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Introduction to Management – II (MB112): January 2007
1. Answer : (b)
Reason : Avoiding eye contact is not an effective listening technique. Effective listening requires eye contact.
Hence, from above discussion, we can infer that option (b) is not an effective listening technique.
Options (a), (c), (d) and (e) are all effective listening techniques.
2. Answer : (e)
Reason : The first stage in a corporation’s multinationalization is when the corporation exports its products.
3. Answer : (a)
Reason : Coordinating is the primary purpose served by lateral organizational communication.
4. Answer : (c)
Reason: A Funds Flow statement is a statement of sources and uses of funds for a definite period between two
dates.
5. Answer : (b)
Reason : Decision Support System (DSS) is an information system that helps the managers in decision-making. It
uses low-volume data and analytical models as data inputs.
Hence from above discussion, we can infer that option (b) is correct.
6. Answer : (b)
Reason : Results-oriented appraisal implies evaluating an individual based on actual job performance.
Hence, from above discussion, we can infer that option (b) is correct.
7. Answer : (b)
Reason : Structural inertia is an organization’s built-in mechanism to produce stability. e.g., formal rules and
procedures for employees to follow. When an organization is confronted with change, this structural
inertia acts as a counterbalance to sustain stability. Hence, from above discussion, we can infer that
option (b) is correct. Options (a), (c), (d) and (e) are all individual sources of resistance to change.
8. Answer : (d)
Reason : According to Fiedler, leader-member relations, task structure, position power are the primary factors that
should be used as a basis for moving leaders into more appropriate situations.
9. Answer : (c)
Reason : Operations Management oversees the transformation process that converts resources such as labor and
raw materials into finished goods and services.
Hence, from above discussion, we can infer that option (c) is true regarding Operations Management.
Options (a), (b), (d) and (e) are all false regarding Operations Management.
10. Answer : (b)
Reason : Leaders who pay attention to the concerns and developmental needs of individual followers, help
followers to look at old problems in new ways, and are able to inspire followers to put extra effort into
the group goals are transformational leaders.
11. Answer : (d)
Reason : In brainstorming none of the ideas are criticized. Therefore, statement (I) is not a rule of brainstorming.
All other statements are rules observed in brainstorming. Hence, option (d) is the answer.
12. Answer : (a)
Reason : Salary, working conditions, and security are examples of hygiene factors in Herzberg’s theory.
13. Answer : (e)
Reason: Quality of work life is a broad approach to job enrichment.
14. Answer : (c)
Reason : Job specification indicates characteristics of the individual who should be hired for the job.
15. Answer : (e)
Reason : Rules, policies, procedures, and budgets are all examples of feed forward control.
16. Answer : (e)
Reason : The purpose of job rotation is to broaden the knowledge of managers or potential managers and trainees
learn through different enterprise functions like non-supervisory works, observation assignments etc. by
rotation into different positions. But they cannot be posted in top-level management positions as high
stakes are involved.
17. Answer : (a)
Reason : Controlling function is gaining importance in today’s organizations due to a number of factors. It plays
an important role in assisting managers with changes like coping with uncertainty and detecting
irregularities. Centralizing authority and avoiding complex situations are not applicable.
18. Answer : (c)
Reason : The situational factor that is most unlikely to facilitate cultural change is a strong culture. Hence, from
above discussion, we can infer that option (c) is correct.
19. Answer : (c)
Reason : Malice is not a personality trait required for effective leadership.
20. Answer : (d)
Reason : The term ‘quality circle’ refers to a work group that meets regularly to discuss, investigate and correct
quality problems.
Hence, from above discussion, we can infer that option (d) is correct.
21. Answer : (d)
Reason : Diagonal information flow takes place among persons at different levels who have no direct
relationships.
Hence, from above discussion, we can infer that option (d) is correct.
22. Answer : (e)
Reason : Alderfer proposed a condensed version of Maslow's Need Hierarchy theory with only three groups of
core needs. viz., existence, relatedness and growth. According to this ERG theory, different needs can
emerge simultaneously, and people can move backward and forward through the need continuum as
circumstances change. There is every possibility that a higher-level need may emerge before a lower-
level need, given the right circumstances.
Hence, from above discussion, we can infer that option (e) is not true about Alderfer's ERG theory.
Options (a), (b), (c) and (d) are all true about Alderfer's ERG theory.
23. Answer : (d)
Reason : Vroom's expectancy theory is based on self-interest where each employee seeks to maximize personal
satisfaction and holds that there are two crucial linkages among effort-performance-reward in this theory.
24. Answer : (d)
Reason : Job enrichment is the process of incorporating motivators into the job situation.
25. Answer : (d)
Reason : Job-centered style might work best in the given situation, where Saila can divide work into routine tasks
and as a leader can closely monitor workers to ensure prescribed methods are followed and productivity
standards met.
26. Answer : (d)
Reason : The following are characteristics exhibited by affiliation-oriented people”
I. They enjoy a sense of intimacy and understanding.
II. They console and help those in trouble.
III. They suffer pain when rejected.
An intense desire for success is exhibited by achievement oriented people. Hence, option (d) is the
answer.
27. Answer : (b)
Reason : A performance appraisal technique that makes use of feedback from supervisors, subordinates and co-
workers, is known as 360-degree appraisal.
Hence, from above discussion, we can infer that option (b) is correct.
28. Answer : (c)
Reason : An office automation system aims at facilitating communication and increasing the efficiency and
productivity of managers and office workers through document and message processing.
29. Answer : (a)
Reason : The overall effect on the break-even point of increasing costs or decreasing selling prices is that the
number of products an organization must sell to break even increases.
30. Answer : (c)
Reason : Smoothing conflict resolution technique implies emphasizing the areas of agreement and common goals
and de-emphasizing disagreements.
Hence, from above discussion, we can infer that option (c) is correct.
31. Answer : (d)
Reason : The correct sequence of the steps involved in training individuals is: determining training needs,
designing the training program, administering the training program, and evaluating the training program.
32. Answer : (d)
Reason : A leader who emphasizes the technical aspects of the job and is concerned with accomplishing the
group's tasks is said to be production-oriented, according to the University of Michigan studies.
33. Answer : (d)
Reason : Semantic distortion, either deliberate or accidental, acts as a barrier to effective communication. Such
distortion takes place if the meaning is not communicated properly. So, (d) is correct answer.
34. Answer : (d)
Reason : Content theory of motivation focuses on analyzing what motivates people. Hence, from above
discussion, we can infer that option (d) is correct.
35. Answer : (c)
Reason : An autocratic leader tends to centralize authority, dictate work methods, and make unilateral decisions.
36. Answer : (b)
Reason : In Japanese Management style, the usual staffing position is
I. Young people hired out of school.
III. Slow promotion through ranks.
IV. Promotions based on multiple criteria.
Hence, (b) is the correct answer.
37. Answer : (e)
Reason : Assessment development centers are a specialized appraisal system wherein a high powered panel
constituted by senior persons in the organization appraises employees by identifying their best
capabilities or skills and training them further.
38. Answer : (c)
Reason : A TQM programme is a continual process involving all organization members that spans all production
activities in the organization.
39. Answer : (d)
Reason : Work Sampling Test is used as a means of measuring practical ability on a specific job. The applicant
completes some job activity under structured conditions. Hence from above discussion, we can infer that
option (d) is correct.
40. Answer : (c)
Reason : A manager who consults with his employees and uses their suggestions before making a decision is a
participative leader, according to House.
41. Answer : (c)
Reason : A guideline established by management to be used as a basis for evaluating performance is called a
standard.
Hence from above discussion, we can infer that option (c) is correct.
42. Answer : (d)
Reason : Except corporate policy statements, all the options given are examples of upward communication.
43. Answer : (d)
Reason : Salesperson Quotas is an example of internal information in an organization. Hence from above
discussion, we can infer that option (d) is correct.
Options (a), (b), (c) and (e) are all examples of external information.
44. Answer : (a)
Reason : Current ratio is the ratio of current assets to total current liabilities and measures an organization’s
ability to meet short-term obligations.
Hence from above discussion, we can infer that option (a) is correct.
45. Answer : (b)
Reason : The steps in formulating a career strategy are as follows:
Preparation of a personal profile.
Development of long-range personal and professional goals.
Analysis of the environment.
Analysis of Personal Strengths and Weaknesses.
Development of Strategic Career Alternatives.
Consistency Testing and Strategic Choices.
Development of short-range career objectives and action plans.
Development of contingency plans.
Implementation of the Career Plan.
Monitoring Progress.
Hence, from above discussion, we can infer that option (b) is correct.
46. Answer : (c)
Reason : A successful JIT program requires that suppliers be located in close proximity of the company, so that
materials can arrive as and when needed.
Hence from above discussion, we can infer that option (c) would generally not be associated with a
successful JIT program.
Options (a), (b), (d) and (e) would all be associated with a successful JIT program.
47. Answer : (a)
Reason : The level of management for which information about environmental trends would be most appropriate
is top management.
Hence from above discussion, we can infer that option (a) is correct.
48. Answer : (a)
Reason : Do not resort to outsourcing of activites, instead develop them in-house is not a strategy for innovation;
instead, companies should focus on the core strengths and outsource most other activities.
49. Answer : (e)
Reason : The following are assumptions of preventive control:
I. Application of fundamentals can be evaluated.
III. Well qualified managers can make minimum mistakes.
IV. Management concepts, tools, principles and techniques are effective standards for measuring
managerial standards and performance.
Statement (II) – personal responsibility exists is an assumption of direct control.
50. Answer : (c)
Reason : The characteristics of the planning process usually adopted in US Management style are: (I) Short-term
orientation, (III) Decisions initiated at the top, flowing down, (IV) Fast decision-making. Hence, (c) is
the correct answer.
51. Answer : (e)
Reason : Performance appraisals are important in an organization because they provide systematic judgements to
support promotions; provide a basis for coaching; provide a basis for counseling; and let subordinates
know where they stand with the boss.
52. Answer : (b)
Reason : Hersey and Blanchard define “readiness” as the extent to which followers have the ability and the
willingness to accomplish a specific task.
53. Answer : (d)
Reason : The following are steps involved in the enterprise self audit:
I. Study the outlook of the industry in which the firm is operating.
II. Appraise the position of the firm.
III. Re-examine the basic objectives and major policies of the firm.
54. Answer : (e)
Reason : BARS contain set of specific behaviors that represent gradation of performance used as common
reference points for rating employees. Ratings on job performance and evaluation jointly by manager
and sub-ordinates. Option (e) is correct answer.
55. Answer : (b)
Reason : Return on investment is the ratio of earnings before taxes to that of total assets. So, it attempts to
measure profitability.
Hence, from above discussion, we can infer that option (b) is correct.
56. Answer : (b)
Reason : Blake and Mouton's middle-of-the-road leader operates on the assumption that adequate organization
performance is possible through balancing the necessity to get out work while maintaining morale of
people at a satisfactory level.
57. Answer : (b)
Reason : All options except (b) establishing planned activities, are steps in the control process.
58. Answer : (b)
Reason : The following statements are true with respect to content theories of motivation:
I. Maslow’s self-actualization and esteem needs correspond to Herzberg’s motivators.
Maslow’s esteem needs correspond to Alderfer’s need for power.
The following statements are not true with respect to content theories of motivation
II. McClelland’s need for achievement corresponds to Alderfer’s relatedness needs since
McClelland’s need for achievement corresponds to Alderfer’s growth needs.
IV. Herzber’s hygiene factors correspond to McClelland’s need for affiliation, Maslow’s social
needs and Alderfer’s existence needs since Herzber’s hygiene factors correspond to Maslow’s safety
and physiological needs and Alderfer’s existence needs.
59. Answer : (c)
Reason : Theory Y assumes that commitment to objectives is a function of the rewards associated with
achievement.
60. Answer : (b)
Reason : According to Kurt Lewin, impoverished leadership style is ineffective on every performance criterion.
61. Answer : (e)
Reason : The purpose of job rotation is to broaden the knowledge of managers or potential managers and trainees
learn through different enterprise functions like non-supervisory works, observation assignments etc. by
rotation into different positions. But they cannot be posted in top-level management positions as high
stakes are involved.
62. Answer : (d)
Reason : Simulation exercises create conditions to depict the reality. Problem-solving skills are most effectively
acquired using these exercises.
Hence, from above discussion, we can infer that option (d) is correct.
63. Answer : (d)
Reason : Loss of sale and loss of customer goodwill are examples of stock-out costs.
64. Answer : (c)
Reason : Job enrichment is an attempt to build into jobs a higher sense of challenge and achievement, which does
not involve payment of any financial incentives to the workers.
65. Answer : (c)
Reason : In direct control the cause of an unsatisfactory outcome traced back to the individual responsible for it
who is then made to correct the practice.
66. Answer : (e)
Reason : Managers who make foreign investments believe such investments reduce or eliminate high
transportation costs; allow participation in the rapid expansion of a market abroad; provide foreign
technical, design, and marketing skills; and earn higher profits.
67. Answer : (d)
Reason : There is no such management control as ‘exception control’.
68. Answer : (d)
Reason : Functional Job Analysis focuses on the following dimensions of an individual job:
I. Data, people and jobs pertaining to the individual’s job.
III. Tools and equipment used by the worker.
IV. Products and services produced by the worker.
Hence, from above discussion, we can infer that option (d) is correct.
69. Answer : (b)
Reason : The psychological process of selecting stimuli, organizing the data into recognizable patterns, and
interpreting the resulting information is known as perception.
Hence, from above discussion, we can infer that option (b) is correct.
70. Answer : (c)
Reason : The Economic Order Quantity (EOQ) is an inventory control method developed to minimize ordering
and holding costs, while avoiding stock out costs.
71. Answer : (d)
Reason : According to the Tannenbaum and Schmidt model of leadership, the following statements describe more
of a boss centered leadership
III. A manager more likely "sells" the decision.
IV. A manager presents ideas and invites questions.
The other two statements describe the subordinate centered leadership.
72. Answer : (b)
Reason : Replacement Planning is a means of identifying potential candidates to fill specific managerial positions.
Hence, from above discussion, we can infer that option (b) is correct.
73. Answer : (d)
Reason : Skills Inventory is a computerized database containing basic information about each employee that can
be used to assess the likely availability of individuals for meeting current and future human resource
needs.
Hence, from above discussion, we can infer that option (d) is correct.
74. Answer : (c)
Reason : The information attribute which tells whether the information pertains to the situation at hand or not, is
known as Information Relevance.
Hence from above discussion, we can infer that option (c) is correct.
75. Answer : (a)
Reason : If a training program attempts to sharpen logic, reasoning, or defining problems, it is most likely
teaching Problem-solving skills.
Hence from above discussion, we can infer that option (a) is correct.
76. Answer : (d)
Reason : The following are claims that support self-appraisal:
I. It increases personal commitment of employees.
II. It improves employees understanding of job performance.
Hence, option (d) is the answer.
III. It provides a great deal of information about the appraisee is a claim that supports multiple
appraisal.
77. Answer : (a)
Reason : Organizational development relies on the use of interventions, which are change strategies developed
and initiated with the help of a change agent.
Hence, from above discussion, we can infer that option (a) is correct.
78. Answer : (c)
Reason : The Program Evaluation and Review Technique (PERT) is especially useful in scheduling Projects.
Hence from above discussion, we can infer that option (c) is correct.
79. Answer : (b)
Reason : Feedback control is a control type based on timing that involves regulation exercised after a product or
service has been completed, to ensure that they meet the standards necessary for the transformation
process.
Hence, from above discussion, we can infer that option (b) is correct.
80. Answer : (b)
Reason : Productivity is the relationship between the amount of goods/services produced and the organizational
resources needed to produce them.
81. Answer : (e)
Reason : For an information system to be effective, it should provide both internal and external information that is
timely and accurate.
82. Answer : (d)
Reason : Debt management ratios (I) indicate what percentage of the organization’s assets are financed by
creditors, (II) they are also called leverage ratios and (III) a higher percentage indicates that creditors
have a greater claim over the assets of the organization than the owners. Hence statement (III) is not true
and option (d) is the answer.
83. Answer : (b)
Reason : Polycentric attitude is based on the notion that it is best to give foreign subsidiaries, staffed by local
nationals, a great deal of managerial freedom.
Hence, from above discussion, we can infer that option (b) is correct.
84. Answer : (e)
Reason : Creativity is an individual phenomenon and cannot be discovered through groups is not a limitation of
group discussion techniques to enhance creativity.
85. Answer : (c)
Reason : The Porter-Lawler model of motivation, which is an improvement of the expectancy theory, assumes
that motivation does not equal satisfaction. It assumes satisfaction does not lead to performance. Rather,
the converse is true: performance can, but does not always, lead to satisfaction through the reward
process. It assumes that motivation is not a simple cause-and-effect matter. The model advocates that
managers carefully assess their reward structures and also assumes that performance leads to intrinsic as
well as extrinsic rewards.
86. Answer : (d)
Reason : A democratic-consultative leader involves employees in decision-making, delegates authority, and
gathers input from employees, but makes the final decision himself/herself.
87. Answer : (b)
Reason : In organizations, people who act as catalysts and assume the responsibility for managing the change
process are called change agents.
Hence from above discussion, we can infer that option (b) is correct.
88. Answer : (e)
Reason : Grapevine is an integral part of organizational communication and hence cannot be eliminated.
89. Answer : (a)
Reason : According to Maslow, a need stops motivating when it is substantially satisfied.
90. Answer : (b)
Reason : Path-goal theory suggests four types of leadership: direct, supportive, participative, and achievement-
oriented leadership.
91. Answer : (b)
Reason : Leverage or debt management ratios indicate the company’s ability to pay long-term debts.
92. Answer : (c)
Reason : Equity theory recognizes that individuals are concerned with their rewards relative to others.
93. Answer : (d)
Reason: According to the Japanese management practices, Kaisha refers to “my/one’s company” where people
are treated as family members.
94. Answer : (d)
Reason: Creativity in an organization is either there or it is not – it is a natural process and cannot be controlled.
This would be the best suggestion for Ms. Sondhi to explore.
95. Answer : (b)
Reason : Ratio is an index that measures one variable relative to another.
96. Answer : (b)
Reason : Feedback can be used as a way for sources to evaluate their communication effectiveness.
97. Answer : (d)
Reason: Inventory control system helps a manger to manage the inputs in such a way that they (inputs) are
available at right time, at right place and in the right quantity with minimum cost of maintenance.
98. Answer : (d)
Reason : The interview, as a selection device, is most useful for selecting persons to managerial jobs, such as the
job of a Bank Manager.
Hence from above discussion, we can infer that option (d) is correct.
99. Answer : (b)
Reason : According to research carried out by Ohio University researchers, consideration is the degree to which a
leader builds mutual trust with subordinates, respects their ideas and shows concerns for their feelings.
Hence, from above discussion, we can infer that option (b) is correct.
100. Answer : (c)
Reason : In negotiation and agreement method of overcoming resistance to change, management neutralizes
potential or actual resistance by exchanging something of value for cooperation.
Hence, from above discussion, we can infer that option (c) is correct.
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