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IIBM – Principles and Practices of Management Answer sheet papers

IIBM – Principles and Practices of Management Answer sheet papers

  1. Management as a Science defines…..Tick the correct one. (1)
  2. a) Perfection through practice
  3. b) Practical Knowledge
  4. c) Creativity
  5. d) Test of Validity & Predictability
  1. Indirect Reward involves: (1)
  2. Wages
  3. Provident Fund
  4. Praise& Rewards
  5. Incentives

III. This is the part of the management process that allows the organization members to work efficiently and effectively for the attainment of organizational objectives. Which management function describes this?

  1. a) Planning
  2. b) Organizing
  3. c) Staffing
  4. d) Directing
  5. e) Controlling
  1. It is the function of manning the organization structure and keeping it manned. The main purpose is to put the right man on the right job i.e. square pegs in square holes and round pegs in round holes.
  2. Manpower Planning
  3. Recruitment
  4. Performance Appraisal
  5. Staffing
  6. Training & Development
  1. This type of Organization flows “Flat Hierarchy”. (1)
  2. Traditional
  3. Modern
  4. None of them
  5. All of them
  1. It is deciding in advance – what to do, when to do it & how to do it. It bridges the gap between where we are & where we want to be. (1)
  2. Staffing
  3. Organizing
  4. Planning
  5. Directing
  6. None of them

VII. Decentralization may lead to the problem of coordination at the level of an enterprise as the decision-making authority is not concentrated.

  1. True
  2. False

VIII. “Understanding” is the essence of communication. This only happens when there is an intention of not understanding and not being understood by those involved in a communication situation.

  1. True
  2. False
  1. Here delegation is not entrusted with the work nor he is given the responsibility and authority formally. It does not create any obligation. (1)
  2. Formal Delegation
  3. Informal Delegation
  4. None of them
  5. All of them
  1. The organization must have a supreme authority and a clear line of authority should run from that person (or group) down through the hierarchy, e.g., from the Chairman—to the Managing Director—Plant Manager— Production  Manager— Foreman-rank and file of employees.
  2. Principle of Delegation
  3. Principle of Balance
  4. Scalar Principle
  5. Principle of change

Part B:

  1. Define Administration. In which respect it is different from Management? (5)
  2. What do you understand by the term “Level of Management”? Briefly describe the different levels of Management. (5)
  3. Factors involved in Decentralization of Authority. (5)
  4. Write a short note on the Principles of Unity of Command. (5)


Rajiv Gupta, President of the Universal Food Products Company, was tired of being the only one in his company responsible for profits. While he had good vice-presidents in charge of advertising, sales, finance, purchasing, production, and product research, he realized that he could not hold any of them responsible for company profits, as much as he would like to. He often found it difficult even to hold them responsible for the contribution from their respective areas to company profits. The sales vice-president, for instance, had rather reasonably complained that he could not be fully responsible for sales when the advertising was ineffective, or in a situation when the products customers wanted were not readily available from the manufacturing department, or when he did not have the new products he needed to meet market competition. Likewise, the manufacturing vice president had some justification when he made the point that he could not hold down costs and still be able to produce short runs to fill orders on short notice; moreover, financial controls would not allow the company to carry a large inventory of everything. Mr. Rajiv had considered breaking his company down into six or seven segments by setting up product divisions with a manager over each with profit responsibility. However, he found that this would not be feasible or economical since many of the company\’s branded food products were produced using the same equipment and the same raw materials, and a salesperson calling on a store or supermarket could far more economically handle several related products ….than one or a few. Consequently, Mr. Rajiv concluded that the best thing for him to do was to set up six product managers reporting to a product marketing manager. Each product manager would be given responsibility for one or a few products and would oversee for each product, all aspects of product research, manufacturing, advertising, and sales, thereby the person becoming responsible for the performance and profits of the products under his/her portfolio. Mr. Rajiv realized that he could not give these product managers an actual line of authority over the various operating departments of the company since that would cause each vice president and his or her department to report to six product managers and the product marketing manager, as well as the president. He was concerned with this problem. But, he knew that some of the most successful larger companies in the world had used the product manager system. Mr. Rajiv resolved to put in the product manager system as outlined and hoped for the best. But he wondered how he could avoid the problem of confusion in  reporting relationship


  1. Do you agree with Mr. Rajiv\’s program? If it were you, would you have done it differently? Explain. (10)

2. Exactly what is your suggestion that may help to avoid any confusion in this organizational structure? (10) 


As Ms. Mansi began to devote all of her time to managing The Arbor, she was dismayed by finding the anomalies in what she believed to be a fairly haphazard management system. While the developer of the retail complex was an astute entrepreneur, she began to feel that he had not paid enough attention to detail in the course of day-to-day operating procedures.  She and Mr. Das had learned a lot about management from their experience with SLS. Mr. Das, for example, had found that the most effective way of running the business involved buying only from reputable suppliers, keeping all plants well fertilized and pruned while they were in inventory, and checking with customers after landscape jobs had been completed to ensure that they were satisfied.  When she bought The Arbor, Ms. Mansi talked with a friend who managed a store at the regional shopping mall in town. Her friend explained how the mall development company had elaborate rules and procedures for its tenants. These rules and procedures dictated store hours, appearance standards,  lease terms, promotional and advertising policies, and just about everything imaginable.  The Arbor, however, was a different story. There were no written policies for tenants. As a result,  there was considerable variation in how they were managed. Some stores opened on Sunday or in the evening, for example, while others did not; some tenants had long-term leases while others had no current lease at all. To address these and other issues, Ms. Mansi called a meeting of all the tenants and expressed her  concerns. To her surprise, she found that they already were aware of each of her issues, as well as some others that she had not yet had time to consider. They argued, however, that the current system was the best for The Arbor. As a small operation, each tenant knew all the others,  and they worked together to keep things in good order. They thought it was fine that they kept different hours — few customers came to The Arbor just to walk around and shop. Customers usually came to visit specific stores and were aware of the store\’s hours. The tenants even expressed their opinion about the lease situation as a fine condition. Some wanted the security afforded by a lease, while others preferred the flexibility of no lease.


  1. What are the different control examples illustrated in this situation? (10)
  2. What kind of control systems might be the most useful for retailers? (10)

Section C: Applied Theory (30 marks)

  1. Define Management & its functions. (15)
  2. Explain the various concepts of Management. (15)

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