PRINCIPLE AND PRACTICE OF MANAGEMENT
- LONG QUESTIONS -
Ques. 1. - Discuss the 14 principles of Henry Fayol?
Ans. – Henry Fayol is known as Father of Administrative Management. He was born in 1841 in France. He contributed 14 management principles on the basis of his long experience as a worker.
14 Management Principles
1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interests
7. Remuneration
8. Centralisation
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Esprit de corps
1. Division of work :- It requires that every job and its part should be identified as separate work & entrusted to the most suited person. The quality & quantity of production will improve if every job is assigned to the right person. According to Henry Fayol under the division of work. ― The worker always on the same post, where the manager always concerned with the same matters.
2. Authority and responsibility : - Authority & responsibility are co-existing. If authority is granted to a person, he should also be made responsible. In the same way, if any body is made responsible for any job, he should also have the concern authority.
3. Discipline: - According to Fayol discipline means obedience to the rules of the organization, on the part of both managers and sub-ordinates-including outward marks of respect shown by sub-ordinates towards superiors.
4. Unity of command :- One man one boss.
According to Fayol every employee should receive order and instruction from one boss at a time and he should be responsible & accountable to him only.
5. Unity of direction :- One man one principle. It means that group effort on a particular plan be led and directed by a single person.
6. Subordination of individual interests :- Employee should surrender there on interest of there personal interest before the general interest of the enterprise. Sometimes the employee due to their ignorance, selfishness, laziness, carelessness, and emotional pleasure overlook the interest of the organization. This attitude proves to be very harmful to the enterprise.
7. Remuneration :- According to Fayol, wagerates & methods of their payment should be fair, proper & satisfactory. Both employers & employee should agree to it.
8. Centralisation :- This is the matter of degree depending on the condition of the business and the quality of its personnel. It refers to reservation of decision making authority at top levels of management.
9. Scalar chain: - It is the fore-runner of the hierarchy principle under which authority flows from the top to the bottom level managerial positions.
10. Order :- According to Fayol, there should be proper systematic and orderly arrangement of physical & social factors. Physical factors include land, raw material, tools, and equipment where social factors mean employees.
11. Equity: - The principal of equity should be followed at every level. There should not be discrimination as regard, cast, sex & regions.
12. Stability of tenure of personnel: - Production is being a team work. An efficient management builds a team of good worker.
13. Initiative: - The success management provides an opportunity to its employees to suggest their new ideas, experience and more convenient method of work.
14. Esprit de corps :- (Co-operation) In order to achieve the best possible result, individual & group effort are to be effectively integrated and coordinated.
Ques. 2. - Write a note on :
i) Contribution of Rensis Likert
ii) Maslow‘s Need Hierarchy theory
Ans. -
Dr.likert has conducted much reaserch on human behaviour within organizations, particularly in the industrial situation. he has examined different types of organizations and leadership styles, and he asserts that to achieve maximum profitability, good labor relations high productivity, every organization must make optimum use of their human assets.
Likert had identified 4 main systems:--
1) exploitive- authoritative system------
Decisions are imposed on employees.,
use of threats
Top levels have grater responsibility.
2) benevolent authoritative system-------
master-servant trust,
use of rewards,
Little communication.
Little teamwork.
3) consultative system------
substantial but not full trust on employees,
use of rewards and involvement,
Moderate amount of teamwork.
4) participative – group system-----
complete confidence on employees,
use economic rewards based on goals,
all level feel responsibility,
Much communication.
ii) Hierarchy of needs theory
It is developed by Abraham Maslow. Maslow hypothesized that within every human being, there exists a hierarchy of five needs:
1. Physiological: Includes hunger, thirst, shelter etc.
2. Safety: Security and protection from physical and emotional harm.
3. Social: Affection, belongingness, acceptance and friendship.
4. Esteem: Internal factors such as self-respect, autonomy, achievement and external factors such as status, recognition and attention.
5. Self-actualization: Drive to become what one is capable of becoming includes growth, achieving one‘s potential and self-fulfillment.
As each of this needs becomes substantially satisfied, the next needs becomes dominant. Maslow divide this five needs into higher and lower order needs.
Lower-order needs -
Physiological, safety, and social needs.
Desires for physical and social well being.
Higher-order needs -
Esteem and self-actualization needs.
Desire for psychological growth and development
Ques. 3. - Explain the decision making and steps involved in decision making process?
Ans. - ― Decision-making is the process of selecting the best alternative course of action; from among a number of alternatives given to management or developed by it- after carefully and critically examining alternative‖
Steps involved in decision making:-
Definition of the decision-making problem- The first step in decision making process is to define decision making problem i.e. Discrepancies between a current state of condition and what is desired.
Collection of data – A decision is as good as adequacy and quality of data is on which it is based. Accordingly, management should proceed to collect necessary data, and for these services of MIS is very useful.
Development of alternatives – This step is usually guided by SWOT analysis.
Selection of the best alternative- Selection of best alternatives is based on ,
1. Experience 2. Experimentation
Implementation of the decision – A decision is remains only a ―paper decision‖ unless and until it is put into practice. Implementation of decision requires following managerial aspects:
- communication
- making all resources and facilities
- motivating
- exercising general supervision.
-
Follow-up or feedback action – After decision has been put into practice, the management must watch consequences- this is follow up or feedback aspect of decision making process. In the view of feedback obtained from implementation of decision, necessary modification can be made in the decision.
Ques. 4. – What is Downsizing? What are the problems with Downsizing?
Ans. – Downsizing –
• The intentional reduction in workforce size with the goal of improving organizational efficiency or effectiveness.
• Downsizing is often accompanied by reducing horizontal or vertical complexity.
• Self-managed teams can act as substitutes for a level of management.
• Horizontally, functions can be combined or removed by contracting them out.
Problems with Downsizing –
• Increased formalization and centralization that can have a negative effect on customers or clients.
• Removal of departments and positions without first thinking about the work that needs to be done and who should do it.
• The removal of management levels without considering the implications for job design and workload.
• Traditional guards against unethical activities might be removed.
• Low morale, reduced productivity, and distrust of management.
• Downsizing does not result in cost reductions in the long run or improvements in productivity.
• Its impact on structure and morale must be anticipated and managed to have positive consequences.
Ques. 5. - Define delegation of authority? What are problems in delegation? Explain the principles of effective delegation?
Ans. - Delegation is a process by which a manager assigns his authority to his subordinates to perform certain tasks or activities assigned to them. Thus it involves shifting of decision making authority from one organizational level to another lower level.
Problems -
1. Some managers believe in fallacy.
2. Managers lacking required confidence & trust in subordinates might not be interested in delegating the authority.
3. Low confidence and more overconfidence amongst the managers may create a bottleneck in a process of delegating.
4. Fear amongst managers that they will lose status and position.
5. Poor examples set by superior who do not delegate may discourage the managers to delegate further.
Principles -
1. Principle of delegation by result expected.
2. Principle of functional definition.
3. Principle of scalar principle.
4. Principle of unity of command.
5. Principle of parity of authority and responsibility.
6. Principle of absoluteness of responsibility.
7. Principle of communication.
8. Principle of clarity of limits of delegation.
Ques. 6. - Explain BCG model in detail?
Ans. - Two important portfolio management techniques
1. The BCG (Boston Consulting Group) Matrix
2. The GE (General Electric) Business Screen
1. The BCG (Boston Consulting Group) Matrix -
- A method of evaluating businesses relative to the growth rate of their market and the organization‘s share of the market.
- The matrix classifies the types of businesses that a diversified organization can engage as:
Dogs have small market shares and no growth prospects. So they neither generate nor consume a large amount of cash.
Cash cows have large shares of mature markets and low growth rate, thus generate more cash then they consume. Cash cows provide cash to turn question mark into market leaders, to cover administrative costs of the company, to fund research and development, and to pay dividends to shareholders.
Question marks are growing rapidly and thus consume more cash, but because of low market shares do not generate much cash. A question mark has potential to gain market share and become a star, and eventually cash cow when market growth slows.
Stars have large market shares of rapidly growing markets so they generate more cash, and also consume large amounts of cash because of high growth rate. If a star can maintain its large market share, it will become a cash cow when a market growth rate declines.
- LONG QUESTIONS -
Ques. 1. - Discuss the 14 principles of Henry Fayol?
Ans. – Henry Fayol is known as Father of Administrative Management. He was born in 1841 in France. He contributed 14 management principles on the basis of his long experience as a worker.
14 Management Principles
1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interests
7. Remuneration
8. Centralisation
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Esprit de corps
1. Division of work :- It requires that every job and its part should be identified as separate work & entrusted to the most suited person. The quality & quantity of production will improve if every job is assigned to the right person. According to Henry Fayol under the division of work. ― The worker always on the same post, where the manager always concerned with the same matters.
2. Authority and responsibility : - Authority & responsibility are co-existing. If authority is granted to a person, he should also be made responsible. In the same way, if any body is made responsible for any job, he should also have the concern authority.
3. Discipline: - According to Fayol discipline means obedience to the rules of the organization, on the part of both managers and sub-ordinates-including outward marks of respect shown by sub-ordinates towards superiors.
4. Unity of command :- One man one boss.
According to Fayol every employee should receive order and instruction from one boss at a time and he should be responsible & accountable to him only.
5. Unity of direction :- One man one principle. It means that group effort on a particular plan be led and directed by a single person.
6. Subordination of individual interests :- Employee should surrender there on interest of there personal interest before the general interest of the enterprise. Sometimes the employee due to their ignorance, selfishness, laziness, carelessness, and emotional pleasure overlook the interest of the organization. This attitude proves to be very harmful to the enterprise.
7. Remuneration :- According to Fayol, wagerates & methods of their payment should be fair, proper & satisfactory. Both employers & employee should agree to it.
8. Centralisation :- This is the matter of degree depending on the condition of the business and the quality of its personnel. It refers to reservation of decision making authority at top levels of management.
9. Scalar chain: - It is the fore-runner of the hierarchy principle under which authority flows from the top to the bottom level managerial positions.
10. Order :- According to Fayol, there should be proper systematic and orderly arrangement of physical & social factors. Physical factors include land, raw material, tools, and equipment where social factors mean employees.
11. Equity: - The principal of equity should be followed at every level. There should not be discrimination as regard, cast, sex & regions.
12. Stability of tenure of personnel: - Production is being a team work. An efficient management builds a team of good worker.
13. Initiative: - The success management provides an opportunity to its employees to suggest their new ideas, experience and more convenient method of work.
14. Esprit de corps :- (Co-operation) In order to achieve the best possible result, individual & group effort are to be effectively integrated and coordinated.
Ques. 2. - Write a note on :
i) Contribution of Rensis Likert
ii) Maslow‘s Need Hierarchy theory
Ans. -
Dr.likert has conducted much reaserch on human behaviour within organizations, particularly in the industrial situation. he has examined different types of organizations and leadership styles, and he asserts that to achieve maximum profitability, good labor relations high productivity, every organization must make optimum use of their human assets.
Likert had identified 4 main systems:--
1) exploitive- authoritative system------
Decisions are imposed on employees.,
use of threats
Top levels have grater responsibility.
2) benevolent authoritative system-------
master-servant trust,
use of rewards,
Little communication.
Little teamwork.
3) consultative system------
substantial but not full trust on employees,
use of rewards and involvement,
Moderate amount of teamwork.
4) participative – group system-----
complete confidence on employees,
use economic rewards based on goals,
all level feel responsibility,
Much communication.
ii) Hierarchy of needs theory
It is developed by Abraham Maslow. Maslow hypothesized that within every human being, there exists a hierarchy of five needs:
1. Physiological: Includes hunger, thirst, shelter etc.
2. Safety: Security and protection from physical and emotional harm.
3. Social: Affection, belongingness, acceptance and friendship.
4. Esteem: Internal factors such as self-respect, autonomy, achievement and external factors such as status, recognition and attention.
5. Self-actualization: Drive to become what one is capable of becoming includes growth, achieving one‘s potential and self-fulfillment.
As each of this needs becomes substantially satisfied, the next needs becomes dominant. Maslow divide this five needs into higher and lower order needs.
Lower-order needs -
Physiological, safety, and social needs.
Desires for physical and social well being.
Higher-order needs -
Esteem and self-actualization needs.
Desire for psychological growth and development
Ques. 3. - Explain the decision making and steps involved in decision making process?
Ans. - ― Decision-making is the process of selecting the best alternative course of action; from among a number of alternatives given to management or developed by it- after carefully and critically examining alternative‖
Steps involved in decision making:-
Definition of the decision-making problem- The first step in decision making process is to define decision making problem i.e. Discrepancies between a current state of condition and what is desired.
Collection of data – A decision is as good as adequacy and quality of data is on which it is based. Accordingly, management should proceed to collect necessary data, and for these services of MIS is very useful.
Development of alternatives – This step is usually guided by SWOT analysis.
Selection of the best alternative- Selection of best alternatives is based on ,
1. Experience 2. Experimentation
Implementation of the decision – A decision is remains only a ―paper decision‖ unless and until it is put into practice. Implementation of decision requires following managerial aspects:
- communication
- making all resources and facilities
- motivating
- exercising general supervision.
-
Follow-up or feedback action – After decision has been put into practice, the management must watch consequences- this is follow up or feedback aspect of decision making process. In the view of feedback obtained from implementation of decision, necessary modification can be made in the decision.
Ques. 4. – What is Downsizing? What are the problems with Downsizing?
Ans. – Downsizing –
• The intentional reduction in workforce size with the goal of improving organizational efficiency or effectiveness.
• Downsizing is often accompanied by reducing horizontal or vertical complexity.
• Self-managed teams can act as substitutes for a level of management.
• Horizontally, functions can be combined or removed by contracting them out.
Problems with Downsizing –
• Increased formalization and centralization that can have a negative effect on customers or clients.
• Removal of departments and positions without first thinking about the work that needs to be done and who should do it.
• The removal of management levels without considering the implications for job design and workload.
• Traditional guards against unethical activities might be removed.
• Low morale, reduced productivity, and distrust of management.
• Downsizing does not result in cost reductions in the long run or improvements in productivity.
• Its impact on structure and morale must be anticipated and managed to have positive consequences.
Ques. 5. - Define delegation of authority? What are problems in delegation? Explain the principles of effective delegation?
Ans. - Delegation is a process by which a manager assigns his authority to his subordinates to perform certain tasks or activities assigned to them. Thus it involves shifting of decision making authority from one organizational level to another lower level.
Problems -
1. Some managers believe in fallacy.
2. Managers lacking required confidence & trust in subordinates might not be interested in delegating the authority.
3. Low confidence and more overconfidence amongst the managers may create a bottleneck in a process of delegating.
4. Fear amongst managers that they will lose status and position.
5. Poor examples set by superior who do not delegate may discourage the managers to delegate further.
Principles -
1. Principle of delegation by result expected.
2. Principle of functional definition.
3. Principle of scalar principle.
4. Principle of unity of command.
5. Principle of parity of authority and responsibility.
6. Principle of absoluteness of responsibility.
7. Principle of communication.
8. Principle of clarity of limits of delegation.
Ques. 6. - Explain BCG model in detail?
Ans. - Two important portfolio management techniques
1. The BCG (Boston Consulting Group) Matrix
2. The GE (General Electric) Business Screen
1. The BCG (Boston Consulting Group) Matrix -
- A method of evaluating businesses relative to the growth rate of their market and the organization‘s share of the market.
- The matrix classifies the types of businesses that a diversified organization can engage as:
Dogs have small market shares and no growth prospects. So they neither generate nor consume a large amount of cash.
Cash cows have large shares of mature markets and low growth rate, thus generate more cash then they consume. Cash cows provide cash to turn question mark into market leaders, to cover administrative costs of the company, to fund research and development, and to pay dividends to shareholders.
Question marks are growing rapidly and thus consume more cash, but because of low market shares do not generate much cash. A question mark has potential to gain market share and become a star, and eventually cash cow when market growth slows.
Stars have large market shares of rapidly growing markets so they generate more cash, and also consume large amounts of cash because of high growth rate. If a star can maintain its large market share, it will become a cash cow when a market growth rate declines.
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