MAHENDRA INSTITUTE OF TECHNOLOGY

(AUTONOMOUS)
End Semester UG Degree Examinations – April / May - 2022

SCHEME OF EVALUATION

Course Code & Title MG8591 - PRINCIPLES OF MANAGEMENT Sem: VI

Examination Date & Session Dept.: ECE

Q.No PART A Marks

List the scope of management.
 Organization
 Planning
1  Coordination
 Directing
 Controlling
 Directing
Distinguish between public and private limited companies.
A public limited company is a company listed on a recognized stock exchange and the
2
stocks are traded publicly. On the other hand, a private limited company is neither listed
on the stock exchange nor are they traded. It is privately held by its members only.
Give the features of Planning.
 Planning is goal-oriented
3  Planning is looking ahead
 Planning is an intellectual process
 Planning involves choice & decision making
Define strategy.
4 “A general direction set for the company and its various components to achieve a desired
state in the future. Strategy results from the detailed strategic planning process”.
Mention the need of career planning.
Career planning provides much-needed motivation and guidance. As much as you may want
5 it to, your career path will not likely follow a straight line. Having a career plan will help you
stay motivated during all the twists and turns your career path throws at you.

What do you understand by Organization Chart?

6 An organizational chart is a diagram that visually conveys a company's internal structure by
detailing the roles, responsibilities, and relationships between individuals within an entity.
Distinguish between creativity and innovation.
Creativity is the novel step of being the first to identify that something might be possible in
7
the first place. But innovation is the action of putting things into practical reality, despite
challenges and resistance, rather than just contemplating

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 What are the four basic ingredients of leadership skill?
Self-Awareness
Communication
8 Influence
Learning Agility
What is budgetary control?
Budgetary control is financial jargon for managing income and expenditure. In practice it
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means regularly comparing actual income or expenditure to planned income or expenditure to
identify whether or not corrective action is required.
Why controlling is important in an organization?
Proper controlling measures are often found to be helpful in improving the effectiveness of
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the other functions of the management. Controlling ensures efficient and effective use of the
resources of the organisation in order to achieve the organisational objectives.

Q.No PART B Marks

Enlighten the relevance of environmental factors that affects global business.
11 (a) 1. Technological factors
As technology continues to advance, companies can benefit from these breakthroughs or face
challenges in competing with them.
2. Economic factors
The state of the economy plays an important role in every aspect of daily life from the well-
being of personnel to the ability of a company to thrive.
3. Political and legal factors
As political officials leave office and new ones replace them, the policies they implement
often affect businesses in relevant industries.
4. Demographic factors
Companies with successful products and services evaluate the demographics of their target
market to ensure they meet the needs of those who benefit from their offerings.
5. Social factors
Where people live, their personal values and their socioeconomic status affect what, where and
why people make purchases.
6. Competitive factors
Businesses can increase their market share and stay relevant to their customers by keeping
track of their competitors.
7. Global factors
Executives have a duty to keep track of both domestic and global issues, especially if they
conduct business internationally.
8. Ethical factors
Because each individual has a distinct concept of ethics and morality, some companies may
find it challenging to balance the personal lives of staff members with their expectations in the
workplace.
9. Natural factors
As environmental awareness continues to grow, more consumers have realized the effects of
business processes on the planet.

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11 (b) Enumerate the evolution of management.
Management thought refers to the theory that guides management of people in the
organization. Initially management theories were developed out of the practical experience of
the managers in the industrial organization. Later on, managers borrowed ideas from several
other fields of study like science, sociology, anthropology, etc.
The Concept of Evolution of Management Thought

To understand the entire concept of evolution of the management thought, the topic is divided
into 4 major stages, which are as follows:

 Pre-scientific management period

 Classical theory
 Neo-classical theory ( or behavior approach)
 Bureaucratic Model of Max Weber
12 (a) Discuss the planning process with a suitable note of its features.
1. Planning is goal-oriented.
a. Planning is made to achieve desired objective of business.
b. The goals established should general acceptance otherwise individual efforts &
energies will go misguided and misdirected.
c. Planning identifies the action that would lead to desired goals quickly &
economically.
d. It provides sense of direction to various activities. E.g. Maruti Udhyog is trying
to capture once again Indian Car Market by launching diesel models.
2. Planning is looking ahead.
a. Planning is done for future.
b. It requires peeping in future, analyzing it and predicting it.
c. Thus planning is based on forecasting.
d. A plan is a synthesis of forecast.
e. It is a mental predisposition for things to happen in future.
3. Planning is an intellectual process.
a. Planning is a mental exercise involving creative thinking, sound judgement and
imagination.
b. It is not a mere guesswork but a rotational thinking.
c. A manager can prepare sound plans only if he has sound judgement, foresight
and imagination.
d. Planning is always based on goals, facts and considered estimates.
4. Planning involves choice & decision making.
a. Planning essentially involves choice among various alternatives.
b. Therefore, if there is only one possible course of action, there is no need
planning because there is no choice.
c. Thus, decision making is an integral part of planning.
d. A manager is surrounded by no. of alternatives. He has to pick the best
depending upon requirements & resources of the enterprises.
5. Planning is the primary function of management / Primacy of Planning.
a. Planning lays foundation for other functions of management.
b. It serves as a guide for organizing, staffing, directing and controlling.
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 c. All the functions of management are performed within the framework of plans
laid out.
d. Therefore planning is the basic or fundamental function of management.
6. Planning is a Continuous Process.
a. Planning is a never ending function due to the dynamic business environment.
b. Plans are also prepared for specific period f time and at the end of that period,
plans are subjected to revaluation and review in the light of new requirements
and changing conditions.
c. Planning never comes into end till the enterprise exists issues, problems may
keep cropping up and they have to be tackled by planning effectively.
7. Planning is all Pervasive.
a. It is required at all levels of management and in all departments of enterprise.
b. Of course, the scope of planning may differ from one level to another.
c. The top level may be more concerned about planning the organization as a
whole whereas the middle level may be more specific in departmental plans
and the lower level plans implementation of the same.
8. Planning is designed for efficiency.
a. Planning leads to accompishment of objectives at the minimum possible cost.
b. It avoids wastage of resources and ensures adequate and optimum utilization of
resources.
c. A plan is worthless or useless if it does not value the cost incurred on it.
d. Therefore planning must lead to saving of time, effort and money.
e. Planning leads to proper utilization of men, money, materials, methods and
machines.
9. Planning is Flexible.
a. Planning is done for the future.
b. Since future is unpredictable, planning must provide enough room to cope with
the changes in customer’s demand, competition, govt. policies etc.
c. Under changed circumstances, the original plan of action must be revised and
updated to male it more practical.
(Or)
12(b) (i) Is decision making a rational process? Discuss.
Rational decision making leverages objective data, logic, and analysis instead of subjectivity
and intuition to help solve a problem or achieve a goal. It’s a step-by-step model that helps
you identify a problem, pick a solution between multiple alternatives, and find an answer.
Rational decision making is an important skill to possess, especially in the digital marketing
industry. Humans are inherently emotional, so our biases and beliefs can blur our perception
of reality. Fortunately, data sharpens our view. By showing us how our audience actually
interacts with our brand, data liberates us from relying on our assumptions to determine what
our audience likes about us.
(ii) Define MBO. Explain steps involved in it with a neat diagram.

The process of MBO involves 6 key steps that incorporate managerial plans in such a
systematic way, which is directly influenced by the efficient and effective achievement of
individuals and organizational objectives.

In case you want to analyze the practical importance of Management by Objectives, then it is
good to summarize all the objectives of the organization together with individual goals.

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 The 6 steps involved in the process of MBO are determining organizational goals, determining
employees’ objectives, constantly monitoring progress and performance, performance
evaluation, providing feedback, and MBO performance appraisal.

The 6 steps of the MBO process are:

1. Determining Organizational Goals

2. Determining Employees’ Objectives
3. Constant Monitoring Progress and Performance
4. Performance Evaluation
5. Providing Feedback

6. The Performance Appraisal

13 (a) Describe six key elements in organizational design.
Organizational design is a process that defines a company's leadership practices and hierarchy.
A company's organizational design can affect its workplace culture, efficiency, workplace
relationships and production value. If you are interested in organizational methods that dictate
how a company operates, it may be helpful to understand the elements that go into this design.
In this article, we explore the concept of organizational design, including its definition,
importance and the six elements of organizational design.
1. Work specialization
Work specialization is a process that assigns each professional to a specific task. Because the
management of the company is clear in what they expect from their employees, each one can
focus on their task, gaining special skills and experience that can help them improve.

2. Departmentalization and compartments

Departments and compartments are teams of professionals within a larger company. This
component of organizational design allows each compartment or department to focus on a
specific task the professionals in each group work together to achieve.

3. Formalization of elements
Formalization specifies the relationships and roles within a company. Larger companies often
have a more distinct formalization of primary roles than smaller companies. This is because
employees may fill multiple roles in a smaller company. For example, in a neighborhood pizza
shop, the manager may be responsible for food preparations besides their leadership
responsibilities.

4. Centralization and decentralization

Centralization and decentralization refer to the senior levels of employees who can influence
company decisions. Each company rests somewhere on a scale of centralization.

5. Span of control
A leader can be more successful when they manage an appropriate amount of employees. Span
of control is an element of organizational design that accounts for the number of people a
leader supervises and the tasks they handle. For example, the acquisitions department of a
publishing company is likely to have a large volume of incoming book pitches. If the
department employs many readers to accommodate this demand, the department may need
multiple managers to monitor and guide the readers' work.

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 6. Chain of command
The chain of command of a company describes the business' hierarchy and can affect
workplace culture and the efficiency of work production. An organizational chart can visually
portray each employee's place in the company hierarchy, and the company may have a strict or
flexible chain of command.
(Or)
13(b) Distinguish between Training and Development and explain the various methods of
Training
Differences:
01. Training refers to an education process in which employees get a chance to develop
skills, competency and learning as per the post duty requirements. Development refers to an
informative process which mainly helps in understanding about the overall growth and
improvement of the skills of the employee.
02. So simply we can say it is a process of increasing knowledge and skills of an employee.
So simply we can say it is a process of learning and growth.
03. It is short time/term focused and for a fixed duration. It is long time/term focused, which
takes place through out the life of a person.
04. Training is a job oriented process. Development is a career oriented process.
05. Trainings are performed in an aim of improving knowledge and skill that are needed to
perform their existing jobs. Developments are performed in an aim of improving knowledge
and skill to face future challenges.
06. It helps individual to learn how to perform his/her present job satisfactory. It prepares
individuals for future job and growth in all aspects
Methods:
(1) On The Job Training
(2) Off-The-Job-Training
(3) Apprenticeship Training
(4) Vestibule Training
(Training Centre Training)
(5) Internship Training
(6) Learner Training.
14 (a) Compare and contrast early theories of motivation.

Abraham Maslow's hierarchy of needs theory

According to Maslow' theory, a person's motivational needs can be put in a hierarchical
manner. Though no need is fully gratified, a thoroughly satisfied need will no longer serve as
source of motivation. Now a person can be motivated by focusing on the next level of need
only. So, according to the theory, before motivating someone it is important to know at what
level of need that person is. Only then he/she can be motivated.

The hierarchy of needs consists of following 5 needs in order –

1. Physiological needs

They lie at the lowest level and constitute bodily needs like hunger, thirst, sex, etc.
2. Safety needs

They are concerned with protection at both physical and emotional level. So a person
would seek to work in an environment where adequate protection measures are in
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 place. At the same time insurance policies that promise to take care of an employee in
event of any adversity take care of his emotional safety need.
3. Social needs

Social needs refer to things like friendship, belongingness etc. Since man is a social
animal, he is bound to have social relationships at different places. These needs arise
once safety needs are fulfilled.
4. Esteem needs

Every person seeks individual success that satisfies his inner esteem. Now esteem
needs can be either internal (autonomy, achievement) or external (status, recognition
etc.). These needs lie at one level below the highest level.
5. Self-actualization

This need lies at the highest level. This need is concerned with the urge to discover
oneself and find one's true inner potential which can lead him/her to the highest level
of success.

Maslow's theory is widely read, but it has been criticized as well. The major flaw with the
theory is that empirical research doesn't validate it. Then there are other needs like spiritual
needs which were not identified by Maslow.

McGregor's Theory X and Theory Y

This theory was propounded by Douglas McGregor. According to this theory, human being
have got two distinct point of views – negative and positive. So as per Theory X, the managers
are of the view that employees don't like their job and so there is a need for a directing them,
and in some cases, coercing them. Theory Y is just opposite and according to it the employees
find their job as normal as any general activity (recreation, playing etc.). So it is a positive
outlook on the part of the managers. That basically means that employees can be trusted with
taking up the responsibilities. As per McGregor, challenging job and participative decision
making act as source of motivation for the employees.

This is to be noted that both theories are assumptions and there is no empirical proof for the
same. That's why Theory X and Theory Y didn't get that much prominence.

McClelland's theory of Motivation

According to this theory, any person will have either of the following three needs –
 Need for Achievement

A person with this need will strive to excel and have success in whichever field he is
working.
 Need for Power

A person with this need would want to wield power and influence others on its basis.
 Need for Affiliation

A person with this need seeks friendly relationships with the people around him.

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 Herzberg's two factor theory

Two factor theory, which is also known as motivation-hygiene theory, was given by Fredrick
Herzberg. According to his theory, there are two different sets of factors that influence an
employee. First set of factors is called hygiene factors and includes wages, working
conditions, job security etc. The presence of these factors ensure that the employees aren't
dissatisfied with their jobs. However, it doesn't mean that employees are satisfied with their
job. To make the jobs satisfying for them (something that motivates them to do better),
employees should be provided with challenging opportunities that can give them recognition
and growth etc. These factors are called motivation factors.
(Or)
14(b) Identify barriers to effective interpersonal communication and how to overcome them.
1. Lack of participation
Communicating with someone who doesn’t want to is impossible. People can appear unwilling
to communicate when they don’t speak up when they should, dodge direct questions, or use
defensive body language.
2. Lack of open-mindedness
It’s tough to communicate with someone who refuses to explore different points of view,
opinions, or ideas about the world. We must be able to get along with people of different
viewpoints to function even at a basic level with other people.
3. Lack of trust
Working together is difficult when team members don’t trust one another to do their jobs well.
Micromanaging and undermining others are signs of distrust. Not only does this discourage
people from sharing ideas, but it prevents the team from achieving goals.
4. Lack of transparency
Closing off communication is the precursor to distrust. When we hold back information that
others need, we create an unnecessary hardship for them. Being open and honest is the best
way to build trust and empower others to make good decisions.
5. Lack of patience
Everyone has different strengths, weaknesses, and preferences. Try not to get upset when
someone performs a task or approaches a problem differently from how you would do it.
Being patient with others will help you stay calm when your personalities or work styles clash.
6. Lack of organization
Sometimes, a poorly organized environment creates interpersonal barriers. Do people know
where to go for help or answers? Does everyone have a clear understanding of their roles?
People can’t communicate well if they feel like there’s no order and their concerns will never

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 be addressed.

15 (a)
Illustrate and explain the three steps in the control process.
Establishing Standards
The first step in the control process is to establish standards against which results can be
measured. The standards the managers desire to obtain in each key area should be defined as
far as possible in quantitative terms. Standards expressed in general terms should be avoided.
Standards need to be flexible in order to adapt to changing conditions.

The standard should emphasis the achievement of results more than the conformity to rules
and methods. If they do not do so, then people will start giving more importance to rules and
methods than to the final results.

Measuring and Comparing actual Results against Standards

The second step in the control process is to measure the performance and compare it with the
predetermined standards.

Measurement of performance can be done by personal observation, by reports, charts and

statements. If the control system is well organised, quick comparison of these with the
standard figure is quite possible. This will reveal variations.

Taking Corrective Action

After comparing the actual performance with the prescribed standards and finding the
deviations, the next step that should be taken by the manager is to correct these deviations.
Corrective action should be taken without wasting of time so that the normal position can be
restored quickly. The manager should also determine the correct cause for deviation.
(Or)
15(b) Discuss the various types of tools used to monitor and measure organizational performance.
Key performance indicators (KPIs) and metrics

KPIs and metrics provide a way to measure how well companies, business units, projects or
individuals are performing in relation to their strategic goals and objectives. But the primary
value of KPIs is not in measurement per se, but in enabling rich data-driven performance
conversations and better decision making. Measuring everything that moves provides little
more than an illusion that performance is being managed. Instead, it’s important to ask, “What
goal will this KPI help my organisation achieve,or what problem will it resolve?” and “What

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 decisions will the KPI help drive?” Well-designed KPIs should be vital navigational
instruments, giving a clear picture of current levels of performance and whether the business is
where it needs to be.

Performance appraisals

Alongside KPIs, performance appraisals are probably the most commonly used performance
management tool. When used properly, performance appraisals are incredibly powerful for
aligning the goals of individuals with the strategic aims of the organisation.

360 degree feedback

This tool is all about answering the question, “How well are our people performing in the eyes
of those who have a stake in their performance?” It provides individuals with a broad
assessment of their performance based on the views of those around them, including their
supervisor or manager, direct reports, peers, customers, suppliers, and so on.

Management by objectives (MBO)

MBO is the process of defining specific objectives and then setting out how to achieve each
individual objective. It’s particularly powerful for specific work that needs to be done one step
at a time, and is a great way to create a culture of working towards common goals.
Performance management frameworks

Without a doubt, one of the most popular and best-known management frameworks is the
Balanced Scorecard (BSC). Voted one of the most influential business ideas ever presented in
the Harvard Business Review, the BSC has been massively popular over the last 20 years.

Reward and recognition programmes

When employees feel that good performance goes unrecognised and unrewarded, motivation
plummets, and people disengage from the company’s overall mission. Reward and recognition
programmes are therefore an important part of any thorough performance management
system, creating a method for celebrating those who are high performers.

Personal development plans (PDP)

A PDP is effectively a tailored action plan that is based on reflection and awareness of an
individual’s performance and needs, setting out goals for future performance and actions that
will support personal development. PDPs are often used to identify specific training and
development needs and create an action plan for meeting those needs (for example, through
specific courses or shadowing other employees)

Q.No PART C Marks

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 Enumerate the trends and challenges of Management in globalized era. (5)
16 (a)
1 Planning and Decision Making
Planning and Decision Making in a Global Scenario To effectively plan and make
decisions in a global economy, managers must have a broad based understanding of
(5)
both environmental issues and competitive issues. They need to understand local
market conditions and technological factor that will affect their operations.
2 Organizing
(3)
Organizing in a Global Scenario Managers in international businesses must also
attend to a variety of organizing issues. For example, General Electric has operations
scattered around the globe.
3 Leading
Leading in a Global Scenario We noted earlier some of the cultural factors that affect
international organizations. Individual managers must be prepared to deal with these
and other factors as they interact people from different cultural backgrounds .
4 Controlling
Controlling in a Global Scenario Finally, managers in international organizations must
also be concerned with control. Distances, time zone differences, and cultural factors
also play a role in control.
(Or)
16 (b) (i) A budget is a comprehensive financial plan setting forth the expected route for (2)
achieving the financial and operational goals of your business. Budgeting is an
essential step in effective financial planning. Even the smallest business will
benefit from preparing a formal written plan for its future operations. However,
there are some advantages and disadvantages to consider:
The advantages of budgeting include: (6)
 Planning orientation. The process of creating a budget takes management away from
its short-term, day-to-day management of the business and forces it to think longer-
term. This is the chief goal of budgeting, even if management does not succeed in
(2)
meeting its goals as outlined in the budget - at least it is thinking about the company's
competitive and financial position and how to improve it.
 Profitability review. It is easy to lose sight of where a company is making most of its
(3)
money, during the scramble of day-to-day management. A properly structured budget
points out what aspects of the business produce money and which ones use it, which
forces management to consider whether it should drop some parts of the business or
expand in others.
 Assumptions review. The budgeting process forces management to think about why
the company is in business, as well as its key assumptions about its business
environment. A periodic re-evaluation of these issues may result in altered
assumptions, which may in turn alter the way in which management decides to operate
the business.
 Performance evaluations. You can work with employees to set up their goals for a

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 budgeting period, and possibly also tie bonuses or other incentives to how they
perform. You can then create budget versus actual reports to give employees feedback
regarding how they are progressing toward their goals. This approach is most common
with financial goals, though operational goals (such as reducing the product rework
rate) can also be added to the budget for performance appraisal purposes. This system
of evaluation is called responsibility accounting.
 Funding planning. A properly structured budget should derive the amount of cash that
will be spun off or which will be needed to support operations. This information is
used by the treasurer to plan for the company's funding needs. • Cash allocation. There
is only a limited amount of cash available to invest in fixed assets and working capital,
and the budgeting process forces management to decide which assets are most worth
investing in.
 Bottleneck analysis. Nearly every company has a bottleneck somewhere, and the
budgeting process can be used to concentrate on what can be done to either expand the
capacity of that bottleneck or to shift work around it.

The disadvantages of budgeting include the following:

 Time required. It can be very time-consuming to create a budget, especially in a
poorly-organized environment where many iterations of the budget may be required.
The time involved is lower if there is a well-designed budgeting procedure in place,
employees are accustomed to the process, and the company uses budgeting software.
The time requirement can be unusually large if there is a participative budgeting
process in place, since such a system involves an unusually large number of
employees.
 Gaming the system. An experienced manager may attempt to introduce budgetary
slack, which involves deliberately reducing revenue estimates and increasing expense
estimates, so that he can easily achieve favorable variances against the budget. This
can be a serious problem and requires considerable oversight to spot and eliminate.
 Blame for outcomes. If a department does not achieve its budgeted results, the
department manager may blame any other departments that provide services to it for
not having adequately supported his department. • Expense allocations. The budget
may prescribe that certain amounts of overhead costs be allocated to various
departments, and the managers of those departments may take issue with the allocation
methods used.
 Spend it or lose it. If a department is allowed a certain amount of expenditures and it
does not appear that the department will spend all of the funds during the budget
period, the department manager may authorize excessive expenditures at the last
minute, on the grounds that his budget will be reduced in the next period unless he
spends all of the amounts authorized in the current budget.
 Only considers financial outcomes. Budgets are primarily concerned with the
allocation of cash to specific activities, and the expected outcome of business
transactions - they do not deal with more subjective issues, such as the quality of
products or services provided to customers. These other issues can be stated as part of
the budget, but this is not typically done.

 Strategic rigidity. When a company creates an annual budget, the senior management
team may decide that the focus of the organization for the next year will be entirely on
meeting the targets outlined in the budget. This can be a problem if the market shifts in
a different direction sometime during the budget year. In this case, the company should

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 shift along with the market, rather than adhering to the budget.

Subject Teacher HoD Dean Principal

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