MANAGEMENT – MAY 2012 SOLUTIONS
SECTION A
30 Multiple Choice Questions each carrying 2 marks
1. c
2. a
3. a
4. c
5. a
6. b
7. b
8. b
9. c
10. a
11. b
12. a
13. a
14. b
15. b
16. c
17. c
18. c
19. d
20. a
21. b
22. a
23. c
24. a
25. b
26. a
27. b
28. c
29. c
30. a
SECTION B
Choose any two questions out of the four provided. Each question carries 20
marks
A qualification examined by the Institute of Bankers in Malawi
Page 1
Question 31
(a) Controlling is one of the managerial functions like planning, organizing, staffing
and directing. It is an important function because it helps to check the errors and
to take the corrective action so that deviation from standards are minimized and
stated goals of the organization are achieved in desired manner.
(b) Organizational Practices in diversity management
Organizations can also help manage diversity through a variety of ongoing practices
and procedures.
1. Benefits packages, for example, can be structured to better accommodate
individual situations. An employee who is part of a dual-career couple and who
has no children may require relatively little insurance (perhaps because his
spouse’s employer provides more complete coverage) and would like to be able
to schedule vacations to coincide with those of his spouse. An employee who is
a single parent may need a wide variety of insurance coverage and prefer to
schedule his vacation time to coincide with school holidays.
2. Flexible working hours are also a useful organizational practice to accommodate
diversity. Differences in family arrangements, religious holidays, cultural events,
and so forth may each dictate that employees have some degree of flexibility in
when they work. For example, a single parent may need to leave the office
everyday at 4:30 to pick up the children from their day care center. An
organization that truly values diversity will make every reasonable attempt to
accommodate such a need.
3. Organizations can also facilitate diversity by making sure that its important
committees and executive teams are diverse. Even if diversity exists within the
broader organizational context, an organization that does not reflect diversity in
groups like committees and teams implies that diversity is not a fully ingrained
element of its culture. In contrast, if all major groups and related work
assignments reflect diversity, the message is a quite different one.
(c) (i) Advantages of internal recruitment(any three)
- Gives existing employees greater opportunity to advance their careers in the
business
- May help to retain staff who might otherwise leave
- Requires a short induction training period
A qualification examined by the Institute of Bankers in Malawi
Page 2
- Employer should know more about the internal candidate's abilities (= a reduced
risk of selecting an inappropriate candidate)
- Usually quicker and less expensive than recruiting from outside
(ii) Disadvantages of internal recruitment(any three)
- Limits the number of potential applicants for a job
- External candidates might be better suited / qualified for the job
- Another vacancy will be created that has to be filled
- Existing staff may feel they have the automatic right to be promoted, whether or not
they are competent
- Business may become resistant to change; by recruiting from outside, new
perspectives and attitudes are brought in
Question 32
(a) Any four of Ouichi's Theory Z management assumptions about people
1. Job Security
The Japanese Theory Z approach believes that people are a far too valuable resource
to be lost when the economy has a downturn. In a recession, the Japanese don't fire
people, they'll reduce their hours until things pick up. By contrast, when a US company
is in trouble, they waste no time laying people off and as a result lose all the knowledge,
skills, and expertise that go with them.
2. Trust
The Japanese feel that you should never give people a reason to distrust you. Loyalty is
expected of all employees. In American companies, distrust and suspicion are endemic.
If a person or supplier is not delivering, the company will go elsewhere for a better deal.
3. Decision-Taking
There are two differences between the Japanese and American approaches to
decision-making. In Japanese companies, everyone gets involved in the decision-taking
process as part of their commitment to the organisation. As a result, the process is slow.
In the US, decision-taking is the responsibility of the few and so is quick.
A qualification examined by the Institute of Bankers in Malawi
Page 3
4. Teamwork
In Japan, organisational success is viewed as the result of team effort, so it is illogical to
reward individuals. In the US, there is still a belief that, if you do the work and claim the
results, you should get the reward.
5. Motivation and Target-Setting
The Japanese corporation rarely sets individuals targets as a way of motivating them.
They believe that individual motivation comes from others in the team. As a result, it
often takes years before a Japanese employee receives their first performance
evaluation and even longer before they are promoted. By contrast, the American
corporation believes that the role of management is to set their subordinates targets and
ensure that these are met, using evaluation and promotion as incentives and rewards.
(a) Behavioral Effects of information systems
Information systems affect the behaviors of people in organizations. Some of these
effects are positive; others are negative.
Any two of the following:
-On the plus side, information systems usually improve individual efficiency. Some
people also enjoy their work more because they have fun using the new technology.
As a result of computerized bulletin boards and electronic mail (e-mail), groups can
form across organizational boundaries.
-On the negative side, information systems can lead to isolation as people have
everything they need to do their jobs without interacting with others.
-Managers can work at home easily, with the possible side effects of making them
unavailable to others who need them or removing them from key parts of the social
system.
-Computerized working arrangements also tend to be much less personal than other
methods. For example, a computer-transmitted “pat on the back” will likely mean
less than praise delivered in person.
(c) Any two of the following on impact of stress on an individual
-An individual needs to be aware of implications of unmanaged stress. Reactions to
stress before reaching the extreme state, attacking the stressor directly, adoption of a
behaviour that was successful earlier, forgetting the stressor, engaging in purposive
escape from the stressful situation and persisting in a response regardless of its
effectiveness, are some important stress management strategies.
A qualification examined by the Institute of Bankers in Malawi
Page 4
-The exhaustion stage is the most dangerous stage as the individual is defenseless and
may result in heart disease, severe depression or dissolution of relationships.
-The impact of personal stress at the work place include; increased workload due to
restructuring, job insecurity, rapid change, long working hours, difficult work/life balance,
unrealistic
management
expectations,
poor
management
practices,
productivity/performance targets and harassment.
-The impact also includes; equal opportunity, effective processes for business needs,
good work conditions, health and safety, good job design, work distribution, training and
development, communication, grievance and discipline procedures, performance review
and rewards.
-Stress can help spur one to achieve and it can result in a new awareness and
perspective, but it also can result in feelings or distrust, rejection, fear and anger, which
turn can lead to health problems such as headaches, digestive issues, skin irritation,
insomnia, ulcers and high blood pressure.
Question 33
(a) There are five common forms of departmentalization. Any three of the following:
each 3 marks. I mark for definition of departmentalization.
i.
Functional departmentalization - Grouping activities by functions performed.
Activities can be grouped according to function (work being done) to pursue
economies of scale by placing employees with shared skills and knowledge into
departments for example human resources, IT, accounting, manufacturing,
logistics, marketing, and engineering. Functional departmentalization can be
used in all types of organizations.
ii.
Product departmentalization - Grouping activities by product line. Tasks can
also be grouped according to a specific product or service, thus placing all
activities related to the product or the service under one manager. Each major
product area in the corporation is under the authority of a senior manager who is
specialist in, and is responsible for, everything related to the product line. LA
Gear is an example of company that uses product departmentalization. Its
structure is based on its varied product lines which include women’s footwear,
children’s footwear and men’s footwear. Similarly, banks may have departments
structured according to the products they are offering e.g. Current account
department, forex department, credit department, mortgage department, Leasing
and Finance Department and so on.
A qualification examined by the Institute of Bankers in Malawi
Page 5
iii.
Customer departmentalization - Grouping activities on the basis of common
customers or types of customers. Jobs may be grouped according to the type of
customer served by the organization. The assumption is that customers in each
department have a common set of problems and needs that can best be met by
specialists. The sales activities in an office supply firm can be broken down into
three departments that serve retail, wholesale and government accounts.
iv.
Geographic departmentalization - Grouping activities on the basis of territory. If
an organization's customers are geographically dispersed, it can group jobs
based on geography. For example, the organization structure of Coca-Cola has
reflected the company’s operation in two broad geographic areas – the North
American sector and the international sector, which includes the Pacific Rim, the
European Community, Northeast Europe, Africa and Latin America groups.
Banks in Malawi also have branches in different parts each with a complete
structure reporting to the Head office.
v.
Process departmentalization - Grouping activities on the basis of product or
service or customer flow. Because each process requires different skills, process
departmentalization allows homogenous activities to be categorized. For
example, the applicants might need to go through several departments namely
validation, licensing and treasury, before receiving the driver’s license.
(b) (1) Mechanistic and Organic Organizations
A term created by Tom Burns and G.M. Stalker in the late 1950s, organic
organizations, unlike mechanistic organizations (also coined by Burns and
Stalker), are flexible and value external knowledge.
Also called organismic organization, this form of organizational structure was
widely sought and proposed, but never proved to really exist since it, adversely
to the mechanistic organization, has the least hierarchy and specialization of
functions.
(Ii) Advantages:
Team Structure
Advantages
-A structure in which the entire organization is made up of
work groups or teams
-Employees are more involved and empowered. There is
reduced barrier among functional areas
A qualification examined by the Institute of Bankers in Malawi
Page 6
Matrix-project
Structure
Advantages
Boundaryless
Structure
-Matrix is a structure that assigns specialists from different
functional areas to work on projects but who return to their
areas when the project is completed. Project is a structure
in which employees continuously work on projects. As one
project is completed, employees move on to the next
project.
-fluid and flexible design that can respond to
environmental changes. There is also speed in making
decisions.
-A structure that is not defined by or limited to artificial
horizontal, vertical, or external boundaries; includes
virtual and network types of organizations.
-Highly flexible and responsive. It also draws on talent
wherever it’s found.
Advantages
A qualification examined by the Institute of Bankers in Malawi
Page 7
Question 34
(a)
i.
Goal-Setting Theory
Goal-setting theory suggests that managers and subordinates should set goals for the
individual on regular basis. These goals should be moderately difficult and very
specific. Moreover, they should by of a type that the employee will accept and commit
to accomplishing. Rewards should also be tied directly to reaching the goals. Goalsetting helps the manager tailor rewards to individual needs, clarify expectancies,
maintain equity, and provide systematic reinforcement.
Thus, it provides a
comprehensive framework for integrating the other approaches.
ii.
The Japanese Approach
Another approach to motivation that has earned increasing popularity is the so-called
Japanese approach. This is not really a theory or model but a philosophy of
management. In many ways, it extends from the human resource perspective. The
basic idea underlying the Japanese approach is to bring management and workers
together as partners. Historically, in the United States the management-workers
relationship has ranged from antagonistic to merely indifferent. In Japan, however,
managers and workers see themselves as one group, and the result is that everyone is
highly committed and motivated.
(a) Three types of leadership styles:
Servant leadership
This term, created by Robert Greenleaf in the 1970s, describes a leader who is often
not formally recognized as such. When someone, at any level within an organization,
leads simply by meeting the needs of the team, he or she is described as a "servant
leader."
In many ways, servant leadership is a form of democratic leadership, because the
whole team tends to be involved in decision making.
Supporters of the servant leadership model suggest that it's an important way to move
ahead in a world where values are increasingly important, and where servant leaders
achieve power on the basis of their values and ideals. Others believe that in competitive
leadership situations, people who practice servant leadership can find themselves left
behind by leaders using other leadership styles.
A qualification examined by the Institute of Bankers in Malawi
Page 8
Laissez faire leadership
This French phrase means "leave it be," and it's used to describe leaders who leave
their team members to work on their own. It can be effective if the leader monitors
what's being achieved and communicates this back to the team regularly. Most often,
laissez-faire leadership is effective when individual team members are very experienced
and skilled self-starters. Unfortunately, this type of leadership can also occur when
managers don't apply sufficient control.
Autocratic leadership
Autocratic leadership is an extreme form of transactional leadership, where leaders
have absolute power over their workers or team. Staff and team members have little
opportunity to make suggestions, even if these would be in the team's or the
organization's best interest.
Most people tend to resent being treated like this. Therefore, autocratic leadership
usually leads to high levels of absenteeism and staff turnover. For some routine and
unskilled jobs, the style can remain effective because the advantages of control may
outweigh the disadvantages.
(b) Three roles as identified by Benne and Sheats in a group structure. Any three:
Initiator/Contributor - Proposes original ideas or different ways of approaching group
problems or goals. This role initiates discussions and move groups into new areas of
exploration.
Information Seeker - Requests clarification of comments in terms of their factual
adequacy. Seeks expert information or facts relevant to the problem. Determines what
information is missing and needs to be found before moving forward.
Information Giver - Provides factual information to the group. Is seen as an authority
on the subject and relates own experience when relevant.
Opinion Seeker - Asks for clarification of the values, attitudes, and opinions of group
members. Checks to make sure different perspectives are given.
Opinion Giver - Expresses his or her own opinions and beliefs about the subject being
discussed. Often states opinions in terms of what the group "should" do.
Elaborator - Takes other people's initial ideas and builds on them with examples,
relevant facts and data. Also looks at the consequences of proposed ideas and actions.
A qualification examined by the Institute of Bankers in Malawi
Page 9
Co-ordinator - Identifies and explains the relationships between ideas. May pull
together a few different ideas and make them cohesive.
Orienter - Reviews and clarifies the group's position. Provides a summary of what has
been accomplished, notes where the group has veered off course, and suggests how to
get back on target.
Evaluator/Critic - Evaluates proposals against a predetermined or objective standard.
Assesses the reasonableness of a proposal and looks at whether it is fact-based and
manageable as a solution.
Energizer - Concentrates the group's energy on forward movement. Challenges and
stimulates the group to take further action.
Procedural Technician - Facilitates group discussion by taking care of logistical
concerns like where meetings are to take place and what supplies are needed for each
meeting.
Recorder - Acts as the secretary or minute-keeper. Records ideas and keeps track of
what goes on at each meeting.
A qualification examined by the Institute of Bankers in Malawi
Page 10