Nature & Significance Of Management

Explain the term management in brief? 2 marks

Management is coordinating all the resources of an organization through the process ofcontrolling,
organising, motivating and planning (COMP) in order to achieve its goals. This process starts at the top
and continues in more or less degree at every level of the organization.
State any two characteristic features of management?
Distinct activity:

Management is a distinct activity, which consists of communicating, organizing, motivating,

planning, leading, staffing, controlling, decision making, etc.

It can be studied, experimented and practiced.

Intangible: Management is intangible i.e. it cannot be seen but it can be felt through the performance of
the workers. Mismanagement if any is quickly noticed and is a sign of poor management. While efficient
management reflects the efforts of the workers.
Explain briefly any two OBJECTIVES OF MANAGEMENT 2 marks
Organizational objectives:

The primary organizational objective of the management of any business should be to attain
maximum output with minimum resources and least wastage.

This generates high profits, reduces costs and maximizes prosperity.

Individual objectives:

Each employee that joins an organization wants to satisfy his individual objectives, which means
he would like to have good salary, develop his personality, get peer and social recognition. If his
individual objectives are not satisfied, he will lose interest in his work and performance of
organizational objectives may suffer.

Hence while formulating corporate objectives, management should also consider individual
objectives

Briefly explain MANAGEMENT AS A PROCESS. 2 marks Marking scheme

Management is regarded as a process because it consists of o

Setting up objectives for an enterprise; and

Taking a series of steps such as planning, coordinating, directing, organizing and staffing
(PC-DOS) to ensure that these objectives are achieved.

This process starts at the top and continues in more or less degree at every level of the
organization.

MANAGEMENT AS A GROUP has the responsibility of an enterprise. Explain . 2 marks

Management as a GROUP refers to the Board of Directors or Executive Directors who are
responsible for effectively managing the affairs of the business by guiding and controlling the
work of other managers such as production, sales, finance, personnel, quality control managers,
etc.

This approach focuses on a team rather than individuals.

This is because it is believed that management as a team can contribute more effectively and
efficiently than an individual.

Management is a learned DISCIPLINE. Comment

Discipline is a subject that can be studied, organized and taught. (SOT)

It should meet the basic requirements such as:o

It should be acceptable

It should be capable of discovering knowledge, which can be verified, passed on to

others and can be successfully applied.

A large number of schools, colleges & universities have introduced management courses.

It has got experts, thinkers and philosophers of the subject.

These experts are devoted to impart their skill of the subject to learners of the discipline.

They follow a code of conduct prescribed for them.

As such we can conclude that management is a discipline

Explain in brief MANAGEMENT AS AN ACTIVITY 2 marks

Management is a human activity that (PC-DOS) plans, controls, directs and organizes the efforts
of all employees in the best interest of the organization and society.

For this the human and physical resources should be integrated in such a way that there is
minimum waste of material, time and energy.

It takes decisions on the following activities:

The goals of the organization

The activities to achieve the goals of the organization.

The people who will perform those activities of the organization.

The allocation of resources for the various activities of the organization.

It leads by doing oneself what it wants others to do; and

It directs the subordinates by showing & encouraging them to do things the right way.

Who are considered to be the operative management in an organization? State any two functions
of lower level management 2 marks

The first line/operative or low level management includes supervisors, foreman and Inspectors.

They are a link between middle level management and workers

They have the following functions (any 2 functions)
o

They represent the workers grievances before the management

They procure tools, materials required for the job

They assign duties to workers and guide them in handling their jobs

They prevent wastage of materials by negligent workers

Who are regarded as MIDDLE LEVEL MANAGEMENT in a business organisation? 2 marks

Middle management consists of departmental heads and other executive officers of different
departments

They execute the policies framed by the top management.

They are a link between the top management and supervisory or lower level of management

State any two functions of middle level management 2 marks

Their functions are as follows: (any two functions)

They plan the operations of their department

They prepare the organizational set up of their department.

Find out suitable personnel and assign duties to them for execution of their department functions.

Your grandfather has retired as a director. At what level of management was he working? What
functions do you think he was performing? State any two.
Or
Who are regarded as Top Management in a business organization? State any two functions of Top
management? 2 marks
Top management is the 3rd line of management, which consists of Chairman, Directors, Managing
Director, General Manager and other top-level executives required to achieve the goals of the enterprise.
The functions of top management are:

Determine the objectives of the enterprise.

Frame the policies of the enterprise

What is meant by Balancing in coordination? 2 marks

Or
State any two elements of coordination
The key elements of coordination are as follows: (BIT)
Balancing: The activities of one department must be properly balanced and supported by other
departments in order to achieve optimum results.
Integration: It is the unification of all diverse group efforts, which are brought together to produce best
possible results. This results in better performance of the firm.
Timing: The business activities should be planned in such a way that the functions of every employee
and department are performed according to a time schedule.
What is administration 2 marks
Administration means: (LIDS)

Laying out broad programs, major projects, etc

Identifying general purposes

Determining policies

Setting up major objectives

Administration is part of management. Comment? 5 marks

Some authors suggest that management is a wider concept than administration or administration
is part of management.

According to this view, management involves

Responsibility to make policies

Responsibility for planning, organizing, directing, controlling & supervising (PC-DOS)

Thus it is found that management begins with the administrative function at the top. As one
moves down the levels of organization, managerial functions become more and more important.

Management and Administration mean the same thing Explain this view 5 marks

Management and Administration are synonymous i.e. they are both identical and carry the same
meaning.

In practice, administration involves management and management involves administration. Both

are complementary as well as supplementary to each other. Every officer has to perform both
administrative and management functions at all levels.

Both aim at achieving the desired goal of the business of maximising output at minimum cost and
wastage.

Administration comes first and management follows it Comment. 5 marks,

Some authors suggest that administration is a wider concept than management or administration
comes first and management follows it.

According to this view,

o

Administration determines the policies while management executes those policies

Administration lays down the objectives of the organization while management has to
direct the organization to operate under the broad policies laid down by administration in
order to achieve those objectives.

Is management becoming a profession? Discuss in light of emerging trend?

Yes, management is by and large becoming a profession. This can be seen by referring to the following
emerging trends in business:
1. All big companies appoint professional managers at all levels.
2. Many Indian companies take initiative to replace family members by professional mangers.
3. Proprietary managers are becoming more interested in acquiring latest knowledge and technique
of management. They are sending their relatives abroad to do managerial course.

In conclusion, it may be said that managers at the top level do not satisfy all the requirements of
profession but management is becoming a profession.

II - Nature & Significance Of Management

What do you understand by principles of management?

They are statements of fundamental truth

They provide guidelines which help management to take decisions and action

They are derived by observation and experimental studies

They establish cause and effect relationship

How are management principles derived? 3 marks

Management principles are derived by observation and experimental studies as follows:
Observation:
Management principles are derived by observing and analysing the events management have to face in
actual practice. For example theprinciple of division of labour was derived after it was observed that
dividing the work based on the workers knowledge and experience, resulted in improved performance.
Experimental Studies:
By conducting experimental studies. For example suppose we wish to conduct an experimental study to
confirm the correctness of theprinciple of unity of command which states that no subordinates should
receive orders from more than one boss, we take two groups of employees one having only one boss
and the other having two bosses. After some time it will be noted that the group with one boss is doing
better than the other. This confirms that the principle of unity of command is correct.
State any 3 reasons why proper understanding of management principles is necessary?
Or
Explain briefly any 3 points establishing the NEED/IMPORTANCE of management principles?3
marks Marking Scheme
Management principles are needed for the following reasons: (OCE)
Optimum use of resources:

The management principle of science, not rule of the thumb suggest that every task should be done
with minimum effort and energy and additional work can be done with the saved energy. By saving time,
efforts and energy activities can be made economical and enhance the productivity of the resources.
Change in technology:
The management principle of division of labour helps management in identifying in which activity
technology has changed. If there is no division of labour then confusion may prevail about what and how
much to change and the firm might find it difficult to face competition and might in extreme case run out of
business.
Effective Administration:
o

The principle of scalar chain helps the enterprise to communicate with people at
different levels

Unity of direction removes confusion in minds of employees; and

Unity of command avoids dual subordination.

Thus these principles help management in managing their organisations effectively.

Besides the above, management principles also provide guidelines to managers to:

Effectively handle complex problems.

Clearly understand the nature and scope of their work

To make optimum use of the resources.

To take scientific decisions to meet changing conditions.

Explain 3-4 points that highlight nature/characteristics of principles of management 3 or 4 marks

The following characteristics highlight the nature of management principles: (FUEL)
Flexibility:
Management principles are flexible guidelines and can be modified in different ways in different situations
depending upon the knowledge and experience of an employee and importance of decisions that have to
be taken.
Universal application: Taylors techniques of mgt are UNIVERSALLY APPLICABLE. Do you agree?
Give any four reasons in support of your answer 4 marks - Important

Management principles are effective in:

Both business enterprises as well as government organisations. (All social, economic,

political, cultural or even religious organisations apply management principles for the
successful operations of their activities)

All types or sizes of organisation

All types of problems

Any type of group action be it the army unit, hospital, etc

Example: Delegation of authority in any nature of business is considered as key to organisational

success universally because it empowers people to take decisions on the spot.

Hence it can be concluded that the principles of management are universal and it is possible to
transfer them from one organisation to another and from one country to another.

Evolutionary:
Management principles are developed either from organised quantitative facts or from long experiences
of leaders and scholars of management thoughts. Therefore they are evolutionary in nature.
Limited application:
Application of principles of management in real life is affected by certain limiting factors such as nature,
size, form of business, etc.
An organisation follows the principles of management. Learn the
(a) principles
(b) positive effects, or (c) adverse effects and
(c) examples if any of
each of the following principles of management on the organisation? 3 marks - Important
Which principle of management is violated if subordinate is asked to receive orders from two
seniors? Explain with a suitable example. Name any two ADVERSE EFFECTS that may take place
due to this violation - 4 marks CBSE, 2005 (2)
Fayols principle of UNITY OF COMMAND is violated. This principle implies that an employee should
receive orders from only one superior. If he gets orders from more than one superior at a time then he will
be confused as to which superiors orders should be carried out first.
Adverse Effects: If this principle is violated it may lead to confusion, indiscipline, delay in performance,
difficulty in satisfying seniors and difficulty in fixing responsibility. Therefore to avoid this confusion, dual
subordination should be ruled out.
Example: If a salesman gets instructions from marketing as well as production department at the same
time. He may get instructions from production manager to go slow in selling the product as there is a
power cut in the factory and goods are not being produced fast enough.
On the other hand the marketing manager may insist he sell as per schedule to reach the target. In such

a situation, it may be difficult for the salesman to carry out the orders of two
people, as their instructions are contradictory. Unity of command therefore helps in avoiding such
contradictory issues.
Which principle of management envisages that each group of activities having the same
objectives must have one head and one plan? Explain the principle with a suitable example. What
are the positive effects of this principle 3 marks
UNITY OF DIRECTION

This principle calls of one manager one plan for a group of activities having the same
objective so that the efforts of all employees are directed towards common goals.

The positive effect of this principle is that it ensures unity of action and facilitates coordination.

Example: Suppose an automobile company has three divisions cars, scooters and three
wheelers. Now each division must have its own targets since each product has its own market
and problems. Each division must plan its target as per its environmental conditions to achieve
better results.
(I mark for naming the principle + 1 mark for each point of explanation + 1 mark for example)

What do you mean by the principle SUBORDINATION OF INDIVIDUAL INTEREST TO

GROUP/GENERAL INTEREST CBSE-2005 Set 1. 3 marks
According to this principle of Fayol, management should reconcile the interest of an individual with those
of the group. However if they differ, then the group interest should supersede that of the individual
interest.
Example: If a manager gets an order for supply of a product at his own initiative and due to which the
company benefits immensely.
Positive Effect: The principle suggests that the profit should be shared by all since one person cannot
alone meet an order.
State the principle of ESPIRIT DE CORPS? What is the positive effect of this principle? 3 marks
CBSE-2000, CBSE-2005 Set 1

Espirit de corps means spirit of cooperation.

It means harmony, mutual understanding and team spirit among workers.

If there is team spirit, everyone comes forward to help others.

It helps to develop an atmosphere of mutual trust and understanding and a sense of belong
among workers, which inspires them to work harder and improve quality of work.

Employees up to the standard should be rewarded and those who are not up to the standard
should be given an opportunity to improve their performance.

Positive Effect: When esprit de corps is present the need to penalise the defaulting person is
minimised

Explain FAYOLS Principle of DIVISION OF WORK (2 marks)

State the adverse effects on the violation of the principle of division of work V. Imp

According to this principle of Fayols, every task should be divided into small task and assigned to
the right person who is capable of doing that job. He should also be trained for doing that job.
This is called division of labour.

This principle applies to all kinds of work managerial as well as technical

Positive Effect: A person holding the same post and doing the same job will over time specialise
in that job and improve his performance, efficiency and result in increased output.

Adverse Effects: If this principle is violated it leads to

(a) inefficiency (b) delay in work (c) increase in costs (d) decrease in output.

Explain FAYOLS PRINCIPLE OF DISCIPLINE (2 marks)

According to Fayol, discipline means respect for agreements that are directed at achieving
energy, application, obedience and outward mark of respect (EARO).

Fayol says that discipline requires:

o

Good supervisors at all levels

Agreements should be clear and fair

Penalties should be fairly imposed

However Fayol does not support wrong use of authority to enforce discipline such as warnings,
fines, suspensions, dismissal, etc.

Example: If a company has entered into agreement with employees regarding their wages for 5
years then the company should honour it. Likewise, employee should also honour the
commitments made by them.

An organisation follows the principles of management. What are the POSITIVE EFFECTS of each
of the following principles of management on the organisation (3 will be asked) -3 marks (30-40
words) V. Important
(a) Unity of Direction
Positive effect: of this principle is that it ensures unity of action and facilitates coordination
(b) Espirit de corps

Positive Effect: When esprit de corps is present the need to penalise the defaulting person is minimised
(c) Subordination of individual interest to general interest
Positive Effect: This principle suggests that the profit should be shared by all since one person cannot
alone meet an order.
(d) Scalar chain
Positive Effect: This will produce quicker results in sorting out problems in one or two sittings and avoid
lengthy time procedure, danger of miscommunication, distortion or even danger of being killed in the
process.
(e) Equity
Positive Effect: If similar treatment is assured to people performing similar jobs and the management is
always kind, fair and just in its dealing with its subordinates, it earns the respect, loyalty and devotion of
the employees and they are motivated to put in their best efforts.
(f) Division of work:
Positive Effect: A person holding the same post and doing the same job will over time specialise in that
job, improve his performance, efficiency and result in increased output
An organisation follows the principles of management. What are the ADVERSE EFFECTS of each
of the following principles of management on the organisation? V. Important
(a) Unity of command
Adverse Effect: If this principle is violated it may lead to confusion, indiscipline, delay in performance,
difficulty in satisfying seniors and difficulty in fixing responsibility. Therefore to avoid this confusion, dual
subordination should be ruled out.
(b) Unity of order
Adverse Effect: When there is no arrangement for things and people, the organisation will not be able to
achieve its objectives in time. Effective utilisation of physical and human resources will not be possible.
(c) Stability of tenure of personnel
Adverse Effect: If this principle is violated, it will lead to high labour turnover rate and will increase the
cost of selection and training of the employees
(g) Division of work
Adverse Effects: If this principle is violated it leads to
(a) inefficiency (b) delay in work (c) increased costs (d) decreased output.

(h) Remuneration of personnel

Adverse Effects: If fair remuneration is not paid to the workers, it will create a sense of dissatisfaction
among workers leading to various problems such as trade unions, strikes, high labour turnover rate, etc
Explain Fayols view on REMUNERATION OF PERSONNEL? 2 marks

In Fayols view, remuneration of employees should be fair and reasonable which will satisfy both
employers and employees.

It will stimulate the workers to work more and better.

Wages should be determined on the basis of

work assigned

cost of living

financial position of the business; and

average wage rate for similar work in the industry.

Adverse Effects: If fair remuneration is not paid to the workers, it will create a sense of
dissatisfaction among workers leading to various problems such as trade unions, strikes, high
labour turnover rate, etc.

Why did Fayol suggest the idea of GANG PLANK? What light does it throw on the nature of
Fayols principles? 5 marks

Principles Of Management
What is GANG-PLANK? Show it through a diagram 3 marks
Gang-plank is the technique of shortening the route of communication which is usually followed through
all channel of hierarchy. Fayol suggested that in case of urgencies, by jumping the prescribed line of
authority, these officials could deal with one another at one sitting and sort out several problems quickly.
How can Fayols PRINCIPLES OF EQUITY and order be applied in work situation?-4 marks.
Illustrate with an example. (CBSE-1996, CBSE-2001)
Or
Which principle of management aims at securing the loyalty and devotion of the employees by
giving them kind, fair and just treatment? Explain this principle with a suitable example -4 marks

The principle of equity suggest that similar treatment is assured to people performing similar
jobs. Example two typists should be paid the same wage rate.

An effective management is always kind, fair and just in its dealing with its subordinates. This way
it earns the respect, loyalty and devotion of the employees and they are motivated to put in their
best efforts.

However the principle of equity should be applied at all levels. Workers should be treated at par
at every level.

For example: There should be no discrimination with regards to position, sex, age etc while
granting medical leave to the employees.

Name the function of management, which concentrates on employing and retaining the right
person at the right place. Explain why this function is important in any organisation.
Or
If an organisation does not provide the right place for physical and human resources in the
organisation., which principle is violated? What are the consequences of it?
Principle of ORDER:
If an organisation does not provide the right place for physical and human resources in the organisation,
the PRINCIPLE OF ORDER is violated.
The principle of order is concerned with proper arrangement of things and people. This principle can be
divided into two:
Material order: An orderly arrangement of things is called material order. There should be an orderly
arrangement of physical factors of production like land, raw material, tools and equipment. This means
that there should be a specific place for everything. Every piece of land and every article should be used
properly, economically and in the best possible way.
Social order: An orderly arrangement of people is called social order. This includes employees. Right man
for the right job will ensure effective use of man power resources. Right place for everything and for
everyone should therefore be the guiding principle for every management.
Adverse Effect: When there is no arrangement for things and people, the organisation will not be able to
achieve its objectives in time. Effective utilisation of physical and human resources will not be possible.
Explain the principle of INITIATIVE through a suitable example - 3 marks (CBSE-2000)

Freedom to think and execute a plan is known as initiative.

Employees at all level should be allowed to take initiative in work related matters.

Encouraging initiative is likely to motivate employees to work better and harder.

However initiative should not be confused with disrespect to authority. For example: if any
employee is given the initiative to make suggestions but once the decision is taken on any issue
then there is no scope for disobedience.

Fayol points out the danger and costs of unnecessary labour turnover in one of his principles.
Name and explain the principle.(CBSE-2000) (2004)
Or
Illustrate the principle of STABILITY OF TENURE through a suitable example 3 marks
Fayol emphasised in his principle STABILITY OF TENURE that employees should not be shifted from
their position frequently. The period of service should be fixed. It takes time for an employee to get used
to his work and he cannot render useful service if he is removed before he gets accustomed to the work
assigned to him.

Production requires team-work. If the members of the team go on changing the entire
production process will be disturbed.

An effective management will ensure that trusted, trained and experienced personnel do
not leave the organisation, unless it is unavoidable such as illness, retirement or death of
an employee.

Stability of job creates a sense of belonging among the workers and so they are
motivated to improve the quantity and quality of work.
Adverse Effect: If principle of stability of tenure is violated, it will lead to high labour
turnover rate and will increase the cost of selection and training of the employees.

Define Scientific Management? 2 marks

According to F.W.Taylor who is regarded as the father of scientific management, Scientific

Management is the art of knowing exactly what you want your men to do and seeing that they do
it in the cheapest way.

It means conducting business activities according to standardised tools, methods and trained
personnel in order to increase the output, improve its quality and reduce cost and wastage.

Explain any two principles of Scientific Management.

Or
Describe in brief TAYLORS PRINCIPLES of (i) science not rule of the thumb and (ii) separation of
planning and operational work - 4 marks. (any two out of 5 taylors principles will be asked- 4 marks)
Important
Science not rule of thumb 2 marks

In traditional management rule of thumb was prevailing. This was also known as Trial and
errors method or Hit or miss method

This principle meant that go on trying, failing and wasting the resources and finally perfecting the
job.

Workers were careless because no specific amount of work was expected from them. Even the
employer did not know the real worth of his employee. Everything was left to Trial and Errors
method.

Taylor introduced the scientific method in which he emphasized that Rule of the thumb does
NOT involve thinking before doing and that each job in the organisation should NOT be
performed based on intuition, experience and hit and miss methods.

According to scientific method the causes, effects and exact measures of effort and output should
be kept in view for any work to be performed. This forms the core of scientific management.

Separation of planning and operational work: - 2 marks

According to Taylor, planning operations should be separated from operational operations.

He stressed that managers should concentrate on planning the job of the workers while workers
potential should be developed to the fullest extent for their own benefit as well as the prosperity of
the company.

For this purpose there has to be a scientific selection of workers and they should be trained to
adopt new methods of work.

Harmony not discord -2 marks

According to Taylor those who work together should work in harmony i.e. there should be mutual
give and take and proper understanding among the managers and workers. This is because
group efforts contribute more than an individuals efforts.

Managers should adopt an enlightened attitude and share the productive gains with the workers
and workers on their part should work with discipline and loyalty.

Maximum not restricted output 2 marks

Continuous productivity is one of the principles of scientific management.

According to this principle, production should not be curtailed and management and labour
should both be interested in increasing productivity.

Conflict between management and labour arises mainly on division of surplus. The best solution
is to increase the size of the surplus so that both can have a larger share.

Cooperation not individualism: - 2 marks

Scientific management works on cooperation between workers and management and among
workers themselves.

Management can earn higher profits if workers produce better quality, low cost goods.

Workers can earn higher wages if management provides standard materials, standard tools,
standard working conditions and training in standard methods.

Explain method study as a technique of Scientific Management? 2 marks (CBSE-2004)

Method study is concerned with methods of performing a job.

There are various methods to perform the same job with different costs requirements. Taylor
suggested that management should find out one best way to perform the task.

For example The methods of manufacturing shoes may be manual or mechanical but the cost
of labour and capital to manufacture shoes according to each method may vary. Management
has to decide which method to use before it starts manufacturing.

The objective of method study is to minimise production costs by a proper mixture of factors of
production in order to achieve desired result.

Method study should be done right at the planning stage of the job.

What role do motion studies play in setting the standard task? 2 marks

Motion study is the technique that closely observes the movement of the body/machines required
to perform a job so that unnecessary movements can be eliminated and the best way of doing a
job is determined.

Upon a close examination of bodys wasteful motions it is possible to find

which motions are productive

which are unproductive

which motions are incidental i.e. going to the store

Through motion study Taylor was able to design suitable tools & equipment and educate workers
on their use.

Define fatigue study on the basis of meaning and purpose? 2 marks

Fatigue study helps in setting the time interval and frequency of rest period in completing a task.

A person will be tired and less productive if he works without rest interval for a long period of time.
If he is allowed rest intervals he will regain stamina and work with increased efficiency.

What is the role of time study in setting the standard task or help to improve the efficiency of
workers.? Give two points in support of your answer? 2 marks

Time study measures the standard time taken for a qualified worker to perform a well -defined
job.

Time study is done with the help of a time measuring device.

Objective of time study is to:

Determine number of workers to be employed

Determine cost of labour

Frame suitable incentive schemes

Benefit of time study:

o

It helps to determine the fair days work of an employee

It creates time consciousness in a worker

It eliminates idle time

It helps in reducing costs

Distinguish between Time Study and Motion Study 3 marks (Pre Semester 2003)

TIME STUDY

MOTION STUDY

It measures the standard time taken for a

qualified worker to perform a well defined job.

It studies movements of body/machine to perform a job

The purpose is to decide how much time is

normally required to perform a certain job

The purpose is to avoid wasteful motions and to

determine the best way of doing a job

It measures the work provides a yardstick to

It eliminates and reduces wasteful and useless motions.
decide between efficient and inefficient workers

What is Mental Revolution 2 marks.

According to Taylor, mental revolution means that both workers and management should
completely change their attitude regarding relation between themselves and their work.

Management and workers usually suspect each other and try to trick each other.

Workers all the time feel that management exploits them by extracting a lot of work from them
and paying meagre wages. Management on the other hand feels that workers always grumble

about the workload and deliberately slow down their work, damage equipments, tools and show
indifference to quality of products.

Mental revolution requires that such a feeling of suspicion or prejudice should be rooted out.

Management should provide good working conditions and resolves all problems scientifically.
Similarly workers on their part should work with discipline and loyalty.

Instead of fighting for dividing the surplus profit, management and workers should cooperate to
increase it.

Do you agree with the view that Taylors principles of scientific management and Faylors
principles of management are mutually complementary. Give any 4 reasons. (3-4 marks)
Or
List 4 distinctions between Fayols contribution and Taylors theory (Important) 3-4 marks
Yes, they are mutually complementary since no organization can function effectively without mutual
cooperation of managers and employees.
The comparative evaluation of their contributions is given below. (FEES)
Focus:

Taylor tried to improve the productivity of workers and eliminate all kinds of wastes.

Fayol tried to develop the principles to ensure better management.

Taylors principles were more applicable at shop level with emphasis on tasks of workers
and supervisors.

Fayols principles were more applicable at general management level with emphasis on
efficiency of managers and administration

Emphasis:

Expression:

Taylor used the expression scientific management

Fayol used the expression general theory of administration.

Starting point:

Taylor wanted to improve the efficiency of lowest level and then move upwards while
formulating the principles of scientific management.

Fayol began from the top level and moved downwards with emphasis on unity of
direction, command and coordination.

Business Environment

What is meant by business environment? 2 marks

Business environment means forces and institutions which the members of a firm must deal with in order
to achieve the objectives of the organization.
Forces include politic, economic, social, technological, etc (PEST) and Institutions include (competitors,
customers, suppliers, etc)
The environment provides both constraints and opportunities. Discuss with examples

An environment provides constraints (restrictions), which could be in the form of economic

conditions, customs, government regulations, availability of natural resources, labour supply.
Example: Despite many initiatives, foreign direct investment in India is not picking up in the
country because of political and bureaucratic reasons.

On the other hand, environment also provides the firms numerous opportunities in the form of
unmet and changing needs of the customer and market.
Example: the growing demand for air conditioners has attracted many new domestic as well as
multinational firms in the industry

What is meant by environment scanning? 2 marks

Environment scanning is a process by which organizations monitor their relevant environment so

that they can consider the impact different events, trends, issues, expectations have on its
strategic management process.

Example in the Union Carbide gas leakage incident in Bhopal in Dec-1984,

The accident and the holocaust that resulted, was an event
The consciousness on the part of the Regulatory Authorities regarding the safety from hazardous
exposure to chemicals, was the trend
The rising concern about environmental pollution was the issue
expectations of the public from the government was to amend the laws to include safety
measures and stricter enforcement through various mechanisms.

Briefly discuss two dimensions of general environment? Classify business environment in two
major categories and give one example of each? 2 marks
The two dimensions of general environment are:
Economic environment : includes fiscal, monetary and industrial policies, etc
Non economic environment : includes social, cultural, political, legal, technological factors, etc
Explain economic environment? 2 marks
Economic environment consists of (BIG PICCED)

Balance of payment

Inflation rate

Gross national product (GNP)

Productivity

Interest rate

Consumer Income

Corporate Profit

Employment rates

Debt & Spending

Give two examples of the factors and influences that operate in the Indian ECONOMIC
ENVIRONMENT and which have had an impact on all business organizations 2 marks
a. Rapid increase of production capacity after partial decontrol of cement in 1982.
b. Banking sector reforms led to attractive deposit avenues, easier credit terms, better service and
above all an effective and reliable banking system
c.

Due to changes in economic and fiscal policies, entry for financial institutions and banks in stock
trading became easier.

What is meant by SOCIAL ENVIRONMENT of business? 2 marks

Social Environment describes the characteristics of the society in which the firm exist.

The following form a part of the social environment:

o

Customs, Age, Beliefs, Lifestyle, Educational levels (CABLE)

Literacy rates, Values, Demographic distribution & mobility of population (VLDM)

Managers should remember that although the attributes of the society may change slowly or
quickly but they will eventually change.

They should study the social traits of the area before moving in that area otherwise the cost of
ignoring the taste, preference, customs, traditions taboos of the society could be very high.

Examples:
o

Vicks Vaporub is a popular pain balm. If it is used as a mosquito repellant in some

tropical areas due to sheer ignorance, the adverse effects can be very severe.

Similarly, the slogan of Pepsi Cola come alive in some languages is translated as come
out of the grave. Therefore due to this slogan, the product failed to pick up.

Give 2 examples of factors and influences that operate in the Indian SOCIAL ENVIRONMENT and
which have had an impact on all business organizations? 2 marks
1. Demand to reserve jobs for minorities and women.
2. Equal pay to men and women for equal work performed.
3. When there is an increase in middle class families, there is a continuous demand for various
consumer goods and they also influence investment in the corporate sector.
Explain briefly five ways in which Indian managers are responding to changes in the business
environment (Sample paper) 5 marks - V. V. Important for Yr-2006 Board
Following are the ways in which companies are responding to change in business environment.
1. Acquisition & Mergers:
o

Mergers, acquisition, takeovers, amalgamations (MATA) are a common feature of post

liberalized economy.

The purpose of these acquisitions and mergers were to achieve entry, dominance in the
market, access to technology, etc.

Examples: Mergers between ACC Gujarat, Ambuja Cement, Hindustan Aluminum Co and
Indian Aluminum Co are examples of merger. Reliance gaining control over management
of L&T is an example of acquisition.

2. Consolidation of Multinational
Due to liberatisation policy, many multinationals have entered India through joint ventures.
For example General Motors entered through a joint venture with Hindustan Motors. Ford entered
with Mahindra & Mahindra. Multinationals are also entering the core sectors of the Indian
economy.
3. Brand building
Branding means putting the manufacturers name, a picture, etc on the package of the product.
Brands create awareness of a product and hence in todays competitive world, brands have come
to occupy an important place. Many companies increased their expenditure to enhance their
brands. For example heavy expenditure was incurred on launching of Korean brands such as
Hyundai, LG, Samsung, etc. Indian companies are also doing likewise.
4. Distribution & Selling
o

Selling goods through direct marketing of products such as Tupperware, Amway is a

recent development.

This has increased the selling cost of Indian companies more than foreign company
because a large amount is being spent on advertisement.

Capital Structures

Capital structure of companies has changed more to equity than debt. This is because in the past
equity was dominant but thanks to crooks in the stock markets, they have shaken the investors
confidence by so many false new issues in the past, companies now have to rely more on debt
than equity.

Indian companies such as Reliance have also started moving towards global market for equity
and debt capital

Planing -

Planning Syllabus (Only 1 Knowledge Q with choice will come as a 6 marks question) at the Board E

Define Planning? 1 mark (part of the question)

Planning means

making decisions with regards to goals to be achieved and

the methods to be adopted to achieve those goals.

Explain briefly 6 steps in PLANNING PROCESS OR in FORMULATION OF A PLAN 6

DCDCFPF : the steps should be answered in sequence
1. Defining objectives
1st step-of the management is to develop a plan and set some clear and specific
objectives, which should stipulate the areas where organized planning must occur.
2. Choosing alternatives:
2nd step - the manager should ascertain as many available alternatives as possible for
reaching those objectives and he should explore all those alternatives without going into
the merits and demerits of those alternatives.
3. Developing planning premises:
3rd step - the manager should list all the premises (assumptions) for each alternative and
then determine the feasibility of using any one alternative to reach its objectives.
4. Choosing the best alternative:
4th step - the manager should evaluate all the alternatives + the premises on which the
alternatives are based so that the unreasonable alternatives can be eliminated from
further consideration and the best alternative can be decided to achieve the objectives of
the organization.
5. Forming supportive (derivative) plans: (Explain the meaning of supporting plans
with the help of a suitable example?
After forming the main plan, secondary plans are derived in order to support and expedite
the achievement of the main plan. These secondary plans are known as derivative or
supportive plans.
For example once the production plan is prepared, secondary plan would be to buy

equipment, raw material, recruit and train staff, develop new product, etc. These
derivative plans are formed on the basis of the main plan and therefore support it.
6. Putting the plan into action:
Once plans are developed, they are ready to be put into action. The organization does
not benefit from the planning process until this step is carried out.
For example if the firm decides to promote sales through advertising, then the company
should engage an advertising agency to go ahead with the advertising otherwise the
company will not achieve its desired results.
7. Following up:
Once the plan is put into action, it should be monitored because in the course of
implementing the plan, many adjustments may be required in order to achieve the given
objective.
NOTE: if any additional correct point is added at any relevant stage without violating the
sequence, full credit should be given. If sequence is not maintained, 2 marks are
deducted
Planning is not a guarantee of success of a business . Comment
Or
Why does planning sometimes fail in spite of the best effort of management? 5 marks
Or
Explain the LIMITATIONS of planning? 5 marks (First Semester 2003)
Or
Explain rigidity as a limitation of planning 3 marks (Board Exams - 1998, 2004) - Imp
Anagram for Planning Limitations = RIP CUT
Rigidity:

Planning leads to rigidity. This has an adverse effect on the initiative to be taken by the
managers.
For example due to a sudden change in the economic environment, a manager may
have to change the course of action to achieve the desired result. But the manager may
not be able to take the initiative if it is not in the plan in which case rigidity in planning
may prove costly to the organization.

Rigidity may be internal as well as external.

Inaccurate:
Planning is based on the future, which is uncertain and beyond the control of the organization. Predicting
the future is difficult. Any plan based on inaccurate information may not be very useful to the organization.
Psychological barriers:
There are some inbuilt psychological barriers. For example-people prefer the present rather than the
future, as the future is relatively uncertain. Also planning involves change and adjustment to such
changes and people tend to resist change.
Costly:

Planning is an expensive exercise as it involves time and money to prepare estimates,

collect information and evaluate various courses of action.

Often there may be need to hire the services of experts for the purpose of planning.

Thus, planning can be beneficial only if the benefits to be derived from it are more than
the costs.

Unsuitable:
In planning there are set policies, procedures to be strictly followed under all circumstances. However,
this is against the very concept of business. Business is a dynamic activity faced with opportunities and
problems. If it follows a set course of action, there may be risks of failure.
Time consuming:
Planning requires time to think, analyze the situation and then design the final plan. In case of
emergencies it is necessary to take on the spot decisions. In such situations, time is a precious
commodity and any delay caused by planning may deprive the business of a profitable opportunity.
Explain in brief, the meaning of Goals & Objectives & Rules as types of plans and give any four
examples of each.
Or
Explain the types of plans? This Q comes as a choice
Goals are collective ends towards that an organization direct their energies and activities.
Examples:
1. The goal of a car company can be to provide good quality and economically priced
automobiles to the public.
2. Improvement in communication system
3. Improvement in customer relationship
4. Improvement in sales of specific product
Objectives are the ends towards which activity is aimed. They are the results to be achieved. An
objective should meet the following five requirements
1. It should relate to a single specific topic
2. It should relate to a result and not to an activity to be performed
3. It should be measured in quantitative terms whenever feasible
4. It should have a deadline for achievement
Rules are rigid instructions. They are specific statements and guide to behaviour. They indicate what
should and should not be done. In rules, there is no scope for discretion.
Explain the term policy and procedure as types of plans and give any four points of distinction
between them. 6 marks
Policy is a general statement of an organization which specifies its intention to respond to a specific
problem or situation .
Example: McDonald has a policy that it will not grant franchise to an individual who already owns another
fast food restaurant.
Likewise a school admission office may have a policy that admission will be granted only to those
applicants who have secured 60% and above
Procedure is a guide to action. It contains steps in chronological order for handling future activities.

Example: McDonald has a procedure that explains exactly how Big Macs are to be cooked, how long they
can stay in the warming rack, etc.

Distinguish between (Any four points): 6 marks

POLICIES

PROCEDURES

It is a guide to thinking and steps to decision making It is a guide to action and contains steps in
chronological order to handle future activities
They are general statements

They are specific statements

Flexible

Rigid

Scope for discretion

No scope for discretion

Decided by top level management

Decided by middle & low level management

There may be different policies for different

departments

There are same procedures for all departments

They are not dependent on procedures

They are dependent on policies

Marking Scheme Policies and Rules (Important)

POLICIES

RULES

General statements

Specific statements

Flexible

Rigid

Scope for discretion

No scope for discretion

Guide to decision making

Guide to behaviour

Lay down management attitude

Indicates what should or should not be done

Example : McDonald's has a policy that it will not

grant franchise to an individual who already owns
another fast food restaurant.

Example: McDonald restaurant has a rule which

prohibits customers from using its telephone

Organising Define Organising and enumerate 3 steps involved in the process of organising?

Organising means identifying and grouping various activities into jobs and then sub grouping
these jobs into sections and departments.

It is bringing together financial, physical & human resources and establishing productive relations
among them for achieving specific goals.

The organising process involves the following steps:

Division of work:
1st step divide the work since one individual cannot do the entire work. If work is divided it leads to
specialisation of work and skill.
Grouping Jobs and Departmentation:

The 2nd step is to group similar jobs into departments, divisions or sections such as marketing,
financing, manufacturing, etc.

This brings about coordination and facilitates unity of effort.

The departments so created are linked together on the basis of their interdependence.

Establishing authority relationships:

3rd step is to create an authority structure among various job holders

This links the various job holders by authority-responsibility relationship.

Define Organising as a structure? Enumerate any three CONSIDERATIONS to be kept in mind

while building an organisational structure. - 4 marks
Definition:

An organisation structure define:

o

job positions,

the roles assigned to them ;and

the authority relationships among the various job positions.

It facilitates work-flow in the organisation.

Considerations (any 3)
The following considerations should be kept in mind while building an organisation structure
Job design:

Manager has to first design the jobs

Then specify which task is to be included in each job

Then decide which person will do which job

Departmentation:
Once the jobs are defined they must be grouped together to form a department as coordination becomes
easier if similar jobs are under one department and one manager.
Span of Control:
After the departments are formed, how many people and jobs the manager will manage is the next
decision. The manager is responsible for coordinating a particular number of jobs, which is called the
span of control.

Delegation of Authority:
As jobs have been assigned, some degree of authority is required to get the job completed.
Explain how organising helps in Specialization and Co-ordination
Or
Describe IMPORTANCE OR OBJECTIVES of organising as a function of Mgt? 6 marks
Organising function is important because it leads to: (SCARS)
Specialisation:

Activities should be grouped based on their similarity and convenience.

This leads to efficiency, specialisation and speedy performance of task.

Clarifies authority and responsibility:

If each manager is aware of his respective powers and privileges, his area of activity, whom he can order
and for which task, it helps to minimize conflicts and confusion.
Avoids duplication of work
Organising helps to avoid duplication of work and overlapping of responsibilities. This is because specific
jobs are assigned to individuals and work groups.
Role clarity:

The organising process clarifies what role a person doing a job is supposed to perform.

It is quite often spelt out in a written document called job description.

This helps to
o

Avoid duplication of work

Finding right person for the right job.

Source of support and security:

Organising is a source of support, security and satisfaction to managers and employees in performing the
task assigned to them. Each member enjoys a definite status in the firm.
FUNCTIONAL AND DIVISIONAL STRUCTURE: (Important sub chapter)
Define functional organisation? 1 mark (part of the question)
Grouping together the entire work into major functional departments and entrusting these departments to
functional specialists is known as functional structure of the organisation.
In an electrical manufacturing company, there are four main activities Production, Marketing,
Finance and Personnel. The General Manager is planning to structure the organisation. Which
type of organisation structure should be adopt and why? Give two reasons.

This company should adopt the functional structure because:

Each major function is organised as a separate department viz. marketing, production, finance,
personnel, etc.

This promotes division of work which leads to specialisation

Ensures effective utilisation of workforce

Supervision and coordination becomes easy since each individual manager is specialised in his
job.

State any 3 advantages of functional structure of organizing - 3 marks Marking Scheme

Promotes division of work which leads to specialisation

Ensures effective utilisation of workforce

Supervision and coordination becomes easy since each individual manager is specialised in his
job.

State any 3 limitations of functional structure of organising 3 marks

As each function is separate and each departmental head is concerned with the performance of
his department, conflicts may arise and the overall objectives of the organisation suffer.

In large functional organisations, taking quick decisions & coordination becomes difficult

It becomes difficult to hold a particular department accountable if any problem arises.

For example, if a product fails the production, sales and research departments may point accusing fingers
at each other.

XYZ Limited is manufacturing chemicals and textiles. What type of organization structure would
suit the requirement of such an organisation? And why?

Divisional organisational structure would suit the requirements of XYZ Limited.

In divisional organisational structure, activities and personnel are grouped on the basis of
different products manufactured by the firm.

This allows each division to specialise in its areas of operation

Decision can be taken quickly and effectively

Each division can concentrate on each product line. This will result in efficiency and economy in
its operation

State any 3 advantages of DIVISIONAL STRUCTURE of organising 3 marks

Each division can specialise in its areas of operation.

Decision can be taken quickly and effectively.

Can concentrate on each product line, which leads to efficiency and economy in its operation.

State any 3 disadvantages of divisional structure of organising 3 marks

As each division has its own production, marketing and finance arrangements, it involves heavy
expenditure on human and physical resources.

Managers in each department focus only on their own product without thinking of the rest of the
organisation.

Full utilisation of equipments may not be there in different departments.

It is not suitable for small and medium sized companies.

DELEGATION OF AUTHORITY: (Meaning, Importance & Elements) Imp sub chapter

Define delegation of authority?
The manager cannot perform the entire work assigned to him alone. So while he himself does jobs that
are unique to the position he holds, he shares routine work and authority with competent subordinates to
operate within prescribed limits. The sharing of this routine authority and responsibility with the
subordinates is delegation of authority.
Explain briefly the ELEMENTS/PROCESS OF DELEGATION OF AUTHORITY? Marking Scheme - 4
marks
Or
Delegation of authority is a process involving authority, responsibility and accountability
Explain this statement in brief. 4 marks Important
Delegation means entrusting responsibility and authority to another person and creating accountability.
Thus the process of delegation of authority has the following three important elements:
Responsibility:

Responsibility can be delegated. It is the first step in the delegation process.

A manager assigns certain tasks to his subordinates because he alone cannot perform all
those tasks.

However he only assigns the task to his subordinate but not the responsibilities for their
performance.

The responsibility for proper performance of such task continues to rest with him.

Besides assignment of duties, the subordinates are also granted authority to perform
those duties properly.

Authority refers to the powers and rights to use financial, physical and human resources
as well as the right to decide to act or not to act.

Authority is needed perform a given responsibility because without authority it may be

very difficult and even impossible to carry out the given task.

Authority:

Accountability:

The process of delegation is complete when the subordinate to whom the duties are assigned and
authority is delegated is made accountable for properly performing his duties and for properly exercising
the authority delegated to him.
Authority can be delegated but responsibility cannot. Explain the statement in brief
Or
Responsibility can be delegated but accountability is absolute Explain. 6 marks
According to the principle of absolute responsibility, authority can be delegated but responsibility and
accountability cannot be delegated by a manager. The manager is responsible or accountable to his own
superior for both, the tasks that he has assigned his subordinates and the acts of his subordinates. In
other words only authority can be delegated but responsibility and accountability is absolute.
Example: if a foreman fails to get 100 units produced by the workers on any day, he is responsible to his
superior. He cannot escape by saying that the workers were at fault. Similarly, the factory manager
remains responsible to his superior for the work he entrusted to this foreman. He cannot escape from the
responsibility by passing on the blame to his foreman.
Why is it necessary to delegate authority? Give three reasons? (Importance/advantages of
delegation of authority)
Or
Delegation of authority helps in reducing the workload of managers and in motivating the
subordinates. Explain this statement 6 marks V.Important
It is necessary to delegate authority due to the following reasons:

It reduces the workload of managers. By sharing some of his own work with the subordinates,
the manager is able to concentrate on more important jobs. This way he increases his own
effectiveness and that of his subordinates. When delegation of authority takes place at all levels
of the organisation it leads to proper division of work and assignment to all managers in a
systematic manner.

It establishes a superior-subordinate relationship. The flow of authority from top to lower level
of management is directed and controlled by the process of delegation. This gives meaning and
content to the flow of authority and to managerial jobs.

It increases morale of the subordinates: Delegation helps the subordinate to develop their
capabilities to handle new and more challenging jobs. This gives him job satisfaction. it increases
his morale, self confidence and efficiency to get promotion.

Explain the term decentralization in brief? 3 marks

Decentralisation means delegating authority at all management levels and all departments of the
organisation to take decision and appropriate action on tasks assigned to them.

In a decentralized organisation, while top management have authority to frame policies and take
major decisions; middle and lower level managers have authority for taking decisions on tasks
assigned to them.

Example: In an organisation, major decisions on products, line of business, capital investment,

etc are made by top management while marketing manager for example is authorised to decide
on prices of products, distribution channels, methods of advertising the products and organising
sales campaigns. Top management does not interfere with his authority. However, marketing
manager is required to keep in view the overall policies of the organisation while making

decisions concerning matters within his authority. This organisation may be regarded as a
decentralized one.
The concept of decentralisation is related to the concept of delegation. Explain this statement in
brief. 4 marks

Decentralization refers to the dispersal of authority to take decisions to the lower level of an
organisation where the problem arises.

Delegation means entrustment of responsibility and authority from one individual to another. The
concept of decentralisation is wider in scope and coverage.

Decentralisation is completed only when the fullest possible delegation is made to all or most of
the people who are delegated a specific kind of work or responsibility.

Explain the concept of delegation and decentralisation bringing out its distinction
Or
Dist between: (All points are important as any 3 are specifically asked in the CBSE paper 3 marks
or 6 marks
DELEGATION OF AUTHORITY
Scope

DECENTRALIZATION

Scope is limited to the manager and Scope is wider than delegation as it involves
his immediate subordinates in the delegation of authority at all levels and in all
work unit.
functions of the organisation.
It is entrusting authority from one
person to another

It is an extension of delegation to the lowest

level in the firm.

Significance

Delegation is compulsory in every

organisation at every level.

Decentralisation is optional and is decided

by the top management if it wants or does
not want it.

Freedom of Action

Manager exercises control over

activities of subordinate

Essentiality
Responsibility

Managers of work units have greater

freedom of action. They are not kept under
close supervision by their superiors but have
to work under guidelines and performance
targets set by top management

Organisation cannot function without Organisation can function without

delegation of authority
decentralisation.
Responsibility cannot be delegated
Responsibility can be delegated

Grant of Authority Delegated authority can be withdrawn Cannot be easily withdrawn as introduced
by delegator.
by top management.

- Staffing -

2-3 marks Q should not exceed 30-40 words

4-5 marks Q should not exceed 60-80 words
6 marks Q should not exceed 100 words
Staffing Syllabus (one 6 marks question comes as a choice and one 4 marks question comes on
wage and time piece system) 6+4=10 marks
Define staffing as a function of management? (DASTOD)

Staffing is the process of determining the manpower needed to meet the objectives of the
organisation.

Apprising and selecting candidates to fill these requirements; and

Training, orienting and developing (TOD) new and existing staff.

Explain briefly 6 steps in the STAFFING PROCESS ?6 mks

(maintain the sequence. 2 marks will be deducted if sequence is not maintained)
Following are the important steps involved in the staffing process:
Manpower planning:

Man power planning tries to assess manpower requirements in advance keeping the
production schedules, market fluctuations, demand forecasts, etc. in the background.

The focus of manpower planning is to get the right number of qualified people at the right
time.

Manpower requirements are estimated through job analysis.

Job analysis: (What is job analysis?)

Job analysis means a careful study of the tasks and responsibilities involved in a job.

The relation of one job with another job

The conditions under which the job is to be done; and

The capabilities of the job-holder to perform the job satisfactorily.

Recruitment: (Define recruitment?)

Recruitment is the process of finding and attracting candidates to fill up vacant positions
in the organisation.

The process begins when new recruits are sought and ends when their applications are
submitted.

Both internal and external sources may be used to recruit staff.

Selection: (Define selection?)

Selection is choosing from among the applications the most suitable candidates to fill up
the vacancies in the organisation.

It involves comparing and evaluating candidates in the light of qualifications required to

perform the job.

It consists of application, test, interview, medical examination, reference check, etc.

Training (Define Training)

Training means providing new recruits with required knowledge and skills relating to their
jobs.

Training increases workers knowledge, ability, competence & makes them more useful.

Every new recruit has to undergo a period of training in different departments till he is
found to have sufficient knowledge of the important types of work. Subsequently he is
given the job that he is best suited for.

Placement & Orientation

Placement means asking the candidates to occupy the position in the organisation for
which they have been selected.

Orientation means taking the new recruits round the office/plant and introducing them to
all employees and to the rules and policies of the organisation.

Orientation enables new recruits to adjust themselves to the work environment.

Why are external sources of recruitment better than internal sources of recruitment? Explain
briefly, any six reasons 6 marks
Or
What are the merits of external sources of recruitment?

Wide choice is possible as many applications can be obtained from external source.

Fresh candidates infuse new blood and new ideas into the enterprise

Internal employees have to compete with fresh external candidates, which proves to be
advantageous to the firm.

Internal source is not capable of meeting entire requirements of the enterprise so it has to depend
on external sources also.

Explain in brief any 6 external sources of recruitment of employees?

( for naming each source + mark for explanation) - Imp
All firms cannot meet all their manpower requirements from internal sources alone. Therefore recruitment
from outside sources is necessary. These sources are:
Recommendation of present employees:
Many firms encourage their employees to recommend their relatives/friends for employment because they
believe this policy will prove to be a valuable asset

in maintaining goodwill of the present employees; and

in finding reliable candidates.

Factory Gate:
In times of severe unemployment and when unskilled workers and casual workers are required, workers
are recruited from a large number of job seekers that assemble everyday at the factory gate.
Notices:
Notices or posters placed at a central location in the workshop, office or at the factory gate help in
identifying suitable candidates for the job.
Jobbers & Contractors: (Agents)

Many industries in India secure their manpower requirements through jobbers and contractors. These
jobbers and contractors keep in touch with the potential labourers in the villages and on payment of a
commission, bring them to the places where workers are needed.
Waiting list:
Many firms receive casual applications either through mail or personal visits to the firms. These
applications are kept in record and can prove to be an excellent source of recruitment.
Personnel Consultants:
If the personnel policy of the firm permits, a firm can opt to use the services of a personnel or
management consultancy firm that is specialised in recruitment purposes.
Media advertising:
Advertising is a popular method of recruiting staff. The benefit is that the firm can use the most
appropriate newspaper or journal to advertise the vacancy and also get the best candidate to fill up the
vacancy.
EXPLAIN THE STEPS IN THE SELECTION PROCESS 6 MARKS
(Any six in sequence with suitable explanation 1 mark to be deducted if proper sequence is not
followed)
Code to remember Select APATIR (The Personnel Manager scrutinises the candidates application then
arranges a preliminary interview, then makes candidate fill the form, gives a test, interviews, lastly request
references and medical check ups).
Application scrutiny:
Every person who applies for the job may not possess the qualifications that the job demands. Hence the
applications are carefully screened and those who do not possess the required qualifications are
eliminated from the list of candidates that will be called for a preliminary interview.
Preliminary interview:
A brief preliminary interview is conducted in which questions relating to the job for which vacancies are
being filled up, are asked. If the applicant is successful in the preliminary interview, he or she will be
asked to fill an application form.
Application form:
The candidates selected in the preliminary interview have to fill up blank application forms. Sometimes
the applicant may also have to attach his or her photograph to the application form. These applications
are then maintained in the records of the Personnel Department.
Testing: (list the different types of test used in the selection process)
The candidates are then tested and there are large number of tailor made or standardised tests available
for this purpose. These include the following tests:

Interview:

Trade test - to discover the job skills of the prospective candidate

Performance test to check the proficiency of the applicant. For example a typist/steno is
tested on the speed of her typing/shorthand.

Psychological test to check the intelligence, attitude, aptitude, achievements, emotions,

interests and other such qualities of the candidate.

Interview is especially important for skilled and technical jobs.

In an interview the candidate is evaluated for poise, appearance and to get more
information than what is stated in the application form.

Since a pool of interviewers interview the candidate, wide judgement of all experts
becomes available.

References/medical checks:

After the interview, the candidate may have to provide unbiased references to assess the
character and reputation of the candidate.

The candidate has to then undergo a medical examination to check the physical fitness.

On satisfactory conclusion of the above process, a letter of appointment is issued to the

successful candidate and a reasonable time is given to join the organisation.

Distinguish between: (all points V. Imp)

On the basis of Purpose/Objective, level of persons involved, depth of knowledge, etc
(Imp)

TRAINING

DEVELOPMENT

Purpose/Objective

It imparts technical skills

It imparts technical, human and

conceptual skills

Level of persons involved

It is useful for non managerial

personnel

It is useful for managerial personnel

Depth of knowledge
Imparted

It develops skills already possessed It develops hidden skills and talents

by personnel

Initiative in learning

It uses on the job training

It uses off the job training

Scope of learning

It has limited scope of imparting

skills to workers

It has wider scope associated with

overall development of executives

Duration

Short duration as it is job oriented

Long duration as it is career oriented

Explain briefly any six reasons as to why the training of employees is necessary?

Training helps to improve the performance of both new and experienced employees.

It qualifies employees for promotion to hold more responsible jobs.

It reduces the learning time and ensures higher productivity from new employees.

It reduces absenteeism, turnover, accidents and grievances.

It helps in economic and better utilisation of raw materials, tools and equipment.

It helps employees to acquire new knowledge and job skills. This increases their market value
and earning power. It also increases their job security with existing employer.

It is difficult for a company to get sufficient skilled workers, training therefore solves this
manpower problem by establishing its own apprentice training programme.

It helps to mould the attitude of employees and obtains better cooperation and greater loyalty
from employees.

EXPLAIN JOB ROTATION, VESTIBULE TRAINING AND INTERNSHIP AS METHODS OF

TRAINING? 6 MARKS
Or
What are the METHODS used for training of workers? 6 marks CBSE-1992
Job Rotation: (on the job training)
Under this method, an employee is periodically rotated from one job to another to acquire knowledge and
general background of all the jobs.
Advantage: New comers get knowledge of several business situations.
Drawback: It prevents specialisation of a particular job.
Apprenticeship training: (on the job training)
It is a practical form of training whereby the trainee is placed under the control and supervision of an
experienced person. He observes how the work is done and thus learns from him. He is in a way
assistant to the experienced person. People seeking to enter skilled trades like plumber, electrician, etc.
are often required to undergo this training under the guidance of a master worker.
Vestibule training: (Off the job training)
Under this method, employees learn their jobs on the equipment they will be using, but the training is
conducted away from the actual work floor. It is generally used to train employees on sophisticated
modern equipments and machinery.
Internship training (Off the job training)
This refers to a joint programme of training in which technical institutes and business enterprises
cooperate to enable the students to gain practical training of the theoretical knowledge gained in the
classroom. Classroom principles are better understood against a practical background in a factory. It is
not a service contract but during this period normally a stipend is paid to the student.
What is meant by INCENTIVE?

Incentive means
o

Paying a guaranteed minimum remuneration irrespective of whether there has

been an output or not.

Plus paying additional remuneration for larger output

For saving time

For reducing costs; and

For better workmanship

Your subordinate expect new source of motivation at every subsequent stage. Suggest any 4
MONETARY AND ANY 3 NON MONETARY SOURCES, giving a sentence for each source, how it will
inspire them
Or
Explain the various types of INCENTIVES which may be used to motivate employees with suitable
examples ( 6 marks)
There are two types of incentives monetary and non-monetary incentives.

Monetary incentives (financial incentives):

They are monetary benefits paid in cash or kind or both.

They are generally used to motivate workers and non-managerial employees.

The various sources of monetary incentives are:

o

Profit sharing incentives given to workers for higher productivity and greater
profitability.

Co partnership- workers get their usual wages + a share in profits + a share in

management of the company.

Bonus It is a one time reward in cash, kind or any other form offered to workers for
higher performance

Suggestion system: It is an incentive given to a worker when his suggestions results in

either increased profits or reduced costs. The amount of reward varies according to the
value of the suggestions.

Non-Monetary incentives: (non financial incentives)

They do not involve cash but satisfy ego and self -esteem.

They are generally used to motivate higher level of management.

The various sources of non monetary incentives are: (sarp)

o

Supervisory relationship: coordination with supervisors enhances commitment to work

and motivates employees to work efficiently and effectively.

Assigning Challenging jobs Repetitive work creates monotony in work. In order to

create interest in the work, employees should be assigned challenging jobs. When the
challenging tasks are successfully performed, it gives a sense of satisfaction to the
employees, which should also be suitably rewarded.

Recognition Praise or recognition has a great impact when given on received and
helps in improving the attitude of employee and motivates them to perform better.

Participation in management decisions: employees should be encouraged to

participate in management decisions. Good suggestions and comments from employees
should be acknowledged and implemented.

4 marks definite question on time rate and piece rate wage system (v. important)
You are the representative of workers in a factory and want to impress upon the management the
need for introducing time rate system in place of piece-rate system of wage payment. What four
reasons would you like to give to the management to justify your point of view? Explain in brief.
(Give any four advantages of time rate wage system)
As a workers representative, I would prefer the time rate wage system due to its following advantages:

It is simple to calculate the wages and therefore easily understood by workers.

It provides stable income to employees so they can plan their expense budgets.

Workers are therefore not in a hurry to complete the job and can therefore pay more
attention to quality of their work. There is no rough handling of machinery, tools and
equipment.

As the workers work sincerely and honestly, constant supervision is not required which
reduces production and administration costs.

It is favoured by trade unions as workers are treated at par on the basis of their output
and efficiency.

The workers of a factory are demanding the introduction of time wage system in place of the
existing piece-rate system of wage payment. The management is not prepared to accept this
demand of the workers. Why, in your opinion, is the management opposing this demand? Explain
in brief any four reasons.
The management is opposing the introduction of time wage system due to the following reasons: (write
the disadvantages of time wage system) any 4

In time wage system, both efficient and inefficient workers get equal remuneration for
same job. There is no incentive for efficient workers to work better in terms of quality and
quantity of output. Efficiency will neither result in extra remuneration nor promotion for
them. As a result there is quality of work is low.

It is difficult to assess a workers efficiency, as there is no record of his performance.

Time wage system treats workers at par. As such trade unions pressurise management to
accept their demands. If they do not accept the demands it leads to industrial unrest,
strikes, riots and lockouts, etc.

Constant supervision of workers is required which increases cost of production

There is the tendency for workers to go slow and hence production suffers.

Skilled workers are not required.

What are the advantages of piece rate system?

It provides an incentive to produce more.

It ensures fairness by correlating wages and productivity.

Cost of supervision is less as workers do not need to be supervised.

When is TIME wage payment method suitable? {Hint all work that requires time to do the work is
time wage system} Go through all they are important

When high degree of skill is required

Where production process is complicated and intricate

Where quality is more important than quantity.

Where mental work is involved such as administration, management and policy making.

When workers are recruited on group basis

When machines used are delicate and expensive

When workers have no control over their output (control is by machine)

When there is no clear relationship between effort and output

Where units of output CANNOT be measured

When output of learners CANNOT be expected to reach the minimum standard

Which method of wage payment time rate or piece rate would you adopt under each of the
following situations? Give reasons in support of your answer 4 marks CBSE 2004 Set 1, 2 and 3
(V. Important)
When production process is complicated and (intricate) or requires a high degree of skill.
Time rate is more suitable as the job requires a high degree of skill. The workers would not be in a hurry
to complete their job and would maintain the degree of skill and quality desired.
Where quality is of supreme importance
Time-rate wage payment method.
The workers are not in a hurry to complete the job If it was piece rate workers would hurry to complete
the job and would not maintain the quality desired.
When a collective effort of group of individuals is necessary for computation of a job
Time rate wage system will be adopted because in collective effort where it is difficult to measure
precisely the output of individual workers this system is more suitable
When skilled personnel is engaged in tasks requiring high quality workmanship
Time wage system is suitable as workers are not in a hurry to complete their work to get more wages.
When workers have no control over the rate of output
Or
Where the output of learners CANNOT be expected to reach the minimum standard
Or
Where rate of output is determined solely by machine and not by operation
Time rate wage payment method
As there is no standard unit of output and rate of output is determined solely by machine and not by
operator or measurement technique.
Where there is NO clear relationship between effort and output.
Time rate wage payment method.
Because here it is not possible to pay the worker according to her work done by him as output of each
worker cannot be separately identified.
Where time factor is not important
Time rate wage system as time factor is not significant which means quality is preferred over quantity.
Where delays in work are beyond employers control
Time rate wage system as delay in work is not in control of employer.
When the nature of work requires close supervision.
Time rate wage system because quality is more important than quantity
State any five situations when is PIECE wage payment method suitable? (Learn all are important)
-4 marks CBSE 1999

When the units of output can be measured

The job is standardised (of repetitive nature), work flow is regular and delays are few and
consistent

There is a clear relationship between efforts of employees and quantity of output

Quality is less important than quantity

Employees are efficient and do not require constant supervision

Which method of wage payment time rate or piece rate would you adopt under each of the
following situations? Give reasons in support of your answer 4 marks CBSE 2004 Set 1, 2 and 3
(V. Important)
Where units of output can be measured;
Piece rate wage payment method.
As there is clear relation between effort and output. OR
As wages can be easily calculated on the basis of output produced by the worker.
Where quantity of work is measured, inspected and counted
Piece rate wage system is suitable in order to differentiate between efficient and non efficient workers
and to motivate them.
When the job is standardised. OR method of production is standardised
Piece rate wage payment method is suitable as output of each worker can be measured
When workflow is regular
Piece rate wage system
As the workflow is regular and delays are few and consistent, here output of each worker can be easily
measured and workers can easily be paid according to the efforts and work done by him.
Where there is clear relationship between efforts and output.
Piece rate wage system
Because here it is possible to pay the worker according to the work done by him as output of each worker
can be separately identified.
Where quality is less important than quantity (i.e. when quantity is more imp than quality)
Piece rate wage payment method.
Because worker is in a hurry to complete the work as he gets wages based on quantity produced.
Therefore quality will not be maintained.
Where the work is of a repetitive nature and there is no need to increase the production.
Where work is of repetitive nature and there is no need to increase the production, no supervision is
required, no skilled personnel is required, quality is not important, in such cases piece rate system is
more suitable

Directing - V. Imp. Chapter

2 and 3 marks which should not exceed (30-40 words)
DIRECTING:
Define Direction as a function of management? 2 marks (Important)

Directing consists of supervision, motivation, leadership & communication (SMCL)

It involves issuing orders and instructions by managers to subordinates

Guiding and inspiring them

Supervising their affairs

Leading and motivating them to efficiently achieve the desired goals of the organisation.

Write two elements of directing? 2 marks

Answer: give definitions of any two elements viz. supervision, motivation and leadership and
communication
Enumerate any two FEATURES of directing?
Or
Enumerate any 2 points of IMPORTANCE OF DIRECTING as a function of management.
Direction helps to facilitate changes and motivate subordinates (any two points) - FM
Facilitates changes:
Directing helps to make adjustments in the organisation and cope with the changing conditions through
communication and leadership.
Motivates subordinates
Directing helps to motivate subordinates to work efficiently and contribute their maximum efforts towards
achieving the goals of the organisation.
Initiates action:

All the activities of the organisation are initiated through direction.

The aim of direction is to activate employees to work towards achieving the goals

Without direction all other managerial functions like (PCOS) planning, coordination,
organising and staffing will be ineffective as plans will not be implemented in the desired
manner.

SUPERVISION
Define Supervision 2 marks

Supervision means overseeing the employees at work.

It means monitoring, instructing, guiding and observing (MIGO) the subordinates in their task to
ensure that both plans and procedures are implemented.

Supervision normally refers to individuals who supervise the operations. He may be a Foreman,
Overseer, Superintendent, Section Officer or Section In-charge. Who is a supervisor?

IMPORTANCE OF SUPERVISION:
Explain any 4 points how supervision is an important element of directing 6 marks
Or
Explain how supervision facilitates control improves communication and helps in optimum
utilisation of resources sample papers 3 marks(Important)
The following points highlight the importance of supervision as an element of directing:
Facilitates control:
Supervision/supervisor facilitates control by

monitoring the work in progress against plan schedule,

checking the methods being used

evaluating actual performance at regular intervals; and

taking action, if necessary

Optimum utilisation of resources:

If the work is supervised while the work is in progress

It leads to minimum wastage of time and resources.

It ensures time and plan schedules are adhered to; and

If there are any deviations, immediate remedial measures can be taken.

This results in efficient utilisation of resources.

Improves communication:

Issuing orders and instructions leads to clear communication to subordinates regarding

what is to be done.

During monitoring, supervisors take feedback on progress of work and conditions in

which work is being carried out. This improves communication and leads to better
understanding of the needs, aspirations and problems of the individuals at different levels
of the organisation.

A supervisor is not at all required in an organisation? Do you agree? Give reasons to support your
answer (Answer importance of supervisor)
Or
The post of supervisor should be abolished in the hierarchy of managers. React 3 marks
(Hint: Give importance of supervision)
Or
Enumerate any 2-3 FUNCTIONS OF SUPERVISOR (3 points) PIG - V. Imp.
Plans the work:
The supervisor analyses the work of his department and then assign the work to different workers
according to their abilities. He also makes arrangements of the tools, equipment, raw material to ensure
there is a steady flow of work.
Issues orders & Controls Output

The supervisor issues orders and instructions to the workers by telling them what and
how to do the work.

He controls their output and compares their performance with the prescribed standard

Grievance handling and liaison between management & workers:

The supervisor maintains a close contact with the workers and handles their grievances. He reports the
workers problems to top management. He also explains the management policies and passes on
management instructions to the workers.
LEADERSHIP:

Define Leadership? 2 marks

Leadership means influencing the behaviour of the people at work towards realising the specified
goals.

It is the ability to use non-coercive (no force) influence on the motivation, activities and goals
(MAG) of others in order to achieve the objectives of the organisation.

Ramesh, a supervisor in a factory always expects that his subordinates should obey him. He is
not prepared to listen to any suggestion made by workers. Do you think this quality of Ramesh
will help him to become a good leader? Why? 2 marks
No, this quality of Ramesh will not help him to become a good leader, as it is the duty of the supervisor to
listen to any suggestions/grievances of workers and try to understand their problems. He should evaluate
the suggestions and implement them to the extent possible by bringing it to the notice of top
management.
All managers are leaders but all leaders are not manager. Do you agree with this statement?
Give any 3 reasons in support of your answer.
Or
Sometimes Managership and Leadership are regarded as synonymous. Is this true?
No, it is not true.

A manager may NOT be a leader because:

o

He may NOT be able to win the trust and confidence of his subordinates

They may NOT look up to him for guidance, assistance and support (gas)

If a manager possesses leadership qualities, he is able to:

o

Influence the behaviour of his subordinates in such a way that they will be willing
to cooperate towards achieving the goals of the organisation.

He will be able to inspire and motivate them to work with zeal and enthusiasm

In this context, it is also possible that a leader may not be a manager. He may not hold a
managerial position but still employees look towards him for guidance, assistance and
support (gas).

Explain the IMPORTANCE of leadership as a directing function of management? 3 marks Practice

Paper-4 (V. Important) - 3marks
Or
Leadership is the source of motivation. Do you agree? Give three reasons in support of your
answer. 3 marks (give 3 reasons)
Or
Leadership is required only for less efficient subordinates. Do you agree? Give 3 reasons in
support of your answer? (Answer: No, I do not agree give importance of leadership
(In short leadership -Guides, inspires, secures cooperation and creates confidence in employees)

Guides and inspires employees: Leadership helps in guiding and inspiring employees to
perform well and directs the potential abilities of the employees towards achieving the desired
goals.

Secures cooperation: Leadership secures cooperation of employees by persuading them to

cooperate and work enthusiastically, confidently and diligently towards achieving the goals of the
organisation.

Creates confidence:By his exemplary conduct, a leader creates confidence, provides

psychological support and infuses spirit of enthusiasm in the employees.

Effectiveness of leadership depends on the qualities of the leader. Explain any four such
qualities of a leader.
Or
Efficiency and productivity depend upon the QUALITY OF LEADERSHIP. Do you agree with this
statement? Give any 3 reasons in support of your answer. (Yes)
Or
What are the QUALITIES required by a good leader (any 3 skills)
Judgement skills:
A good leader should be able to examine problems in right perspective.
His judgement and decision making abilities should be superior to others.
He should be able to form opinions and judge based on facts and not be prejudiced
Communication skills:
A good leader should be able to communicate the goals and procedures of the organisation clearly,
precisely and effectively to the subordinates. Only then will it be possible for him to convince, persuade
and stimulate subordinates to action.
Listening skills:
People tend to avoid a leader who does not listen. Hence a good leader in one who can listen to other
peoples problems. He should be able to create a culture whereby people can be frank with him and give
him information and also give him feedback about himself, which can help him to improve himself.
Inspiring skills:
A good leader should be able to inspire people to deal with the why question. He should not just
command and control but be able to lead the people and get them involved to work together as a team.
MOTIVATION:
Define motivation as an element of directing? 2 marks sample paper V. Imp

Motivation is a mental state.

Motivation in management means stimulating people to action in order to achieve the desired
goals.

It arouses the desires in the people to initiate and direct their behaviour in purposeful manner.

How does motivation improve the efficiency of workers in an organisation? Give any 3 points.

Motivation infuses willingness in employees to achieve a high level of performance.

A motivated employee feels pleasure in performing their duties. This helps to improve productivity,
reduce cost of operations and secure overall efficiency.

Motivation is essentially goal directed. Therefore, more the subordinates are motivated higher are
the chances of achieving the goals of the organisation.

Effectiveness of motivation contributes to the success of an organisation? How? Explain giving

any four points.
Or
Why is it important to motivate employees in an organisation? Give any 3 reasons
Motivation is important in the organisation due to the following reasons:
Motivation improves workers efficiency

Motivation infuses willingness in employees to achieve a high level of performance.

A motivated employee feels pleasure in performing their duties. This helps to improve
productivity, reduce cost of operations and secure overall efficiency.

Motivation is essentially goal directed. Therefore, more the subordinates are motivated
higher are the chances of achieving the goals of the organisation.

Reduction in resistance to change

Employees normally resist changes in the organisation. However if employees are motivated they are
likely to support the change even if it means more efforts on their part. This is because they identify their
own progress with the prosperity of the organisation.
Reduction in employee turnover:
Motivation secures loyalty of the employees and creates confidence in them. As a result employee
turnover is reduced. This results in maintaining stability in work force.
Motivation facilitates achievement of organisation goals
By motivating employees through suitable rewards in the form of money, promotion, recognition of
efficient work, management can secure the cooperation of subordinates to contribute their best efforts
towards fulfilling their assigned tasks and thus achieve the goals of the organisation.
Explain any 4 NEEDS that motivate an employee to work?
Or
State any three types of needs that govern human motivation? 3 marks
Or
Briefly explain Abraham Maslows HIERARCHY OF NEEDS? PESS
Physiological needs:
It includes basic needs required for survival and maintenance of human life such as food, clothing,
shelter, water and other necessities of life.
ESTEEM NEEDS: (Define v. imp)
It includes a desire for self-image and self respect on one hand and respect, recognition from others.
These needs are satisfied by recognising good performance of employees, providing challenging job
assignments, good job titles, nice office, extra authority, etc.
Security needs:
People want physical, economical as well as social security. They want security for themselves, their
property and a safe environment to live in.
Physical security : includes protection against fire, accidents, disease, crime etc.

Economical security : includes having a permanent job and money to fulfil basic needs on a permanent
basis.
Social security : includes need for security in old age, illness, disability, etc.
Social needs:
It includes a desire to give and receive love and affection and the need to be accepted by the peers.
These needs are satisfied by friendship, family and community relations outside the workplace.
COMMUNICATION
Define the term Communication? 2 marks

Communication means exchange of messages between two or more persons.

These messages could mean idea, opinions, facts, information, instructions and anything that
conveys a meaning.

These messages may be conveyed in words, pictures, and actions or gestures

Effective communication takes place only when the receiver is able to interpret the message as
desired by the sender and responds to it.

What do you mean by noise. How does it interfere in the communication process 3 marks
When there is a disrupted interference anywhere in the communication process, it is termed as noise.

Examples:
o

Someone coughing,

two people talking close at hand,

a truck driving,

a letter being lost in the mail,

a telephone line going dead or one of the persons being called away before the
communication process is completed.

Noise may also arise because a manager is not able to express himself well or if the listener is
not being attentive or memos are poorly written and therefore hard to read.

However if communication is two-way, the communicator can find out if the message was
received and if has produced the intended response.

Enumerate any 3 advantages of informal communication from the point of view of members of
an organization and from the point of view of management 3 marks
Advantages of informal communication from view of members are:

Employees can develop friendly relations and derive social satisfaction through informal
exchange of ideas and information

Employees can give a free and frank expression of their views, which cannot be done
through official channels.

It helps employees who are not linked through the official chain of command to
communicate.

Advantages of informal communication from view of management are:

It helps to communicate those messages, which is not possible through official channel.

It can be used for speedy communication in emergency

It reduces tensions in employer-employee relations & provides emotional relief to

workers.

Employees reactions and attitudes can be easily ascertained.

Difference between:
FORMAL COMMUNICATION

INFORMAL COMMUNICATION

Channel

It follows established line of

command

It arises as a result of personal

relations

Nature

It is rigid and cannot be modified

It is flexible as it arises as a result

of social interaction

Expression

It is mostly in written form

It is mostly in oral form

Responsibility

It is easy to fix responsibility in

formal communication

As the source cannot be traced, it

is difficult to fix responsibility

Needs

It serves organizational needs

It serves organizational as well as

individual needs

Records

Records are kept for future

reference

No records are kept

Speed

It is usually slow

It is usually fast

Explain any four factors that are likely to disrupt effective communication? 3 marks
Or
Enumerate 4 barriers of communication? 2 or 3 marks (PCS) - Important
The following are the factors that are likely to disrupt effective communication:
Predispositions:
Sometimes the person who receives the message may be biased or predisposed i.e. he may ignore the
suggestions for change from the subordinate because he thinks the subordinate is always complaining
about something.
Poor listening skills:
Some people are poor listeners. When someone is talking to them they are distracted. This problem
occurs both with superiors and subordinates.
Complex Organisation structure:

An organisation having a long chain of command also acts as a barrier to effective communication
Selective reception:
Selective reception takes place when people tend to hear only what they want to hear and block out that
part of the information that disagrees with what they believe. As a result communication gets distorted.
Status difference:
Effectiveness of communication can be adversely affected when status of communicator is not equal.