Principles and Practice of Management

02 Jul


MANAGERIAL DEVELOPMENT THROUGH MBO The banking sector is still reeling under the impact. The new American Bank has been in India for the past twenty years with branches in metropolitan of the recent economic crisis cities. The bank can boast of various innovations in the field of consumer banking. Their customer service and finance divisions has been the best of all foreign banks. But the business going through a bad phase from last two years. The vice president asked Mahesh Rao, to draw together a small group to examine and recommend improvement in the current structure and managerial practices within the bank. Though Mahesh was, as manager, training and development, at a lower level then GMs and directors, the VP trusted his abilities to handle the training and improvements. In the month’s time Mahesh reported back with a plan for management training base on job structures. The plan was based on key performance areas identified for various levels and consisted of inhouse and external programmes. All development programmes covered the key areas, which directly affect the performance and development of specific levels of manager. One hundred and twenty managers were earmarked to attend two three programmes depending upon the analysis done by Mahesh. Over the next four months, almost 80% of the managers attended programmes on managerial skill and on their specific area of work. By the end of these four months, most senior managers indicated that improvement in work place is visible. Most of the trainers themselves reacted positively to the training programme.

Answer the following question.

Q1. Agreement between boss and subordinates regarding their goals is vital for the success of Management by objectives. Comment.

Q2. What benefits can you expect from the training programme based upon MBO.



THE DILEMMA OF UNCERTAINITY The ancient skills Training Company was started by Abu Ibrahim as a major house dealing in silken upholstery and carpets. He sold most of the products directly through the retail chains and also through his own boutiques in metro cities. Two years ago, he entered into a partnership with an old friend, running a direct marketing company to form Ancient skills Pvt Ltd, a small order business. His partner had good exposure to this line and they used one of his old factories at Delhi as head officecum warehouse. The business took off reasonably well but it was slower than what Ibrahim had expected. It also required considerable capital to set up the stocks, computer systems for enquires and follow ups, etc. Recently Ibrahim received an offer from his old agent, a buying house in Mumbai for large quantity of handwoven rugs. The transportation costs were very high and also their profit was dependent on how well the agent sold the rugs. The risk was that if the rugs didn’t sell in high volume, the margin would be very low and also disposing off these unsold rugs would be difficult. They would need to either sell these through their own store in Mumbai or include these in mail order category. Both will require large advertising expenses, thus reducing the profit margin. Still the offer was big enough to give a second thought with 50% chances making a good deal.

Answer the following question.

Q1. Should Ibrahim accept the offer? Give reason for your choice of answer.

Q2. If the rugs failed to succeed in this sale deal, what options should Ibrahim exercise for selling the unsold rugs?



Safety of aero planes has been a major issue with airlines. The human life in itself is priceless and any accident evens a minor one is a setback to the accountability and reputation of the airline. Apart from this loss, accidents destroy assets worth in crores of rupees including aircrafts, crew and pilots. The magnitude of an air accident is large and thus all the airlines have to constantly maintain and improve upon safety standards. One critical factor in these accidents is human error. The fact about accidents is that majority of them occur at taking off or landing or within ten minutes of any start or end of journey. These operations are done by pilots and administered by the ground control authorities, thus the human factor becomes important. Considering this, International Airways, a private airline, has recently taken up the issues at major level. The top management has decided to compare and study the best available monitoring systems and adopt the one which is most suitable for their process. The top management decided that one of the actions taken in this direction will be to provide the best training to their pilots and crew. It decided to approach one of the best and most advanced airlines. Eska which is a multinational leader in equipment and quality to train their employees. The deal was finalized and a team of twelve senior trainers and pilots came to International Airways. After initial introductions, twenty pilots and twelve senior crew managers were to start their training under these foreign trainers. The top management also took keen interest in their system developed inhouse and training schedules. Generally the people at International Airways have been very positive about this training. The Group Chief training Anil has served many national and international airlines and is considered an icon in the industry. He had cultural differences in the company and its counterpart, Eska. He also felt that the cultural difference is even more apparent in the area of development and training. The trainers have a task oriented style and very upright about it. During training, the trainers used the class room teaching and flight simulators to achieve maximum benefits. The group of trainees for around ten days was fully captivated by the teaching style and the techniques displayed. The concept advocated strongly by the trainers were the ones they never encouraged for in their company. The trainers on the other hand emphasized that the ultimate aim to the pilot and the crew is to avoid a crisis.

Answer the following question.

Q1. What is the case all about? Give brief.

Q2. Compare the cultural aspects of the International Airways with those of their trainers.



PROMOTIONAL ISSUES Mary Roberts had been with the company three years when she was promoted to manager of the tax department which was part of the controller’s division. Roberts started with the company when she graduated from college as an accounting major. She entered the organization as a management trainee, and during the oneyear program she demonstrated considerable leadership ability as an informal leader her peers. Mary also impressed many senior managers in the company with her sense of responsibility and her willingness to work hard. All of her training assignments were completed on time with considerable skill for an inexperienced person. Since she was very interested in tax accounting, Roberts was assigned to the tax department to be developed further as staff accountant. Within four months she became a supervisor of ten staff as a staff accountants to fill a vacancy created by an unexpected early retirement. Her superior believed her to be the most qualified individual to fill the position even though others in the department had more experience in tax accounting. None, however, demonstrated leadership ability or the commitment to work that Mary possessed. The tax department manager was promoted to fill a vacancy in the financial planning department eight months later, and he recommended to the controller that Mary Roberts be promoted to fill the position he was leaving. He mentioned that her work was excellent and that she was a very effective supervisor. The tax department had 45 employees including 3 supervisors, 10 clerical employees, and 3 typists. Several people in the department were senior personnel with 10 to 30 years of experience in tax work. Some of these were more technically knowledgeable in taxation than Mary. There was some resentment in this group that so young a person was made a department head, and three of these people were particularly upset because they desired the promotion and felt they deserved it. What made them even more upset was the fact that the tax manager did not discuss the promotion with them.

Answer the following question.

Q1. What can Mary Roberts do about the resentful senior employees?

Q2. Will her lack of technical knowledge hinder Mary’s managerial effectiveness?

Q3. Should Mary’s superior have discussed the promotion with the senior employees before announcing it?

Q4. Can higher management do anything to help Roberts make the transitions to greater responsibility?

Principles and Practices of Management

02 Jul

Section A

I Answer all questions:-

1. Define System of Authority.

2. What is Operational Planning?

3. Explain the Concept of Motivation?

4. Define MIS.

5. Difference between Individual & Group.

Section B

II Answer all questions:-

1.What are four essential components of a System?

2. What are the disadvantages of control through Costing?

3. What are Grouping Principles?

4. Explain the theories of Organizational Conflicts?

5. Mention any twelve Characteristics of Management?

Section C

III Answer All questions:-

1. Explain in Detail “Management – A Profession”.

2. What are the major contributions of Objective?

3. Explain Organization Dynamics – Closed & Open System.

4. What are the methods of Performance Appraisal?

5. Explain Break-Even Analysis?

Principles and Practice of Management

02 Jul

1. a) What are the steps involved in planning?

b) How you make planning effective?

2. What is the difference between a policy and a procedure?

3. Explain the advantages and limitations of planning.

4. Explain the strategic planning in the Indian industry. Which are the planning skills required for better business.

5. a) Define a decision making?

b) Explain common difficulties in decision-making.

6. a) Decision-making is a key part of a manager’s activities. – Elaborate.

b) What are the steps involved in rational decision-making.

7. a) Explain the individual and group decision-making.

b) Describe advantages and disadvantages of group decisions.

8. a) Draw models of decision-making? b) Explain any two.

Principles and Practice of Management

28 Jun

Q1) “Management is the art of getting things done”. Explain and bring out the nature and feature of management?                       

Q2) Define leadership and state the qualities of a successful leader?                       

Q3) What is span of control? Identify the factors determining span of control?                  

Q4) Enumerate and explain the important principles of an Organization?                

Q5) Write short notes            

a) Maslow’s theory of motivation

b) Advantages of delegation

c) Line Organization

d) Selection Process

Q6) Explain the following concept                

 1) Planning                

 2) Decision –Making Organization               

 3) Organization                     

 4) Staffing                 

Q7) Define Performance Appraisal. Discuss two modern and two traditional methods of Performance appraisal?

Q8) What is Organizational Change? Discuss the causes for resistance to change?

Principle and Practice of Management

28 Jun


International Case:   Carrefour — Which Way to Go?

Wal-Mart’s biggest global competitor is the big French retailer Carretour, a firm that has hypermarkets, big stores offering a variety of goods. It has made large investments around the globe in Latin America and China. But not all is well as competitors taking market share its home market, for instance. There has been even speculation of a takeover by Wal-Mart or Tesco, an English chain. Mr. Barnard has been ousted after heading the company for 12 years; he was replaced by Jose Luis Durant who is of German-Spanish descent. Although the global expansion is cited by some as success, it may be even a big mistake. It withdrew from Japan and sold 29 hypermarkets in Mexico. Carrefour also had problems competing with Tesco in Slovakia and the Czech Republic. In Germany, the company faced tough competition from Aldi and Lidle, two successful discounters. On the other hand, it bought stores in Poland, Italy, Turkey, and opened new stores in China, South Korea, and Columbia. Carrefour has become more careful in selecting markets. But. the company is eager to enter the Indian market, but found out in late 2006 that Wal-Mart will do so as well.

In France, where Carrefour is well established, the company made the big mistake in its pricing policy. It probably started with the 1999 merger with Promodes, the French discount chain. Carrefour confused the French clientele by losing its low-cost image; whether the image can be changed remains to be seen. Mr. Durant, the new CEO since 2005, embarked          on the new strategy by offering 15 percent new products in its hypermarkets and 10 percent in its supermarkets. Moreover, he wants to employ more staff, extend the operating hours in certain hypermarkets, cutting prices, trying small stores, and pushing down decision making. Mr. Durant aims to stay only in countries where Carrefour is among the top retailers.


1. How should Mr. Durant assess the opportunities in various countries around the world?

2. Should Carrefour adopt Wal-Mart’s strategy of “low prices everyday”? What would be the advantage or disadvantage of such a strategy?

3. How could Carrefour differentiate itself from Wal-Mart?

4. Identify cultures in selected countries that need to be considered in order to be successful?



International Case:  Reengineering the Business Process at Procter & Gamble

Procter & Gamble (P&G), a multinational corporation known for products such as diapers, shampoo, soap, and toothpaste, was committed to improving value to the customer. Its products were sold through various channels, such as grocery retailers, wholesalers, mass merchandisers, and club stores. The flow of goods in the retail grocery channel was from the factory’s warehouse to the distributors’ warehouses before going to the grocery stores where customers selected the merchandise from the shelves.

The improvement-driven company was not satisfied with its performance and developed a variety of programs to improve its service and the efficiency of its operation. One such program was electronic data interchange, which provided daily information from the retail stores to P&G. The installation of the system resulted in better service, reduced inventory levels, and labor-cost savings. Another approach, the continuous replenishment program, provided additional benefits for P&G as well as for its retailer customers. Eventually, the entire ordering system was redesigned, with the result of dramatic performance improvements. The reengineering efforts also required restructuring of the organization. P&G had been known for its brand management for more than 50 years. But in the late 1980s and early 1990s, the brand management approach pioneered by the company in the 1930s required rethinking and restructuring. In a drive to improve efficiency and coordination, several brands were combined with authority and responsibility given to category managers. Such a manager would determine overall pricing and product policies. Moreover, the category managers had the authority to withdraw weak brands, thus avoiding conflict between similar brands. They were also held responsible for the profit of the product category they were managing. The switch to category management required not only new skills but also a new attitude.


1)  The reengineering efforts of P&G focused on the business process system. Do you think other processes, such as the human system, or other managerial policies need to be considered in a process redesign?

2)  What do you think was the reaction of the brand managers, who may have worked under the old system for many years, when the category management structure was installed?

3) As a consultant, would you have recommended a top-down or a bottom-up approach, or both, to process redesign and organizational change?

4)  What are the advantages and disadvantages of each approach.



International Case:  The Restructuring of Daimler-Benz

In a 1996 address to stockholders and friends of Daimler-Benz, CEO Jurgen Schrempp reviewed the position of the diversified company. He started by saying “1995 was a dramatic year in the history of Daimler-Benz.” It was also a year that the board of management made a major break with the past.

Daimler-Benz, with more than 300,000 employees worldwide, consisted of four major groups: The first, by far the biggest and most successful group, was Mercedes-Benz with about 200,000 employees. It is best known for its passenger cars and commercial vehicles. The second was the AEG Daimler-Benz industries in the business of rail systems, microelectronics, heavy diesel engines, energy systems technology, and automation. The third was the Aerospace Group in the business of aircraft (the company has a more than one-third interest in the Airbus consortium), space systems, defense and civil systems, and propulsion systems. Finally, there was the Inter Services Group consisting of systemshaus, financial services, insurance brokerage, trading, marketing services, mobile communications services, and real estate management.

Daimler-Benz went through various development phases. From 1985 to 1990, it diversified into aerospace and electrical engineering. The aim was to become an integrated high-tech group. This diversification was further consolidated in the next phase that extended from 1990 to 1995. Under the leadership of Schrempp, the core business was redefined and the strategy refocused.

A 1995-96 portfolio review showed the need for refocusing on what the company could do best. Top management reevaluated its strategies and its core businesses based on economic criteria and the strategic fit of the various activities. It became clear that the company’s strengths were in car manufacturing, the truck business, and the railroad sector. Mercedes Benz, for example, had a strong competitive position with its cars and trucks in Europe, North America, and Latin America. Vans were also relatively strong in Europe, and buses had a good competitive position in Latin America. Based on this analysis, the strategies for potential growth were through globalization and the development of new product segments.

In 1996, top management reassessed the company’s position and its 1995 unsatisfactory results from its operations. It was discovered that the company was exposed to currency fluctuations that affected profitability. The company’s image was also blurred because of the ventures into many different kinds of industries. The management board decided to cut its losses and chart a new direction for the company, with greater emphasis on profitability. The organization structure was tightened and certain businesses were divested. In fact, policy decision from an earlier period were reversed.  The unprofitable AEG Group and the Dutch aircraft manufacturer Fokker did not receive financial support. Since both the Dutch government and Daimler-Benz withdrew support, Fokker filed for bankruptcy. Although these and other drastic decisions helped reduce the 1995 financial losses, the company’s goal was not to emphasize maximizing short-term profitability but to work toward medium- and long-term profitability.

A number of other managerial decisions were made to achieve the ambitious goals of reducing costs and improving profitability. Employees close to the operations were empowered to make decisions necessary to carry out their tasks. The organization structure was simplified and decentralized so that organizational units could respond faster to environmental changes. Moreover, the new organization structure was designed to promote an entrepreneurial spirit. Control was exercised through a goal-driven, performance-based reward system. At the same time, the new structure was designed to promote cooperation. In 1997, the board of management restructured and integrated the Mercedes-Benz Group into     Daimler-Benz. Consequently, Mercedes-Benz’s chief, Helmut Werner, who had been given credit for a successful model policy, resigned from the company.


1)  What is your assessment of Daimler-Benz’s operations in many different fields?

2) Should the various groups operate autonomously? What kinds of activities should be centralized?

3) Daimler-Benz is best known for its Mercedes-Benz cars. Why do you think Daimler bought AEG in the first place and why did it venture into the Aerospace and Inter Services businesses?

4)  Given the apparent mistakes in acquiring non-automotive businesses, what should Jurgen Schrempp do now?




International Case:  Global Car Industry

How the Lexus Was Born-and Continued Its Success in the United States, but will Lexus Succeed in Japan?

One of the best examples of global competition is in the car industry. As the Japanese gained market share in America, U.S. car makers required the Japanese to self-impose quotas on cars exported to the United States. This encouraged Japanese firms not only to establish their plants in the United States but also to build bigger and more luxurious cars to compete against the higher-priced U.S. cars- and the expensive European cars such as the Mercedes and the BMW.

One such Japanese car is the Lexus, by Toyota. This car is aimed at customers who would like to buy a Mercedes or BMW but cannot afford either. With a sticker price of $35,000, the Lexus is substantially less expensive than comparable European imports. In 1983, Toyota set out to develop the best car in the world-measured against the Mercedes and the BMW. The aim was to produce a quiet, comfortable, and safe car that could travel at 150 miles per hour and still avoid the gas guzzler tax imposed on cars getting less than           22.5 miles per gallon. This seemed to be an idea of conflicting goals: cars being fast seemed irreconcilable with cars being at the same time fuel-efficient. To meet these conflicting goals, each subsystem of the car had to be carefully scrutinized, improved whenever possible, and integrated with the total design. The first version of the 32-valve V-8 engine did not meet the fuel economy requirement. The engineers applied a problem-solving technique called “thoroughgoing countermeasures at the source.” This means an attempt to improve every component until the design objectives are achieved. Not only the engine but also the transmission and other parts underwent close scrutiny to make the car meet U.S. fuel requirements.

Toyota’s approach to achieving quality is different from that of German car manufacturers. The latter use relatively labor-intensive production processes. In contrast, Toyota’s advanced manufacturing technology aims at high quality through automation requiring only a fraction of the work force used by German car makers. Indeed, this strategy, if successful, may be the secret weapon to gain market share in the luxury car market.


1)  Prepare a profile of the potential buyer of the Lexus.

2)  What should Mercedes and BMW do to counteract the Japanese threat in the United States and Europe?

3)  Why has the Lexus model been very successful in the U.S.  but has not been marketed in Japan?  (Suggestion:  Review the frequency of repair records of luxury cars.  Also talk to Lexus dealers or Lexus owners).

4)  Do you think Lexus will succeed in Japan?  Why or why not?

Principles and Practice of Management

27 Jun

1. Explain disadvantages of functional organization.

2. Describe characteristics of an organization.

3. Factors affecting span of control.

4. Distinguish between delegation & decentralization.

5. How many types of critical standard in management control?

6. What are the advantages and disadvantages of democratic style?

7. Write short note on Staffing as function of management & Managerial skills.

8. What is planning & explain its element.

Principles and Practice of Management

27 Jun

Answer the following question.

Q1. What is management & its three distinct aspects.

Q2. Disadvantages of an informal organization.

Q3. Describe types of departmentation with examples.

Q4. Distinguish between delegation & decentralization.

Q5. Describe types of internal coordination.

Q6. What is decentralization?

Q7. Define leadership and state the qualities of a successful leader.

Q8. What is motivation? What are the different methods that can be used to motivate employees?

Principles and Practice of Management

27 Jun

Answer the following question.

Q1. Explain similarities between the line organization & line and staff organization.

Q2. Describe on the part of the subordinate difficulty in weakness of delegation.

Q3. Explain main tools of operational research in decision making.

Q4. Explain factors influencing group cohesiveness.

Q5. Explain trait theory of leadership.

Q6. Define Staffing.

Q7. What is Power Motive?

Q8. Management is what management does. Explain.