need the same type of equipment and facilities. Functional departmentation also facilitates coordination since a supervisor is in charge of one major area of activity. Coordination will be easier this way than to have the similar functions performed in different departments under different supervisors as it is done in product departmentation. Product departmentation establishes each major product (or group of closely related products) in a product line as a relatively independent unit within the overall framework of the enterprise. For example, a beverage products company may divide its operations into alcoholic beverages department and non-alcoholic beverages department. As such there is no application of the principle of specialization since each department would comprise of people with different training and skills, and people of the same technical skills would be in different departments and

under different chains of command, as contrasted to functional departmentation. There is also little or no coordination at all among personnel of the same knowledge and skill that are placed in different departments. Considering the example of a beverages company, we would have quality control personnel in each department. This would be avoided if departmentation was by function.

Q5. (a)Distinguish between delegation and decentralization

Answer: Delegation (of authority) is the process a manager follows in dividing and assigning the work assigned to him among others so that he performs that part which only he, because of his unique organizational placement, can perform effectively. As contrasted from delegation, decentralization is the dispersal of authority throughout the organization.It is the systematic delegation to the lowest levels possible of all authority except that which can only be exercised at central points. From the above definitions, the following distinctions can be drawn between delegation and decentralization: i. Delegation means temporary transfer of authority from one individual to another while decentralization means diffusion of authority throughout the organization. Decentralization is the process of transference of authority. It is the end result which is achieved when delegation is systematically repeated up to the lowest level. Delegation denotes relationship between a superior and a subordinate while decentralisation denotes relationship between the top management and various departments or divisions. Delegation is always essential for performance managerial activities while decentralization is optional as top management may or may not disperse authority. Delegation can take place between two individuals and be a complete process, while decentralization is completed only when the fullest possible delegation is made at all levels of the organization. Delegation is a technique for management while decentralization is a philosophy of management. In delegation, the delegator exercises control over the subordinates to whom authority is delegated. In decentralization, management may delegate the control to departmental heads. Delegation of authority can take place without decentralization, but decentralization cannot take place without delegation.

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Q5. (b)Explain in brief the significance of staffing.

Answer: Staffing is the process of filling all positions in the organisation with adequate and qualified personnel. Staffing consists of manpower planning, recruitment, selection, training, compensation, integration and maintenance of employees. According to Koontz and ODonnell, The managerial function of staffing involves manning the organizational structure through proper and effective selection, appraisal and development of personnel to fill the roles designed into the structure. Staffing is significant to an organisation for the following reasons: 1. It provides human resources For all other resources of capital and raw-materials and even other people in an organization to be put to useful application it requires the most vital of assets human resources, because it is the people who make other resources (and other people) get to work. 2. For Filling organisational positions With increasing competition for human resources, the cost of acquiring them has increased tremendously thereby necessitating systematic staffing so that the organization can fill its various positions with good quality personnel. 3. For Development of competencies The filling of the various positions in an organisation is necessary but it is not exclusively sufficient for staffing. There should also be the development of competencies among personnel because of changing nature of the job profile. 4. For retention of personnel It would be detrimental for an organisation to be acquiring and developing personnel, and then be losing them out to other organisations. Thus retention of personnel is an equally significant aspect of staffing. 5. For enhancement productivity Staffing facilitates discovery of competent and qualified personnel to fill various positions in the organizations thereby enhancing productivity by placing the right people on the right jobs. 6. For the development of the workforce Staffing is concerned with the placement, growth and development of all those members of the organization whose function is to get the things done through their own and other peoples efforts. It reinforces the workforce through training and development programmes.

ASSIGNMENT B Q1. Compare Maslows Need Hierarchy theory with that of Herzbergs Two factor theory.

Answer:
INTRODUCTION

A H Maslow and Frederick Herzberg have each come up with general theories which can be used to understand motivational needs of employees based upon identifying and classifying human needs. Before we are able to compare the two theories, let us take a closer look at each of them separately and try to understand what each of the theories is really based on. MASLOWS NEED HIERARCHY THEORY Maslows hierarchy of needs theory is based on the premise that the behavior of an individual at a particular moment is determined by his strongest need. It further claims that the needs have priorities, as such, when the more basic needs are satisfied, an individual seeks to satisfy the higher needs. According to A.H. Maslow, human needs are arranged into the following hierarchy in ascending order: physiological needs, safety and security needs, social needs, ego or esteem needs, and selfactualization needs. HERZBERGS TWO-FACTOR THEORY According to Herzbergs motivation hygiene theory or two-factor theory, needs priority are related to types of behavior of individuals. This behavior is either directed towards achieving certain desirable positive goals or towards avoiding other undesirable, negative consequences. Herzberg conducted a study after which he concluded that there are two categories of needs essentially independent of each other affecting behaviour in different ways. He found that there are some job conditions which he called maintenance or hygiene factors which operate primarily to dissatisfy employees when the conditions are absent, however, their presence does not motivate them in a strong way. Another set of job conditions which he called motivational factors operates primarily to build strong motivation and high job satisfaction, but their absence rarely proves strongly dissatisfying. According to Herzberg, there are ten maintenance or hygiene factors, namely: company policy and administration, technical supervision, interpersonal relationship with supervisors, interpersonal relationship with peers, interpersonal relationship with subordinates, salary, job security, personal life, working conditions and status. These do not make the job itself but they are related to conditions under which a job is performed. For employee motivation, Herzberg stipulated six motivational factors that are capable of having a positive effect on job satisfaction and often result in an increase in ones total output. These are: achievements, recognition, advancement, work itself, possibility of growth, and responsibility. COMPARISON OF MASLOWS AND HERZBERG S THEORIES OF MOTIVATION Both Maslow and Frederick Herzberg have come up with content theories of motivation, which have attempted to identify and classify human needs. It is clearly observable that most of the maintenance factors of Herzberg come under low level needs of Maslow. Maslow says that when the lower needs are satisfied, they stop being motivators and what Herzberg says is the same in the sense that they are maintenance factors.

The difference is that Maslow emphasizes that any unsatisfied need, whether lower or higher level, will motivate people while Herzberg clearly identifies certain needs and call them maintenance factors which can never motivate people. Thus Herzbergs needs fall in one or the other category of Maslows hierarchy of needs as shown in the figure below:

Figure B1: Comparison of Maslows Need Hierarchy and Herzbergs Two-Factor theories The figure shows that Maslows self actualization and all but two (status and technical aspects of supervision) esteem needs are regarded by Herzberg as motivational factors. All the Maslows social, safety, and physiological needs are regarded by Herzberg as maintenance or hygiene factors. However, there are some other noteworthy differences between the theories of Maslow and Herzberg: 1. Nature of theory Maslows theory is descriptive in nature and based on long experience of human needs. It does not make any suggestion on how to deal with motivational problems. Herzbergs theory is prescriptive in nature and is based on actual information collected through interviewing 200 engineers and accountants. It suggests job enrichment to deal with motivational problems. 2. Order of needs

Maslow thinks that human needs have a priority and therefore arranges them in a hierarchy in which higher order needs become significant only when the lower order needs are reasonably satisfied.

According to Herzberg there is no such ordering of needs all needs are operational at all times.

3. Motivators According to Maslow theory any need can be a motivator if it is relatively unsatisfied. However, according to Herzbergs theory only higher order needs are motivators.

4. Emphasis Maslows theory gives much emphasis on human needs whereas Herzberg talks of goals and incentives or rewards which satisfy those needs. Maslow focuses on what impels individuals to behave as he does, whereas Herzberg talks about what makes an individual satisfied or dissatisfied with his job.

5. Essence of theory What Maslows theory implies is that unsatisfied needs can be used to energise behavior which would in turn cause performance. He thinks that satisfaction of any satisfied need is motivating to the individual.

Herzbergs theory implies that gratified needs cause performance. He thinks that satisfaction of only intrinsic or job content needs, i.e. growth, achievement, recognition, etc. has a motivating effect on the individual. On the other hand, satisfaction of extrinsic or job context needs, i.e. company policy, pay, status, working conditions, etc. has no motivating effect it only creates conditions for the satisfaction of motivating needs.

6. Scope and Applicability Maslows hierarchy of needs theory deals with general motivation and applies to all people in the society whereas Herzbergs two-factor theory deals with work related motivation and applies to people in organisations.

Further, even if we go into the organisation, Maslows theory takes a general view of motivational problems of all workers it has universal applicability i.e. can be applied to

all kinds of employees. Herzbergs theory takes a micro-view and deals with workoriented motivational problems of professional workers. Thus it has limited applicability it is mostly applicable to white-collar or professional jobs.

7. Position on Financial Rewards Maslows theory states that financial rewards can motivate behavior and as such is suitable for application in poor and developing countries where money is still a very important motivating factor. According to Herzbergs theory financial rewards can not motivate behavior and as such is applicable for rich countries where money is no longer a very important motivating factor. Q2.Critically examine Mc. Gregors Theory X and Theory Y. Answer: CRITICAL EXAMINATION OF MC.GREGORS THEORY X AND THEORY Y. Theory X and Theory Y were proposed by Douglas McGregor for application in employee motivation. These theories are based on the premise that management's role is to assemble the factors of production, including people, for the economic benefit of the firm. Theory X assumes that the average person, dislikes and attempts to avoid work; has no ambition, wants no responsibility, and would rather follow than lead; is self-centred and therefore does not care about organizational goals; resists change; and is nave and gullible and not particularly intelligent. Thus, in essence, theory X assumes that people work only for money and security. However, according to Theory Y, employees can best be motivated through higher-level needs of esteem and self-actualization since these are continuing needs that can never be completely satisfied. Theory Y assumes that: work can be as natural as play and rest; people will be self-directed to meet their work objectives if they are committed to them; people will be committed to their objectives if rewards are in place that address higher needs such as self-fulfillment; and under these conditions, people will seek responsibility. It also holds as true that most people can handle responsibility because creativity and ingenuity are common in the population. Under Theory X, management approaches can range from a hard approach that relies on coercion, implicit threats, close supervision, and tight controls, etc., to a soft approach that is permissive and seek harmony with the hope that in return employees will cooperate when asked to do so. The optimal management approach under Theory X probably would be somewhere between these extremes. The hard approach would result in hostility, purposely low-output, and hard-line union demands while the soft approach would result in ever-increasing requests for more incentives in exchange for ever-decreasing work output. McGregor asserts, however, that neither approach is appropriate - for the assumptions of Theory X are faulty.

According to the assumptions of Theory Y, it is possible to align personal goals with organizational goals using the employee's own quest for fulfillment as the motivator. McGregor recognized that some people may not have reached the level of maturity assumed by Theory Y and therefore, might need tighter controls that can be relaxed as the employee develops thus Theory Y does not imply soft approach on employees. Theory X implies that only incentives can satisfy employees' lower needs, and once those needs are satisfied the source of motivation is lost. Thus the application of Theory X in employee motivation would not allow for the satisfaction of higher-level needs. The only way to satisfy their higher level needs in their work is by seeking more compensation, so that they will focus on monetary rewards. While money may not be the most effective way to self-fulfillment, in a Theory X environment it may be the only way which is not totally effective in its own. Under Theory X, people use work to satisfy their lower needs, and seek to satisfy their higher needs in their leisure time. However, it is in satisfying their higher needs that employees can be most productive. This implies that the application of Theory X would not motivate employees to productive levels in their work. Thus Theory X is not effective because it relies on lower needs for motivation, but in modern society those needs already are satisfied and thus no longer are motivators. In this situation, one would expect employees to dislike their work, avoid responsibility, have no interest in organizational goals, resist change, etc. This makes Theory X obsolete since employees do not behave as such. If the assumptions of Theory Y hold, making it possible to synchronise personal goals and organizational goals through the employee's own quest for fulfillment as the motivator, management can harness the motivational energies of employees through the processes of decentralization and delegation; job enlargement; participative management; and performance appraisals. If the processes outlined above are properly implemented, such an environment would create a high level of motivation as employees would work to satisfy their higher level personal needs through their jobs.

Q3.Why is managing diversity significant? Explain. Answer: According to Fred Luthans, diversity is the presence of members of different ages, genders, ethnic groups, and/or educational backgrounds in an organization. Management of diversity is significant since the composition of the workforce has changed over the past few years and no organization can avoid it. To be precise, management of diversity is a requirement and necessity for every organization for the following reasons: 1. Change in demographic structure of the workforce: the composition of the workforce has changed over the years. The modern workforce includes women, minorities, older employees and highly educated people in large numbers. This is due to increase in skills and education levels across the entire population. 2. Government legislation: legislation in many countries has made it binding on organizations to provide equal employment opportunity for all employees.

3. Improves competitiveness of firms: the firms that recruit people from diverse backgrounds generally have a talented and capable workforce, and are most likely to gain a reputation as fair employers and are more likely to attract competent employees. 4. Globalization of firms: when an organization goes multinational, managers and technical personnel who go to a foreign country to put an organizational system in place will meet people from diverse cultures, customs, and social norms an will have to change their leadership styles, communication patterns, etc. i.e. they must be able to manage diversity. Thus it will be easy for organisations which value and manage diversity well to go multinational or global. Furthermore, better management of diversity has the following advantages: It reduces costs

It improves staffing It improves marketing It promotes creativity It facilitates problem solving It increases flexibility

Thus, management of diversity is not only significant for purposes of the demographic structure of the workforce, legislation, globalization and improvement of competitiveness of the firm but also for the reduction of costs, improvement of staffing, improvement of marketing functions, promotion of creativity and skill, facilitation of problem solving, and increase in flexibility.

CASE STUDY I expect every manager in my department to act completely rational in every decision he makes , declared Ishwar Dayal, Director Marketing in Overseas Plastics Ltd.. Everyone of us , irrespective of his position in the organisation has to be a professional rationalist and I expect him not only to know what he is doing and why he is doing it , but also to be right in his decisions. I know someone has said that a good manager needs to be right only in more than half of his decisions. But that is not good enough for me. However , one may be excused for an occasional mistake especially on matters beyond ones control but no one can be pardoned for acting irrationally. I endorse your views , Sir , said Indu Alluwalia , his Advertising Manager , and I always try to be rational and logical in my decisions but would you mind helping me to be sure of this by explaining what rational decisions are? Read and analyse the above case and answer the following questions : (A) Explain , how Mr. Ishwar Dayal might describe what is involved in making rational decisions. (B) If Ms. Indu Alluwalia then declares that there is no way that she can be completely rational , what would you suggest as a reply ?

Answers:

(A) RATIONAL DECISION MAKING PROCESS

In answering his Advertising Manager, Mr Ishwar Dayal might first of all need to explain the meaning of the word rational, which according to the sixth edition of Oxford Advanced Learners Dictionary of Current English by A.S. Hornby, is an adjective used to refer to behavior or idea, etc. based on reason rather than emotions; or to refer to a person who is able to think clearly and make decisions based on reason rather than emotions.

According to Haynes and Massie, Decision making is a process of selection from a set of alternative courses of action (that) which is thought to fulfill the objective of the decision problem more satisfactorily than others.

With reference to the above definitions, a rational decision is therefore the best decision or course of action chosen from among available alternatives to achieve a desired goal with all due prudence and in the best possible way any logically and scientifically thinking person would do, by studying the available and appropriate facts basing on reason, and excluding all emotional or personal attachment to the subject matter. As guidance to the rational decision making process, the Director for Marketing might give the following steps that when followed by decision makers will ascertain the rationality of their decisions: 1. Identification of decision problem This is the recognition of a problem that requires a decision. The problem may arise due to various reasons like discrepancies between present and desired state of affairs, changes in the business or working environment leading to threats or opportunities, etc.

For managers to identify problems quickly to have ample time for rational decision making, they must continuously monitor the decision-making environment. This requires imagination capabilities, experience and good judgment. 2. Diagnosis of the Problem This involves analyzing the problem in terms of its elements, its magnitude, its urgency, its causes, and its relation with other problems in order to know exactly what the real problem is. For correct diagnosis, a manager must acquire all the relevant facts and analyze them critically. This will bring out the real causes or sources of the problem. In diagnosing the problem managers must be careful not to mistake symptoms for real problems. For example, management might mistake incompetence or negligence in a technician and start disciplinary proceedings when the real problem is lack of training or staff development to keep up with advances in technology. 3. Discovering Alternatives At this stage we seek out for the various possible alternatives. Managers should not rush for the first apparent feasible solution so as to solve the problem quickly there might be some better alternatives. But he has to bear in mind the time and cost limitations as he is seeking out the feasible solutions. Careful and critical exploration around the problem will enable collection and analysis of relevant information which will in turn ensure identification of the best alternatives. Evaluation of Alternatives This is the assessment of pros and cons of each decision alternative. The the positive and negative consequences of each alternative are measured systematically. Management must balance the costs against possible benefits (i.e. risks versus returns) . Management must set some systematic and scientific criteria against which the alternatives can be evaluated. According to Peter Drucker, the following criteria can be used to weigh the alternative courses of action: (i) degree of risk involved in each alternative (ii) cost, time and effort involved in each alternative (iii) the urgency problem, and (iv)resources available with the organization. 5. Selection of the Best Alternative After evaluation the alternative that will maximize the results or returns under given conditions is selected. The choice of this optimum alternative is the most critical point in decision making it is the final determinant of the rationality of the decision to be made. The ability to select the best course of action from several possible alternatives separates the successful managers from the unsuccessful ones. Past experience, experimentation research and analysis are useful in selecting the best alternative.1 Implementation and follow-up: Once the optimum alternative is selected it has to be put to action or implemented and the following steps are involved in process: (i) Communication of the decision to those responsible for its implementation. (ii) Acceptance of the decision by those responsible for implementation. (iii)Establishment of procedures and time sequence for implementation.

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(iv)Allocation of necessary resources and assignment of responsibility for specific tasks to individuals. The implementation of the decision needs to be constantly monitored and its consequences analysed by periodic progress reports.
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Business Organisation and Management, Geeta Mishra. If the reports indicate unfavourable consequences then variations should be applied to the decision or its implementation.

Following the steps and methods outlined above in decision making will ensure that managers do always - and in 100 percent of the cases, as emphasized by Mr. Ishwar Dayal make rational decision with all certainty and confidence. (C) RESPONSE TO MS. INDU ALLUWALIA DECLARATION Ms. Indu Alluwalia has declared that there is no way she can be completely rational - but that is very far from the truth. Rational decision making is a scientific process and scientific ways are always exact. For decision making to be scientific and therefore rational, Ms. Indu Alluwalia has to know, the steps outlined above have to be followed. The steps above, when applied correctly and appropriately, will ascertain the rationality of decisions. Ofcourse, as the Director for Marketing pointed out, one may be excused for an occasional mistake as a matter of erroneous application of variables in the process, but that does not mean he could not and does not act rationally. As in statistical methods, the more the samples assessed the more accurate the analysis and the better the prediction of the behaviour of the remainder of the population or future values of variables. In the same way, as one strives to always make rational decisions by applying the necessary steps for rational decision making, and he occasionally makes errors, he will eventually come to learn and be able to detect possible sources of error with ease, from experience. Thus in the end, he will be able to be rational when making decisions. The last step in the process above (implementation and follow-up) prescribes that the implementation of the decision needs to be constantly monitored and its consequences analysed by periodic progress reports. It further prescribes that if the reports indicate unfavourable consequences then variations should be applied to the decision or its implementation. This will ensure that the ultimate decision or mode of implementation reduces the effect of errors and therefore make the decision atleast very close to being rational. Therefore, the more the decisions that one makes by application of the process of rational decision making, the more accurate she will be or the less errors she will make, and eventually she will be a professional rationalist. As a conclusive advise to Ms. Indu Alluwalia, I would tell her to go and apply correctly, and be assured of becoming a professional rationalist.

ASSIGNMENT C Multiple Choice Questions

Q-1- Which of the following is a middle level function? a) Reviewing daily and weekly production or sales report. b) Selecting board members. c) Supervising day-to-day operations. d) Evaluating the all-round performance of various department. Q-2- The process of designing and maintaining an environment in which individuals working together in groups, efficiently accomplish specific aims is termed as_______. a) Administration. b) Management. c) Organization. d) Staffing. Q-3- The analysis and measurement of actual operations against the established standards developed during the planning process is called__________. a) Controlling. b) Monitoring. c) Leading. d) Organizing. Q-4- Which of the following theories ignored the concepts of leadership, motivation, power, and informal relations? a) Pre-Classical. b) Classical. c) Behavioral. d) Modern. Q-5- __________ Managers deals with the actual operation of an organizations units. a) First-level. b) Top-level. c) Middle-level. d) Link-level. Q-6- Which of the following skills is important at all levels of an organization? a) Conceptual. b) Design. c) Human. d) Technical. Q-7- Under which system does a workers wage increases in proportion to the output produced? a) Time-and-motion study. b) Piece-rate incentive system. c) Micromotion study. d) Gantt chart. Q-8- Decreasing the role of subordinates in decision-making is known as__________.

a) b) c) d)

Decentralization. Stabilization. Centralization. Organization.

Q-9- The two major managerial practices that are emerged from Taylors approach to management are the piece-rate incentive system and __________________ a) Time and motion study b) Work study c) Fatigue study d) Organization study Q-10- Weber coined the term ________ to identify large organizations tat operated on a rational basis . a) Autocracy b) Dictatorship c) Bureaucracy d) Diplomacy Q-11- A company has the following managers-Manager(Production),Manager(Finance), Manager(Marketing).This is an example for departmentation by: (a) Functions (b) Products (c) Territory Q-12 -..consists of a set of activities aimed at attracting and selecting individuals for positions in a way that will facilitate the achievement of organizational goals (a)Recruitment (b) Selection (c)Staffing Q-13 - . is the process of identifying and attempting to attract candidates who are capable of effectively filling job vacancies. (a) Recruitment (b) Staffing (c) Selection

Q-14 - ...involves choosing the candidates who best meet the qualifications and have the
greatest aptitude for the job. (a) Staffing (b) Recruitment (c) Selection

Q-15- A virtual organizational structure can be defined as:

a) a virtual structure of company functions which come together to serve a specific purpose and then disappear. b) a temporary network of company functions which come together to serve a specific purpose and then disappear. c) a non-permanent form of organization which encourages the growth of regional groupings, thus allowing a degree of autonomy. d) an organizational form based on a functional corporate structure with a mainly ' domestic' focus and a small international division. Q-16- There are many types of organizational forms. Which of the following is not a type of organization form? a) Function b) Geographical c) Matrix d) Subsidiary Q-17- Which one of the following is not a type of single-out plan? a) Programs. b) Policies. c) Budgets d) Projects. Q-18- Which one of the following is the first step in the planning process? a) Establishing objectives. b) Analyzing opportunities. c) Determining planning premises. d) Identifying alternatives. Q-19- Which of the following is not the limitations of planning? a) Time consuming process. b) Expensive. c) Flexible. d) Lack of accurate information. Q-20- When developing a contingency plan, manager should not try to_____________. a) Increase interruption to the operations of the business. b) Speed up the restoration of services. c) Reduce financial losses. d) Resume critical operation within a specified time after a disaster. Q-21- Te open systems approach to planning is effective as it leads to____________ in planning. a) Rigidity. b) Flexibility. c) Inelasticity. d) Invariability.

Q-22- The management function tat involves setting goals and deciding how best to achieve tem is known as___________. a) Planning.

b) Organizing c) Leading. d) Controlling. Q-23- Generally `strategic plan` is an important aspect of the jobs of________ managers. a) Operation-level. b) Middle- Level. c) Top-level. d) At all levels Q-24-There is no universal definition of Knowledge Management. Nonetheless, Knowledge Management can be described as the involvement of: a) Ideas b) Human mind c) Time horizon d) Process Q-25-Adopting Knowledge Management can lead to sustainable competitive advantage. Which of the following statement is not true: a) We view Knowledge Management strategy as an exclusive part of the organization b) Our top priority is to treat people like assets rather than costs c) We believe that Knowledge Management is contributing to stronger relationships among partners/suppliers/customers and the organization d) It creates strategic advantage by enabling an innovative strategy that would not otherwise be possible Q-26-The concept of "ba" refers to what? a) The creation of knowledge b) Transformation of information c) Conversion of data d) Management of key human resources Q-27-The main barrier to implementing Knowledge Management within an organization is: a) The willingness to initiate change. b) Weak leadership and commitment. c) IT infrastructure. d) The lack of clear process and procedures. Q-28- The importance of assessing Knowledge Management as part of the overall organizational performance measurement process is attributed to: a) the significance of intellectual capital/asset. b) individual accountability. c) changes in business strategy. d) contemporary accounting reporting standards.

Q-29- The 'people portfolio' of an organization can describe its people (i.e. knowledge owners) based on their level of expertise and potential for growth in the organization-specific Knowledge Management skill/expert areas. Four types or states of 'knowledge owners' can be identified, what are these?

a) 'key players', 'rising stars', 'core competent' and 'redundancy' b) 'key players'. 'rising stars', 'core competent' and 'deadwood' c) 'core assets', 'rising stars', 'core competent' and 'deadwood' d) 'core assets', 'rising stars', 'core competent' and 'redundancy' Q-30-Which of the following is not a strategic advantage of successful Knowledge Management? a) Making possible execution of an important but common strategy throughout an industry b) Adding knowledge to the products and services they offer for sale c) Increasing the investment in information technology therefore expanding its capacity to process data d) Using knowledge and Knowledge Management to perform non-strategic processes exceptionally well Q-31-Which of the following is not the means by which an organization can use to measure or value knowledge assets? a) Further external and internal investment b) Innovation and continuous learning c) Improvement of current practices aiming for best practice d) Factors that influence competitors' global strategies Q-32- The necessity of developing KMIS derives from: a) the need of exploring data and information. b) the influx of knowledge IT vendors and products. c) the need to improve the quality and efficiency of the organization. d) the shortfall of computerized databases. Q-33- In general, there are two distinctive approaches which can be adopted to implement a knowledge management system. The first is the creation of a separate and distinctive knowledge management unit within the organization. What is the second? a) Building a knowledge management strategy as an integral part of the business strategy b) Developing an inter-organizational partnership with all suppliers c) Formulating a knowledge management plan that involves a major organizational restructuring d) Developing an integrative IT strategy to improve communications between key knowledge workers Q-34- More direction is required at _________ level. a) Top b) Middle c) Lower d) Directors.

Q-35- ___________ is the result of the business policies. a) Formal organization. b) Informal organization. c) Line organization.

d) Staff organization. Q-36- In case of line organization authorities are_____________. a) Centralised. b) Decentralised. c) Equally distributed. d) None of the above. Q-37- Supervisors are link between___________ a) Directors and managers. b) Workers and middle level managers. c) Directors and workers. d) Workers and workers. Q-38- The supervisor has to ___________ under his control. a) Plan the work. b) Organize the work. c) Control the work. d) All the above. Q-39- Controlling is the __________ function of the management. a) First b) Last c) Both (a) and (b) d) Neither (a) nor (b). Q-40 In business enterprises controlling is required __________ a) While establishing business. b) In the beginning of the year. c) At the end of the year. d) Continuously.

References: Agarwal R. D., Organisation and Management Jain N. K., Organisational Behaviour Mishra Geeta, Business Organisation and Management